Justia Department Of Health And Human Services Centers For Medicare & Medicaid Services Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements, 80170-80562 [2016-26668]

Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements, 80170-80562 [2016-26668]

Download as PDF 80170 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 405, 410, 411, 414, 417, 422, 423, 424, 425, and 460 [CMS–1654–F] RIN 0938–AS81 Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Final rule. AGENCY: This major final rule addresses changes to the physician fee schedule and other Medicare Part B payment policies, such as changes to the Value Modifier, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This final rule also includes changes related to the Medicare Shared Savings Program, requirements for Medicare Advantage Provider Networks, and provides for the release of certain pricing data from Medicare Advantage bids and of data from medical loss ratio reports submitted by Medicare health and drug plans. In addition, this final rule expands the Medicare Diabetes Prevention Program model. DATES: These regulations are effective on January 1, 2017. FOR FURTHER INFORMATION CONTACT: Jessica Bruton, (410) 786–5991, for issues related to identification of potentially misvalued services and any physician payment issues not identified below. Gail Addis, (410) 786–4522, for issues related to diabetes self-management training. Jaime Hermansen, (410) 786–2064, for issues related to moderate sedation coding and anesthesia services. Roberta Epps, (410) 786–4503, for issues related to PAMA section 218(a) policy and the transition from traditional x-ray imaging to digital radiography. Ann Marshall, (410) 786–3059, for primary care issues related to chronic mstockstill on DSK3G9T082PROD with RULES2 SUMMARY: VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 care management (CCM), burden reduction, telehealth services and evaluation and management services. Emily Yoder, (410) 786–1804, for issues related to resource intensive services, telehealth services and other primary care issues. Lindsey Baldwin, (410) 786–1694, for primary care issues related to behavioral health integration services. Geri Mondowney, (410) 786–4584, and Donta Henson, (410) 786–1947, for issues related to geographic practice cost indices. Michael Soracoe, (410) 786–6312, for issues related to the target and phase-in provisions, the practice expense methodology, impacts, conversion factor, and the valuation of pathology and surgical procedures. Pamela West, (410) 786–2302, for issues related to therapy. Patrick Sartini, (410) 786–9252, for issues related to malpractice RVUs, radiation treatment, mammography and other imaging services. Kathy Bryant, (410) 786–3448, for issues related to collecting data on resources used in furnishing global services. Donta Henson, (410) 786–1947, for issues related to ophthalmology services. Corinne Axelrod, (410) 786–5620, for issues related to rural health clinics or federally qualified health centers. Simone Dennis, (410) 786–8409, for issues related to FQHC-specific market basket. JoAnna Baldwin, (410) 786–7205, or Sarah Fulton, (410) 786–2749, for issues related to appropriate use criteria for advanced diagnostic imaging services. Robin Usi, (410) 786–0364, for issues related to open payments. Sean O’Grady, (410) 786–2259, or Julie Uebersax, (410) 786–9284, for issues related to release of pricing data from Medicare Advantage bids and release of medical loss ratio data submitted by Medicare Advantage organizations and Part D sponsors. Sara Vitolo, (410) 786–5714, for issues related to prohibition on billing qualified Medicare beneficiary individuals for Medicare cost-sharing. Michelle Peterman, (410) 786–2591, for issues related to Accountable Care Organization (ACO) participants who report PQRS quality measures separately. Katie Mucklow, (410) 786–0537 or John Spiegel, (410) 786–1909, for issues related to Provider Enrollment Medicare Advantage Program. Jen Zhu, (410) 786–3725, Carlye Burd, (410) 786–1972, or Nina Brown, (410) 786–6103, for issues related to Medicare Diabetes Prevention Program model expansion. PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 Rabia Khan or Terri Postma, (410) 786–8084 or ACO@cms.hhs.gov, for issues related to the Medicare Shared Savings Program. Kimberly Spalding Bush, (410) 786– 3232, or Fiona Larbi, (410) 786–7224, for issues related to Value-based Payment Modifier and Physician Feedback Program. Lisa Ohrin Wilson, (410) 786–8852, or Gabriel Scott, (410) 786–3928, for issues related to physician self-referral updates. SUPPLEMENTARY INFORMATION: Table of Contents I. Executive Summary and Background A. Executive Summary B. Background II. Provisions of the Final Rule for PFS A. Determination of Practice Expense Relative Value Units (PE RVUs) B. Determination of Malpractice Relative Value Units (MRVUs) C. Medicare Telehealth Services D. Potentially Misvalued Services Under the Physician Fee Schedule 1. Background 2. Progress in Identifying and Reviewing Potentially Misvalued Codes 3. Validating RVUs of Potentially Misvalued Codes 4. CY 2017 Identification and Review of Potentially Misvalued Services 5. Valuing Services That Include Moderate Sedation as an Inherent Part of Furnishing the Procedure 6. Collecting Data on Resources Used in Furnishing Global Services E. Improving Payment Accuracy for Primary Care, Care Management Services, and Patient-Centered Services F. Improving Payment Accuracy for Services: Diabetes Self-Management Training (DSMT) G. Target for Relative Value Adjustments for Misvalued Services H. Phase-In of Significant RVU Reductions I. Geographic Practice Cost Indices (GPCIs) J. Payment Incentive for the Transition From Traditional X-Ray Imaging to Digital Radiography and Other Imaging Services K. Procedures Subject to the Multiple Procedure Payment Reduction (MPPR) and the OPPS Cap L. Valuation of Specific Codes M. Therapy Caps III. Other Provisions of the Final Rule for PFS A. Chronic Care Management (CCM) and Transitional Care Management (TCM) Supervision Requirements in Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) B. FQHC-Specific Market Basket C. Appropriate Use Criteria for Advanced Diagnostic Imaging Services D. Reports of Payments or Other Transfers of Value to Covered Recipients: Summary of Public Comments E. Release of Part C Medicare Advantage Bid Pricing Data and Part C and Part D Medical Loss Ratio (MLR) Data E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations F. Prohibition on Billing Qualified Medicare Beneficiary Individuals for Medicare Cost-Sharing G. Recoupment or Offset of Payments to Providers Sharing the Same Taxpayer Identification Number H. Accountable Care Organization (ACO) Participants Who Report Physician Quality Reporting System (PQRS) Quality Measures Separately I. Medicare Advantage Provider Enrollment J. Expansion of the Diabetes Prevention Program (DPP) Model K. Medicare Shared Savings Program L. Value-Based Payment Modifier and Physician Feedback Program M. Physician Self-Referral Updates N. Designated Health Services IV. Collection of Information Requirements V. Regulatory Impact Analysis Regulations Text mstockstill on DSK3G9T082PROD with RULES2 Acronyms In addition, because of the many organizations and terms to which we refer by acronym in this final rule, we are listing these acronyms and their corresponding terms in alphabetical order below: A1c Hemoglobin A1c AAA Abdominal aortic aneurysms ACO Accountable care organization AMA American Medical Association ASC Ambulatory surgical center ATA American Telehealth Association ATRA American Taxpayer Relief Act (Pub. L. 112–240) 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) BLS Bureau of Labor Statistics CAD Coronary artery disease CAH Critical access hospital CBSA Core-Based Statistical Area CCM Chronic care management CEHRT Certified EHR technology CF Conversion factor CG–CAHPS Clinician and Group Consumer Assessment of Healthcare Providers and Systems CLFS Clinical Laboratory Fee Schedule CoA Certificate of Accreditation CoC Certificate of Compliance CoR Certificate of Registration CNM Certified nurse-midwife CP Clinical psychologist CPC Comprehensive Primary Care CPEP Clinical Practice Expert Panel CPT [Physicians] Current Procedural Terminology (CPT codes, descriptions and other data only are copyright 2015 American Medical Association. All rights reserved.) CQM Clinical quality measure CSW Clinical social worker CT Computed tomography CW Certificate of Waiver CY Calendar year DFAR Defense Federal Acquisition Regulations DHS Designated health services VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 DM Diabetes mellitus DSMT Diabetes self-management training eCQM Electronic clinical quality measures ED Emergency Department EHR Electronic health record E/M Evaluation and management EMT Emergency Medical Technician EP Eligible professional eRx Electronic prescribing ESRD End-stage renal disease FAR Federal Acquisition Regulations FDA Food and Drug Administration FFS Fee-for-service FQHC Federally qualified health center FR Federal Register FSHCAA Federally Supported Health Centers Assistance Act GAF Geographic adjustment factor GAO Government Accountability Office GPCI Geographic practice cost index GPO Group purchasing organization GPRO Group practice reporting option GTR Genetic Testing Registry HCPCS Healthcare Common Procedure Coding System HHS [Department of] Health and Human Services HOPD Hospital outpatient department HPSA Health professional shortage area IDTF Independent diagnostic testing facility IPPE Initial preventive physical exam IPPS Inpatient Prospective Payment System IQR Inpatient Quality Reporting ISO Insurance service office IT Information technology IWPUT Intensity of work per unit of time LCD Local coverage determination MA Medicare Advantage MAC Medicare Administrative Contractor MACRA Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 114– 10) MAP Measure Applications Partnership MAPCP Multi-payer Advanced Primary Care Practice MAV Measure application validity [process] MCP Monthly capitation payment MedPAC Medicare Payment Advisory Commission MEI Medicare Economic Index MFP Multi-Factor Productivity MIPPA Medicare Improvements for Patients and Providers Act (Pub. L. 110–275) MMA Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Pub. L. 108–173, enacted on December 8, 2003) MP Malpractice MPPR Multiple procedure payment reduction MRA Magnetic resonance angiography MRI Magnetic resonance imaging MSA Metropolitan Statistical Areas MSPB Medicare Spending per Beneficiary MU Meaningful use NCD National coverage determination NCQDIS National Coalition of Quality Diagnostic Imaging Services NP Nurse practitioner NPI National Provider Identifier NPP Nonphysician practitioner NQS National Quality Strategy OACT CMS’s Office of the Actuary OBRA ’89 Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101–239) PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 80171 OBRA ’90 Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101–508) OES Occupational Employment Statistics OMB Office of Management and Budget OPPS Outpatient prospective payment system OT Occupational therapy PA Physician assistant PAMA Protecting Access to Medicare Act of 2014 (Pub. L. 113–93) PAMPA Patient Access and Medicare Protection Act (Pub. L. 114–115) PC Professional component PCIP Primary Care Incentive Payment PE Practice expense PE/HR Practice expense per hour PEAC Practice Expense Advisory Committee PECOS Provider Enrollment, Chain, and Ownership System PFS Physician Fee Schedule PLI Professional Liability Insurance PMA Premarket approval PPM Provider-Performed Microscopy PQRS Physician Quality Reporting System PPIS Physician Practice Expense Information Survey PPS Prospective Payment System PT Physical therapy PT Proficiency Testing PT/INR Prothrombin Time/International Normalized Ratio PY Performance year QA Quality Assessment QC Quality Control QCDR Qualified clinical data registry QRUR Quality and Resources Use Report RBRVS Resource-based relative value scale RFA Regulatory Flexibility Act RHC Rural health clinic RIA Regulatory impact analysis RUC American Medical Association/ Specialty Society Relative (Value) Update Committee RUCA Rural Urban Commuting Area RVU Relative value unit SBA Small Business Administration SGR Sustainable growth rate SIM State Innovation Model SLP Speech-language pathology SMS Socioeconomic Monitoring System SNF Skilled nursing facility TAP Technical Advisory Panel TC Technical component TIN Tax identification number TCM Transitional Care Management UAF Update adjustment factor UPIN Unique Physician Identification Number USPSTF United States Preventive Services Task Force VBP Value-based purchasing VM Value-Based Payment Modifier Addenda Available Only Through the Internet on the CMS Web Site The PFS Addenda along with other supporting documents and tables referenced in this final rule are available through the Internet on the CMS Web site at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ PhysicianFeeSched/PFS-FederalRegulation-Notices.html. Click on the link on the left side of the screen titled, E:\FR\FM\15NOR2.SGM 15NOR2 80172 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations ‘‘PFS Federal Regulations Notices’’ for a chronological list of PFS Federal Register and other related documents. For the CY 2017 PFS Final Rule, refer to item CMS–1654–F. Readers who experience any problems accessing any of the Addenda or other documents referenced in this rule and posted on the CMS Web site identified above should contact Jessica Bruton at (410) 786– 5991. CPT (Current Procedural Terminology) Copyright Notice Throughout this final rule, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2015 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulations (DFAR) apply. I. Executive Summary and Background A. Executive Summary mstockstill on DSK3G9T082PROD with RULES2 1. Purpose This major final rule revises payment polices under the Medicare Physician Fee Schedule (PFS) and makes other policy changes related to Medicare Part B payment. These changes will be applicable to services furnished in CY 2017. In addition, this final rule includes the following provisions: Payment policy changes for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs); expansion of the Medicare Diabetes Prevention Program model; policy changes related to the Medicare Shared Savings Program; and release of pricing data submitted to CMS by Medicare Advantage (MA) organizations; and medical loss ratio reports submitted by MA plans and Part D plans. These additional policies are addressed in section III. of this final rule. 2. Summary of the Major Provisions The statute requires us to establish payments under the PFS based on national uniform relative value units (RVUs) that account for the relative resources used in furnishing a service. The statute requires that RVUs be established for three categories of resources: Work, practice expense (PE); and malpractice (MP) expense; and, that we establish by regulation each year’s payment amounts for all physicians’ services paid under the PFS, incorporating geographic adjustments to reflect the variations in the costs of furnishing services in different geographic areas. In this major final VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 rule, we establish RVUs for CY 2017 for the PFS, 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, as well as changes in the statute. In addition, this final rule includes summaries of public comments and final policies regarding: • Potentially Misvalued Codes. • Telehealth Services. • Establishing Values for New, Revised, and Misvalued Codes. • Target for Relative Value Adjustments for Misvalued Services. • Phase-in of Significant RVU Reductions. • Chronic Care Management (CCM) and Transitional Care Management (TCM) Supervision Requirements in Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs). • FQHC-Specific Market Basket. • Appropriate Use Criteria for Advanced Diagnostic Imaging Services. • Reports of Payments or Other Transfers of Value to Covered Recipients: Solicitation of Public Comments. • Release of Part C Medicare Advantage Bid Pricing Data and Part C and Part D Medical Loss Ratio (MLR) Data. • Prohibition on Billing Qualified Medicare Beneficiary Individuals for Medicare Cost-Sharing. • Recoupment or Offset of Payments to Providers Sharing the Same Taxpayer Identification Number. • Accountable Care Organization (ACO) Participants Who Report Physician Quality Reporting System (PQRS) Quality Measures Separately. • Medicare Advantage Provider Enrollment. • Expansion of the Diabetes Prevention Program (DPP) Model. • Medicare Shared Savings Program. • Value-Based Payment Modifier and the Physician Feedback Program. • Physician Self-referral Updates. • Designated Health Services. 3. Summary of Costs and Benefits The statute requires that annual adjustments to PFS RVUs may not cause annual estimated expenditures to differ by more than $20 million from what they would have been had the adjustments not been made. If adjustments to RVUs would cause expenditures to change by more than $20 million, we must make adjustments to preserve budget neutrality. These adjustments can affect the distribution of Medicare expenditures across specialties. In addition, several changes in this final rule will affect the specialty PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 distribution of Medicare expenditures. When considering the combined impact of work, PE, and MP RVU changes, the projected payment impacts would be small for most specialties; however, the impact would be larger for a few specialties. We have determined that this major final rule is economically significant. For a detailed discussion of the economic impacts, see section VI. of this final rule. B. 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 PFS relies on national relative values that are established for work, PE, and MP, which are adjusted for geographic cost variations. These values are multiplied by a conversion factor (CF) to convert the RVUs into payment rates. The concepts and methodology underlying the PFS were enacted as part of the Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101– 239, enacted on December 19, 1989) (OBRA ’89), and the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101– 508, enacted on November 5, 1990) (OBRA ’90). The final rule published on November 25, 1991 (56 FR 59502) set forth the first fee schedule used for payment for physicians’ services. We note that throughout this major final rule, unless otherwise noted, the term ‘‘practitioner’’ is used to describe both physicians and nonphysician practitioners (NPPs) who are permitted to bill Medicare under the PFS for services furnished to Medicare beneficiaries. 1. Development of the Relative Values a. Work RVUs The work RVUs established for the initial fee schedule, which was implemented on January 1, 1992, were developed with extensive input from the physician community. A research team at the Harvard School of Public Health developed the original work RVUs for most codes under a cooperative agreement with the Department of Health and Human Services (HHS). In constructing the code-specific vignettes used in determining 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. As specified in section 1848(c)(1)(A) of the Act, the work component of physicians’ services means the portion E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 of the resources used in furnishing the service that reflects physician time and intensity. We establish work RVUs for new, revised and potentially misvalued codes based on our review of information that generally includes, but is not limited to, recommendations received from the American Medical Association/Specialty Society Relative Value Update Committee (RUC), the Health Care Professionals Advisory Committee (HCPAC), the Medicare Payment Advisory Commission (MedPAC), and other public commenters; medical literature and comparative databases; as well as a comparison of the work for other codes within the Medicare PFS, and consultation with other physicians and health care professionals within CMS and the federal government. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters, and the rationale for their recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalk to key reference or similar codes, and magnitude estimation. More information on these issues is available in that rule. b. Practice Expense RVUs Initially, only the work RVUs were resource-based, and the PE and MP RVUs were based on average allowable charges. 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 required to consider general categories of expenses (such as office rent and wages of personnel, but excluding malpractice expenses) comprising PEs. The PE RVUs continue to represent the portion of these resources involved in furnishing PFS services. Originally, the resource-based method was to be used beginning in 1998, but section 4505(a) of the Balanced Budget Act of 1997 (Pub. L. 105–33, enacted on August 5, 1997) (BBA) delayed 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 the charge-based PE RVUs to the resource-based PE RVUs. We established the resource-based PE RVUs for each physicians’ service in a final rule, published on November 2, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 1998 (63 FR 58814), effective for services furnished in CY 1999. Based on the requirement to transition to a resource-based system for PE over a 4year period, payment rates were not fully based upon resource-based PE RVUs until CY 2002. This resourcebased 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. (These data sources are described in greater detail in the CY 2012 final rule with comment period (76 FR 73033). Separate PE RVUs are established for services furnished in facility settings, such as a hospital outpatient department (HOPD) or an ambulatory surgical center (ASC), and in nonfacility settings, such as a physician’s office. The nonfacility RVUs reflect all of the direct and indirect PEs involved in furnishing a service described by a particular HCPCS code. The difference, if any, in these PE RVUs generally results in a higher payment in the nonfacility setting because in the facility settings some costs are borne by the facility. Medicare’s payment to the facility (such as the outpatient prospective payment system (OPPS) payment to the HOPD) would reflect costs typically incurred by the facility. Thus, payment associated with those facility resources is not made under the PFS. Section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L. 106– 113, enacted on November 29, 1999) (BBRA) 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 CY 2007 PFS final rule with comment period (71 FR 69624), we revised the methodology for calculating direct PE RVUs from the top-down to the bottom-up methodology beginning PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 80173 in CY 2007. We adopted a 4-year transition to the new PE RVUs. This transition was completed for CY 2010. In the CY 2010 PFS final rule with comment period, we updated the practice expense per hour (PE/HR) data that are used in the calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010, we began a 4-year transition to the new PE RVUs using the updated PE/HR data, which was completed for CY 2013. c. Malpractice RVUs Section 4505(f) of the BBA amended section 1848(c) of the Act to require that we implement resource-based MP RVUs for services furnished on or after CY 2000. The resource-based MP RVUs were implemented in the PFS final rule with comment period published November 2, 1999 (64 FR 59380). The MP RVUs are based on commercial and physician-owned insurers’ malpractice insurance premium data from all the states, the District of Columbia, and Puerto Rico. For more information on MP RVUs, see section II.B.2. of this final rule. d. Refinements to the RVUs Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no less often than every 5 years. Prior to CY 2013, we conducted periodic reviews of work RVUs and PE RVUs independently. We completed five-year reviews of work RVUs that were effective for calendar years 1997, 2002, 2007, and 2012. Although refinements to the direct PE inputs initially relied heavily on input from the RUC Practice Expense Advisory Committee (PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to the use of the updated PE/ HR data in CY 2010 have resulted in significant refinements to the PE RVUs in recent years. In the CY 2012 PFS final rule with comment period (76 FR 73057), we finalized a proposal to consolidate reviews of work and PE RVUs under section 1848(c)(2)(B) of the Act and reviews of potentially misvalued codes under section 1848(c)(2)(K) of the Act into one annual process. In addition to the five-year reviews, beginning for CY 2009, CMS and the RUC have identified and reviewed a number of potentially misvalued codes on an annual basis based on various identification screens. This annual review of work and PE RVUs for potentially misvalued codes was supplemented by the amendments to section 1848 of the Act, as enacted by section 3134 of the Affordable Care Act, that require the agency to periodically E:\FR\FM\15NOR2.SGM 15NOR2 80174 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations identify, review and adjust values for potentially misvalued codes. e. Application of Budget Neutrality to Adjustments of RVUs As described in section VI.C. of this final rule, in accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions to the RVUs cause expenditures for the year to change by more than $20 million, we make adjustments to ensure that expenditures did not increase or decrease by more than $20 million. mstockstill on DSK3G9T082PROD with RULES2 2. Calculation of Payments Based on RVUs To calculate the payment for each service, the components of the fee schedule (work, PE, and MP RVUs) are adjusted by geographic practice cost indices (GPCIs) to reflect the variations in the costs of furnishing the services. The GPCIs reflect the relative costs of work, PE, and MP in an area compared to the national average costs for each component. RVUs are converted to dollar amounts through the application of a CF, which is calculated based on a statutory formula by CMS’s Office of the Actuary (OACT). The formula for calculating the Medicare fee schedule payment amount for a given service and fee schedule area can be expressed as: Payment = [(RVU work × GPCI work) + (RVU PE × GPCI PE) + (RVU MP × GPCI MP)] × CF. 3. Separate Fee Schedule Methodology for Anesthesia Services Section 1848(b)(2)(B) of the Act specifies that the fee schedule amounts for anesthesia services are to be based on a uniform relative value guide, with appropriate adjustment of an anesthesia conversion factor, in a manner to ensure that fee schedule amounts for anesthesia services are consistent with those for other services of comparable value. Therefore, there is a separate fee schedule methodology for anesthesia services. Specifically, we establish a separate conversion factor for anesthesia services and we utilize the uniform relative value guide, or base units, as well as time units, to calculate the fee schedule amounts for anesthesia services. Since anesthesia services are not valued using RVUs, a separate methodology for locality adjustments is also necessary. This involves an adjustment to the national anesthesia CF for each payment locality. 4. Most Recent Changes to the Fee Schedule Section 220(d) of the Protecting Access to Medicare Act of 2014 (Pub. L. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 113–93, enacted on April 1, 2014) (PAMA) added a new subparagraph (O) to section 1848(c)(2) of the Act to establish an annual target for reductions in PFS expenditures resulting from adjustments to relative values of misvalued codes. If the estimated net reduction in expenditures for a year is equal to or greater than the target for that year, the provision specifies that reduced expenditures attributable to such adjustments shall be redistributed in a budget-neutral manner within the PFS. The provision specifies that the amount by which such reduced expenditures exceed the target for a given year shall be treated as a reduction in expenditures for the subsequent year for purposes of determining whether the target for the subsequent year has been met. The provision also specifies that an amount equal to the difference between the target and the estimated net reduction in expenditures, called the target recapture amount, shall not be taken into account when applying the budget neutrality requirements specified in section 1848(c)(2)(B)(ii)(II) of the Act. The PAMA amendments originally made the target provisions applicable for CYs 2017 through 2020 and set the target for reduced expenditures at 0.5 percent of estimated expenditures under the PFS for each of those 4 years. Subsequently, section 202 of the Achieving a Better Life Experience Act of 2014 (Division B of Pub. L. 113–295, enacted December 19, 2014) (ABLE) accelerated the application of the target, amending section 1848(c)(2)(O) of the Act to specify that target provisions apply for CYs 2016, 2017, and 2018; and setting a 1 percent target for reduced expenditures for CY 2016 and a 0.5 percent target for CYs 2017 and 2018. The implementation of the target legislation was finalized in the CY 2016 PFS final rule with comment period, and revisions are discussed in section II.G. of this final rule. Section 1848(c)(7) of the Act, as added by section 220(e) of the PAMA, specified that for services that are not new or revised codes, if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, the applicable adjustments in work, PE, and MP RVUs shall be phased in over a 2-year period. Section 220(e) of the PAMA required the phase-in of RVU reductions of 20 percent or more to begin for 2017. Section 1848(c)(7) of the Act was later amended by section 202 of the ABLE Act to require instead that the phase-in must begin in CY 2016. The implementation of the phase-in PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 legislation was finalized in the CY 2016 PFS final rule with comment period and revisions in this year’s rulemaking are discussed in section II.H. of this final rule. II. Provisions of the Final Rule for PFS A. Determination of Practice Expense (PE) Relative Value Units (RVUs) 1. Overview Practice expense (PE) is the portion of the resources used in furnishing a service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages, but excluding malpractice expenses, as specified in section 1848(c)(1)(B) of the Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use a resource-based system for determining PE RVUs for each physicians’ service. We develop PE RVUs by considering the direct and indirect practice resources involved in furnishing each service. Direct expense categories include clinical labor, medical supplies, and medical equipment. Indirect expenses include administrative labor, office expense, and all other expenses. The sections that follow provide more detailed information about the methodology for translating the resources involved in furnishing each service into servicespecific PE RVUs. We refer readers to the CY 2010 PFS final rule with comment period (74 FR 61743 through 61748) for a more detailed explanation of the PE methodology. 2. Practice Expense Methodology a. Direct Practice Expense We determine the direct PE for a specific service by adding the costs of the direct resources (that is, the clinical staff, medical supplies, and medical equipment) typically involved with furnishing that service. The costs of the resources are calculated using the refined direct PE inputs assigned to each CPT code in our PE database, which are generally based on our review of recommendations received from the RUC and those provided in response to public comment periods. For a detailed explanation of the direct PE methodology, including examples, we refer readers to the Five-Year Review of Work Relative Value Units under the PFS and Proposed Changes to the Practice Expense Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629). E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations b. Indirect Practice Expense per Hour Data We use survey data on indirect PEs incurred per hour worked in developing the indirect portion of the PE RVUs. Prior to CY 2010, we primarily used the practice expense per hour (PE/HR) by specialty that was obtained from the AMA’s Socioeconomic Monitoring Surveys (SMS). The AMA administered a new survey in CY 2007 and CY 2008, the Physician Practice Expense Information Survey (PPIS). The PPIS is a multispecialty, nationally representative, PE survey of both physicians and nonphysician practitioners (NPPs) paid under the PFS using a survey instrument and methods highly consistent with those used for the SMS and the supplemental surveys. The PPIS gathered information from 3,656 respondents across 51 physician specialty and health care professional groups. We believe the PPIS is the most comprehensive source of PE survey information available. We used the PPIS data to update the PE/HR data for the CY 2010 PFS for almost all of the Medicare-recognized specialties that participated in the survey. When we began using the PPIS data in CY 2010, we did not change the PE RVU methodology itself or the manner in which the PE/HR data are used in that methodology. We only updated the PE/HR data based on the new survey. Furthermore, as we explained in the CY 2010 PFS final rule with comment period (74 FR 61751), because of the magnitude of payment reductions for some specialties resulting from the use of the PPIS data, we transitioned its use over a 4-year period from the previous PE RVUs to the PE RVUs developed using the new PPIS data. As provided in the CY 2010 PFS final rule with comment period (74 FR 61751), the transition to the PPIS data was complete for CY 2013. Therefore, PE RVUs from CY 2013 forward are developed based entirely on the PPIS data, except as noted in this section. Section 1848(c)(2)(H)(i) of the Act requires us to use the medical oncology supplemental survey data submitted in 2003 for oncology drug administration services. Therefore, the PE/HR for medical oncology, hematology, and hematology/oncology reflects the continued use of these supplemental survey data. Supplemental survey data on independent labs from the College of American Pathologists were implemented for payments beginning in CY 2005. Supplemental survey data from the National Coalition of Quality Diagnostic Imaging Services (NCQDIS), VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 representing independent diagnostic testing facilities (IDTFs), were blended with supplementary survey data from the American College of Radiology (ACR) and implemented for payments beginning in CY 2007. Neither IDTFs, nor independent labs, participated in the PPIS. Therefore, we continue to use the PE/HR that was developed from their supplemental survey data. Consistent with our past practice, the previous indirect PE/HR values from the supplemental surveys for these specialties were updated to CY 2006 using the Medicare Economic Index (MEI) to put them on a comparable basis with the PPIS data. We also do not use the PPIS data for reproductive endocrinology and spine surgery since these specialties currently are not separately recognized by Medicare, nor do we have a method to blend the PPIS data with Medicarerecognized specialty data. Previously, we established PE/HR values for various specialties without SMS or supplemental survey data by crosswalking them to other similar specialties to estimate a proxy PE/HR. For specialties that were part of the PPIS for which we previously used a crosswalked PE/HR, we instead used the PPIS-based PE/HR. We continue previous crosswalks for specialties that did not participate in the PPIS. However, beginning in CY 2010, we changed the PE/HR crosswalk for portable X-ray suppliers from radiology to IDTF, a more appropriate crosswalk because these specialties are more similar to each other for work time. For registered dietician services, the resource-based PE RVUs have been calculated in accordance with the final policy that crosswalks the specialty to the ‘‘All Physicians’’ PE/HR data, as adopted in the CY 2010 PFS final rule with comment period (74 FR 61752) and discussed in more detail in the CY 2011 PFS final rule with comment period (75 FR 73183). We have incorporated the available utilization data for interventional cardiology, which became a recognized Medicare specialty during 2014. We finalized the use of a proxy PE/HR value for interventional cardiology in the CY 2016 final rule with comment period (80 FR 70892), as there are no PPIS data for this specialty, by crosswalking the PE/HR from Cardiology, since the specialties furnish similar services in the Medicare claims data. Comment: A commenter questioned the validity of the PPIS survey data since it is nearly 10 years old. Several other commenters stated that CMS’ estimated per-minute labor cost inputs are lower than actual labor costs. PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 80175 Response: We have previously identified several concerns regarding the underlying data used in determining PE RVUs in the CY 2014 PFS final rule (78 FR 74246–74247). Even when we first incorporated the survey data into the PE methodology, many in the community expressed serious concerns over the accuracy of this or other PE surveys as a way of gathering data on PE inputs from the diversity of providers paid under the PFS. However, we currently lack another source of comprehensive data regarding PE costs, and as a result, we continue to believe that the PPIS survey data is the best data currently available. We continue to seek the best broad-based, auditable, routinely-updated source of information regarding PE costs. c. Allocation of PE to Services To establish PE RVUs for specific services, it is necessary to establish the direct and indirect PE associated with each service. (1) Direct Costs The relative relationship between the direct cost portions of the PE RVUs for any two services is determined by the relative relationship between the sum of the direct cost resources (that is, the clinical staff, medical supplies, and medical equipment) typically involved with furnishing each of the services. The costs of these resources are calculated from the refined direct PE inputs in our PE database. For example, if one service has a direct cost sum of $400 from our PE database and another service has a direct cost sum of $200, the direct portion of the PE RVUs of the first service would be twice as much as the direct portion of the PE RVUs for the second service. (2) Indirect Costs Section II.A.2.b. of this final rule describes the current data sources for specialty-specific indirect costs used in our PE calculations. We allocated the indirect costs to the code level on the basis of the direct costs specifically associated with a code and the greater of either the clinical labor costs or the work RVUs. We also incorporated the survey data described earlier in the PE/ HR discussion. The general approach to developing the indirect portion of the PE RVUs is as follows: • For a given service, we used the direct portion of the PE RVUs calculated as previously described and the average percentage that direct costs represent of total costs (based on survey data) across the specialties that furnish the service to determine an initial indirect allocator. That is, the initial indirect allocator is E:\FR\FM\15NOR2.SGM 15NOR2 80176 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 calculated so that the direct costs equal the average percentage of direct costs of those specialties furnishing the service. For example, if the direct portion of the PE RVUs for a given service is 2.00 and direct costs, on average, represented 25 percent of total costs for the specialties that furnished the service, the initial indirect allocator would be calculated so that it equals 75 percent of the total PE RVUs. Thus, in this example, the initial indirect allocator would equal 6.00, resulting in a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75 percent of 8.00). • Next, we added the greater of the work RVUs or clinical labor portion of the direct portion of the PE RVUs to this initial indirect allocator. In our example, if this service had a work RVU of 4.00 and the clinical labor portion of the direct PE RVU was 1.50, we would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 clinical labor portion) to the initial indirect allocator of 6.00 to get an indirect allocator of 10.00. In the absence of any further use of the survey data, the relative relationship between the indirect cost portions of the PE RVUs for any two services would be determined by the relative relationship between these indirect cost allocators. For example, if one service had an indirect cost allocator of 10.00 and another service had an indirect cost allocator of 5.00, the indirect portion of the PE RVUs of the first service would be twice as great as the indirect portion of the PE RVUs for the second service. • Next, we incorporated the specialtyspecific indirect PE/HR data into the calculation. In our example, if, based on the survey data, the average indirect cost of the specialties furnishing the first service with an allocator of 10.00 was half of the average indirect cost of the specialties furnishing the second service with an indirect allocator of 5.00, the indirect portion of the PE RVUs of the first service would be equal to that of the second service. (3) Facility and Nonfacility Costs For procedures that can be furnished in a physician’s office, as well as in a facility setting, where Medicare makes a separate payment to the facility for its costs in furnishing a service, we establish two PE RVUs: Facility, and nonfacility. The methodology for calculating PE RVUs is the same for both the facility and nonfacility RVUs, but is applied independently to yield two separate PE RVUs. In calculating the PE RVUs for services furnished in a facility, we do not include resources that would generally not be provided by physicians when furnishing the service. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 For this reason, the facility PE RVUs are generally lower than the nonfacility PE RVUs. (4) Services With Technical Components (TCs) and Professional Components (PCs) Diagnostic services are generally comprised of two components: A professional component (PC) and a technical component (TC). The PC and TC may be furnished independently or by different providers, or they may be furnished together as a ‘‘global’’ service. When services have separately billable PC and TC components, the payment for the global service equals the sum of the payment for the TC and PC. To achieve this, we use a weighted average of the ratio of indirect to direct costs across all the specialties that furnish the global service, TCs, and PCs; that is, we apply the same weighted average indirect percentage factor to allocate indirect expenses to the global service, PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum to the global.) (5) PE RVU Methodology For a more detailed description of the PE RVU methodology, we refer readers to the CY 2010 PFS final rule with comment period (74 FR 61745 through 61746). We also direct interested readers to the file called ‘‘Calculation of PE RVUs under Methodology for Selected Codes’’ which is available on our Web site under downloads for the CY 2017 PFS final rule at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html. This file contains a table that illustrates the calculation of PE RVUs as described below for individual codes. (a) Setup File First, we create a setup file for the PE methodology. The setup file contains the direct cost inputs, the utilization for each procedure code at the specialty and facility/nonfacility place of service level, and the specialty-specific PE/HR data calculated from the surveys. (b) Calculate the Direct Cost PE RVUs Sum the costs of each direct input. Step 1: Sum the direct costs of the inputs for each service. Step 2: Calculate the aggregate pool of direct PE costs for the current year. We set the aggregate pool of PE costs equal to the product of the ratio of the current aggregate PE RVUs to current aggregate work RVUs and the proposed aggregate work RVUs. Step 3: Calculate the aggregate pool of direct PE costs for use in ratesetting. This is the product of the aggregate PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 direct costs for all services from Step 1 and the utilization data for that service. Step 4: Using the results of Step 2 and Step 3, use the conversion factor to calculate a direct PE scaling factor to ensure that the aggregate pool of direct PE costs calculated in Step 3 does not vary from the aggregate pool of direct PE costs for the current year. Apply the scaling factor to the direct costs for each service (as calculated in Step 1). Step 5: Convert the results of Step 4 to an RVU scale for each service. To do this, divide the results of Step 4 by the CF. Note that the actual value of the CF used in this calculation does not influence the final direct cost PE RVUs, as long as the same CF is used in Step 4 and Step 5. Different CFs will result in different direct PE scaling factors, but this has no effect on the final direct cost PE RVUs since changes in the CFs and changes in the associated direct scaling factors offset one another. (c) Create the Indirect Cost PE RVUs Create indirect allocators. Step 6: Based on the survey data, calculate direct and indirect PE percentages for each physician specialty. Step 7: Calculate direct and indirect PE percentages at the service level by taking a weighted average of the results of Step 6 for the specialties that furnish the service. Note that for services with TCs and PCs, the direct and indirect percentages for a given service do not vary by the PC, TC, and global service. We use an average of the 3 most recent years of available Medicare claims data to determine the specialty mix assigned to each code. As we stated in the CY 2016 final rule with comment period (80 FR 70894), we believe that the 3-year average will mitigate the need to use dominant or expected specialty instead of the claims data. Because we incorporated CY 2015 claims data for use in the CY 2017 proposed rates, we believe that the finalized PE RVUs associated with the CY 2017 PFS final rule provide a first opportunity to determine whether service-level overrides of claims data are necessary. Currently, in the development of PE RVUs we apply only the overrides that also apply to the MP RVU calculation. Since the proposed PE RVUs include a new year of claims into the 3-year average for the first time, we solicited comment on the proposed CY 2017 PFS rates and whether or not the incorporation of a new year of utilization data into a 3-year average mitigates the need for alternative service-level overrides such as a claimsbased approach (dominant specialty) or stakeholder-recommended approach E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations (expected specialty) in the development of PE (and MP) RVUs for low-volume codes. Prior year RVUs are available at several locations on the PFS Web site located at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/. Comment: Several commenters contended that even a multi-year average of claims data to determine the mix of specialties that furnish the services creates distortions and wide variability for low volume services, particularly those services with fewer than 100 annual Medicare claims. Commenters stated that low volume codes that use a specialty override appear to have stable PE and MP RVUs, while other low volume codes without overrides continue to shift from year to year. Given these fluctuations, commenters suggested that CMS implement service-level overrides to determine the specialty mix for these low volume procedures. These commenters provided a list of nearly 2000 codes and suggested specialty overrides. Response: We appreciate commenters’ interest in relatively stable PE and MP RVUs and for continuing to highlight the challenges faced when determining the specialty allocation for low volume services. Since we did not make a proposal regarding specialty overrides for low volume services, we do not believe that it would be appropriate to establish overrides for several thousand codes at this time. However, given the continued concerns, we will consider the issue, including these specific recommendations, for future rulemaking. Step 8: Calculate the service level allocators for the indirect PEs based on the percentages calculated in Step 7. The indirect PEs are allocated based on the three components: The direct PE RVUs; the clinical labor PE RVUs; and the work RVUs. For most services the indirect allocator is: Indirect PE percentage * (direct PE RVUs/direct percentage) + work RVUs. There are two situations where this formula is modified: • If the service is a global service (that is, a service with global, professional, and technical components), then the indirect PE allocator is: Indirect percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs + work RVUs. • If the clinical labor PE RVUs exceed the work RVUs (and the service is not a global service), then the indirect allocator is: Indirect PE percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 (Note: For global services, the indirect PE allocator is based on both the work RVUs and the clinical labor PE RVUs. We do this to recognize that, for the PC service, indirect PEs will be allocated using the work RVUs, and for the TC service, indirect PEs will be allocated using the direct PE RVUs and the clinical labor PE RVUs. This also allows the global component RVUs to equal the sum of the PC and TC RVUs.) For presentation purposes, in the examples in the download file called ‘‘Calculation of PE RVUs under Methodology for Selected Codes’’, the formulas were divided into two parts for each service. • The first part does not vary by service and is the indirect percentage (direct PE RVUs/direct percentage). • The second part is either the work RVU, clinical labor PE RVU, or both depending on whether the service is a global service and whether the clinical PE RVUs exceed the work RVUs (as described earlier in this step). Apply a scaling adjustment to the indirect allocators. Step 9: Calculate the current aggregate pool of indirect PE RVUs by multiplying the result of step 8 by the average indirect PE percentage from the survey data. Step 10: Calculate an aggregate pool of indirect PE RVUs for all PFS services by adding the product of the indirect PE allocators for a service from Step 8 and the utilization data for that service. Step 11: Using the results of Step 9 and Step 10, calculate an indirect PE adjustment so that the aggregate indirect allocation does not exceed the available aggregate indirect PE RVUs and apply it to indirect allocators calculated in Step 8. Calculate the indirect practice cost index. Step 12: Using the results of Step 11, calculate aggregate pools of specialtyspecific adjusted indirect PE allocators for all PFS services for a specialty by adding the product of the adjusted indirect PE allocator for each service and the utilization data for that service. Step 13: Using the specialty-specific indirect PE/HR data, calculate specialtyspecific aggregate pools of indirect PE for all PFS services for that specialty by adding the product of the indirect PE/ HR for the specialty, the work time for the service, and the specialty’s utilization for the service across all services furnished by the specialty. Step 14: Using the results of Step 12 and Step 13, calculate the specialtyspecific indirect PE scaling factors. Step 15: Using the results of Step 14, calculate an indirect practice cost index at the specialty level by dividing each PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 80177 specialty-specific indirect scaling factor by the average indirect scaling factor for the entire PFS. Step 16: Calculate the indirect practice cost index at the service level to ensure the capture of all indirect costs. Calculate a weighted average of the practice cost index values for the specialties that furnish the service. (Note: For services with TCs and PCs, we calculate the indirect practice cost index across the global service, PCs, and TCs. Under this method, the indirect practice cost index for a given service (for example, echocardiogram) does not vary by the PC, TC, and global service.) Step 17: Apply the service level indirect practice cost index calculated in Step 16 to the service level adjusted indirect allocators calculated in Step 11 to get the indirect PE RVUs. (d) Calculate the Final PE RVUs Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs from Step 17 and apply the final PE budget neutrality (BN) adjustment. The final PE BN adjustment is calculated by comparing the sum of steps 5 and 17 of to the proposed aggregate work RVUs scaled by the ratio of current aggregate PE and work RVUs. This adjustment ensures that all PE RVUs in the PFS account for the fact that certain specialties are excluded from the calculation of PE RVUs but included in maintaining overall PFS budget neutrality. (See ‘‘Specialties excluded from ratesetting calculation’’ later in this section.) (e) Setup File Information • Specialties excluded from ratesetting calculation: For the purposes of calculating the PE RVUs, we exclude certain specialties, such as certain NPPs paid at a percentage of the PFS and lowvolume specialties, from the calculation. These specialties are included for the purposes of calculating the BN adjustment. They are displayed in Table 1. TABLE 1—SPECIALTIES EXCLUDED FROM RATESETTING CALCULATION Specialty code Specialty description 49 ............ 50 ............ 51 ............ Ambulatory surgical center. Nurse practitioner. Medical supply company with certified orthotist. Medical supply company with certified prosthetist. Medical supply company with certified prosthetist-orthotist. Medical supply company not included in 51, 52, or 53. Individual certified orthotist. 52 ............ 53 ............ 54 ............ 55 ............ E:\FR\FM\15NOR2.SGM 15NOR2 80178 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 1—SPECIALTIES EXCLUDED FROM RATESETTING CALCULATION— Continued Specialty code 56 ............ 57 ............ 58 ............ 59 ............ 60 ............ 61 ............ 73 ............ 74 ............ 87 ............ 88 ............ 89 96 97 A0 A1 A2 A3 A4 A5 A6 ............ ............ ............ ........... ........... ........... ........... ........... ........... ........... only), is associated with the global TABLE 1—SPECIALTIES EXCLUDED FROM RATESETTING CALCULATION— service, CPT code 93000 (Electrocardiogram, routine ECG with at Continued Specialty description Specialty code Specialty description Individual certified prosthetist. Individual certified prosthetistorthotist. Medical supply company with registered pharmacist. Ambulance service supplier, e.g., private ambulance companies, funeral homes, etc. Public health or welfare agencies. Voluntary health or charitable agencies. Mass immunization roster biller. Radiation therapy centers. All other suppliers (e.g., drug and department stores). Unknown supplier/provider specialty. Certified clinical nurse specialist. Optician. Physician assistant. Hospital. SNF. Intermediate care nursing facility. Nursing facility, other. HHA. Pharmacy. Medical supply company with respiratory therapist. A7 ........... B2 ........... B3 ........... Department store. Pedorthic personnel. Medical supply company with pedorthic personnel. • Crosswalk certain low volume physician specialties: Crosswalk the utilization of certain specialties with relatively low PFS utilization to the associated specialties. • Physical therapy utilization: Crosswalk the utilization associated with all physical therapy services to the specialty of physical therapy. • Identify professional and technical services not identified under the usual TC and 26 modifiers: Flag the services that are PC and TC services but do not use TC and 26 modifiers (for example, electrocardiograms). This flag associates the PC and TC with the associated global code for use in creating the indirect PE RVUs. For example, the professional service, CPT code 93010 (Electrocardiogram, routine ECG with at least 12 leads; interpretation and report least 12 leads; with interpretation and report). • Payment modifiers: Payment modifiers are accounted for in the creation of the file consistent with current payment policy as implemented in claims processing. For example, services billed with the assistant at surgery modifier are paid 16 percent of the PFS amount for that service; therefore, the utilization file is modified to only account for 16 percent of any service that contains the assistant at surgery modifier. Similarly, for those services to which volume adjustments are made to account for the payment modifiers, time adjustments are applied as well. For time adjustments to surgical services, the intraoperative portion in the work time file is used; where it is not present, the intraoperative percentage from the payment files used by contractors to process Medicare claims is used instead. Where neither is available, we use the payment adjustment ratio to adjust the time accordingly. Table 2 details the manner in which the modifiers are applied. TABLE 2—APPLICATION OF PAYMENT MODIFIERS TO UTILIZATION FILES Modifier Description Volume adjustment 80, 81, 82 .............. AS .......................... 16% ................................................... 14% (85% * 16%) ............................. Intraoperative portion. Intraoperative portion. or LT and RT ... .......................... .......................... .......................... .......................... Assistant at Surgery ......................... Assistant at Surgery—Physician Assistant. Bilateral Surgery ............................... Multiple Procedure ............................ Reduced Services ............................ Discontinued Procedure ................... Intraoperative Care only ................... 150% of work time. Intraoperative portion. 50%. 50%. Preoperative + Intraoperative portion. 55 .......................... Postoperative Care only ................... 62 .......................... 66 .......................... Co-surgeons ..................................... Team Surgeons ................................ 150% ................................................. 50% ................................................... 50% ................................................... 50% ................................................... Preoperative + Intraoperative Percentages on the payment files used by Medicare contractors to process Medicare claims. Postoperative Percentage on the payment files used by Medicare contractors to process Medicare claims. 62.5% ................................................ 33% ................................................... mstockstill on DSK3G9T082PROD with RULES2 50 51 52 53 54 We also make adjustments to volume and time that correspond to other payment rules, including special multiple procedure endoscopy rules and multiple procedure payment reductions (MPPRs). We note that section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments for multiple imaging procedures and multiple therapy services from the BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 MPPRs are not included in the development of the RVUs. For anesthesia services, we do not apply adjustments to volume since we use the average allowed charge when simulating RVUs; therefore, the RVUs as calculated already reflect the payments as adjusted by modifiers, and no volume adjustments are necessary. However, a time adjustment of 33 percent is made only for medical direction of two to four cases since that is the only situation where a single practitioner is involved PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 Time adjustment Postoperative portion. 50%. 33%. with multiple beneficiaries concurrently, so that counting each service without regard to the overlap with other services would overstate the amount of time spent by the practitioner furnishing these services. • Work RVUs: The setup file contains the work RVUs from this final rule. (6) Equipment Cost Per Minute The equipment cost per minute is calculated as: E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations (1/(minutes per year * usage)) * price * ((interest rate/(1¥(1/((1 + interest rate)∧ life of equipment)))) + maintenance) mstockstill on DSK3G9T082PROD with RULES2 Where: minutes per year = maximum minutes per year if usage were continuous (that is, usage = 1); generally 150,000 minutes. usage = variable, see discussion below. price = price of the particular piece of equipment. life of equipment = useful life of the particular piece of equipment. maintenance = factor for maintenance; 0.05. interest rate = variable, see discussion below. Usage: We currently use an equipment utilization rate assumption of 50 percent for most equipment, with the exception of expensive diagnostic imaging equipment, for which we use a 90 percent assumption as required by section 1848(b)(4)(C) of the Act. Stakeholders have often suggested that particular equipment items are used less frequently than 50 percent of the time in the typical setting and that CMS should reduce the equipment utilization rate based on these recommendations. We appreciate and share stakeholders’ interest in using the most accurate assumption regarding the equipment utilization rate for particular equipment items. However, we believe that absent robust, objective, auditable data regarding the use of particular items, the 50 percent assumption is the most appropriate within the relative value system. We welcome the submission of data that illustrates an alternative rate. Maintenance: This factor for maintenance was finalized in the CY 1998 PFS final rule (62 FR 33164). We continue to investigate potential avenues for determining equipment maintenance costs across a broad range of equipment items. Comment: One commenter stated that the cost of maintaining imaging equipment exceeds the cost of general medical equipment, and that for imaging modalities the median maintenance cost is approximately 10 percent of the equipment purchase price. The commenter stated that the current 5 percent equipment maintenance rate continues to be an inadequate and outdated reflection of actual maintenance costs. The commenter also stated that information on maintenance costs is readily available to CMS through both public and private sources. The commenter did not identify these sources. Response: As we previously stated in the CY 2016 final rule with comment period (80 FR 70897), we agree with the commenter that we do not believe the annual maintenance factor for all equipment is exactly 5 percent, and we VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 concur that the current rate likely understates the true cost of maintaining some equipment. We also believe it likely overstates the maintenance costs for other equipment. When we solicited comments regarding sources of data containing equipment maintenance rates, commenters were unable to identify an auditable, robust data source that could be used by CMS on a wide scale. As a result, in the absence of publicly available datasets regarding equipment maintenance costs or another systematic data collection methodology for determining maintenance factor, we do not believe that we have sufficient information at present to adopt a variable maintenance factor for equipment cost per minute pricing. We continue to investigate potential avenues for determining equipment maintenance costs across a broad range of equipment items. Interest Rate: In the CY 2013 PFS final rule with comment period (77 FR 68902), we updated the interest rates used in developing an equipment cost per minute calculation. The interest rate was based on the Small Business Administration (SBA) maximum interest rates for different categories of loan size (equipment cost) and maturity (useful life). The interest rates are listed in Table 3. (See 77 FR 68902 for a thorough discussion of this issue.) We did not propose any changes to these interest rates for CY 2017. 80179 Specifically, the RUC recommended that we remove supply and equipment items associated with film technology from a previously specified list of codes since these items were no longer typical resource inputs. The RUC also recommended that the Picture Archiving and Communication System (PACS) equipment be included for these imaging services since these items are typically used in furnishing imaging services. However, since we did not receive any invoices for the PACS system prior to that year’s proposed rule, we were unable to determine the appropriate pricing to use for the inputs. For CY 2015, we finalized our proposal to remove the film supply and equipment items, and to create a new equipment item as a proxy for the PACS workstation as a direct expense (79 FR 67561–67563). We used the price associated with ED021 (computer, desktop, w-monitor) to price the new item, ED050 (PACS Workstation Proxy), pending receipt of invoices to facilitate pricing specific to the PACS workstation. Subsequent to establishing payment rates for CY 2015, we received information from several stakeholders regarding pricing for items related to the digital acquisition and storage of images. We received invoices from one stakeholder that facilitated a proposed price update for the PACS workstation in the CY 2016 PFS proposed rule, and we updated the price for the PACS workstation to $5,557 in the CY 2016 PFS final rule with comment period (80 TABLE 3—SBA MAXIMUM INTEREST FR 70899). RATES In addition to the workstation used by Interest rate the clinical staff for acquiring the Price Useful life images and furnishing the technical (%) component (TC) of the services, a <$25K ............... <7 Years .... 7.50 stakeholder also submitted more $25K to $50K ... <7 Years .... 6.50 detailed information regarding a >$50K ............... <7 Years .... 5.50 workstation used by the practitioner <$25K ............... 7+ Years .... 8.00 interpreting the image in furnishing the $25K to $50K ... 7+ Years .... 7.00 professional component (PC) of many of >$50K ............... 7+ Years .... 6.00 these services. As we stated in the CY 2015 PFS final d. Changes to Direct PE Inputs for rule with comment period (79 FR Specific Services 67563), we generally believe that workstations used by these practitioners This section focuses on specific PE are more accurately considered indirect inputs. The direct PE inputs are included in the CY 2017 direct PE input costs associated with the PC of the database, which is available on our Web service. However, we understand that the professional workstations for site under downloads for the CY 2017 interpretation of digital images are PFS final rule at https://www.cms.gov/ similar in principle to some of the Medicare/Medicare-Fee-for-Serviceprevious film inputs incorporated into Payment/PhysicianFeeSched/PFSthe global and technical components of Federal-Regulation-Notices.html. the codes, such as the view box (1) PE Inputs for Digital Imaging equipment. Given that the majority of Services these services are reported globally in Prior to the CY 2015 PFS rulemaking the nonfacility setting, we believe it is cycle, the RUC provided a appropriate to include these costs as recommendation regarding the PE direct inputs for the associated HCPCS inputs for digital imaging services. codes. Based on our established PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80180 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations methodology in which single codes with professional and technical components are constructed by assigning work RVUs exclusively to the professional component and direct PE inputs exclusively to the technical components, these costs would be incorporated into the PE RVUs of the global and technical component of the HCPCS code. We stated in the CY 2016 PFS final rule with comment period that the costs of the professional workstation may be analogous to costs related to the use of film previously incorporated as direct PE inputs for these services. We also solicited comments on whether including the professional workstation as a direct PE input for these codes would be appropriate, given that the resulting PE RVUs would be assigned to the global and technical components of the codes. Commenters responded by indicating their approval of the concept of a professional PACS workstation used for interpretation of digital images. We received invoices for the pricing of a professional PACS workstation, as well as additional invoices for the pricing of a mammography-specific version of the professional PACS workstation. The RUC also included these new equipment items in its recommendations for the CY 2017 PFS rulemaking cycle. Based on our analysis of submitted invoices, we proposed to price the professional PACS workstation (ED053) at $14,616.93. We did not propose a change in price for the current technical PACS workstation (ED050), which will remain at a price of $5,557.00. The price of the professional PACS workstation is based upon individual invoices submitted for the cost of a PC Tower ($1531.52), a pair of 3 MP monitors ($10,500.00 in total), a keyboard and mouse ($84.95), a UPS power backup devices for TNP ($1098.00), and a switch for PACS monitors/workstations ($1402.46). We proposed to add the professional PACS workstation to many CPT codes in the 70000 series that use the current technical PACS workstation (ED050) and include professional work for which such a workstation would be used. We did not propose to add the equipment item to add-on codes since the base codes would include minutes for the item. We also did not propose to add the item to codes that are therapeutic in nature, as the professional PACS workstation is intended for use in diagnostic services. We therefore did not propose to add the item to codes in the Radiation Therapy section (77261 through 77799) or the Nuclear Medicine Cardiology section VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 (78414–78499). We also did not propose to add the item to image guidance codes where the dominant provider is not a radiologist (77002, 77011, 77071, 77077, and 77081) according to the most recent year of claims data, since we believe a single workstation would be more typical in those cases. We identified approximately 426 codes to which we proposed to add a professional PACS workstation. Please see Table 4 for the full list of affected codes. For the professional PACS workstation, we proposed to assign equipment time equal to the intraservice work time plus half of the preservice work time associated with the codes, since the work time generally reflects the time associated with the professional interpretation. We proposed half of the preservice work time for the professional PACS workstation because we do not believe that the practitioner would typically spend all of the preservice work period using the equipment. For older codes that do not have a breakdown of physician work time by service period, and only have an overall physician work time, we proposed to use half the total work time as an approximation of the intraservice work time plus one half of the preservice work time. In our review of services that contained an existing PACS workstation and had a breakdown of physician work time, we found that half of the total time was a reasonable approximation for the value of intraservice work time plus one half of preservice work time where no such breakdown existed. We also considered using an equipment time formula of the physician intraservice time plus 1 minute (as a stand-in for the physician preservice work time). We solicited public comment on the most accurate equipment time formula for the professional PACS workstation. We solicited public comment on the proposed list of codes that would incorporate the professional PACS workstation. We were interested in public comment on the codes for which a professional PACS workstation should be included, and whether one of these professional workstations should be included for codes outside the 70000 series. In cases within the 70000 series where radiologists are not the typical specialty reporting the code, such as CPT codes 77002 and 77011, we asked whether it would be appropriate to add one of the professional PACS workstations to these services. The following is a summary of the comments we received on the proposed addition of the professional PACS workstation, the pricing of the workstation, the list of codes that would PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 incorporate the professional PACS workstation, and the equipment minutes to assign to the workstation. Comment: Commenters supported the general concept of the professional PACS workstation and its addition to the proposed list of codes. Commenters stated that the professional PACS workstation is an essential component of diagnostic imaging procedures due to the switch from film to digital technology, and the professional workstation would be an appropriate inclusion as a direct PE input for these services. Response: We appreciate the support from the commenters for the addition of the professional PACS workstation. Comment: Many commenters addressed the subject of the proper pricing of the professional PACS workstation. Several commenters requested that CMS increase the price of the workstation to include a third and fourth monitor (for speech recognition) priced at $1,715.98, an Admin Monitor (the extra working monitor) priced at $279.27, and a Powerscribe Microphone priced at $424.00. Commenters stated that speech recognition equipment is typical for a professional PACS workstation, and that physicians typically employed a monitor with greater resolution than what would be typically used for other purposes (such as for electronic health records). Related comments contended that the proposed pricing of the workstation remained significantly less than what the average imaging facility spends on PACS technology. Other commenters disagreed with these sentiments and supported the pricing of the professional PACS workstation at the proposed rate of $14,616.93. Response: We appreciate the feedback from the commenters regarding the proper pricing of the professional PACS workstation. When proposing a price for the professional PACS workstation, we did not include the cost of the additional monitors and the Powerscribe microphone because these items represent indirect costs under the established PE methodology and the functionality would unlikely have been included in the previously existing film inputs the professional PACS workstation is replacing. Generally, we believe that monitors used to access electronic health records and microphones used for dictation are often used by practitioners who furnish a range a PFS services, are not allocable to particular services or patients, and therefore, are included in the administrative cost category of practice expense, and therefore, are allocated to E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations individual codes through indirect PE RVUs. Comment: Many commenters stated that CMS should expand the list of codes with a professional PACS workstation. Commenters generally focused on three of the criteria proposed by CMS: The exclusion of the workstation from add-on services, the exclusion of therapeutic (as opposed to diagnostic) services, and the exclusion of codes outside the 70000 series. Commenters stated that add-on codes should be incorporated into the professional PACS workstation list, as they require additional time to perform, and therefore, more time with the technical PACS workstation for the technician, as well as additional time for the review and interpretation performed by the physician using the professional PACS workstation. Commenters also indicated that many therapeutic services would also require a professional PACS workstation, and disagreed with limiting the workstation to diagnostic services only. Finally, commenters supplied extensive lists of additional codes, both inside and outside of the 70000 series, where they stated that the inclusion of a professional PACS workstation was warranted. Response: We appreciate the feedback from the commenters in helping to define the criteria for inclusion of the professional PACS workstation, along with more specific recommendations about which codes should include the workstation. After considering these comments, we will be adding the professional PACS workstation to additional suggested codes. We took the following into account in making these additions: • We did not add the professional PACS workstation to any code that currently lacks a technical PACS workstation (ED050) or lacks a work RVU. We continue to believe that procedures which do not include a technical workstation, or do not have physician work, would not require a professional workstation. • We did not add the professional PACS workstation to add-on codes. Because the base codes include equipment minutes for the workstation, we continue to believe it would be duplicative to add additional equipment time for the professional PACS workstation in the add-on code. • We agree with commenters that because the clinical utility of the PACS workstation is not necessarily limited to diagnostic services, there may be therapeutic codes where it would be reasonable to assume its use to be typical. We believe that in these specific VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 cases, the use of the professional PACS workstation has been established to be typical for the code in question by the specialties furnishing the service, as a result of the evidence provided in the comments submitted in response to our proposal. We have added the workstation to many of the therapeutic codes requested by commenters, specifically codes listed outside the 70000 series, where use of the professional PACS station is typical. • Within the 70000 series, we reviewed each of the codes submitted by commenters. Most of these codes did not fall within one of the categories where we proposed to add the professional PACS workstation in the proposed rule: They lacked a technical PACS workstation, they were add-on codes, or they were diagnostic procedures for which radiology is not the dominant specialty providing the service. We continue to believe that the professional PACS workstation should not be added to codes that do not fall into these categories, since we believe that the image must be captured in order to for it to be interpreted, that the use of the PACS workstation in the base code reported with add-on codes would accurately capture the associated resources used, and that the PACS professional workstation is only typically used by radiologists. Based on comments, we are adding the professional workstation to only one code in the 70000 series, CPT code 73562, as it includes a technical PACS workstation, is not an add-on code, and is typically furnished by radiologists. • For codes in the 80000 and 90000 series, we are concerned about whether it is appropriate to include the technical PACS workstation into many of these services. PACS workstations were created for imaging purposes, but many of these services that include a technical PACS workstation do not appear to make use of imaging. Although we are not removing the technical PACS workstation from these codes at this time, we do not believe that a professional PACS workstation should be added to these procedures. We will consider the inclusion of both PACS workstations for future rulemaking. Comment: Several commenters addressed the topic of equipment time for the professional PACS workstation. Commenters requested that CMS allocate the entire preservice physician work time associated with the codes, as opposed to the proposed half of the preservice physician work time. Commenters stated that although certain physician work activities in the preservice period may not directly involve the professional workstation, PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 80181 even when the physician is engaged in these parallel work activities, the professional workstation is ‘‘open’’ to the patient at hand and cannot be used for other patients. Commenters also disagreed with the proposal to use half the total time for older codes in which there is no separation of preservice and intraservice period times. Commenters stated that using the entire physician work time would be the best option since there is no accurate way to estimate the service period times, and that it would avoid potential confusion in equipment formulas in the future. Response: We continue to believe that the professional PACS workstation is more accurately assigned equipment time by using half of the preservice physician work time rather than the full preservice physician work time. As we stated in the proposed rule, we do not believe that the practitioner would typically spend all of the preservice work period using the equipment. Commenters agreed that the physician may not need the professional workstation for the full preservice period, but contended that the equipment would be ‘‘open’’ and unavailable for use by other physicians or for other patients. We disagree with this argument on clinical practice and methodological grounds. We do not agree that the professional PACS workstation would necessarily be unavailable for use by other physicians when the physician in question is not using the machine, Additionally, we note that the number of minutes assigned to the predecessor film inputs did not generally include the full number of pre-service minutes. Finally, our PE methodology is based on the resources typically used to furnish the procedure, and we typically assign time for equipment items based on when it cannot be used by another practitioner or for another patient due to its use in the given procedure. We continue to believe that half of the preservice physician work time (along with the full physician intraservice work time) is a good approximation of the time in the preservice period that the professional PACS workstation will typically be in use. As we stated in the proposed rule, we do not believe that the practitioner would typically spend all of the preservice time using the equipment, and would also spend preservice time on other activities, such as scrubbing and dressing, for example. For older codes where there is no breakdown of work time values by service period, we do not agree with commenters that the professional PACS workstation should use the total work time. The comments do not provide a E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80182 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations persuasive rationale for using the total work time instead of our proposed alternative, developed for consistency with codes for which we do have work time breakdowns by service period. Therefore, in the absence of service period work time detail, we continue to believe that half of the total work time is a reasonable proxy for the small number of old codes affected by this issue. We are not concerned about the potential for confusion in the future with differing equipment time formulas, as the addition of the professional PACS workstation to these codes is a one-time inclusion that will not affect the future review of this equipment. Finally, we believe that there is a difference in the pattern of equipment usage for the professional PACS workstation between diagnostic and therapeutic codes. Generally, the intraservice work for diagnostic imaging codes describes the review of images, while the intraservice work for therapeutic services describes a broader range of activities. Therefore, although we used an equipment formula of half the preservice physician work time and the full intraservice physician work time for the diagnostic procedures, we do not believe that this same time formula would be appropriate for therapeutic procedures since the professional PACS workstation would not be in use during the intraservice portion of these services. Therefore, we will use an equipment time formula of half the preservice physician work time and half the postservice physician work time for the therapeutic codes to which we are adding a professional PACS workstation, which we believe is more consistent with the descriptions of work for the codes in question. Consistent with our ongoing efforts to improve payment accuracy for these costs, we seek recommendations from the RUC and other stakeholders on a more precise allocation methodology for equipment minutes for these procedures. After consideration of comments received, we are finalizing our proposal to add a professional PACS workstation (ED053) to the equipment database and price it at the proposed rate of $14,616.93. We are dividing the codes that will contain a professional PACS workstation into diagnostic and therapeutic categories. For diagnostic codes, we are assigning equipment minutes equal to half the preservice physician work time and the full intraservice physician work time. For the relatively smaller group of diagnostic codes with no service period time breakdown, we are assigning equipment time equal to half of the total VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 physician work time. For therapeutic codes, we are assigning equipment minutes equal to half the preservice physician work time and half the postservice physician work time for the second group. There are no therapeutic codes on our current list which lack a service period time breakdown. The following table lists all of the codes that include a professional PACS workstation for CY 2017, along with the equipment minutes for the workstation. TABLE 4—CODES WITH PROFESSIONAL PACS WORKSTATION IN THE DIRECT PE INPUT DATABASE—Continued HCPCS 47536 47537 47538 47539 47540 47541 49083 TABLE 4—CODES WITH PROFESSIONAL 49405 PACS WORKSTATION IN THE DIRECT 49406 49407 PE INPUT DATABASE 49418 49440 ED053 49441 HCPCS Procedure type Minutes 49442 49446 10030 .......... Therapeutic ..... 23 49450 10035 .......... Therapeutic ..... 15 49451 19081 .......... Therapeutic ..... 19 49452 19083 .......... Therapeutic ..... 17 49460 19085 .......... Therapeutic ..... 19 49465 19281 .......... Therapeutic ..... 18 50382 19283 .......... Therapeutic ..... 19 50384 19285 .......... Therapeutic ..... 18 50385 19287 .......... Therapeutic ..... 19 50386 22510 .......... Therapeutic ..... 32 50387 22511 .......... Therapeutic ..... 32 50389 22513 .......... Therapeutic ..... 32 50430 22514 .......... Therapeutic ..... 32 50431 32555 .......... Therapeutic ..... 19 50432 32557 .......... Therapeutic ..... 19 50433 36221 .......... Therapeutic ..... 34 50434 36222 .......... Therapeutic ..... 34 50435 36223 .......... Therapeutic ..... 34 50693 36224 .......... Therapeutic ..... 34 50694 36225 .......... Therapeutic ..... 34 50695 36226 .......... Therapeutic ..... 34 58340 36251 .......... Therapeutic ..... 31 62302 36252 .......... Therapeutic ..... 31 62303 36253 .......... Therapeutic ..... 31 62304 36254 .......... Therapeutic ..... 31 62305 36598 .......... Therapeutic ..... 13 70015 37184 .......... Therapeutic ..... 30 70030 37187 .......... Therapeutic ..... 25 70100 37188 .......... Therapeutic ..... 23 70110 37191 .......... Therapeutic ..... 22 70120 37192 .......... Therapeutic ..... 23 70130 37193 .......... Therapeutic ..... 23 70134 37197 .......... Therapeutic ..... 26 70140 37220 .......... Therapeutic ..... 34 70150 37221 .......... Therapeutic ..... 34 70160 37224 .......... Therapeutic ..... 34 70190 37225 .......... Therapeutic ..... 34 70200 37226 .......... Therapeutic ..... 34 70210 37227 .......... Therapeutic ..... 34 70220 37228 .......... Therapeutic ..... 34 70240 37229 .......... Therapeutic ..... 34 70250 37230 .......... Therapeutic ..... 34 70260 37231 .......... Therapeutic ..... 34 70300 37236 .......... Therapeutic ..... 31 70310 37238 .......... Therapeutic ..... 31 70320 37241 .......... Therapeutic ..... 26 70328 37242 .......... Therapeutic ..... 31 70330 37243 .......... Therapeutic ..... 38 70332 37244 .......... Therapeutic ..... 38 70336 47531 .......... Therapeutic ..... 20 70350 47532 .......... Therapeutic ..... 22 70355 47533 .......... Therapeutic ..... 26 70360 47534 .......... Therapeutic ..... 26 70370 47535 .......... Therapeutic ..... 19 70371 PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... 15NOR2 Procedure type Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Therapeutic ..... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... Diagnostic ....... ED053 Minutes 16 19 22 26 26 26 18 28 28 28 27 29 29 29 22 20 20 20 20 13 28 24 27 25 22 15 23 20 25 25 23 18 25 25 25 7 17 17 17 18 12 3 3 4 3 4 4 3 4 3 3 4 3 4 3 4 7 2 3 3 3 22 6 20 3 5 3 4 9 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80183 TABLE 4—CODES WITH PROFESSIONAL TABLE 4—CODES WITH PROFESSIONAL TABLE 4—CODES WITH PROFESSIONAL PACS WORKSTATION IN THE DIRECT PACS WORKSTATION IN THE DIRECT PACS WORKSTATION IN THE DIRECT PE INPUT DATABASE—Continued PE INPUT DATABASE—Continued PE INPUT DATABASE—Continued mstockstill on DSK3G9T082PROD with RULES2 HCPCS 70380 70390 70450 70460 70470 70480 70481 70482 70490 70491 70492 70540 70542 70543 70544 70545 70546 70547 70548 70549 70551 70552 70553 70554 71010 71015 71020 71021 71022 71023 71030 71034 71035 71100 71101 71110 71111 71120 71130 71250 71260 71270 71275 71550 71551 71552 71555 72020 72040 72050 72052 72070 72072 72074 72080 72081 72082 72083 72084 72100 72110 72114 72120 72125 72126 72127 72128 72129 72130 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... VerDate Sep<11>2014 Procedure type Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic ED053 Minutes ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 22:03 Nov 11, 2016 3 5 12 15 18 13 13 14 13 13 14 14 19 19 13 18 18 13 20 25 21 23 28 43 4 3 4 4 4 5 4 5 3 5 4 4 5 3 3 18 17 13 28 15 30 28 33 3 4 6 6 4 3 3 3 6 7 8 9 4 6 6 4 18 12 12 18 12 12 Jkt 241001 HCPCS 72131 72132 72133 72141 72142 72146 72147 72148 72149 72156 72157 72158 72159 72170 72190 72191 72192 72193 72194 72195 72196 72197 72198 72200 72202 72220 72240 72255 72265 72270 72275 72285 72295 73000 73010 73020 73030 73040 73050 73060 73070 73080 73085 73090 73092 73100 73110 73115 73120 73130 73140 73200 73201 73202 73206 73218 73219 73220 73221 73222 73223 73225 73501 73502 73503 73521 73522 73523 73525 PO 00000 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... Frm 00015 Procedure type Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Fmt 4701 ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... Sfmt 4700 ED053 Minutes 18 12 12 23 26 23 26 23 26 28 28 28 31 5 3 28 12 12 12 30 26 30 28 3 3 3 19 18 18 23 36 9 9 3 3 3 5 6 3 4 3 4 6 3 3 4 4 6 4 4 3 18 11 12 35 25 25 30 23 23 35 31 4 5 6 5 6 7 6 HCPCS 73551 73552 73560 73562 73564 73565 73580 73590 73592 73600 73610 73615 73620 73630 73650 73660 73700 73701 73702 73706 73718 73719 73720 73721 73722 73723 73725 74000 74010 74020 74022 74150 74160 74170 74174 74175 74176 74177 74178 74181 74182 74183 74185 74210 74220 74230 74240 74241 74245 74246 74247 74249 74250 74251 74260 74261 74262 74263 74270 74280 74283 74290 74400 74410 74415 74430 74440 74455 74485 E:\FR\FM\15NOR2.SGM .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... 15NOR2 Procedure type Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ED053 Minutes 4 5 4 5 6 4 6 4 3 4 4 6 4 4 3 3 18 11 12 35 20 25 30 23 24 32 33 4 3 4 4 14 17 21 33 28 25 28 33 15 28 35 33 5 5 12 7 7 9 7 18 9 5 33 6 43 48 42 7 23 19 4 18 6 6 4 5 4 6 80184 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 4—CODES WITH PROFESSIONAL TABLE 4—CODES WITH PROFESSIONAL TABLE 4—CODES WITH PROFESSIONAL PACS WORKSTATION IN THE DIRECT PACS WORKSTATION IN THE DIRECT PACS WORKSTATION IN THE DIRECT PE INPUT DATABASE—Continued PE INPUT DATABASE—Continued PE INPUT DATABASE—Continued mstockstill on DSK3G9T082PROD with RULES2 HCPCS 74710 74712 74740 75557 75559 75561 75563 75571 75572 75573 75574 75600 75605 75625 75630 75635 75658 75705 75710 75716 75726 75731 75733 75736 75741 75743 75746 75756 75791 75809 75820 75822 75825 75827 75831 75833 75840 75842 75860 75870 75872 75880 75885 75887 75889 75891 75893 75901 75902 75962 75966 75978 75984 75989 76000 76010 76080 76098 76100 76101 76102 76120 76376 76380 76390 76506 76536 76604 76700 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... VerDate Sep<11>2014 Procedure type Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic ED053 Minutes ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 22:03 Nov 11, 2016 4 68 5 45 58 50 66 13 25 38 35 6 11 11 13 50 13 20 11 13 11 11 13 11 13 16 11 11 33 5 7 11 11 11 11 14 11 14 11 11 11 7 14 14 11 11 6 11 13 6 13 6 8 12 3 3 6 3 6 6 6 5 8 10 28 10 12 9 14 Jkt 241001 HCPCS 76705 76706 76770 76775 76776 76800 76801 76805 76811 76813 76815 76816 76817 76818 76819 76820 76821 76825 76826 76830 76831 76856 76857 76870 76872 76873 76881 76885 76886 76936 76942 76970 77012 77014 77021 77053 77054 77058 77059 77072 77074 77075 77076 77084 78012 78013 78014 78015 78016 78018 78070 78071 78072 78075 78102 78103 78104 78135 78140 78185 78190 78195 78201 78202 78205 78206 78215 78216 78226 PO 00000 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... Frm 00016 Procedure type Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Fmt 4701 ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... Sfmt 4700 ED053 Minutes 11 13 13 11 13 14 18 18 35 23 8 18 13 35 28 13 13 45 11 13 30 13 10 10 20 40 18 20 15 71 19 8 11 9 53 5 5 50 55 3 5 6 12 15 8 13 13 31 49 29 13 18 23 38 18 22 20 48 40 16 40 30 16 20 20 25 13 22 13 HCPCS 78227 .......... 78230 .......... 78231 .......... 78232 .......... 78258 .......... 78261 .......... 78262 .......... 78264 .......... 78265 .......... 78266 .......... 78278 .......... 78290 .......... 78291 .......... 78300 .......... 78305 .......... 78306 .......... 78315 .......... 78320 .......... 78579 .......... 78580 .......... 78582 .......... 78597 .......... 78598 .......... 78600 .......... 78601 .......... 78605 .......... 78606 .......... 78607 .......... 78610 .......... 78630 .......... 78635 .......... 78645 .......... 78647 .......... 78650 .......... 78660 .......... 78700 .......... 78701 .......... 78707 .......... 78708 .......... 78709 .......... 78710 .......... 78740 .......... 78761 .......... 78800 .......... 78801 .......... 78802 .......... 78803 .......... 78804 .......... 78805 .......... 78806 .......... 78807 .......... 79440 .......... G0106 ......... G0120 ......... G0297 ......... G0365 ......... G0389 ......... Procedure type Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic Diagnostic ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ED053 Minutes 18 19 23 28 27 21 25 13 18 23 18 18 31 15 22 11 11 24 8 13 15 13 13 16 18 21 22 29 10 24 36 32 15 40 16 17 18 22 32 40 21 30 20 28 32 24 43 35 25 23 37 24 24 24 18 20 9 (2) Standardization of Clinical Labor Tasks As we noted in the CY 2015 PFS final rule (79 FR 67640–67641), we continue to make improvements to the direct PE input database to provide the number of clinical labor minutes assigned for each task for every code in the database instead of only including the number of E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations clinical labor minutes for the preservice, service, and postservice periods for each code. In addition to increasing the transparency of the information used to set PE RVUs, this improvement would allow us to compare clinical labor times for activities associated with services across the PFS, which we believe is important to maintaining the relativity of the direct PE inputs. This information would facilitate the identification of the usual numbers of minutes for clinical labor tasks and the identification of exceptions to the usual values. It would also allow for greater transparency and consistency in the assignment of equipment minutes based on clinical labor times. Finally, we believe that the information can be useful in maintaining standard times for particular clinical labor tasks that can be applied consistently to many codes as they are valued over several years, similar in principle to the use of physician preservice time packages. We believe such standards would provide greater consistency among codes that share the same clinical labor tasks and could improve relativity of values among codes. For example, as medical practice and technologies change over time, changes in the standards could be updated simultaneously for all codes with the applicable clinical labor tasks, instead of waiting for individual codes to be reviewed. In the following paragraphs, we address a series of issues related to clinical labor tasks, particularly relevant to services currently being reviewed under the misvalued code initiative. (a) Clinical Labor Tasks Associated With Digital Imaging In CY 2015 PFS rulemaking, we noted that the RUC recommendation regarding inputs for digital imaging services indicated that, as each code is reviewed under the misvalued code initiative, the clinical labor tasks associated with digital technology (instead of film) would need to be addressed. When we reviewed that recommendation, we did not have the capability of assigning standard clinical labor times for the hundreds of individual codes since the direct PE input database did not previously allow for comprehensive adjustments for clinical labor times based on particular clinical labor tasks. Therefore, consistent with the recommendation, we proposed to remove film-based supply and equipment items but maintain clinical 80185 labor minutes that were assigned based on film technology. As noted in the paragraphs above, we continue to improve the direct PE input database by specifying for each code the minutes associated with each clinical labor task. Once completed, this work would allow adjustments to be made to minutes assigned to particular clinical labor tasks related to digital technology that occur in multiple codes, consistent with the changes that were made to individual supply and equipment items. In the meantime, we believe it would be appropriate to establish standard times for clinical labor tasks associated with all digital imaging services for purposes of reviewing individual services at present, and for possible broad-based standardization once the changes to the direct PE input database facilitate our ability to adjust time across services. During the CY 2016 PFS rulemaking cycle, we proposed appropriate standard minutes for five different clinical labor tasks associated with services that use digital imaging technology. In the CY 2016 PFS final rule with comment period (80 FR 70901), we finalized appropriate standard minutes for four of those five activities, which are listed in Table 5. TABLE 5—CLINICAL LABOR TASKS ASSOCIATED WITH DIGITAL IMAGING TECHNOLOGY Typical minutes Clinical labor task mstockstill on DSK3G9T082PROD with RULES2 Availability of prior images confirmed .................................................................................................................................................. Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist ......................................................................................................................................................................................... Review examination with interpreting MD ........................................................................................................................................... Exam documents scanned into PACS. Exam completed in RIS system to generate billing process and to populate images into Radiologist work queue .................................................................................................................................................................... We did not finalize standard minutes for the activity ‘‘Technologist QC’s images in PACS, checking for all images, reformats, and dose page.’’ We agreed with commenters that this task may require a variable length of time depending on the number of images to be reviewed. We stated that it may be appropriate to establish several different standard times for this clinical labor task for a low/medium/high quantity of images to be reviewed, in the same fashion that the clinical labor assigned to clean a surgical instrument package has two different standard times depending on the use of a basic pack (10 minutes) or a medium pack (30 minutes). We solicited public comment and feedback on this subject, with the anticipation of including a proposal in the CY 2017 proposed rule. We received many comments suggesting that this clinical labor VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 activity should not have a standard time value. Commenters stated that the number of minutes varies significantly for different imaging modalities; and the time is not simply based on the quantity of images to be reviewed, but also the complexity of the images. The commenters recommended that time for this clinical labor activity should be assigned on a code by code basis. We agree with the commenters that the amount of clinical labor needed to check images in a PACS workstation may vary depending on the service. However, we do not believe that this precludes the possibility of establishing standards for clinical labor tasks as we have done in the past by creating multiple standard times, for example, those assigned to cleaning different kinds of scopes. We continue to believe that the use of clinical labor standards provides greater consistency among PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 2 2 2 1 codes that share the same clinical labor tasks and can improve relativity of values among codes. We proposed to establish a range of appropriate standard minutes for the clinical labor activity, ‘‘Technologist QCs images in PACS, checking for all images, reformats, and dose page.’’ These standard minutes will be applied to new and revised codes that make use of this clinical labor activity when they are reviewed by us for valuation. We proposed 2 minutes as the standard for the simple case, 3 minutes as the standard for the intermediate case, and 4 minutes as the standard for the complex case. We proposed the simple case of 2 minutes as the standard for the typical procedure code involving routine use of imaging. These values are based upon a review of the existing minutes assigned for this clinical labor activity; we have determined that 2 minutes is the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80186 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations duration for most services and a small number of codes with more complex forms of digital imaging have higher values. We proposed to use 2 minutes for services involving routine X-rays (simple), 3 minutes for services involving CTs and MRIs (intermediate), and 4 minutes for the most highly complex services, which would exceed these more typical cases. We solicited comments regarding the most accurate category—simple, intermediate, or complex for existing codes, and in particular what criteria might be used to identify complex cases systematically. The following is summary of the comments we received regarding the ongoing standardization of clinical labor tasks, and our specific proposal regarding the clinical labor task, ‘‘Technologist QCs images in PACS, checking for all images, reformats, and dose page.’’ Comment: Many commenters restated their opposition to the principle of establishing standard values for clinical labor tasks. Commenters contended that clinical labor tasks were highly variable across different specialties, that the standardization process would disrupt the relativity of direct PE inputs across the PFS, and that the proposed standard times were too low and underestimated the staffing time needed to carry out the tasks in question. Commenters stressed that each code should be evaluated on an individual basis. One commenter expressed support for the overall concept regarding efforts to streamline the time for clinical labor activities. Response: We note the objections raised by the commenters to the process of standardizing time values for clinical labor tasks. However, as we have stated previously, we believe the establishment of standards can provide greater consistency among codes that share the same clinical labor tasks, as well as improve relativity of values among codes. We also note that we do evaluate each code on an individual basis for direct PE inputs, and establishing clinical labor standards assists in that process of individual review. We continue to allow clinical labor times above the standard values for individual services, provided that there is a compelling rationale to explain why that particular service requires additional clinical labor time above and beyond the standard. We believe that establishing a range of standard minutes for this particular digital imaging clinical labor task will provide clarity and help maintain relativity across a wide range of imaging services. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment: One commenter requested a broad study of the actual clinical labor times associated with digital imaging. Response: We appreciate the importance of incorporating robust, auditable, and routinely updated data sources for use in the determination of RVUs. We welcome stakeholder information on the availability of such data, while we continue to consider the best means of acquiring such data. Comment: Several commenters addressed our specific proposal for the clinical labor task, ‘‘Technologist QCs images in PACS, checking for all images, reformats, and dose page.’’ Commenters requested that, short of no standard times at all, the establishment of categories for this clinical labor task should be as follows: Simple (2 min); intermediate (3 min), complex (4 min) and highly complex (5 min). Response: We appreciate the suggestion from the commenters to adopt a categorization system very similar to our proposal, with the addition of an extra category for highly complex services valued at 5 minutes. We agree with this addition to our proposal, as it will allow for additional specificity in classifying different types of imaging services, including those that are unusually complex. However, we note that we proposed to define the simple case of 2 minutes as the standard for the typical procedure code involving routine use of imaging, and we believe only a small number of codes with more complex forms of digital imaging would typically involve more time for the task. We proposed to use 2 minutes for services involving routine X-rays (the simple case), and 3 minutes for services involving CTs and MRIs (the intermediate case). We seek recommendations from the RUC and other stakeholders and we intend to request feedback from commenters through future rulemaking to assist in identifying what we believe would be the small number of services that fall into the complex (4 min) and highly complex (5 min) categories, and the specific basis used to set the two categories apart from one another. In the meantime, we will consider individual codes on a case by case basis for this clinical labor task. After considering the comments received, we are finalizing a range of appropriate standard minutes for the clinical labor activity, ‘‘Technologist QCs images in PACS, checking for all images, reformats, and dose page’’ as follows: Simple (2 min); intermediate (3 min), complex (4 min) and highly complex (5 min). We are also finalizing our criteria for determining the simple PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 and intermediate categories as proposed. (b) Pathology Clinical Labor Tasks As with the clinical labor tasks associated with digital imaging, many of the currently assigned times for the specialized clinical labor tasks associated with pathology services are not consistent across codes. In reviewing past RUC recommendations for pathology services, we have not identified information that supports the judgment that the same tasks take significantly more or less time depending on the individual service for which they are performed, especially given the high degree of specificity with which the tasks are described. We continue to believe that, in general, a clinical labor task will tend to take the same amount of time to perform for one individual service as the same clinical labor task when it is performed in a clinically similar service. Therefore, we developed standard times for clinical labor tasks that we have used in finalizing direct PE inputs in recent years, starting in the CY 2012 PFS final rule with comment period (76 FR 73213). These times were based on our review and assessment of the current times included for these clinical labor tasks in the direct PE input database. We proposed in the CY 2016 PFS proposed rule to establish standard times for a list of 17 clinical labor tasks related to pathology services, and solicited public feedback regarding our proposed standards. Many commenters stated in response to our proposal that they did not support the standardization of clinical labor activities across pathology services. Commenters stated that establishing a single standard time for each clinical labor task was infeasible due to the differences in batch size or number of blocks across different pathology procedures. Several commenters indicated that it might be possible to standardize across codes with the same batch sizes, and urged us to consider pathology-specific details, such as batch size and block number, in the creation of any future standard times for clinical labor tasks related to pathology services. As we stated in the CY 2016 PFS proposed rule, we developed the proposed standard times based on our review and assessment of the current times included for these clinical labor tasks in the direct PE input database. We believe that, generally speaking, clinical labor tasks with the same description are comparable across different pathology procedures. We believe this to be true based on the comparability of clinical labor tasks in E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations non-pathology services, as well as the high degree of specificity with which most clinical labor tasks for pathology services are described relative to clinical labor tasks associated with other PFS services. We concurred with commenters that accurate clinical labor times for pathology codes may be dependent on the number of blocks or batch size typically used for each individual service. However, we also believe that it is appropriate and feasible to establish ‘‘per block’’ standards or standards varied by batch size assumptions for many clinical labor activities that would be comparable across a wide range of individual services. We have received detailed information regarding batch size and number of blocks during review of individual pathology services on an intermittent basis in the past. We requested regular submission of these details on the PE worksheets supplied by the RUC as part of the review process for pathology services, as a means to assist in the determination of the most accurate direct PE inputs. We also stated our belief that many of the clinical labor activities for which we proposed to establish standard times were tasks that do not depend on number of blocks or batch size. Clinical labor activities such as ‘‘Clean room/ equipment following procedure’’ and ‘‘Dispose of remaining specimens’’ 80187 would typically remain standard across different services without varying by block number or batch size, with the understanding that additional time may be required above the standard value for a clinical labor task that is part of an unusually complex or difficult service. As a result, we ultimately finalized standard times for 6 of the 17 proposed clinical labor activities in the CY 2016 final rule with comment period (80 FR 70902). We have listed the finalized standard times in Table 6. We are taking no further action on the remaining 11 clinical labor activities in this final rule, pending further action by the RUC (see below). TABLE 6—STANDARD TIMES FOR CLINICAL LABOR TASKS ASSOCIATED WITH PATHOLOGY SERVICES Standard clinical labor time (minutes) Clinical labor task mstockstill on DSK3G9T082PROD with RULES2 Accession specimen/prepare for examination ................................................................................................................................. Assemble and deliver slides with paperwork to pathologists .......................................................................................................... Assemble other light microscopy slides, open nerve biopsy slides, and clinical history, and present to pathologist to prepare clinical pathologic interpretation ................................................................................................................................................... Clean room/equipment following procedure (including any equipment maintenance that must be done after the procedure) ..... Dispose of remaining specimens, spent chemicals/other consumables, and hazardous waste .................................................... Prepare, pack and transport specimens and records for in-house storage and external storage (where applicable) .................. We remain committed to the process of establishing standard clinical labor times for tasks associated with pathology services. This may include establishing standards on a per-block or per-batch basis, as we indicated during the previous rulemaking cycle. However, we are aware that the PE Subcommittee of the RUC is currently working to standardize the pathology clinical labor activities they use in making their recommendations. We believe the RUC’s efforts to narrow the current list of several hundred pathology clinical labor tasks to a more manageable number through the consolidation of duplicative or highly similar activities into a single description may serve PFS relativity and facilitate greater transparency in PFS ratesetting. We also believe that the RUC’s standardization of pathology clinical labor tasks would facilitate our capacity to establish standard times for pathology clinical labor tasks in future rulemaking. Therefore, we did not propose any additional changes to clinical labor tasks associated with pathology services. (3) Equipment Recommendations for Scope Systems During our routine reviews of direct PE input recommendations, we have regularly found unexplained VerDate Sep<11>2014 16:32 Nov 12, 2016 Jkt 241001 inconsistencies involving the use of scopes and the video systems associated with them. Some of the scopes include video systems bundled into the equipment item, some of them include scope accessories as part of their price, and some of them are standalone scopes with no other equipment included. It is not always clear which equipment items related to scopes fall into which of these categories. We have also frequently found anomalies in the equipment recommendations, with equipment items that consist of a scope and video system bundle recommended, along with a separate scope video system. Based on our review, the variations do not appear to be consistent with the different code descriptions. To promote appropriate relativity among the services and facilitate the transparency of our review process, during review of recommended direct PE inputs for the CY 2017 PFS proposed rule, we developed a structure that separates the scope and the associated video system as distinct equipment items for each code. Under this approach, we proposed standalone prices for each scope, and separate prices for the video systems that are used with scopes. We would define the scope video system as including: (1) A monitor; (2) a processor; (3) a form of digital capture; (4) a cart; and (5) a PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 4 0.5 0.5 1 1 1 printer. We believe that these equipment components represent the typical case for a scope video system. Our model for this system is the ‘‘video system, endoscopy (processor, digital capture, monitor, printer, cart)’’ equipment item (ES031), which we proposed to re-price as part of this separate pricing approach. We obtained current pricing invoices for the endoscopy video system as part of our investigation of these issues involving scopes, which we proposed to use for this re-pricing. We understand that there may be other accessories associated with the use of scopes; we proposed to separately price any scope accessories, and individually evaluate their inclusion or exclusion as direct PE inputs for particular codes as usual under our current policy based on whether they are typically used in furnishing the services described by the particular codes. We also proposed standardizing refinements to the way scopes have been defined in the direct PE input database. We believe that there are four general types of scopes: Non-video scopes; flexible scopes; semi-rigid scopes, and rigid scopes. Flexible scopes, semi-rigid scopes, and rigid scopes would typically be paired with one of the video scope systems, while the non-video scopes would not. The E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80188 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations flexible scopes can be further divided into diagnostic (or non-channeled) and therapeutic (or channeled) scopes. We proposed to identify for each anatomical application: (1) A rigid scope; (2) a semi-rigid scope; (3) a non-video flexible scope; (4) a non-channeled flexible video scope; and (5) a channeled flexible video scope. We proposed to classify the existing scopes in our direct PE database under this classification system, to improve the transparency of our review process and improve appropriate relativity among the services. We plan to propose input prices for these equipment items through future rulemaking. We proposed these changes only for the reviewed codes that make use of scopes; this applies to the codes in the Flexible Laryngoscope family (CPT codes 31572, 31573, 31574, 31575, 31576, 31577, 31578, 31579) (see section II.L) and the Laryngoplasty family (CPT codes 31551, 31552, 31553, 31554, 31580, 31584, 31587, 31591, 31592) (see section II.L) along with updated prices for the equipment items related to scopes utilized by these services. We also solicited comment on this separate pricing structure for scopes, scope video systems, and scope accessories, which we could consider proposing to apply to other codes in future rulemaking. The following is a summary of the comments we received on this separate pricing structure for scopes, scope video systems, and scope accessories. Comment: Many commenters addressed our general proposal to reclassify scopes and their related equipment items. Commenters expressed their support for the decision to remove the scopes from the proposed scope packages, and the proposed definition of the scope video system based on the current endoscopy video system equipment item (ES031). There were no comments opposing the general principle behind reclassifying scopes and scope equipment. Response: We appreciate the support from the commenters for the broad project to clarify these issues related to scopes. Comment: Many commenters also requested that CMS delay implementing the scope proposal until additional time could be devoted to the subject. Several commenters asked CMS to wait to make any changes until the RUC could form a PE Subcommittee to address this issue. For codes with proposed CY 2017 values, commenters urged CMS to adopt the RUC-recommended direct PE inputs instead of the proposed direct PE inputs, pending anticipated RUC recommendations on the subject. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Another commenter requested that CMS make no change for CY 2017 for any endoscopy procedures until proper identification of the capital and disposable cost inputs could be confirmed. Response: We appreciate commenters’ interests in making certain that there is appropriate opportunity for stakeholders to provide feedback and recommendations on the reclassification of scopes and related scope equipment. This was our primary rationale for limiting proposed changes regarding these kinds of inputs to codes reviewed for the current CY 2017 rule cycle, that is, the Flexible Laryngoscope and Laryngoplasty families of codes. Because these codes are under current review; however, we believe that they should be valued according to a scheme that accurately describes the scope equipment typically used in the services. As a result, we continue to believe that our proposed classification system for scopes is the more sound methodology to use for valuation of these two families of codes for CY 2017. However, we note that we would expect to include examination of these codes as part of any broader proposal we would make regarding scope equipment items, in response to new recommendations on the subject. We look forward to receiving recommendations from the upcoming RUC PE Subcommittee regarding scopes and related scope equipment items. We note that in order for these recommendations to be considered for CY 2018 rulemaking, we would need to receive these recommendations by the same February deadline for the submission of recommendations on code valuations. Comment: Many commenters disagreed with the CMS proposal to price the endoscopy video system (ES031) at a price of $15,045.00. Some commenters stated that CMS should use the submitted invoices for the pricing of this equipment, which recommended a price of $49,400.00. One commenter stated that the proposed amount did not accurately reflect the current price of GI endoscopy video systems. Another commenter stated that CMS had defined the endoscopy video system as containing five items: (1) A monitor; (2) a processor; (3) a form of digital capture; (4) a cart; and (5) a printer. However, the commenter pointed out that CMS had not included a price for the digital capture device, which the commenter stressed was a significant part of the overall cost and needed to be included in the equipment’s pricing. The commenter submitted a series of new invoices for endoscopy video system PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 and requested that CMS incorporate them into the pricing of the equipment. Response: We appreciate the feedback from the commenters about pricing, especially the submission of new data in the form of additional invoices. We agree that the cost of a digital capture device should be included in the cost of the endoscopy video system; it was our belief that the digital capture device was included in the cost of the processor. We appreciate the clarification from the commenters indicating that this is not the case, and that the digital capture device is a separately priced component of the video system. As a result, we are averaging the price of the digital capture device on the two submitted invoices and pricing it at $18,346.00. We will add this into the overall cost of the endoscopy video system. For the other four components of the video system, we are finalizing the prices as proposed. The invoices submitted for these components indicate that they are different forms of equipment with different product IDs and different prices. For example, our price for the processor comes from a ‘‘Video Processor with keyboard & video cable’’ (CV–180) as opposed to the newly submitted invoice for a ‘‘Viscera Elite Video System’’ (OTV–S190). These are two distinct equipment items, and we do not have any data to indicate that the equipment on the newly submitted invoices is more typical in its use than the equipment that we are currently using to price the endoscopy video system. Therefore, we are finalizing the price of the endoscopy video system at $33,391.00, based on component prices of $9,000.00 for the processor, $18,346.00 for the digital capture device, $2,000.00 for the monitor, $2,295.00 for the printer, and $1,750.00 for the cart. Comment: A few commenters also addressed the pricing of related scope accessories. They stated that the proposed price for the fiberscope, flexible, rhinolaryngoscopy (ES020) was decreased by 33 percent based on one unrepresentative invoice and that this price undervalued the actual cost. Similarly, commenters stated that the proposed price for the stroboscopy system (ES065) at $19,100 was much lower than the manufacturer average invoice pricing. The proposed prices for the channeled and non-channeled flexible video rhinolaryngoscopes (ES064 and ES063 respectively) were also both two to three times lower than the manufacturer’s average invoice price. One commenter submitted additional invoices for pricing these scopes and scope accessories. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Response: We appreciate the submission of this additional pricing data for review. Although many commenters stated that the price of the stroboscopy system was too low, only one commenter supplied additional invoices for the same equipment item that we defined in the proposed rule, the StrobeLED system, and these invoices reflected lower prices than the one we had proposed. These invoices reflected prices of $16,431.00 and $15,000.00. We are averaging these together with our previously submitted price of $19,100.00 for the stroboscopy system, which results in a new price of $16,843.87. When we reviewed the invoices for the channeled and non-channeled flexible video rhinolaryngoscopes (ES064 and ES063 respectively), we found that the product numbers indicated that these were different equipment items than the scopes that we priced in the proposed rule. As we mentioned for the pricing of the endoscopy video system, we have no data to indicate that use of these particular rhinolaryngoscopes would be typical, as opposed to the rhinolaryngoscopes that we proposed to use to establish prices in the proposed rule. As a result, we are maintaining our current prices for these scopes pending the submission of additional information. We similarly found that the invoices with recommended price increases for the endoscope, rigid, sinoscopy (ES013) from the current price of $2,414.17 to $4,024.00 and for the videoscope, colonoscopy (ES033) from $23,650.00 to $37,273.00 related to different equipment items that we do not believe are a better reflection of the typical case than the item we currently use. We did not propose to make price changes for these scopes, and we have not incorporated these equipment items into the new scope classification system. As we stated previously, we are currently limiting the scope changes to the CPT codes under review for CY 2017 and their associated equipment items. We will consider pricing changes for the rest of the scopes and associated scope equipment as part of the broader scope reclassification and pricing effort in future rulemaking. We received invoices for a series of equipment items listed as ‘‘other capital inputs not included in CMS estimate’’ as part of this collection of invoices. Since these equipment items were not included in the original recommendations or our proposed valuations for the Flexible Laryngoscope and Laryngoplasty families of codes, we are not adding them to our equipment VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 database at this time. We will consider the addition of these equipment items as part of the broader recommendations from the RUC PE Subcommittee on the scope classification project. We did not receive an invoice or other data to support a change in the pricing of the fiberscope, flexible, rhinolaryngoscopy (ES020). Comment: Many commenters objected to the use of a vendor quote for pricing of the scope equipment. Commenters requested that specialty societies should also be allowed to submit quotes for pricing as they are easier to obtain than paid invoices. Commenters also stated that the use of vendor prices created transparency issues and asked CMS to explain why they are appropriate to use rather than invoices supplied by specialties. One commenter stated that a single invoice was not an adequate sample to use as a pricing input for many types of endoscopic equipment. Response: We are always interested in investigating multiple data sources for use in pricing supplies and equipment, provided that the information can be verified as accurate. We agree with the commenter that a single voluntarily submitted invoice may not be an adequate source for making wide ranging pricing decisions. We prefer to have pricing information from multiple data sources whenever possible, which may include information obtained from vendors of medical supplies and equipment. We continue to believe that there are risks of bias in submission of price quotes used for purposes of ratesetting. However, given the way we use these prices in the current ratesetting methodologies, we believe the risk of bias is located in submission of overstated, not understated prices. Therefore, we believe it is reasonable to assume that practitioners would generally be able acquire particular items at the prices vendors submit to CMS. After consideration of comments received, we are finalizing our proposals as detailed in the proposed rule, with the updated prices for the endoscopy video system and the stroboscopy system. (4) Technical Corrections to Direct PE Input Database and Supporting Files Subsequent to the publication of the CY 2016 PFS final rule with comment period, stakeholders alerted us to several clerical inconsistencies in the direct PE database. We proposed to correct these inconsistencies as described below and reflected in the CY 2017 direct PE input database displayed on our Web site under downloads for the CY 2017 PFS proposed rule at PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 80189 https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ PhysicianFeeSched/PFS-FederalRegulation-Notices.html. For CY 2017, we proposed the following technical corrections: • For CPT codes 72081–72084, a stakeholder informed us that the equipment time for the PACS workstation (ED050) should be equal to the clinical labor during the service period; the equipment time formula we used for these codes for CY 2016 erroneously included 4 minutes of preservice clinical labor. We agree with the stakeholder that the PACS workstation should use the standard equipment time formula for a PACS workstation for these codes. As a result, we proposed to refine the ED050 equipment time to 21 minutes for CPT code 72081, 36 minutes for CPT code 72082, 44 minutes for CPT code 72083, and 53 minutes for CPT code 72084 to reflect the clinical labor time associated with these codes. This same commenter also indicated that a number of clinical labor activities had been entered in the database in the incorrect service period for CPT codes 37215, 50432, 50694, and 72081. These clinical labor activities were incorrectly listed in the ‘‘postservice’’ period instead of the ‘‘service post’’ period. We proposed to make these technical corrections as well so that the minutes are assigned to the appropriate service period within the direct PE input database. • Another stakeholder alerted us that ileoscopy CPT codes 44380, 44381 and 44382 did not include the direct PE input equipment item called the Gomco suction machine (EQ235) and indicated that this omission appeared to be inadvertent. We agreed that it was. We have included the item EQ235 in the final direct PE input database for CPT code 44380 at a time of 29 minutes, for CPT code 44381 at a time of 39 minutes, and CPT code 44382 at a time of 34 minutes. The PE RVUs displayed in Addendum B on our Web site were calculated with the inputs displayed in the CY 2017 direct PE input database. Comment: One commenter expressed support for the proposed technical corrections to these services. Response: We appreciate the support from the commenter. After consideration of comments received, we are finalizing these technical corrections. Comment: Several commenters contacted CMS during the comment period after noticing that six services where CMS proposed to accept the refinement panel work RVU did not contain the updated work RVU in the E:\FR\FM\15NOR2.SGM 15NOR2 80190 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 Addendum B file for the proposed rule. These commenters requested that CMS address these discrepancies. Response: We appreciate the assistance from the commenters in recognizing these discrepancies. We have corrected them and assigned the refinement panel work RVUs to the six services in question. Comment: One commenter stated that there were potential technical errors in the clinical labor inputs for CPT codes 88329, 88331, 88360, and 88361. Response: We have reviewed these codes and they do not contain technical errors. The clinical labor inputs were adjusted in the CY 2016 rule cycle as a result of CMS refinement (80 FR 70981– 70983). (5) Restoration of Inputs Several of the PE worksheets included in the RUC recommendations for CY 2016 contained time for the equipment item ‘‘xenon light source’’ (EQ167). Because there appeared to be two special light sources already present (the fiberoptic headlight and the endoscope itself) in the services for which this equipment item was recommended by the RUC, we believed that the use of only one of these light sources would be typical and proposed to remove the xenon light equipment time. In the CY 2016 PFS final rule with comment period, we restored the xenon light (EQ167) and removed the fiberoptic headlight (EQ170) with the same number of equipment minutes for CPT codes 30300, 31295, 31296, 31297, and 92511. We received comments expressing approval for the restoration of the xenon light. However, the commenters also stated that the two light sources were not duplicative, but rather, both a headlight and a xenon light source are required concurrently for otolaryngology procedures when scopes are utilized. The commenters requested that the fiberoptic headlight be restored to these codes. We agreed with the commenters that the use of both light sources would be typical for these procedures. Therefore, we proposed in the CY 2017 proposed rule to add the fiberoptic headlight (EQ170) to CPT codes 30300, 31295, 31296, 31297, and 92511 at the same number of equipment minutes as the xenon light (EQ167). Comment: One commenter expressed appreciation for the CMS proposal to restore the fiberoptic headlight to the codes in question. The commenter also stated that it had supplied invoices for LED lights, which are significantly less expensive than the xenon light source, as it was this commenter’s VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 understanding that xenon lights are no longer the typical light source for these procedures and they are no longer widely available for purchase from vendors. The commenter expressed support for retaining the xenon light as the standard light source line item for all endoscopy codes if that remained CMS’ preference. Response: We appreciate the support for our proposal from the commenter, as well as the submission of additional information regarding the typical light source for these procedures. We will add the LED light source to our equipment database at the submitted invoice price of $1,915.00. However, we will not replace the xenon light with the LED light at this time, as we believe the subject deserves further consideration. We will consider proposing this change in future rulemaking. Comment: We received new invoices for the xenon light equipment from a different commenter which averaged out to a price of $12,298.00. Response: We are finalizing our proposed price of $7,000.00 for the xenon light source. Since we received a comment stating that xenon lights are no longer a typical light source for procedure use, and that they have been supplanted by the use of LED lights, we are viewing the current input as a proxy item, and therefore, do not believe that it would be appropriate to increase the cost of the xenon light source at this time. We will consider making a proposal to address this subject in future rulemaking. After consideration of comments received, we are finalizing our proposal to add the fiberoptic headlight (EQ170) to CPT codes 30300, 31295, 31296, 31297, and 92511 at the same number of equipment minutes as the xenon light (EQ167). (6) Updates to Prices for Existing Direct PE Inputs In the CY 2011 PFS final rule with comment period (75 FR 73205), we finalized a process to act on public requests to update equipment and supply price and equipment useful life inputs through annual rulemaking, beginning with the CY 2012 PFS proposed rule. For CY 2017, we proposed the following price updates for existing direct PE inputs: Several commenters wrote to discuss the price of the Antibody Estrogen Receptor monoclonal (SL493). We received information including three invoices with new pricing information regarding the SL493 supply. We proposed to use this information to propose for the supply item SL493 a price of $14.00 per test, which is the PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 average price based on the invoices that we received in total for the item. Comment: Several commenters supported the proposed price increase and urged CMS to finalize the proposal. Response: We appreciate the support from the commenters. After consideration of comments received, we are finalizing the price of the Antibody Estrogen Receptor monoclonal (SL493) supply at $14.00 as proposed. We also proposed to update the price for two supplies in response to the submission of new invoices. The proposed price for ‘‘antigen, venom’’ supply (SH009) reflects an increase from $16.67 to $20.14 per milliliter, and the proposed price for ‘‘antigen, venom, trivespid’’ supply (SH010) reflects an increase from $30.22 to $44.05 per milliliter. Comment: Several commenters stated that they strongly supported the proposed price updates for antigen supplies and urged CMS to finalize the proposal. Response: We appreciate the support from the commenters. After consideration of comments received, we are finalizing the price of the ‘‘antigen, venom’’ (SH009) and ‘‘antigen, venom, tri-vespid’’ (SH010) supplies as proposed. We proposed to remove the laser tip, diffuser fiber supply (SF030) and replace it with the laser tip, bare (single use) supply (SF029) for CPT code 31572 (formerly placeholder code 317X1). We did not propose a price change for the SF030 supply. Comment: In reference to CPT code 52648, a commenter stated that the price for the laser tip, diffuser fiber supply (SF030) was decreasing from $850 to $197.50. The commenter stated that the methodology for this adjustment was opaque, unanticipated, and not proposed for comment in the proposed rule. The commenter stated that the $850 supply cost would be more appropriate for the laser tip, diffuser fiber supply. Response: We stated in the CY 2017 proposed rule (81 FR 46247) that we did not believe that the submitted invoice for the laser tip, diffuser supply at $197.50 was current enough to establish a new price for the supply. As a result, we proposed to remove the laser tip, diffuser fiber supply (SF030) and replaced it with the laser tip, bare (single use) supply (SF029) for CPT code 31572 (Laryngoscopy, flexible; with ablation or destruction of lesion(s) with laser, unilateral), as we did not believe that it was appropriate to use a supply with an outdated invoice. However, we inadvertently set the price of the laser tip, diffuser fiber supply to E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations $197.50 in the proposed direct PE input database in contradiction of our written proposal. We apologize for the confusion caused by this error. In the final direct PE input database, we are restoring the price of the laser tip, diffuser fiber supply to $850.00, since we did not intend to propose a change the price of this supply. We are also requesting the submission of additional current pricing information for the laser tip, diffuser fiber supply, given the significant difference between the $197.50 and $850.00 prices. Comment: A commenter submitted two invoices containing pricing data for a Cook Biopsy device. Response: While we appreciate the submission of this pricing information from the commenter, we are unable to determine which supply or equipment item these invoices were in reference to. The invoices were not mentioned in the text of the commenter’s letter. We request that invoices submitted for pricing updates should contain clear documentation regarding the item in question: its name, the CMS supply/ equipment code that it references (if any), the unit quantity if the item is shipped in boxes or batches, and any other information relevant for pricing. We routinely accept public submission of invoices as part of our process for developing payment rates for new, revised, and potentially misvalued codes. Often these invoices are submitted in conjunction with the RUCrecommended values for the codes. For CY 2017, we note that some stakeholders have submitted invoices for new, revised, or potentially misvalued codes after the February deadline established for code valuation recommendations. To be considered for a given year’s proposed rule, we generally need to receive invoices by the same February deadline. In similar fashion, we generally need to receive invoices by the end of the comment period for the proposed rule in order to consider them for supply and equipment pricing in the final rule for that calendar year. Of course, we consider invoices submitted as public comments during the comment period following the publication of the proposed rule when relevant for services with values open for comment, and will consider any other invoices received after February and/or outside of the public comment process as part of our established annual process for requests to update supply and equipment prices as finalized in the CY 2011 final rule with comment period (75 FR 73205). VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 (7) Radiation Treatment Delivery Practice Expense RVUs Comment: Several commenters noticed that there was a 10 percent decrease in the proposed Non Facility PE RVUs for HCPCS code G6011 despite proposed changes in direct PE inputs. Commenters requested an explanation for why this decrease was taking place, and referenced section 3 of the Patient Access and Medicare Protection Act (PAMPA) (Pub. L. 114–115, enacted December 18, 2015), which requires CMS to maintain the associated ‘‘definitions, units, and inputs’’ for certain radiation treatment and related services for CY 2017 and CY 2018. Several commenters stated that they believed that this decrease in the PE RVU was in violation of section 1848(c)(2)(C)(i–ii) of the Act (added by section 3 of the PAMPA), which requires inputs for these services to remain unchanged for CY 2017 and 2018. Response: We agree with the commenters that we did not propose to change any of the direct PE inputs for HCPCS code G6011, and we understand the proposed change in the nonfacility PE RVUs would generally not be expected absent a corresponding change in direct PE inputs. However, the change in the PE RVU for HCPCS code G6011 is caused by a significant shift in the specialties furnishing the service in the Medicare claims data. In the claims data we used to establish the PE RVUs for CY 2016, dermatology furnished 51 percent of the services, while radiation oncology furnished 43 percent. The most recent claims data reflects a major shift, with radiation oncology now furnishing about 85 percent of the services and dermatology only about 6 percent. The decrease in the PE RVU between CY 2016 and CY 2017 resulted from this shift in specialty mix, as the specialties actually furnishing the service, reflected in the claims data, have a higher percentage of direct PE relative to indirect PE, and therefore, a lower percentage of indirect PE, than the specialties that were previously furnishing the service in the claims data. In other words, consistent with the established methodology for allocating indirect PE to services, a specialty mix with a lower percentage of indirect PE results in fewer indirect PE RVUs being allocated and a lower overall PE RVU for the code even though the direct PE inputs have remained the same. This kind of shift is relatively unusual outside of low-volume codes, but it is consistent with our established methodology for allocating indirect PE to services. We believe that in many PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 80191 cases, the change in specialty utilization for a particular service would warrant a re-examination of the direct PE inputs for the service under the misvalued code initiative. Given the statutory provision that prohibits us from changing the direct PE inputs prior to CY 2019 or considering these services as potentially misvalued, we will consider this issue further for future rulemaking. We recognize that this change would be unanticipated, but we do not believe there is a straightforward, transparent way to offset the change since the statutory provision requires that we maintain the direct inputs for the PE RVUs. We note that this change is unique among the radiation therapy and related imaging codes where the maintenance of inputs has generally resulted in payment rate stability for these services. B. Determination of Malpractice Relative Value Units (RVUs) 1. Overview Section 1848(c) of the Act requires that each service paid under the PFS be composed of three components: Work, PE, and malpractice (MP) expense. As required by section 1848(c)(2)(C)(iii) of the Act, beginning in CY 2000, MP RVUs are resource based. Malpractice RVUs for new codes after 1991 were extrapolated from similar existing codes or as a percentage of the corresponding work RVU. Section 1848(c)(2)(B)(i) of the Act also requires that we review, and if necessary adjust, RVUs no less often than every 5 years. In the CY 2015 PFS final rule with comment period, we implemented the third review and update of MP RVUs. For a comprehensive discussion of the third review and update of MP RVUs see the CY 2015 proposed rule (79 FR 40349 through 40355) and final rule with comment period (79 FR 67591 through 67596). To determine MP RVUs for individual PFS services, our MP methodology is comprised of three factors: (1) Specialtylevel risk factors derived from data on specialty-specific MP premiums incurred by practitioners, (2) service level risk factors derived from Medicare claims data of the weighted average risk factors of the specialties that furnish each service, and (3) an intensity/ complexity of service adjustment to the service level risk factor based on either the higher of the work RVU or clinical labor RVU. Prior to CY 2016, MP RVUs were only updated once every 5 years, except in the case of new and revised codes. As explained in the CY 2011 PFS final rule with comment period (75 FR E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80192 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 73208), MP RVUs for new and revised codes effective before the next 5-year review of MP RVUs were determined either by a direct crosswalk from a similar source code or by a modified crosswalk to account for differences in work RVUs between the new/revised code and the source code. For the modified crosswalk approach, we adjust (or scale) the MP RVU for the new/ revised code to reflect the difference in work RVU between the source code and the new/revised work RVU (or, if greater, the difference in the clinical labor portion of the fully implemented PE RVU) for the new code. For example, if the proposed work RVU for a revised code were 10 percent higher than the work RVU for its source code, the MP RVU for the revised code would be increased by 10 percent over the source code MP RVU. Under this approach, the same risk factor is applied for the new/ revised code and source code, but the work RVU for the new/revised code is used to adjust the MP RVUs for risk. In the CY 2016 PFS final rule with comment period (80 FR 70906 through 70910), we finalized a policy to begin conducting annual MP RVU updates to reflect changes in the mix of practitioners providing services (using Medicare claims data), and to adjust MP RVUs for risk for intensity and complexity (using the work RVU or clinical labor RVU). We also finalized a policy to modify the specialty mix assignment methodology (for both MP and PE RVU calculations) to use an average of the 3 most recent years of data instead of a single year of data. We stated that under this approach, the specialty-specific risk factors would continue to be updated through notice and comment rulemaking every 5 years using updated premium data, but would remain unchanged between the 5-year reviews. For CY 2016, we did not propose to discontinue our current approach for determining MP RVUs for new/revised codes. For the new and revised codes for which we proposed work RVUs and PE inputs, we also published the proposed MP crosswalks used to determine their MP RVUs. We address comments regarding valuation of new and revised codes in section II.L of this final rule, which makes clear the codes with interim final values for CY 2016 had newly proposed values for CY 2017, all of which were again open for comment. The MP crosswalks for new and revised codes with interim final values were established in the CY 2016 PFS final rule with comment period; we proposed these same crosswalks in the CY 2017 PFS proposed rule. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 2. Updating Specialty Specific Risk Factors The proposed CY 2017 GPCI update (eighth update), discussed in section II.E of this final rule, reflects updated MP premium data, collected for the purpose of proposing updates to the MP GPCIs. Although we could have used the updated MP premium data obtained for the purposes of the proposed eighth GPCI update to propose updates to the specialty risk factors used in the calculation of MP RVUs, this would not be consistent with the policy we previously finalized in the CY 2016 PFS final rule with comment period. In that rule, we indicated that the specialtyspecific risk factors would continue to be updated through notice and comment rulemaking every 5 years using updated premium data, but would remain unchanged between the 5-year reviews. Additionally, consistent with the statutory requirement at section 1848(e)(1)(C) of the Act, only one half of the adjustment to MP GPCIs would be applied for CY 2017 based on the new MP premium data. As such, we did not think it would be appropriate to propose to update the specialty risk factors for CY 2017 based on the updated MP premium data that is reflected in the proposed CY 2017 GPCI update. Therefore, we did not propose to update the specialty-risk factors based on the new premium data collected for the purposes of the 3-year GPCI update for CY 2017 at this time. However, we solicited comment on whether we should consider doing so, perhaps as early as for 2018, prior to the fourth review and update of MP RVUs that must occur no later than CY 2020. The following is summary of the comments we received on whether we should consider updating the specialtyrisk factors based on the new premium data collected for the purposes of the 3year GPCI update, perhaps as early as for 2018, prior to the fourth review and update of MP RVUs that must occur no later than CY 2020. Comment: We received few comments regarding this issue. Some commenters, including the RUC, recommended that CMS use the updated MP premium data collected as part of the CY 2017 GPCI update in the creation of the MP RVUs for CY 2017. One commenter stated that CMS should follow its normal process to update MP RVUs for CY 2020. Another commenter supported the technical and policy changes that CMS made related to the MP RVUs for the CY 2016 PFS, and appreciated CMS’ reluctance to change direction a year later and use the updated malpractice premium data gathered for the purpose PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 of the GPCI update, in advance of the next 5-year review of the MP RVUs, to propose updates to the specialty risk factors used in the calculation of MP RVUs. The commenter suggested that CMS consider using the updated data to update the specialty-risk factors in the MP RVU methodology as early as CY 2018, noting that by CY 2018, the adjustment of the malpractice GPCIs would be complete, so the potential disconnect in the use of the updated premium data would no longer be an issue. Response: We appreciate the commenters’ feedback. In response to the commenters who recommended that CMS use the updated MP premium data collected as part of the CY 2017 GPCI update in the creation of the MP RVUs for CY 2017, we reiterate that we did not propose to update the specialty-risk factors based on the new premium data collected for the purposes of the 3-year GPCI update for the CY 2017 MP RVUs. Instead, we solicited comment on whether we should consider doing so prior to the next 5-year interval, perhaps as early as for CY 2018. We will consider the possibility of using the updated MP data to update the specialty risk factors used in the calculation of the MP RVUs prior to the next 5-year update in future rulemaking. Comment: One commenter stated that CPT code 93355 should be added to the MP RVUs Invasive Cardiology Outside of Surgical Range list so that the surgical risk factor is applied when calculating the MP RVU. Response: We did not previously propose to include this code on the list of Invasive Cardiology Outside of Surgical Range when we updated MP risk factors for CY 2015 and we did not propose the change in the CY 2017 PFS proposed rule. We will consider that request for future rulemaking in conjunction with the next update of MP risk factors. C. Medicare Telehealth Services 1. Billing and Payment for Telehealth Services Several conditions must be met for Medicare to make payments for telehealth services under the PFS. The service must be on the list of Medicare telehealth services and meet all of the following additional requirements: • The service must be furnished via an interactive telecommunications system. • The service must be furnished by a physician or other authorized practitioner. • The service must be furnished to an eligible telehealth individual. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations • The individual receiving the service must be located in a telehealth originating site. When all of these conditions are met, Medicare pays a facility fee to the originating site and makes a separate payment to the distant site practitioner furnishing the service. Section 1834(m)(4)(F)(i) of the Act defines Medicare telehealth services to include professional consultations, office visits, office psychiatry services, and any additional service specified by the Secretary, when furnished via a telecommunications system. We first implemented this statutory provision, which was effective October 1, 2001, in the CY 2002 PFS final rule with comment period (66 FR 55246). We established a process for annual updates to the list of Medicare telehealth services as required by section 1834(m)(4)(F)(ii) of the Act in the CY 2003 PFS final rule with comment period (67 FR 79988). As specified at § 410.78(b), we generally require that a telehealth service be furnished via an interactive telecommunications system. Under § 410.78(a)(3), an interactive telecommunications system is defined as multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication between the patient and distant site physician or practitioner. Telephones, facsimile machines, and stand-alone electronic mail systems do not meet the definition of an interactive telecommunications system. An interactive telecommunications system is generally required as a condition of payment; however, section 1834(m)(1) of the Act allows the use of asynchronous ‘‘store-and-forward’’ technology when the originating site is part of a federal telemedicine demonstration program in Alaska or Hawaii. As specified in § 410.78(a)(1), asynchronous store-and-forward is the transmission of medical information from an originating site for review by the distant site physician or practitioner at a later time. Medicare telehealth services may be furnished to an eligible telehealth individual notwithstanding the fact that the practitioner furnishing the telehealth service is not at the same location as the beneficiary. An eligible telehealth individual is an individual enrolled under Part B who receives a telehealth service furnished at a telehealth originating site. Practitioners furnishing Medicare telehealth services are reminded that these services are subject to the same non-discrimination laws as other VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 services, including the effective communication requirements for persons with disabilities of section 504 of the Rehabilitation Act and language access for persons with limited English proficiency, as required under Title VI of the Civil Rights Act of 1964. For more information, see https://www.hhs.gov/ ocr/civilrights/resources/specialtopics/ hospitalcommunication. Practitioners furnishing Medicare telehealth services submit claims for telehealth services to the MACs that process claims for the service area where their distant site is located. Section 1834(m)(2)(A) of the Act requires that a practitioner who furnishes a telehealth service to an eligible telehealth individual be paid an amount equal to the amount that the practitioner would have been paid if the service had been furnished without the use of a telecommunications system. Originating sites, which can be one of several types of sites specified in the statute where an eligible telehealth individual is located at the time the service is being furnished via a telecommunications system, are paid a facility fee under the PFS for each Medicare telehealth service. The statute specifies both the types of entities that can serve as originating sites and the geographic qualifications for originating sites. With regard to geographic qualifications, § 410.78(b)(4) limits originating sites to those located in rural health professional shortage areas (HPSAs) or in a county that is not included in a metropolitan statistical area (MSA). Historically, we have defined rural HPSAs to be those located outside of MSAs. Effective January 1, 2014, we modified the regulations regarding originating sites to define rural HPSAs as those located in rural census tracts as determined by the Federal Office of Rural Health Policy of the Health Resources and Services Administration (HRSA) (78 FR 74811). Defining ‘‘rural’’ to include geographic areas located in rural census tracts within MSAs allows for broader inclusion of sites within HPSAs as telehealth originating sites. Adopting the more precise definition of ‘‘rural’’ for this purpose expands access to health care services for Medicare beneficiaries located in rural areas. HRSA has developed a Web site tool to provide assistance to potential originating sites to determine their geographic status. To access this tool, see the CMS Web site at https:// www.cms.gov/Medicare/MedicareGeneral-Information/Telehealth/ index.html. An entity participating in a federal telemedicine demonstration project that PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 80193 has been approved by, or received funding from, the Secretary as of December 31, 2000 is eligible to be an originating site regardless of its geographic location. Effective January 1, 2014, we also changed our policy so that geographic status for an originating site would be established and maintained on an annual basis, consistent with other telehealth payment policies (78 FR 74400). Geographic status for Medicare telehealth originating sites for each calendar year is now based upon the status of the area as of December 31 of the prior calendar year. For a detailed history of telehealth payment policy, see 78 FR 74399. 2. Adding Services to the List of Medicare Telehealth Services As noted previously, in the CY 2003 PFS final rule (67 FR 79988), we established a process for adding services to or deleting services from the list of Medicare telehealth services. This process provides the public with an ongoing opportunity to submit requests for adding services. Under this process, we assign any qualifying request to make additions to the list of telehealth services to one of two categories. Revisions to criteria that we use to review requests in the second category were finalized in the CY 2012 PFS final rule (76 FR 73102). The two categories are: • Category 1: Services that are similar to professional consultations, office visits, and office psychiatry services that are currently on the list of telehealth services. In reviewing these requests, we look for similarities between the requested and existing telehealth services for the roles of, and interactions among, the beneficiary, the physician (or other practitioner) at the distant site and, if necessary, the telepresenter, a practitioner who is present with the beneficiary in the originating site. We also look for similarities in the telecommunications system used to deliver the service; for example, the use of interactive audio and video equipment. • Category 2: Services that are not similar to the current list of telehealth services. Our review of these requests includes an assessment of whether the service is accurately described by the corresponding code when furnished via telehealth and whether the use of a telecommunications system to furnish the service produces demonstrated clinical benefit to the patient. Submitted evidence should include both a description of relevant clinical studies that demonstrate the service furnished by telehealth to a Medicare beneficiary E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80194 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations improves the diagnosis or treatment of an illness or injury or improves the functioning of a malformed body part, including dates and findings, and a list and copies of published peer reviewed articles relevant to the service when furnished via telehealth. Our evidentiary standard of clinical benefit does not include minor or incidental benefits. Some examples of clinical benefit include the following: • Ability to diagnose a medical condition in a patient population without access to clinically appropriate in-person diagnostic services. • Treatment option for a patient population without access to clinically appropriate in-person treatment options. • Reduced rate of complications. • Decreased rate of subsequent diagnostic or therapeutic interventions (for example, due to reduced rate of recurrence of the disease process). • Decreased number of future hospitalizations or physician visits. • More rapid beneficial resolution of the disease process treatment. • Decreased pain, bleeding, or other quantifiable symptom. • Reduced recovery time. For the list of telehealth services, see the CMS Web site at https:// www.cms.gov/Medicare/MedicareGeneral-Information/Telehealth/ index.html. Requests to add services to the list of Medicare telehealth services must be submitted and received no later than December 31 of each calendar year to be considered for the next rulemaking cycle. For example, qualifying requests submitted before the end of CY 2016 will be considered for the CY 2018 proposed rule. Each request to add a service to the list of Medicare telehealth services must include any supporting documentation the requester wishes us to consider as we review the request. Because we use the annual PFS rulemaking process as a vehicle for making changes to the list of Medicare telehealth services, requesters should be advised that any information submitted is subject to public disclosure for this purpose. For more information on submitting a request for an addition to the list of Medicare telehealth services, including where to mail these requests, see the CMS Web site at https:// www.cms.gov/Medicare/MedicareGeneral-Information/Telehealth/ index.html. 3. Submitted Requests To Add Services to the List of Telehealth Services for CY 2017 Under our existing policy, we add services to the telehealth list on a category 1 basis when we determine that VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 they are similar to services on the existing telehealth list for the roles of, and interactions among, the beneficiary, physician (or other practitioner) at the distant site and, if necessary, the telepresenter. As we stated in the CY 2012 final rule with comment period (76 FR 73098), we believe that the category 1 criteria not only streamline our review process for publicly requested services that fall into this category, but also expedite our ability to identify codes for the telehealth list that resemble those services already on this list. We received several requests in CY 2015 to add various services as Medicare telehealth services effective for CY 2017. The following presents a discussion of these requests, and our decisions regarding additions to the CY 2017 telehealth list. Of the requests received, we found that four services were sufficiently similar to ESRDrelated services currently on the telehealth list to qualify on a category 1 basis. Therefore, we proposed to add the following services to the telehealth list on a category 1 basis for CY 2017: • CPT codes 90967 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients younger than 2 years of age; 90968 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients 2–11 years of age; 90969 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients 12–19 years of age); and 90970 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients 20 years of age and older). As we indicated in the CY 2015 final rule with comment period (80 FR 41783), for the ESRD-related services (CPT codes 90963–90966) added to the telehealth list for CY 2016, the required clinical examination of the catheter access site must be furnished face-toface ‘‘hands on’’ (without the use of an interactive telecommunications system) by a physician, CNS, NP, or PA. This requirement also applies to CPT codes 90967–90970. While we did not receive a specific request, we also proposed to add two advance care planning services to the telehealth list. We have determined that these services are similar to the annual wellness visits (HCPCS codes G0438 & G0439) currently on the telehealth list: • CPT codes 99497 (advance care planning including the explanation and discussion of advance directives such as standard forms (with completion of such forms, when performed), by the physician or other qualified health care PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 professional; first 30 minutes, face-toface with the patient, family member(s), or surrogate); and 99498 (advance care planning including the explanation and discussion of advance directives such as standard forms (with completion of such forms, when performed), by the physician or other qualified health care professional; each additional 30 minutes (list separately in addition to code for primary procedure)). We also received requests to add services to the telehealth list that do not meet our criteria for Medicare telehealth services. We did not propose to add the following procedures for observation care, emergency department visits, critical care E/M, psychological testing, and physical, occupational and speech therapy, for the reasons noted: a. Observation Care: CPT Codes— • 99217 (observation care discharge day management (this code is to be utilized to report all services provided to a patient on discharge from ‘‘observation status’’ if the discharge is on other than the initial date of ‘‘observation status.’’ To report services to a patient designated as ‘‘observation status’’ or ‘‘inpatient status’’ and discharged on the same date, use the codes for observation or inpatient care services [including admission and discharge services, 99234–99236 as appropriate.])); • 99218 (initial observation care, per day, for the evaluation and management of a patient which requires these three key components: A detailed or comprehensive history; a detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the problem(s) requiring admission to ‘‘observation status’’ are of low severity. Typically, 30 minutes are spent at the bedside and on the patient’s hospital floor or unit); • 99219 (initial observation care, per day, for the evaluation and management of a patient, which requires these three key components: A comprehensive history; a comprehensive examination; and medical decision making of moderate complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the problem(s) requiring admission to ‘‘observation status’’ are of moderate severity. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Typically, 50 minutes are spent at the bedside and on the patient’s hospital floor or unit); • 99220 (initial observation care, per day, for the evaluation and management of a patient, which requires these three key components: A comprehensive history; a comprehensive examination; and medical decision making of high complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the problem(s) requiring admission to ‘‘observation status’’ are of high severity. Typically, 70 minutes are spent at the bedside and on the patient’s hospital floor or unit); • 99224 (subsequent observation care, per day, for the evaluation and management of a patient, which requires at least two of these three key components: Problem focused interval history; problem focused examination; medical decision making that is straightforward or of low complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the patient is stable, recovering, or improving. Typically, 15 minutes are spent at the bedside and on the patient’s hospital floor or unit); • 99225 (subsequent observation care, per day, for the evaluation and management of a patient, which requires at least two of these three key components: An expanded problem focused interval history; an expanded problem focused examination; medical decision making of moderate complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Typically, 25 minutes are spent at the bedside and on the patient’s hospital floor or unit); • 99226 (subsequent observation care, per day, for the evaluation and management of a patient, which requires at least two of these three key components: A detailed interval history; a detailed examination; medical decision making of high complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 of the problem(s) and the patient’s and family’s needs. Usually, the patient is unstable or has developed a significant complication or a significant new problem. Typically, 35 minutes are spent at the bedside and on the patient’s hospital floor or unit); • 99234 (observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these three key components: A detailed or comprehensive history; a detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually the presenting problem(s) requiring admission are of low severity. Typically, 40 minutes are spent at the bedside and on the patient’s hospital floor or unit); • 99235 (observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these three key components: A comprehensive history; a comprehensive examination; and medical decision making of moderate complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually the presenting problem(s) requiring admission are of moderate severity. Typically, 50 minutes are spent at the bedside and on the patient’s hospital floor or unit); • 99236 (observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these three key components: A comprehensive history; a comprehensive examination; and medical decision making of high complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually the presenting problem(s) requiring admission are of high severity. Typically, 55 minutes are spent at the bedside and on the patient’s hospital floor or unit); The request to add these observation services referenced various studies supporting the use of observation units. The studies indicated that observation PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 80195 units provide safe, cost effective care to patients that need ongoing evaluation and treatment beyond the emergency department visit by having reduced hospital admissions, shorter lengths of stay, increased safety and reduced cost. Additional studies cited indicated that observation units reduce the work load on emergency department physicians, and reduce emergency department overcrowding. In the CY 2005 PFS proposed rule (69 FR 47510), we considered a request but did not propose to add the observation CPT codes 99217–99220 to the list of Medicare telehealth services on a category two basis for the reasons described in that rule. The most recent request did not include any information that would cause us to question the previous evaluation under the category one criterion, which has not changed, regarding the significant differences in patient acuity between these services and services on the telehealth list. While the request included evidence of the general benefits of observation units, it did not include specific information demonstrating that the services described by these codes provided clinical benefit when furnished via telehealth, which is necessary for us to consider these codes on a category two basis. Therefore, we did not propose to add these services to the list of approved telehealth services. b. Emergency Department Visits: CPT Codes— • 99281 (emergency department visit for the evaluation and management of a patient, which requires these three key components: A problem focused history; a problem focused examination; and straightforward medical decision making. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the presenting problem(s) are selflimited or minor); • 99282 (emergency department visit for the evaluation and management of a patient, which requires these three key components: An expanded problem focused history; an expanded problem focused examination; and medical decision making of low complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the presenting problem(s) are of low to moderate severity); E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80196 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations • 99283 (emergency department visit for the evaluation and management of a patient, which requires these three key components: An expanded problem focused history; an expanded problem focused examination; and medical decision making of moderate complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the presenting problem(s) are of moderate severity); • 99284 (emergency department visit for the evaluation and management of a patient, which requires these three key components: A detailed history; a detailed examination; and medical decision making of moderate complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the presenting problem(s) are of high severity, and require urgent evaluation by the physician, or other qualified health care professionals but do not pose an immediate significant threat to life or physiologic function); and • 99285 (emergency department visit for the evaluation and management of a patient, which requires these three key components within the constraints imposed by the urgency of the patient’s clinical condition and mental status: A comprehensive history; a comprehensive examination; and medical decision making of high complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and family’s needs. Usually, the presenting problem(s) are of high severity and pose an immediate significant threat to life or physiologic function). In the CY 2005 PFS proposed rule (69 FR 47510), we considered a request but did not propose to add the emergency department visit CPT codes 99281– 99285 to the list of Medicare telehealth services for the reasons described in that rule. The current request to add the emergency department E/M services stated that the codes are similar to outpatient visit codes (CPT codes 99201–99215) that have been on the telehealth list since CY 2002. As we noted in the CY 2005 PFS final rule, while the acuity of some patients in the emergency department might be the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 same as in a physician’s office; we believe that, in general, more acutely ill patients are more likely to be seen in the emergency department, and that difference is part of the reason there are separate codes describing evaluation and management visits in the Emergency Department setting. The practice of emergency medicine often requires frequent and fast-paced patient reassessments, rapid physician interventions, and sometimes the continuous physician interaction with ancillary staff and consultants. This work is distinctly different from the pace, intensity, and acuity associated with visits that occur in the office or outpatient setting. Therefore, we did not propose to add these services to the list of approved telehealth services on a category one basis. The requester did not provide any studies supporting the clinical benefit of managing emergency department patients with telehealth which is necessary for us to consider these codes on a category two basis. Therefore, we did not propose to add these services to the list of approved telehealth services on a category two basis. Many requesters of additions to the telehealth list urged us to consider the potential value of telehealth for providing beneficiaries access to needed expertise. We note that if clinical guidance or advice is needed in the emergency department setting, a consultation may be requested from an appropriate source, including consultations that are currently included on the list of telehealth services. c. Critical Care Evaluation and Management: CPT Codes— • 99291 (critical care, evaluation and management of the critically ill or critically injured patient; first 30–74 minutes); and 99292 (critical care, evaluation and management of the critically ill or critically injured patient; each additional 30 minutes (list separately in addition to code for primary service). We previously considered and rejected adding these codes to the list of Medicare telehealth services in the CY 2009 PFS final rule (74 FR 69744) on a category 1 basis because, due to the acuity of critically ill patients, we did not believe critical care services are similar to any services on the current list of Medicare telehealth services. In that rule, we said that critical care services must be evaluated as category 2 services. Because we considered critical care services under category 2, we needed to evaluate whether these are services for which telehealth can be an PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 adequate substitute for a face-to-face encounter, based on the category 2 criteria at the time of that request. We had no evidence suggesting that the use of telehealth could be a reasonable surrogate for the face-to-face delivery of this type of care. The American Telemedicine Association (ATA) submitted a new request for CY 2016 that cited several studies to support adding these services on a category 2 basis. To qualify under category 2, we would need evidence that the service furnished via telehealth is still described accurately by the requested code and produces a clinical benefit for the patient via telehealth. However, in reviewing the information provided by the ATA and a study titled, ‘‘Impact of an Intensive Care Unit Telemedicine Program on Patient Outcomes in an Integrated Health Care System,’’ published July 2014 in JAMA Internal Medicine, which found no evidence that the implementation of ICU telemedicine significantly reduced mortality rates or hospital length of stay, which could be indicators of clinical benefit. Therefore, we stated that we do not believe that the submitted evidence demonstrates a clinical benefit to patients. Therefore, we did not propose to add these services on a category 2 basis to the list of Medicare telehealth services for CY 2016 (80 FR 71061). This year, requesters cited additional studies to support adding critical care services to the Medicare telehealth list on a category 2 basis. Eight of the studies dealt with telestroke and one with teleneurology. Telestroke is an approach that allows a neurologist to provide remote treatment to vascular stroke victims. Teleneurology offers consultations for neurological problems from a remote location. It may be initiated by a physician or a patient, for conditions such as headaches, dementia, strokes, multiple sclerosis and epilepsy. However, according to the literature, the management of stroke via telehealth requires more than a single practitioner and is distinct from the work described by the above E/M codes, 99291 and 99292. One additional study cited involved pediatric patients, while another noted that the Department of Defense has used telehealth to provide critical care services to hospitals in Guam for many years. Another reference study indicated that consulting intensivists thought that telemedicine consultations were superior to telephone consultations. In all of these cases, we believe the evidence demonstrates that interaction between these patients and distant site practitioners can have clinical benefit. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations However, we do not agree that the kinds of services described in the studies are those that are included in the above critical care E/M codes 99291 and 99292. We note that CPT guidance makes clear that a variety of other services are bundled into the payment rates for critical care, including gastric intubations and vascular access procedures among others We do not believe these kinds of services are furnished via telehealth. Public comments, included cited studies, can be viewed at https:// www.regulations.gov/ #!documentDetail;D=CMS-2015-00810002. Therefore, we did not propose to add CPT codes 99291 or 99292 to the list of Medicare telehealth services for CY 2017. However, we are persuaded by the requests that we recognize the potential benefit of critical care consultation services that are furnished remotely. We note that there are currently codes on the telehealth list that could be reported when consultation services are furnished to critically ill patients. In consideration of these public requests, we recognize that there may be greater resource costs involved in furnishing these services relative to the existing telehealth consultation codes. We also agree with the requesters that there may be potential benefits of remote care by specialists for these patients. For these reasons, we think it would be advisable to create a coding distinction between telehealth consultations for critically ill patients, for example stroke patients, relative to telehealth consultations for other hospital patients. Such a coding distinction would allow us to recognize the additional resource costs in terms of time and intensity involved in furnishing such services, under the conditions where remote, intensive consultation is required to provide access to appropriate care for the critically ill patient. We recognize that the current set of E/M codes, including current CPT codes 99291 and 99292, may not adequately describe such services because current E/M coding presumes that the services are occurring in-person, in which case the expert care would be furnished in a manner described by the current codes for critical care. Therefore, we proposed to make payment through new HCPCS codes G0508 and G0509, initial and subsequent, used to describe critical care consultations furnished via telehealth. This new coding would provide a mechanism to report an intensive telehealth consultation service, initial or subsequent, for the critically ill patient, such as a stroke VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 patient, under the circumstance when a qualified health care professional has in-person responsibility for the patient but the patient benefits from additional services from a distant-site consultant specially trained in providing critical care services. We proposed limiting these services to once per day per patient. Like the other telehealth consultations, these services would be valued relative to existing E/M services. More details on the new coding (G0508 and G0509) and valuation for these services are discussed in section II.L. of this final rule and the final RVUs for this service are included in Addendum B of this final rule, including a summary of the public comments we received and our responses to the comments. Like the other telehealth consultation codes, we proposed that these services would be added to the telehealth list and would be subject to the geographic and other statutory restrictions that apply to telehealth services. d. Psychological Testing: CPT Codes— • 96101 (psychological testing (includes psychodiagnostic assessment of emotionality, intellectual abilities, personality and psychopathology, e.g., MMPI, Rorschach, WAIS), per hour of the psychologist’s or physician’s time, both face-to-face time administering tests to the patient and time interpreting these test results and preparing the report); • 96102 psychological testing (includes psychodiagnostic assessment of emotionality, intellectual abilities, personality and psychopathology, e.g., MMPI and WAIS), with qualified health care professional interpretation and report, administered by technician, per hour of technician time, face-to-face); • 96118 Neuropsychological testing (e.g., Halstead-Reitan neuropsychological battery, Wechsler memory scales and Wisconsin card sorting test), per hour of the psychologist’s or physician’s time, both face-to-face time administering tests to the patient and time interpreting these test results and preparing the report); and, • 96119 Neuropsychological testing (e.g., Halstead-Reitan neuropsychological battery, Wechsler memory scales and Wisconsin card sorting test), with qualified health care professional interpretation and report, administered by technician, per hour of technician time, face-to-face). Requesters indicated that there is nothing in the Minnesota Multiphasic Personality Inventory (MMPI), the Rorschach inkblot test, the Wechsler Adult Intelligence Scale (WAIS), the PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 80197 Halstead-Reitan Neuropsychological Battery and Allied Procedures, or the Wisconsin Card Sorting Test (WCST), that cannot be done via telehealth nor is different than neurological tests done for Parkinson’s disease, seizure medication side effects, gait assessment, nor any of the many neurological examinations done via telehealth with the approved outpatient office visit and inpatient visit CPT codes currently on the telehealth list. As an example, requesters indicated that the MPPI is administered by a computer, which generates a report that is interpreted by the clinical psychologist, and that the test requires no interaction between the clinician and the patient. We previously considered the request to add these codes to the Medicare telehealth list in the CY 2015 final rule with comment period (79 FR 67600). We decided not to add these codes, indicating that these services are not similar to other services on the telehealth list because they require close observation of how a patient responds. We noted that the requesters did not submit evidence supporting the clinical benefit of furnishing these services via telehealth so that we could evaluate them on a category 2 basis. While we acknowledge that requesters believe that some of these tests require minimal, if any, interaction between the clinician and patient, we disagree. We continue to believe that successful completion of the tests listed as examples in these codes require the clinical psychologist to closely observe the patient’s response, which cannot be performed via telehealth. Some patient responses, for example, sweating and fine tremors, may be missed when the patient and examiner are not in the same room. Therefore, we did not propose to add these services to the list of Medicare telehealth services for CY 2017. e. Physical and Occupational Therapy and Speech-Language Pathology Services: CPT Codes— • 92507 (treatment of speech, language, voice, communication, and auditory processing disorder; individual); and, 92508 (treatment of speech, language, voice, communication, and auditory processing disorder; group, 2 or more individuals); 92521 (evaluation of speech fluency (e.g., stuttering, cluttering)); 92522 (evaluation of speech sound production (e.g., articulation, phonological process, apraxia, dysarthria)); 92523 (evaluation of speech sound production (e.g., articulation, phonological process, apraxia, dysarthria); with evaluation of language comprehension and expression E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80198 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations (e.g., receptive and expressive language)); 92524 (behavioral and qualitative analysis of voice and resonance); (evaluation of oral and pharyngeal swallowing function); 92526 (treatment of swallowing dysfunction or oral function for feeding); 92610 (evaluation of oral and pharyngeal swallowing function); CPT codes 97001 (physical therapy evaluation); 97002 (physical therapy re-evaluation); 97003 (occupational therapy evaluation); 97004 (occupational therapy reevaluation); 97110 (therapeutic procedure, 1 or more areas, each 15 minutes; therapeutic exercises to develop strength and endurance, range of motion and flexibility); 97112 (therapeutic procedure, 1 or more areas, each 15 minutes; neuromuscular reeducation of movement, balance, coordination, kinesthetic sense, posture, or proprioception for sitting or standing activities); 97116 (therapeutic procedure, 1 or more areas, each 15 minutes; gait training (includes stair climbing)); 97532 (development of cognitive skills to improve attention, memory, problem solving (includes compensatory training), direct (one-onone) patient contact, each 15 minutes); 97533 (sensory integrative techniques to enhance sensory processing and promote adaptive responses to environmental demands, direct (one-onone) patient contact, each 15 minutes); 97535 (self-care/home management training (e.g., activities of daily living (adl) and compensatory training, meal preparation, safety procedures, and instructions in use of assistive technology devices/adaptive equipment) direct one-on-one contact, each 15 minutes); 97537 (community/work reintegration training (e.g., shopping, transportation, money management, avocational activities or work environment/modification analysis, work task analysis, use of assistive technology device/adaptive equipment), direct one-on-one contact, each 15 minutes); 97542 (wheelchair management (e.g., assessment, fitting, training), each 15 minutes); 97750 (physical performance test or measurement (e.g., musculoskeletal, functional capacity), with written report, each 15 minutes); 97755 (assistive technology assessment (e.g., to restore, augment or compensate for existing function, optimize functional tasks and maximize environmental accessibility), direct one-on-one contact, with written report, each 15 minutes); 97760 Orthotic(s) management and training (including assessment and fitting when not otherwise reported), upper extremity(s), lower extremity(s) VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 and/or trunk, each 15 minutes); 97761 (prosthetic training, upper and lower extremity(s), each 15 minutes); and 97762 (checkout for orthotic/prosthetic use, established patient, each 15 minutes). The statute defines who is an authorized practitioner of telehealth services. Physical therapists, occupational therapists and speechlanguage pathologists are not authorized practitioners of telehealth under section 1834(m)(4)(E) of the Act, as defined in section 1842(b)(18)(C) of the Act. Because the above services are predominantly furnished by physical therapists, occupational therapists and speech-language pathologists, we do not believe it would be appropriate to add them to the list of telehealth services at this time. One requester suggested that we can add telehealth practitioners without legislation, as evidenced by the addition of nutritional professionals. However, we do not believe we have such authority and note that nutritional professionals are included as practitioners in the definition at section 1834(b)(18)(C)(vi) of the Act, and thus, are within the statutory definition of telehealth practitioners. Therefore, we did not propose to add these services to the list of Medicare telehealth services for CY 2017. In summary, we proposed to add the following codes to the list of Medicare telehealth services beginning in CY 2017 on a category 1 basis: • ESRD-related services 90967 through 90970. The required clinical examination of the catheter access site must be furnished face-to-face ‘‘hands on’’ (without the use of an interactive telecommunications system) by a physician, CNS, NP, or PA. • Advance care planning (CPT codes 99497 and 99498). • Telehealth Consultations for a Patient Requiring Critical Care Services (G0508 and G0509). The following is summary of the comments we received regarding the proposed addition of services to the list of Medicare telehealth services: Comment: Many commenters supported one or more of our proposals to add ESRD-related services (CPT codes 90967, 90968, 90969 and 90970) and advance care planning services (CPT codes 99497 and 99498) to the list of Medicare telehealth services for CY 2017. Response: We appreciate the commenters’ support for the proposed additions to the list of Medicare telehealth services. After consideration of the public comments received, we are finalizing our proposal to add these services to the list of Medicare PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 telehealth services for CY 2017 on a category 1 basis. Comment: Many commenters also supported the proposal to make payment through new codes, initial and subsequent, used to describe critical care consultations furnished via telehealth. Commenters indicated that the codes will improve patient outcomes and quality of care. Response: We thank the commenters for their support. We believe the new coding G0508 and G0509 would provide a mechanism to report an intensive telehealth consultation service, initial or subsequent, for the critically ill patient, for example a stroke patient, under the circumstance when a qualified health care professional has in-person responsibility for the patient but the patient benefits from additional services from a distant-site consultant specially trained in furnishing critical care services. After consideration of the public comments received, we are finalizing our proposal to add these critical care consultation services to the list of Medicare telehealth services for CY 2017 on a category 1 basis. We are finalizing these services as limited to once per day per patient. We are also finalizing our proposal to make payment for these critical care consultation services through new codes G0508 and G0509, initial and subsequent, used to describe critical care consultations furnished via telehealth. More details on the new coding and valuation for these services are discussed in section II.L. of this final rule and the final RVUs for this service are included in Addendum B of this final rule. Like the other telehealth consultation codes, we proposed and are finalizing that these services would be added to the telehealth list and would be subject to the geographic and other statutory restrictions that apply to telehealth services. Comment: Several commenters agreed with our decision not to add psychological and neuropsychological testing services to the telehealth list, noting that the face-to-face contact between the psychologist or technician and the beneficiary is critical for detecting behaviors related to test taking, such as movements or other nonverbal signals that could be missed by using current telehealth media. A few commenters disagreed with our decision not to add psychological and neuropsychological testing services. Commenters cited general benefits, such as increased access to care, improved health outcomes, and as a remedy to address provider shortages. One commenter maintained that the requested codes are similar to many E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations neurological examinations done via telehealth with the approved outpatient office visit and inpatient visit CPT codes currently on the telehealth list. Response: As noted above, we previously considered the request to add these codes to the telehealth list, on a category 1 basis, in the CY 2015 final rule with comment period (79 FR 67600). We decided not to add these codes, indicating that these services are not similar to other services on the telehealth list because they require close observation of how a patient responds. Commenters provided no evidence of clinical benefit, which is necessary to support adding these services on a category 2 basis. Therefore, we are not adding these services to the list of Medicare list telehealth services for CY 2017. Comment: A few commenters disagreed with our decision not to add observation care and emergency department visits. Commenters cited general benefits, such as improved quality of care, reduced physician workload, reduced emergency department overcrowding, and reduced shortage of available specialty services. Concerning CPT codes 99281–99283, one commenter indicated that none of these codes include what is categorized as a ‘‘detailed’’ or ‘‘comprehensive’’ history or exam; none of these codes include complexity in medical decision making that is categorized as ‘‘high;’’ and none of these codes include presenting problems of ‘‘high’’ or ‘‘high severity/immediate significant threat to life or physiological function.’’ Response: As noted above, we previously considered and rejected adding these codes to the list of Medicare telehealth services in the CY 2005 PFS final rule (69 FR 66276) on a category 1 basis because of the difference in typical patient acuity relative to any services on the current list of Medicare telehealth services. While CPT codes 99281–99283 may not include a detailed or comprehensive history or exam or a high level of medical decision making, we do not agree that these codes are similar to outpatient visit codes (CPT codes 99201–99215) currently on the list of Medicare telehealth services. As previously stated, more acutely ill patients are more likely to be seen in the emergency department, and that difference is part of the reason there are separate codes describing evaluation and management visits in the Emergency Department setting. The work in an Emergency Department setting is distinctly different from the pace, intensity, and acuity associated with visits that occur in the office or VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 outpatient setting. Commenters provided no evidence of clinical benefit for these services when furnished via telehealth specifically, which is necessary to support adding these services on a category 2 basis. Therefore, we are not adding these services to the list of Medicare telehealth services for CY 2017. We remind stakeholders that if consultative telehealth services are required for patients where emergency department or observation care services would ordinarily be reported, multiple codes describing consultative services are currently on the telehealth list and can be used to bill for such telehealth services. Comment: Concerning various services primarily furnished by physical therapists, occupational therapists, and speech-language pathologists, commenters recognized that a statutory change is required to allow such services to be added to the list of Medicare telehealth services. Response: We appreciate commenters recognizing the statutory limitation on adding these services. Therefore, we are not adding these services to the list of Medicare telehealth services for CY 2017. 4. Place of Service (POS) Code for Telehealth Services We have received multiple requests from various stakeholders to establish a POS code to identify services furnished via telehealth. These requests have come from other payers, but may also be related to confusion concerning whether to use the POS where the distant site physician is located or the POS where the patient is located. The process for establishing POS codes is managed by the POS Workgroup within CMS, is available for use by all payers, and is not contingent upon Medicare PFS rulemaking. We noted in the CY 2017 proposed rule (81 FR 46184) that, if such a POS code were created, in order to make it valid for use in Medicare, we would have to determine the appropriate payment rules associated with the code. Therefore, we proposed how a POS code for telehealth would be used under the PFS with the expectation that, if such a code is available, it would be used as early as January 1, 2017. We proposed that the physicians or practitioners furnishing telehealth services would be required to report the telehealth POS code to indicate that the billed service is furnished as a telehealth service from a distant site. As noted below, since the publication of the CY 2017 proposed rule, the telehealth POS code has been created. PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 80199 Our requirement for physicians and practitioners to use the telehealth POS code to report that telehealth services were furnished from a distant site would improve payment accuracy and consistency in telehealth claims submission. Currently, for services furnished via telehealth, we have instructed practitioners to report the POS code that would have been reported had the service been furnished in person. However, some practitioners use the POS where they are located when the service is furnished, while others use the POS corresponding to the patient’s location. Under the PFS, the POS code determines whether a service is paid using the facility or non-facility practice expense relative value units (PE RVUs). The facility rate is paid when a service is furnished in a location where Medicare is making a separate facility payment to an entity other than the physician or practitioner that is intended to reflect the facility costs associated with the service (clinical staff, supplies and equipment). We note that in accordance with section 1834(m)(2)(B) of the Act, the payment amount for the telehealth facility fee paid to the originating site is a national fee, paid without geographic or site of service adjustments that generally are made for payments to different kinds of Medicare providers and suppliers. In the case of telehealth services, we believe that facility costs (clinical staff, supplies, and equipment) associated with furnishing the service would generally be incurred by the originating site, where the patient is located, and not by the practitioner at the distant site. The statute requires Medicare to pay a fee to the site that hosts the patient. This is analogous to the circumstances under which the facility PE RVUs are used to pay for services under the PFS. Therefore, we proposed to use the facility PE RVUs to pay for telehealth services reported by physicians or practitioners with the telehealth POS code. We note that there are only three codes on the telehealth list with a difference greater than 1.0 PE RVUs between the facility PE RVUs and the non-facility PE RVUs. We did not anticipate that this proposal would result in a significant change in the total payment for the majority of services on the telehealth list. Moreover, many practitioners already use a facility POS when billing for telehealth services (those that report the POS of the originating site where the beneficiary is located). The policy to use the telehealth POS code for telehealth services would not affect payment for E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80200 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations telehealth services for these practitioners. The POS code for telehealth would not apply to originating sites billing the facility fee. Originating sites are not furnishing a service via telehealth since the patient is physically present in the facility. Accordingly, the originating site would continue to use the POS code that applies to the type of facility where the patient is located. We also proposed a change to § 414.22(b)(5)(i)(A) that addresses the PE RVUs used in different settings. These revisions would improve clarity regarding our current policies. Specifically, we proposed to amend this section to specify that the facility PE RVUs are paid for practitioner services furnished via telehealth under § 410.78. In addition, we proposed a change to resolve any potential ambiguity and clarify that payment under the PFS is made at the facility rate (facility PE RVUs) when services are furnished in a facility setting paid by Medicare, including in off-campus provider based departments. As proposed, the regulation reflected the policy being proposed, for CY 2017 only, to pay the physician the nonfacility rate for services furnished in an off-campus provider based department that was not excepted under section 603 of the Bipartisan Budget Act of 2015. Finally, to streamline the existing regulation, we also proposed to delete § 414.32 of our regulation that refers to the calculation of payments for certain services prior to 2002. The following is summary of the comments we received regarding the proposal to use a POS code for services furnished via telehealth: Comment: Many commenters supported the proposal to use the POS code for telehealth, indicating that it would clarify and simplify billing requirements, improve payment accuracy and consistency in telehealth claims submissions, and provide more reliable data regarding telehealth services. Response: We appreciate the support for this proposal. Comment: One commenter asked us to reconsider the proposal, noting that the AMA’s CPT Editorial Panel has adopted a telehealth modifier for those medical services that are currently covered telehealth services by Medicare or other payers, which obviates the need for the POS code. Response: The POS code was requested by other payers, and we continue to believe that adopting it for use in the Medicare program would provide consistency in reporting and identifying services furnished via VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 telehealth. We have had longstanding HCPCS modifiers for telehealth. While these modifiers were not adopted by CPT, they have been available for use by other payers. Despite the availability of these HCPCS modifiers noting telehealth services, payers have requested creation of the new POS code. Therefore, we do not understand why introduction of a new CPT modifier as opposed to a HCPCS modifier would obviate the need for a POS code. Instead, we agree with other payers that the POS code would provide consistency in reporting and identifying services furnished via telehealth, since it eliminates the need for servicespecific rules regarding appropriate POS reporting for telehealth services. Comment: Another commenter stated that use of the POS code, or originating site restrictions, would place additional administrative barriers for telepsychiatric access. Response: We note that the POS is a required field on the professional claim, regardless of whether the service is furnished via telehealth. Since a selection needs to be made, we believe that requiring the selection of a specific code is no more burdensome than requiring the claim to specify the POS appropriate to either the setting of the telehealth patient or the setting of the distant site practitioner. The POS code does not entail any new originating site restrictions. Comment: Various commenters asked for clarification of the following: • Whether the POS code would replace the GT modifier. • Whether the description of telehealth as a service furnished via an interactive audio and video telecommunications system applies to the POS code as it does to the GT modifier. • How to ensure proper payment when the distant site practitioner is at a facility, but the patient is not. Response: Under current policy, use of the GT and GQ modifiers certifies that the service meets the telehealth requirements, and would continue to be required. The POS code would be used in addition to the GT and GQ modifiers. We did not propose to implement a change in the requirement to use either the GT and GQ modifier because at the time of the proposed rule, we did not know whether the telehealth POS code would be made effective for January 1, 2017. However, because under our proposal the POS code would serve to identify telehealth services furnished under section 1834(m) of the Act via an interactive audio and video telecommunications system, we believe that we should consider eliminating the PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 required use of the GT and GQ telehealth modifiers, and we may revisit this question through future rulemaking. Like the modifiers, use of the POS code certifies that the service meets the telehealth requirements. Distant site providers will be paid using the facility PE RVUs, regardless of their location. The setting of the patient does not affect the payment to the distant site provider. Comment: Commenters also asked for clarification that the proposal to adopt the telehealth POS relates solely to payment, and not to licensure requirements. The commenter noted that practitioners who furnish telehealth services must adhere to the standard of care and licensure rules, regulations and laws of the state where the patient is located, just as the practitioner would in a traditional face-to-face encounter. Response: The commenters are correct that the purpose of our POS proposal is to assist in determining proper payment. It will also help us to accurately track telehealth utilization and spending. The proposal to adopt the telehealth POS code has no bearing on state licensure requirements or other state regulations. We appreciate the commenters’ request for clarification. Comment: Several commenters supported the proposal to use the facility PE RVUs for telehealth services. One commenter said paying some telehealth services at non-facility rates creates undesirable financial incentives to prefer telehealth services over services that are furnished in person at the originating site. Response: We appreciate the support for the proposal and agree with the commenter’s articulation regarding the importance of developing payment rates that reflect the relative resource costs of furnishing the services and that do not create unintended financial incentives. Comment: Many other commenters opposed the proposal. Commenters stated that it would result in lower fees for telehealth services furnished by psychologists. Commenters also stated that PE costs increase for services furnished via telehealth due to the costs of HIPAA-compliant telecommunication equipment. One commenter remarked that use of a POS code should not be the basis for reducing payments and that many codes would experience a significant payment change. The commenter noted that a 1.0 RVU reduction would result in a $36 payment reduction for the service. One commenter stated CMS should propose budget neutral PE and originating site fees, based on data, for CY 2018. One commenter noted that there are no facility PE RVUs for several codes. E:\FR\FM\15NOR2.SGM 15NOR2 80201 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Response: We do not believe that use of the telehealth POS code produces a significant payment change in the vast majority of circumstances. For distant site practitioners who are already paid using the facility PE RVUs and for services where there is no payment difference between the facility and nonfacility PE RVUs, there will be no change in payment as a result of the telehealth POS code. There is utilization data for 56 of the 81 codes on the telehealth list. For these codes, 20 are not paid differently based on site of service, and 27 codes are paid differently by fewer than 0.5 RVUs. There are only three codes on the telehealth list with a difference greater than 1.0 PE RVUs between the facility PE RVUs and the non-facility PE RVUs. Concerning psychotherapy and psychological testing services, we note that for the vast majority of psychiatric services the difference between the two rates is very small. For example, the difference between the facility and nonfacility national rates for 45 minutes of psychotherapy is 0.02 RVUs per service: Less than $1.00. The differences between the facility PE RVUs and nonfacility PE RVUS ranges from 0.01–0.03 RVUs for nine of the psychological testing codes on the Medicare telehealth list, and 0.12 RVUs lower for two other codes. We do not consider these reductions significant, nor do we have any evidence that practice expense costs are greater for furnishing such services via telehealth than for furnishing a faceto-face service. Commenters provided no evidence that practice expense costs for services furnished via telehealth are greater, due to the requirement for HIPAA-compliant equipment, than for furnishing in-person services, even in the facility setting. There are a few HCPCS codes on the telehealth list that do not have a calculated facility PE RVU. For these services, the non-facility PE RVUs would serve as a proxy, and therefore, there would be no payment change for these codes. Finally, we note that the originating site facility fee is established by statute (section 1834(m)(2)(B) of the Act) and is not affected by this proposal. We note that we believe that payment using the facility PE RVUs for telehealth services is consistent our belief that the direct practice expense costs are generally incurred at the location of the beneficiary and not by the distant site practitioner. After reviewing the current list of telehealth services in the context of the comments, we continue to believe this is accurate. After consideration of the public comments received, we are finalizing VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 our proposal to use the POS code for telehealth and to use the facility PE RVUs to pay for telehealth service reported by physicians or practitioners with the telehealth POS code for CY 2017. However, we understand commenters’ concerns and will consider the concerns regarding use of the facility payment rate as we monitor utilization of telehealth services. We will welcome information from stakeholders regarding any potential unintended consequences of the payment policy. We will also consider the applicability of the facility rate to any codes newly added to the list of telehealth services. We have updated the POS code list on our Web site at https://www.cms.gov/ Medicare/Coding/place-of-servicecodes/Place_of_Service_Code_Set.html to include POS 02: Telehealth (Descriptor: The location where health services and health related services are provided or received, through telecommunication technology). The new code will be used for services furnished on or after January 1, 2017. We are finalizing proposed revisions to our regulation at § 414.22(b)(5)(i)(A) that addresses the PE RVUs used in different settings as described above, except that we are not finalizing the proposed change that would have resulted in the payment of the nonfacility rate for services furnished in off-campus provider based departments that are not excepted under Section 603 of the Bipartisan Budget Act of 2015 since we are finalizing that payments to such non-excepted PBDs will be made under the PFS. In a separate interim final rule with comment period issued in conjunction with the CY 2017 OPPS/ ASC final rule with comment period (see Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Organ Procurement Organization Reporting and Communication; Transplant Outcome Measures and Documentation Requirements; Electronic Health Record (EHR) Incentive Programs; Payment to Certain Off-Campus Outpatient Departments of a Provider; Hospital Value-Based Purchasing (VBP) Program; Establishment of Physician Fee Schedule Payment Rates for Nonexcepted Items and Services Billed by Applicable Departments of a Hospital), we are finalizing other payment policies for nonexcepted items and services furnished by such nonexcepted off-campus provider based departments. Accordingly, physicians furnishing services in such providerbased departments will continue to be paid the facility rate. We are also PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 finalizing the proposal to delete § 414.32 of our regulation that refers to the calculation of payments for certain services prior to 2002. We remind the public that we are currently soliciting requests to add services to the list of Medicare telehealth services. To be considered during PFS rulemaking for CY 2018, these requests must be submitted and received by December 31, 2016. Each request to add a service to the list of Medicare telehealth services must include any supporting documentation the requester wishes us to consider as we review the request. For more information on submitting a request for an addition to the list of Medicare telehealth services, including where to mail these requests, we refer readers to the CMS Web site at https:// www.cms.gov/Medicare/MedicareGeneral-Information/Telehealth/ index.html. 5. Telehealth Originating Site Facility Fee Payment Amount Update Section 1834(m)(2)(B) of the Act establishes the Medicare telehealth originating site facility fee for telehealth services furnished from October 1, 2001 through December 31, 2002, at $20.00. For telehealth services furnished on or after January 1 of each subsequent calendar year, the telehealth originating site facility fee is increased by the percentage increase in the MEI as defined in section 1842(i)(3) of the Act. The originating site facility fee for telehealth services furnished in CY 2016 is $25.10. The MEI increase for 2017 is 1.2 percent and is based on the most recent historical update through 2016Q2 (1.6 percent), and the most recent historical MFP through calendar year 2015 (0.4 percent). Therefore, for CY 2017, the payment amount for HCPCS code Q3014 (Telehealth originating site facility fee) is 80 percent of the lesser of the actual charge or $25.40. The Medicare telehealth originating site facility fee and the MEI increase by the applicable time period is shown in Table 6. TABLE 6—THE MEDICARE TELEHEALTH ORIGINATING SITE FACILITY FEE AND MEI [Increase by the applicable time period] MEI increase Time period 10/01/2001–12/31/2002 01/01/2003–12/31/2003 01/01/2004–12/31/2004 01/01/2005–12/31/2005 01/01/2006–12/31/2006 01/01/2007–12/31/2007 01/01/2008–12/31/2008 01/01/2009–12/31/2009 E:\FR\FM\15NOR2.SGM 15NOR2 ...... ...... ...... ...... ...... ...... ...... ...... N/A 3.0 2.9 3.1 2.8 2.1 1.8 1.6 Facility fee $20.00 20.60 21.20 21.86 22.47 22.94 23.35 23.72 80202 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 6—THE MEDICARE TELEHEALTH recommendations submitted to us by ORIGINATING SITE FACILITY FEE AND the RUC for our review. We also consider information provided by other MEI—Continued [Increase by the applicable time period] MEI increase Time period 01/01/2010–12/31/2010 01/01/2011–12/31/2011 01/01/2012–12/31/2012 01/01/2013–12/31/2013 01/01/2014–12/31/2014 01/01/2015–12/31/2015 01/01/2016–12/31/2016 01/01/2017–12/31/2017 ...... ...... ...... ...... ...... ...... ...... ...... 1.2 0.4 0.6 0.8 0.8 0.8 1.1 1.2 Facility fee 24.00 24.10 24.24 24.43 24.63 24.83 25.10 25.40 mstockstill on DSK3G9T082PROD with RULES2 D. Potentially Misvalued Services Under the Physician Fee Schedule 1. Background Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a periodic review, not less often than every 5 years, of the RVUs established under the PFS. Section 1848(c)(2)(K) of the Act requires the Secretary to periodically identify potentially misvalued services using certain criteria and to review and make appropriate adjustments to the relative values for those services. Section 1848(c)(2)(L) to the Act also requires the Secretary to develop a process to validate the RVUs of certain potentially misvalued codes under the PFS, using the same criteria used to identify potentially misvalued codes, and to make appropriate adjustments. As discussed in section II.B. of this final rule, each year we develop appropriate adjustments to the RVUs taking into account recommendations provided by the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC), the Medicare Payment Advisory Commission (MedPAC), and others. For many years, the RUC has provided us with recommendations on the appropriate relative values for new, revised, and potentially misvalued PFS services. We review these recommendations on a code-by-code basis and consider these recommendations in conjunction with analyses of other data, such as claims data, to inform the decision-making process as authorized by the law. We may also consider analyses of work time, work RVUs, or direct PE inputs using other data sources, such as Department of Veteran Affairs (VA), National Surgical Quality Improvement Program (NSQIP), the Society for Thoracic Surgeons (STS), and the Physician Quality Reporting System (PQRS) databases. In addition to considering the most recently available data, we also assess the results of physician surveys and specialty VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 stakeholders. We conduct a review to assess the appropriate RVUs in the context of contemporary medical practice. We note that section 1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and other techniques to determine the RVUs for physicians’ services for which specific data are not available and requires us to take into account the results of consultations with organizations representing physicians who provide the services. In accordance with section 1848(c) of the Act, we determine and make appropriate adjustments to the RVUs. In its March 2006 Report to the Congress (https://www.medpac.gov/ documents/reports/Mar06_ EntireReport.pdf?sfvrsn=0), MedPAC discussed the importance of appropriately valuing physicians’ services, noting that misvalued services can distort the market for physicians’ services, as well as for other health care services that physicians order, such as hospital services. In that same report MedPAC postulated that physicians’ services under the PFS can become misvalued over time. MedPAC stated, ‘‘When a new service is added to the physician fee schedule, it may be assigned a relatively high value because of the time, technical skill, and psychological stress that are often required to furnish that service. Over time, the work required for certain services would be expected to decline as physicians become more familiar with the service and more efficient in furnishing it.’’ We believe services can also become overvalued when PE declines. This can happen when the costs of equipment and supplies fall, or when equipment is used more frequently than is estimated in the PE methodology, reducing its cost per use. Likewise, services can become undervalued when physician work increases or PE rises. As MedPAC noted in its March 2009 Report to Congress (https:// www.medpac.gov/documents/reports/ march-2009-report-to-congressmedicare-payment-policy.pdf?sfvrsn=0), in the intervening years since MedPAC made the initial recommendations, CMS and the RUC have taken several steps to improve the review process. Also, section 1848(c)(2)(K)(ii) of the Act augments our efforts by directing the Secretary to specifically examine, as determined appropriate, potentially misvalued services in the following categories: PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 • Codes that have experienced the fastest growth. • Codes that have experienced substantial changes in practice expenses. • Codes that describe new technologies or services within an appropriate time period (such as 3 years) after the relative values are initially established for such codes. • Codes which are multiple codes that are frequently billed in conjunction with furnishing a single service. • Codes with low relative values, particularly those that are often billed multiple times for a single treatment. • Codes that have not been subject to review since implementation of the fee schedule. • Codes that account for the majority of spending under the physician fee schedule. • Codes for services that have experienced a substantial change in the hospital length of stay or procedure time. • Codes for which there may be a change in the typical site of service since the code was last valued. • Codes for which there is a significant difference in payment for the same service between different sites of service. • Codes for which there may be anomalies in relative values within a family of codes. • Codes for services where there may be efficiencies when a service is furnished at the same time as other services. • Codes with high intra-service work per unit of time. • Codes with high practice expense relative value units. • Codes with high cost supplies. • Codes as determined appropriate by the Secretary. Section 1848(c)(2)(K)(iii) of the Act also specifies that the Secretary may use existing processes to receive recommendations on the review and appropriate adjustment of potentially misvalued services. In addition, the Secretary may conduct surveys, other data collection activities, studies, or other analyses, as the Secretary determines to be appropriate, to facilitate the review and appropriate adjustment of potentially misvalued services. This section also authorizes the use of analytic contractors to identify and analyze potentially misvalued codes, conduct surveys or collect data, and make recommendations on the review and appropriate adjustment of potentially misvalued services. Additionally, this section provides that the Secretary may coordinate the review and adjustment of E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 any RVU with the periodic review described in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of the Act specifies that the Secretary may make appropriate coding revisions (including using existing processes for consideration of coding changes) that may include consolidation of individual services into bundled codes for payment under the physician fee schedule. 2. Progress in Identifying and Reviewing Potentially Misvalued Codes To fulfill our statutory mandate, we have identified and reviewed numerous potentially misvalued codes as specified in section 1848(c)(2)(K)(ii) of the Act, and we plan to continue our work examining potentially misvalued codes in these areas over the upcoming years. As part of our current process, we identify potentially misvalued codes for review, and request recommendations from the RUC and other public commenters on revised work RVUs and direct PE inputs for those codes. The RUC, through its own processes, also identifies potentially misvalued codes for review. Through our public nomination process for potentially misvalued codes established in the CY 2012 PFS final rule with comment period, other individuals and stakeholder groups submit nominations for review of potentially misvalued codes as well. Since CY 2009, as a part of the annual potentially misvalued code review and Five-Year Review process, we have reviewed over 1,671 potentially misvalued codes to refine work RVUs and direct PE inputs. We have assigned appropriate work RVUs and direct PE inputs for these services as a result of these reviews. A more detailed discussion of the extensive prior reviews of potentially misvalued codes is included in the CY 2012 PFS final rule with comment period (76 FR 73052 through 73055). In the CY 2012 PFS final rule with comment period, we finalized our policy to consolidate the review of physician work and PE at the same time (76 FR 73055 through 73958), and established a process for the annual public nomination of potentially misvalued services. In the CY 2013 PFS final rule with comment period, we built upon the work we began in CY 2009 to review potentially misvalued codes that have not been reviewed since the implementation of the PFS (so-called ‘‘Harvard-valued codes’’). In CY 2009, we requested recommendations from the RUC to aid in our review of Harvardvalued codes that had not yet been reviewed, focusing first on high-volume, low intensity codes (73 FR 38589). In VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the fourth Five-Year Review (76 FR 32410), we requested recommendations from the RUC to aid in our review of Harvard-valued codes with annual utilization of greater than 30,000. In the CY 2013 PFS final rule with comment period, we identified specific Harvardvalued services with annual allowed charges that total at least $10,000,000 as potentially misvalued. In addition to the Harvard-valued codes, in the CY 2013 PFS final rule with comment period we finalized for review a list of potentially misvalued codes that have stand-alone PE (codes with physician work and no listed work time and codes with no physician work that have listed work time). In the CY 2016 PFS final rule with comment period, we finalized for review a list of potentially misvalued services, which included eight codes in the neurostimulators analysisprogramming family (CPT 95970– 95982). We also finalized as potentially misvalued 103 codes identified through our screen of high expenditure services across specialties. 3. Validating RVUs of Potentially Misvalued Codes Section 1848(c)(2)(L) of the Act requires the Secretary to establish a formal process to validate RVUs under the PFS. The Act specifies that the validation process may include validation of work elements (such as time, mental effort and professional judgment, technical skill and physical effort, and stress due to risk) involved with furnishing a service and may include validation of the pre-, post-, and intra-service components of work. The Secretary is directed, as part of the validation, to validate a sampling of the work RVUs of codes identified through any of the 16 categories of potentially misvalued codes specified in section 1848(c)(2)(K)(ii) of the Act. Furthermore, the Secretary may conduct the validation using methods similar to those used to review potentially misvalued codes, including conducting surveys, other data collection activities, studies, or other analyses as the Secretary determines to be appropriate to facilitate the validation of RVUs of services. In the CY 2011 PFS proposed rule (75 FR 40068) and CY 2012 PFS proposed rule (76 FR 42790), we solicited public comments on possible approaches, methodologies, and data sources that we should consider for a validation process. A summary of the comments along with our responses are included in the CY 2011 PFS final rule with comment period (75 FR 73217) and the CY 2012 PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 80203 PFS final rule with comment period (73054 through 73055). We contracted with two outside entities to develop validation models for RVUs. Given the central role of time in establishing work RVUs and the concerns that have been raised about the current time values used in rate setting, we contracted with the Urban Institute to develop empirical time estimates based on data collected from several health systems with multispecialty group practices. The Urban Institute collected data by directly observing the delivery of services and through the use of electronic health records for services selected by the contractor in consultation with CMS and is using this data to produce objective time estimates. We expect the final Urban Institute report will be made available on the CMS Web site later this year. The second contract is with the RAND Corporation, which used available data to build a validation model to predict work RVUs and the individual components of work RVUs, time and intensity. The model design was informed by the statistical methodologies and approach used to develop the initial work RVUs and to identify potentially misvalued procedures under current CMS and RUC processes. RAND consulted with a technical expert panel on model design issues and the test results. The RAND report is available under downloads on the Web site for the CY 2015 PFS final rule with comment period at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ PhysicianFeeSched/PFS-FederalRegulation-Notices-Items/CMS-1612FC.html. After posting RAND’s report on the models and results on our Web site, we received comments indicating that the models did not adequately address global surgery services due to the lack of available data on included visits. Therefore, we modified the RAND contract to include the development of G-codes that could be used to collect data about post-surgical follow-up visits on Medicare claims to meet the requirements in section 1848(c)(8)(B) of the Act regarding collection of data on global services. Our discussion related to this data collection requirement is in section II.D.6. Also, the data from this project would provide information that would allow the time for these services to be included in the model for validating RVUs. E:\FR\FM\15NOR2.SGM 15NOR2 80204 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 4. CY 2017 Identification and Review of Potentially Misvalued Services a. 0-Day Global Services That Are Typically Billed With an Evaluation and Management (E/M) Service With Modifier 25 Because routine E/M is included in the valuation of codes with 0-, 10-, and 90-day global periods, Medicare only makes separate payment for E/M services that are provided in excess of those considered included in the global procedure. In such cases, the physician would report the additional E/M service with Modifier 25, which is defined as a significant, separately identifiable E/M service performed by the same physician on the day of a procedure above and beyond other services provided or beyond the usual preservice and postservice care associated with the procedure that was performed. Modifier 25 allows physicians to be paid for E/M services that would otherwise be denied as bundled. In reviewing misvalued codes, both CMS and the RUC have often considered how frequently particular codes are reported with E/M codes to account for potential overlap in resources. Some stakeholders have expressed concern with this policy especially with regard to the valuation of 0-day global services that are typically billed with a separate E/M service with the use of Modifier 25. For example, when we established our valuation of the osteopathic manipulative treatment (OMT) services, described by CPT codes 98925–98929, we did so with the understanding that these codes are usually reported with E/M codes. For our CY 2017 proposal (81 FR 46187), we investigated Medicare claims data for CY 2015 and found that 19 percent of the codes that described 0day global services were billed over 50 percent of the time with an E/M with Modifier 25. Since routine E/M is included in the valuation of 0-day global services, we believed that the routine billing of separate E/M services may have indicated a possible problem with the valuation of the bundle, which is intended to include all the routine care associated with the service. In the proposed rule (81 FR 46187), we stated that reviewing the procedure codes typically billed with an E/M with Modifier 25 may be one avenue to appropriate valuation for these services. Therefore, we developed and proposed a screen for potentially misvalued codes that identified 0-day global codes billed with an E/M 50 percent of the time or more, on the same day of service, with the same physician and same VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 beneficiary. We included a list of codes with total allowed services greater than 20,000. There are 83 codes that met the proposed criteria for the screen and were proposed as potentially misvalued. We also sought comment regarding additional ways to address appropriate valuations for all services that are typically billed with an E/M with Modifier 25. The following is the summary of the comments we received. Comment: Several commenters disagreed with CMS’ assertion that there is a possible valuation problem with the bundle when an E/M with Modifier 25 is typically reported on the same day of service as a 0-day global procedure. Commenters stated that billing an E/M with Modifier 25 pays physicians for the justifiable and appropriate services they render to patients; allowing for a patient-centered approach to care. Some commenters considered the possibility that there could be fraudulent billing practices when reporting an E/M with Modifier 25 and a few offered various solutions for rectifying the problem from a program integrity perspective. For example, one commenter suggested that further education on the appropriate use of Modifier 25 or penalty for misuse would be effective alternatives to combat inappropriate billing while another commenter suggested investigating the diagnosis coding for services. Commenters overwhelmingly opposed any change to billing policies or standard valuation for 0-day services that are billed with an E/M with Modifier 25. Response: We appreciate commenters’ perspective on this issue. While we understand the commenters’ views, since routine E/M is included in the valuation of 0-day global services we continue to believe that the routine billing of separate E/M services may still indicate a possible problem with the valuation of the global period or the assignment of the global period for particular codes, given that the period is intended to include all the routine care associated with the service. As discussed below, we are finalizing some of the 0-day global services as potentially misvalued. We will also continue to consider this issue for future rulemaking. Comment: Several commenters expressed appreciation for the identification of an objective screen and reasonable query. While some commenters were accepting of the screen as proposed, others stated their preference for the screen to be withdrawn entirely or limited in scope, with some commenters suggesting the PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 screen be limited to the codes that met the criteria and for which the overlap had not already been considered by the RUC in developing recommended values. Several thousand commenters suggested withdrawing or limiting the scope of this screen, particularly as it pertains to the OMT codes. Response: Section 1848(c)(2)(K) of the Act requires the Secretary to periodically identify potentially misvalued services and to review and make appropriate adjustments to the relative values for those services. Section 1848(c)(2)(K) of the Act identifies several categories of services as potentially misvalued, including codes for services where there may be efficiencies when a service is furnished at the same time as other services, along with codes as determined appropriate by the Secretary. Based on the comments received, we understand that stakeholders would have us identify as potentially misvalued only those individual codes with obvious overlapping resource costs when typically reported with an E/M, rather than consider the issue of misvaluation of the global period more broadly. In response to these comments, we are finalizing the use of our screen for 0-day global services that are typically billed with an E/M with Modifier 25 as a mechanism for identifying services that are potentially misvalued. Because we recognize that the primary purpose in displaying lists of misvalued codes in rulemaking has been to seek recommendations regarding appropriate valuation from stakeholders, including the RUC, for 2017 we are only identifying the services for which we believe there might be the kind of misvaluation the RUC and the medical specialty societies recognize. Based on the comments from these organizations, we believe that for codes reviewed in the past 5 years, the RUC has already addressed that kind of misvaluation. In other words, commenters have made clear that external review of these services is likely to be limited to clear overlap in resource costs, but will not address the broader concerns we have about developing rates for services that include routine E/M when evaluation and management is also routinely separately reported. As a result, we will continue to consider that issue for future rulemaking. We note that we are required under statute to improve the valuation of the 10- and 90-day global periods, and therefore, we will consider this issue in that context, as well. Comment: While some commenters supported our review of the 83 codes that were proposed as potentially E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations misvalued through the screen, the majority of commenters, including the RUC, stated that the codes detailed in Table 7 did not meet the criteria for the screen because they were either reviewed in the last 5 years and/or are not typically reported with an E/M, and therefore, should be removed. While 80205 commenters largely disagreed on the list of proposed codes, most agreed that the services they believed met the screen criteria should be reviewed. TABLE 7—CODES REQUESTED TO BE REMOVED FROM THE LIST OF POTENTIALLY MISVALUED SERVICES HCPCS 11000 11100 11300 11301 11302 11305 11306 11307 11310 11311 11312 11740 11900 11901 12001 12002 12004 12011 12013 17250 20550 20552 20553 20600 20604 ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... 20605 ........................... 20606 ........................... mstockstill on DSK3G9T082PROD with RULES2 20610 ........................... 20611 ........................... 20612 29125 29515 30901 30903 31231 31238 31500 31575 31579 31645 32551 32554 40490 46600 51701 51702 51703 56605 57150 57160 58100 64418 65222 67810 67820 68200 69100 69200 69210 69220 92511 92941 ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... 92950 ........................... VerDate Sep<11>2014 Long descriptor Removal of inflamed or infected skin, up to 10% of body surface. Biopsy of single growth of skin and/or tissue. Shaving of 0.5 centimeters or less skin growth of the trunk, arms, or legs. Shaving of 0.6 centimeters to 1.0 centimeters skin growth of the trunk, arms, or legs. Shaving of 1.1 to 2.0 centimeters skin growth of the trunk, arms, or legs. Shaving of 0.5 centimeters or less skin growth of scalp, neck, hands, feet, or genitals. Shaving of 0.6 centimeters to 1.0 centimeters skin growth of scalp, neck, hands, feet, or genitals. Shaving of 1.1 to 2.0 centimeters skin growth of scalp, neck, hands, feet, or genitals. Shaving of 0.5 centimeters or less skin growth of face, ears, eyelids, nose, lips, or mouth. Shaving of 0.6 centimeters to 1.0 centimeters skin growth of face, ears, eyelids, nose, lips, or mouth. Shaving of 1.1 to 2.0 centimeters skin growth of face, ears, eyelids, nose, lips, or mouth. Removal of blood accumulation between nail and nail bed. Injection of up to 7 skin growths. Injection of more than 7 skin growths. Repair of wound (2.5 centimeters or less) of the scalp, neck, underarms, trunk, arms and/or legs. Repair of wound (2.6 to 7.5 centimeters) of the scalp, neck, underarms, genitals, trunk, arms and/or legs. Repair of wound (7.6 to 12.5 centimeters) of the scalp, neck, underarms, genitals, trunk, arms and/or legs. Repair of wound (2.5 centimeters or less) of the face, ears, eyelids, nose, lips, and/or mucous membranes. Repair of wound (2.6 to 5.0 centimeters) of the face, ears, eyelids, nose, lips, and/or mucous membranes. Application of chemical agent to excessive wound tissue. Injections of tendon sheath, ligament, or muscle membrane. Injections of trigger points in 1 or 2 muscles. Injections of trigger points in 3 or more muscles. Aspiration and/or injection of small joint or joint capsule. Arthrocentesis, aspiration and/or injection, small joint or bursa (eg, fingers, toes); with ultrasound guidance, with permanent recording and reporting. Aspiration and/or injection of medium joint or joint capsule. Arthrocentesis, aspiration and/or injection, intermediate joint or bursa (eg, temporomandibular, acromioclavicular, wrist, elbow or ankle, olecranon bursa); with ultrasound guidance, with permanent recording and reporting. Aspiration and/or injection of large joint or joint capsule. Arthrocentesis, aspiration and/or injection, major joint or bursa (eg, shoulder, hip, knee, subacromial bursa); with ultrasound guidance, with permanent recording and reporting. Aspiration and/or injection of cysts. Application of non-moveable, short arm splint (forearm to hand). Application of short leg splint (calf to foot). Simple control of nose bleed. Complex control of nose bleed. Diagnostic examination of nasal passages using an endoscope. Control of nasal bleeding using an endoscope. Emergent insertion of breathing tube into windpipe cartilage using an endoscope. Diagnostic examination of voice box using flexible endoscope. Examination to assess movement of vocal cord flaps using an endoscope. Aspiration of lung secretions from lung airways using an endoscope. Removal of fluid from between lung and chest cavity, open procedure. Removal of fluid from chest cavity. Biopsy of lip. Diagnostic examination of the anus using an endoscope. Insertion of temporary bladder catheter. Insertion of indwelling bladder catheter. Insertion of indwelling bladder catheter. Biopsy of external female genitals. Irrigation of vagina and/or application of drug to treat infection. Fitting and insertion of vaginal support device. Biopsy of uterine lining. Injection of anesthetic agent, collar bone nerve. Removal of foreign body, external eye, cornea with slit lamp examination. Biopsy of eyelid. Removal of eyelashes by forceps. Injection into conjunctiva. Biopsy of ear. Removal of foreign body from ear canal. Removal of impact ear wax, one ear. Removal of skin debris and drainage of mastoid cavity. Examination of the nose and throat using an endoscope. Insertion of stent, removal of plaque and/or balloon dilation of coronary vessel during heart attack, accessed through the skin. Attempt to restart heart and lungs. 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80206 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 7—CODES REQUESTED TO BE REMOVED FROM THE LIST OF POTENTIALLY MISVALUED SERVICES—Continued HCPCS 98925 98926 98927 98928 98929 ........................... ........................... ........................... ........................... ........................... Long descriptor Osteopathic Osteopathic Osteopathic Osteopathic Osteopathic manipulative manipulative manipulative manipulative manipulative Response: After considering the comments received, we are significantly reducing the number of codes identified as potentially misvalued. We agree with commenters that the majority of the codes that we are not finalizing have been recently reviewed. Due to a drafting error in the proposed rule, we stated that we had exempted codes that had been reviewed in the past 5 years. While that exclusion has been standard for many other misvalued code screens, treatment treatment treatment treatment treatment to to to to to 1–2 body regions. 3–4 body regions. 5–6 body regions. 7–8 body regions. 9–10 body regions. we did not intend to apply it in this case, given our concerns with the valuation of the global period when E/ M visits are routinely reported at the same time. As displayed in the proposed rule, the list of codes reflected our intention to include codes that have been recently reviewed. Regardless, we understand based on comments that any review by stakeholders for recently reviewed codes would be likely to result in similar valuation. Therefore, we do not believe that we should include codes reviewed in the past 5 years on this list of misvalued codes, given the limited nature of the likely review. Regarding the accuracy of which of the codes are typically reported with E/M codes, we note that our review included analysis was based on more recent, full claims data than had yet been made public. In the interest of transparency, we are finalizing the list of services based on the publically available data. TABLE 8—LIST OF POTENTIALLY MISVALUED SERVICES IDENTIFIED THROUGH THE SCREEN FOR 0-DAY GLOBAL SERVICES THAT ARE TYPICALLY BILLED WITH AN EVALUATION AND MANAGEMENT (E/M) SERVICE WITH MODIFIER 25 HCPCS 11755 20526 20551 20612 29105 29540 29550 43760 45300 57150 57160 58100 64405 64455 65205 65210 67515 G0168 G0268 ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... ........................... Long descriptor Biopsy of finger or toe nail. Injection of carpal tunnel. Injections of tendon attachment to bone. Aspiration and/or injection of cysts. Application of long arm splint (shoulder to hand). Strapping of ankle and/or foot. Strapping of toes. Change of stomach feeding, accessed through the skin. Diagnostic examination of rectum and large bowel using an endoscope. Irrigation of vagina and/or application of drug to treat infection. Fitting and insertion of vaginal support device. Biopsy of uterine lining. Injection of anesthetic agent, greater occipital nerve. Injections of anesthetic and/or steroid drug into nerve of foot. Removal of foreign body in external eye, conjunctiva. Removal of foreign body in external eye, conjunctiva or sclera. Injection of medication or substance into membrane covering eyeball. Wound closure utilizing tissue adhesive(s) only. Removal of impacted cerumen (one or both ears) by physician on same date of service as audiologic function testing. mstockstill on DSK3G9T082PROD with RULES2 b. End-Stage Renal Disease Home Dialysis Services (CPT Codes 90963 Through 90970) In the CY 2004 PFS final rule with comment period (68 FR 63216), we established new Level II HCPCS G-codes for end-stage renal disease (ESRD) services and established payment for those codes through monthly capitation payment (MCP) rates. For ESRD centerbased patients, payment for the G-codes varied based on the age of the beneficiary and the number of face-toface visits furnished each month (for example, 1 visit, 2–3 visits and 4 or more visits). We believed that many physicians would provide 4 or more visits to center-based ESRD patients and a small proportion will provide 2–3 visits or only one visit per month. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Under the MCP methodology, to receive the highest payment, a physician would have to provide at least four ESRDrelated visits per month. However, payment for home dialysis MCP services only varied by the age of beneficiary. Although we did not initially specify a frequency of required visits for home dialysis MCP services, we stated that we expect physicians to provide clinically appropriate care to manage the home dialysis patient. The CPT Editorial Panel created new CPT codes to replace the G-codes for monthly ESRD-related services, and we accepted the new codes for use under the PFS in CY 2009. The CPT codes created were 90963–90966 for monthly ESRD-related services for home dialysis patient and CPT codes 90967–90970 for PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 dialysis with less than a full month of services. In a GAO report titled ‘‘END-STAGE RENAL DISEASE Medicare Payment Refinements Could Promote Increased Use of Home Dialysis’’ dated October 2015, https://www.gao.gov/products/ GAO-16-125, the GAO stated that experts and stakeholders they interviewed indicated that home dialysis could be clinically appropriate for at least half of patients. Also, at a meeting in 2013, the chief medical officers of 14 dialysis facility chains jointly estimated that a realistic target for home dialysis would be 25 percent of dialysis patients. The GAO noted that CMS data showed that about 10 percent of adult Medicare dialysis patients use home dialysis as of March 2015. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations In the report, the GAO noted that CMS intended for the existing payment structure to create an incentive for physicians to prescribe home dialysis, because the monthly payment rate for managing the dialysis care of home patients, which requires a single inperson visit, was approximately equal to the rate for managing and providing two to three visits to ESRD center-based patients. However, GAO found that, in 2013, the rate of $237 for managing home patients was lower than the average payment of $266 and maximum payment of $282 for managing ESRD center-based patients. The GAO stated that this difference in payment rates may discourage physicians from prescribing home dialysis. Physician associations and other physicians GAO interviewed stated that the visits with home patients are often longer and more comprehensive than incenter visits; this is in part because physicians may conduct visits with individual home patients in a private setting, but they may be able to more easily visit multiple in-center patients on a single day as they receive dialysis. The physician associations GAO interviewed also said that they may spend a similar amount of time outside of visits to manage the care of home patients and that they are required to provide at least one visit per month to perform a complete assessment of the patient. It is important to note that, as stated in the CY 2011 PFS final rule with comment period (75 FR 73296), we believe that furnishing monthly face-toface visits is an important component of high quality medical care for ESRD patients being dialyzed at home and generally would be consistent with the current standards of medical practice. However, we also acknowledged that extenuating circumstances may arise that make it difficult for the MCP physician (or NPP) to furnish a visit to a home dialysis patient every month. Therefore, we allow Medicare contractors the discretion to waive the requirement for a monthly face-to-face visit for the home dialysis MCP service on a case-by-case basis, for example, when the MCP physician’s (or NPP’s) notes indicate that the MCP physician (or NPP) actively and adequately managed the care of the home dialysis patient throughout the month. The GAO recommended, and we agreed, that CMS examine Medicare policies for monthly payments to physicians to manage the care of dialysis patients and revise them if necessary to ensure that these policies are consistent with our goal of encouraging the use of home dialysis VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 among patients for whom it is appropriate. Therefore, we proposed to identify CPT codes 90963 through 90970 as potentially misvalued codes based on the volume of claims submitted for these services relative to those submitted for facility ESRD services. The following is summary of the comments we received. Comment: Commenters supported the proposal to identify these codes as potentially misvalued and supported CMS’ goal of encouraging the use of home dialysis among patients for whom it is appropriate. Some commenters suggested we establish parity between payment for four ESRD-related visits per month for in-center dialysis patients and payment for the care of home dialysis patients for an entire month. One commenter cautioned that CMS should also consider factors other than payment that play a critical role in whether a patient decides to use a home dialysis modality as outlined in a recent GAO report and requested that CMS work closely with nephrologists on this issue. One commenter encouraged CMS to focus on incentives for the adult population separately from pediatrics as they see no benefit from reanalysis of the pediatric home and daily dialysis CPT codes 90963–90965 and 90967– 90969. Response: We appreciate all of the comments and agree that CPT codes 90963 through 90970 should be identified as potentially misvalued. After considering the comments, we are finalizing the addition of CPT codes 90963 through 90970 to the list of potentially misvalued codes. We will also continue to consider these issues for future rulemaking. c. Direct PE Input Discrepancies i. Appropriate Direct PE Inputs Involved in Procedures Involving Endoscopes In the proposed rule (81 FR 46190), we stated that stakeholders had raised concerns about potential inconsistencies with the inputs and the prices related to endoscopic procedures in the direct PE database. Upon review, we noted that there are 45 different pieces of endoscope related-equipment and 25 different pieces of endoscope relatedsupplies that are currently associated with these services. Relative to other kinds of equipment items in the direct PE input, these items are much more varied and used for many fewer services. Given the frequency with which individual codes can be reviewed and the importance of standardizing inputs for purposes of maintaining relativity across PFS services, we PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 80207 believed that this unusual degree of variation was likely to result in code misvaluation. To facilitate efficient review of this particular kind of misvaluation, and because we believed that stakeholders would prefer the opportunity to contribute to such standardization, we requested that stakeholders like the AMA RUC review and make recommendations on the appropriate endoscopic equipment and supplies typically provided in all endoscopic procedures for each anatomical body region, along with their appropriate prices. The following is summary of the comments we received. Comment: Many commenters stated that the RUC is the appropriate resource for the review of appropriate direct PE inputs involved in procedures involving endoscopes and urged CMS to work with the RUC to address this issue. Additionally, the RUC stated that due to the complexity of this issue and the need to incorporate input from various specialty societies that the RUC planned to form a workgroup of the PE subcommittee to review the issue. Response: We appreciate the comments and will review any recommendation provided to us by the RUC for use in future rulemaking, consistent with our normal review processes. ii. Appropriate Direct PE Inputs in the Facility Post-Service Period When PostOperative Visits Are Excluded In the proposed rule (81 FR 46190), we identified a potential inconsistency in instances where there are direct PE inputs included in the facility postservice period even though postoperative visit is not included in a service. We identified 13 codes affected by this issue and stated that we were unclear if the discrepancy was caused by inaccurate direct PE inputs or inaccurate post-operative data in the work time file. We requested that stakeholders including the AMA RUC review these discrepancies and provide their recommendations on the appropriate direct PE inputs for the codes. The following is summary of the comments we received. Comment: The RUC stated that for CPT codes 21077 (Impression and preparation of eye socket prosthesis), 21079 (Impression and custom preparation of temporary oral prosthesis), 21080 (Impression and custom preparation of permanent oral prosthesis), 21081 (Impression and custom preparation of lower jaw bone prosthesis), 21082 (Impression and custom preparation of prosthesis for E:\FR\FM\15NOR2.SGM 15NOR2 80208 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 roof of mouth enlargement), 21083 (Impression and custom preparation of roof of mouth prosthesis), and 21084 (Impression and custom preparation of speech aid prosthesis) the practice expense time in the postservice period in the facility setting is completely distinct from the physician postoperative visit and that time must be accounted for the manufacture and fitting of the prosthetics. The RUC stated that the following codes all had inaccurate post-operative data in the work time file and provided recommendations on appropriate postoperative visits: CPT codes 28636 (Insertion of hardware to foot bone dislocation with manipulation, accessed through the skin), 28666 (Insertion of hardware to toe joint dislocation with manipulation, accessed through the skin), 43652 (Incision of vagus nerves of stomach using an endoscope), 47570 (Connection of gall bladder to bowel using an endoscope), and 66986 (Exchange of lens prosthesis). Additionally, another commenter stated that CPT code 46900 (Chemical destruction of anal growths) also had inaccurate post-operative data in the work time file and provided a recommendation on the appropriate post-operative visit. Response: We thank stakeholders for their comments. We will review the recommendations provided to us by the AMA RUC and other commenters and will consider for future rulemaking, consistent with our normal review processes. d. Insertion and Removal of Drug Delivery Implants—CPT Codes 11981 and 11983 In the proposed rule (81 FR 46190), we stated that stakeholders had urged CMS to create new coding describing the insertion and removal of drug delivery implants for buprenorphine hydrochloride, formulated as a 4 rod, 80 mg, long acting subdermal drug implant for the treatment of opioid addiction. The stakeholders suggested that current coding describing insertion and removal of drug delivery implants was too broad and that new coding was needed to account for specific additional resource costs associated with particular treatment. We identified existing CPT codes 11981 (Insertion, nonbiodegradable drug delivery implant), 11982 (Removal, non-biodegradable drug delivery implant), and 11983 (Removal with reinsertion, nonbiodegradable drug delivery implant) as potentially misvalued codes and sought comment and information regarding whether the current resource inputs in work and practice expense for the codes VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 appropriately accounted for variations in the service relative to which devices and related drugs are inserted and removed. The following is summary of the comments we received. Comment: One commenter stated that CMS should create distinct codes and payment levels for a four-rod implant as opposed to the one-rod implant detailed in CPT codes 11981–11983. In contrast, another commenter stated that the identified codes adequately describe the work and practice expense for drug implant delivery and removal services. Additionally, another commenter stated the codes should be removed from the potentially misvalued list. The RUC stated that a coding change proposal had been submitted for the services under the CPT process and that the RUC anticipated providing relevant recommendations for CY 2018. Response: We thank stakeholders for their comments. We will review new coding and recommended valuations for future rulemaking, consistent with our normal review processes. 5. Valuing Services That Include Moderate Sedation as an Inherent Part of Furnishing the Procedure The CPT manual identifies more than 400 diagnostic and therapeutic procedures (listed in Appendix G) for which the CPT Editorial Panel has determined that moderate sedation is an inherent part of furnishing the procedure. In developing RVUs for these services, we include the relative resources associated with moderate sedation in the valuation since the CPT codes include moderate sedation as an inherent part of the procedure. Therefore, practitioners only report the procedure code when furnishing the service. Endoscopic procedures constitute a significant portion of the services identified in Appendix G. In the CY 2015 PFS proposed rule (79 FR 40349), we noted that it appeared that practice patterns for endoscopic procedures were changing, with anesthesia increasingly being separately reported for these procedures, meaning that the relative resources associated with sedation were no longer incurred by the practitioner reporting the Appendix G procedure. We indicated that, in order to reflect apparent changes in medical practice, we were considering establishing a uniform approach to the appropriate valuation of all Appendix G services for which moderate sedation is no longer inherent, rather than addressing the issue at the procedure level as individual codes are revalued. We solicited public comment PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 on approaches to the appropriate valuation of these services. In the CY 2016 PFS proposed rule (80 FR 41707), we again solicited public comment and recommendations on approaches to address the appropriate valuation of moderate sedation related to Appendix G services. Following our comment solicitation, the CPT Editorial Panel created CPT codes for separately reporting moderate sedation services in association with the elimination of Appendix G from the CPT manual for CY 2017. This coding change would provide for payment for moderate sedation services only in cases where they are furnished. In addition to providing recommended values for the new codes used to separately report moderate sedation, the RUC provided a methodology for revaluing all services previously identified in Appendix G, without moderate sedation, in order to make appropriate corresponding adjustments for the procedural services. The RUC recommended this methodology to address moderate sedation valuation generally instead of recommending that it be addressed as individual codes are reviewed. The RUC’s recommended methodology would remove work RVUs for moderate sedation from Appendix G codes based on a code-level assessment of whether the procedures are typically furnished to straightforward patients or more difficult patients. Based on its recommended methodology, the RUC recommended removal of fewer RVUs from each of the procedural services than it recommended for valuing the moderate sedation services. If we were to use the RUC-recommended values for both the moderate sedation codes and the Appendix G procedural codes without refinement, overall payments for these procedures, when moderate sedation is furnished, would increase relative to the current payment. We direct readers to section II.L. of this final rule, which includes more detail regarding our valuation of the new moderate sedation codes, our methodology for revaluation of the procedural codes previously identified in Appendix G, and discussion and responses to the public comments we received regarding our proposal. We believe that the RVUs assigned under the PFS should reflect the overall relative resources of PFS services, regardless of how many codes are used to report the services. Therefore, our methodology for valuation of Appendix G procedural services maintains current resource assumptions for the procedures when furnished with moderate sedation and redistributes the RVUs associated with moderate sedation (previously E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations included in the Appendix G procedural codes) to other PFS services. We believe that this methodology for revaluation of Appendix G services without moderate sedation is consistent with our general principle that the overall relative resources for the procedures do not change based solely on changes in coding. We also noted in the CY 2017 PFS proposed rule that stakeholders presented information to CMS regarding specialty group survey data for physician work. The stakeholders shared survey results for physician work involved in furnishing moderate sedation that demonstrated a significant bimodal distribution between procedural services furnished by gastroenterologists (GI) and procedural services furnished by other specialties. Since we believe that gastroenterologists furnish the highest volume of services previously identified in Appendix G, and services primarily furnished by gastroenterologists prompted the concerns that led to our identification of changes in medical practice and potentially duplicative payment for these codes, we have addressed the variations between GI and other specialties in our review of the new moderate sedation CPT codes and their recommended values. We again direct readers to section II.L. of this final rule where we discuss our establishment of an endoscopy-specific moderate sedation G-code that augments the new CPT codes for moderate sedation, the public comments we received, and our finalized valuations reflecting the differences in the physician survey data between GI and other specialties. 6. Collecting Data on Resources Used in Furnishing Global Services mstockstill on DSK3G9T082PROD with RULES2 a. Background (1) Current Payment Policy for Global Packages Under the PFS, certain services, such as surgery, are valued and paid for as part of global packages that include the procedure and the services typically furnished in the periods immediately before and after the procedure. For each of these global packages, we establish a single PFS payment that includes payment for particular services that we assume to be typically furnished during the established global period. There are three primary categories of global packages that are labeled based on the number of post-operative days included in the global period: 0-day; 10-day; and 90-day. The 0-day global packages include the surgical procedure and the pre-operative and post-operative services furnished by the physician on VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the day of the service. The 10-day global packages include these services and, in addition, visits related to the procedure during the 10 days following the day of the procedure. The 90-day global packages include the same services as the 0-day global codes plus the preoperative services furnished one day prior to the procedure and postoperative services during the 90 days immediately following the day of the procedure. Section 40.1 of Chapter 12 of the Claims Processing Manual (Pub. 100–04) defines the global surgical package to include the following services related to the surgery when furnished during the global period by the same physician or another practitioner in the same group practice: • Pre-operative Visits: Pre-operative visits after the decision is made to operate beginning with the day before the day of surgery for major procedures and the day of surgery for minor procedures; • Intra-operative Services: Intraoperative services that are normally a usual and necessary part of a surgical procedure; • Complications Following Surgery: All additional medical or surgical services required of the surgeon during the post-operative period of the surgery because of complications that do not require additional trips to the operating room; • Post-operative Visits: Follow-up visits during the post-operative period of the surgery that are related to recovery from the surgery; • Post-surgical Pain Management: By the surgeon; and • Miscellaneous Services: Items such as dressing changes; local incisional care; removal of operative pack; removal of cutaneous sutures and staples, lines, wires, tubes, drains, casts, and splints; insertion, irrigation and removal of urinary catheters, routine peripheral intravenous lines, nasogastric and rectal tubes; and changes and removal of tracheostomy tubes. In the CY 2015 PFS proposed and final rules we extensively discussed the problems with accurate valuation of 10and 90-day global packages. Our concerns included the fact that we do not use actual data on services furnished to update the rates, questions regarding the accuracy of our current assumptions about typical services, whether we will be able to adjust values on a regular basis to reflect changes in the practice of medicine and health care delivery, and how our global payment policies affect what services are actually furnished (79 FR 67582 through 67585). In finalizing a policy to transform all 10and 90-day global codes to 0-day global PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 80209 codes in CY 2017 and CY 2018, respectively, to improve the accuracy of valuation and payment for the various components of global packages, including pre- and post-operative visits and the procedure itself, we stated that we were adopting this policy because it is critical that PFS payment rates be based upon RVUs that reflect the relative resources involved in furnishing the services. We also stated our belief that transforming all 10- and 90-day global codes to 0-day global packages would: • Increase the accuracy of PFS payment by setting payment rates for individual services that more closely reflect the typical resources used in furnishing the procedures; • Avoid potentially duplicative or unwarranted payments when a beneficiary receives post-operative care from a different practitioner during the global period; • Eliminate disparities between the payment for E/M services in global periods and those furnished individually; • Maintain the same-day packaging of pre- and post-operative physicians’ services in the 0-day global packages; and • Facilitate the availability of more accurate data for new payment models and quality research. (2) Data Collection & Revaluation of Global Packages Required by MACRA Section 523(a) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114–10, enacted April 16, 2015) added section 1848(c)(8)(A) of the Act, which prohibits the Secretary from implementing the policy, described above, that would have transformed all 10-day and 90-day global surgery packages to 0-day global packages. Section 1848(c)(8)(B) of the Act, which was also added by section 523(a) of the MACRA, requires us to collect data to value surgical services. Section 1848(c)(8)(B)(i) of the Act requires us to develop, through rulemaking, a process to gather information needed to value surgical services from a representative sample of physicians, and requires that the data collection begin no later than January 1, 2017. The collected information must include the number and level of medical visits furnished during the global period and other items and services related to the surgery and furnished during the global period, as appropriate. This information must be reported on claims at the end of the global period or in another manner specified by the Secretary. Section 1848(c)(8)(B)(ii) of the Act requires that, E:\FR\FM\15NOR2.SGM 15NOR2 80210 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 every 4 years, we reassess the value of this collected information; and allows us to discontinue the collection of this information if the Secretary determines that we have adequate information from other sources to accurately value global surgical services. Section 1848(c)(8)(B)(iii) of the Act specifies that the Inspector General shall audit a sample of the collected information to verify its accuracy. Section 1848(c)(9) of the Act (added by section 523(b) of the MACRA) authorizes the Secretary, through rulemaking, to delay up to 5 percent of the PFS payment for services for which a physician is required to report information under section 1848(c)(8)(B)(i) of the Act until the required information is reported. Section 1848(c)(8)(C) of the Act, which was also added by section 523(a) of the MACRA, requires that, beginning in CY 2019, we must use the information collected as appropriate, along with other available data, to improve the accuracy of valuation of surgical services under the PFS. (3) Public Input As noted above, section 1848(c)(8)(C) of the Act mandates that we use the collected data to improve the accuracy of valuation of surgery services beginning in 2019. We described in the CY 2015 PFS final rule (79 FR 67582 through 67591) the limitations and difficulties involved in the appropriate valuation of the global packages, especially when the resources and the related values assigned to the component services are not defined. To gain input from stakeholders on implementation of this data collection, we sought comment on various aspects of this task in the CY 2016 proposed rule (80 FR 41707 through 41708). We solicited comments from the public regarding the kinds of auditable, objective data (including the number and type of visits and other services furnished during the post-operative period by the practitioner furnishing the procedure) needed to increase the accuracy of the valuation and payment for 10- and 90-day global packages. We also solicited comment on the most efficient means of acquiring these data as accurately and efficiently as possible. For example, we sought information on the extent to which individual practitioners or practices may currently maintain their own data on services furnished during the post-operative period, and how we might collect and objectively analyze those data and use the results for increasing the accuracy of the values beginning in CY 2019. We received many comments in response to the comment solicitation in VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the CY 2016 proposed rule regarding potential methods of valuing the individual components of the global surgical package. A large number of comments expressed strong support for our proposal to hold an open door forum or town hall meetings with the public. In response, we held a national listening session on January 20, 2016. Prior to the listening session, the topics for which guidance was being sought were sent electronically to those who registered for the session and made available on our Web site. The topics were: • Capturing the types of services typically furnished during the global period. • Determining the representative sample for the claims-based data collection. • Determining whether we should collect data on all surgical services or, if not, which services should be sampled. • Potential for designing data collection elements to interface with existing infrastructure used to track follow-up visits within the global period. • Consideration of using the 5 percent withhold until required information is furnished to encourage reporting. The 658 participants in the national listening session provided valuable information on this task. A written transcript and an audio recording of this session are available at https:// www.cms.gov/Outreach-and-Education/ Outreach/NPC/National-Provider-Callsand-Events-Items/2016-01-20MACRA.html. b. Data Collection Required To Accurately Value Global Packages Resource-based valuation of individual physicians’ services is a critical foundation for Medicare payment to physicians. It is essential that the RVUs under the PFS be based as closely and accurately as possible on the actual resources used in furnishing specific services to make appropriate payment and preserve relativity among services. For global surgical packages, this requires using objective data on all of the resources used to furnish the services that are included in the package. Not having such data for some components may significantly skew relativity and create unwarranted payment disparities within the PFS. The current valuations for many services valued as global packages are based upon the total package as a unit rather than by determining the resources used in furnishing the procedure and each additional service/visit and summing the results. As a result, we do PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 not have the same level of information about the components of global packages as we do for other services. To value global packages accurately and relative to other procedures, we need accurate information about the resources—work, PEs and malpractice— used in furnishing the procedure, similar to what is used to determine RVUs for all services. In addition we need the same information on the postoperative services furnished in the global period (and pre-operative services the day before for 90-day global packages). Public comments about our CY 2015 proposal to value all global services as 0-day global services and pay separately for additional post-operative services when furnished indicated that there were no reliable data available on the value of the underlying procedure that did not also incorporate the value of the post-operative services, reinforcing our view that more data are needed across the board. While we believe that most of the services furnished in the global period are visits for follow-up care, we do not have accurate information on the number and level of visits typically furnished because those billing for global services are not required to submit claims for post-operative visits. A May 2012 Office of Inspector General (OIG) report, titled Cardiovascular Global Surgery Fees Often Did Not Reflect the Number of Evaluation and Management Services Provided (https:// oig.hhs.gov/oas/reports/region5/ 50900054.pdf) found that for 202 of the 300 sampled cardiovascular global surgeries, the Medicare payment rates were based on a number of visits that did not reflect the actual number of services provided. Specifically, physicians provided fewer services than the visits included in the payment calculation for 132 global surgery services and provided more services than were included in the payment calculations for 70 services. Similar results were found in OIG reports titled ‘‘Musculoskeletal Global Surgery Fees Often Did Not Reflect The Number Of Evaluation And Management Services Provided’’ (https://oig.hhs.gov/oas/ reports/region5/50900053.asp) and ‘‘Review of Cataract Global Surgeries and Related Evaluation and Management Services, Wisconsin Physicians Service Insurance Corporation Calendar Year 2003, March 2007.’’ (https://oig.hhs.gov/oas/reports/ region5/50600040.pdf). Claims data plays a major role in PFS ratesetting. Specifically, Medicare claims data are a primary driver in the allocation of indirect PE RVUs and MP RVUs across the codes used by E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations particular specialties, and in making overall budget neutrality and relativity adjustments. In most cases, a claim must be filed for all visits. Such claims provide information such as the place of service, the type and, if relevant, the level of the service, the date of the service, and the specialty of the practitioner furnishing the services. Because we have not required claims reporting of visits included in global surgical packages, we do not have any of this information for the services bundled in the package. In addition to the lack of information about the number and level of visits actually furnished, the current global valuations rely on crosswalks to E/M visits, based upon the assumption that the resources, including work, used in furnishing pre- and post-operative visits are similar to those used in furnishing E/M visits. We are unaware of any studies or surveys that verify this assertion. Although we generally value the visits included in global packages using the same direct PE inputs as are used for E/M visits, for services for which the RUC recommendations include specific PE inputs in addition to those typically included for E/M visits, we generally use the additional inputs in the global package valuation. In contrast, when a visit included in a global package would use fewer resources than a comparable E/M service, the RUC generally does not include recommendations to decrease the PE inputs of the visit included in the global package, and we have not generally made comparable reductions. Another inconsistency with our current global package valuation approach is that even though we effectively assume that the E/M codes are appropriate for valuing pre- and post-operative services, the indirect PE inputs used for calculating payments for global services are based upon the specialty mix furnishing the global service, not the specialty mix of the physicians furnishing the E/M services, resulting in a different valuation for the E/M services contained in global packages than for separately billable E/M services. There is a critical need to obtain complete information if we are to value global packages accurately and in a way that preserves relativity across the fee schedule. In response to the requirement of section 1848(c)(8)(B)(i) of the Act that we develop, through rulemaking, a process to gather information needed to value surgical services, we proposed a rigorous data collection effort to provide us the data needed to accurately value the 4,200 codes with a 10- or 90-day global period. Using our authority under VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 sections 1848(c)(2)(M) and (c)(8)(B)(i) of the Act, we proposed to gather the data needed to determine how to best structure global packages with postoperative care that is typically delivered days, weeks or months after the procedure and whether there are some procedures for which accurate valuation for packaged post-operative care is not possible. Finally, we indicated that these data would provide useful information to assess the resources used in furnishing pre- and post-operative care in global periods. To accurately do so, we need to know the volume and costs of the resources typically used. We proposed a three-pronged approach to collect timely and accurate data on the frequency of and the level of pre- and post-operative visits and the resources involved in furnishing the pre-operative visits, post-operative visits, and other services for which payment is included in the global surgical payment. By analyzing these data, we would not only have the most comprehensive information available on the resources used in furnishing these services, but also would be able to determine the appropriate packages for such services. Specifically, the proposal included: • A requirement for claims-based reporting about the number and level of pre- and post-operative visits furnished for 10- and 90-day global services. • A survey of a representative sample of practitioners about the activities involved in and the resources used in providing a number of pre- and postoperative visits during a specified, recent period of time, such as two weeks. • A more in-depth study, including direct observation of the pre- and postoperative care delivered in a small number of sites, and a separate survey module for practitioners practicing in ACOs. The information collected and analyzed through the activities would be the first comprehensive look at the volume and level of services in a global period, and the activities and inputs involved in furnishing global services. The data from these activities would ultimately inform our revaluation of global surgical packages as required by statute. To expand awareness of the proposal for data collection, we held a national listening session in which CMS reviewed the proposal for participants. Subsequent to this national listening session, we held a town hall meeting at the CMS headquarters in which participants, in person and virtual, shared their views on the proposal with CMS. The transcript from these town PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 80211 halls is available on the CMS Web site with the CY 2017 final rule downloads. (1) Statutory Authority for Data Collection As described in this section of the final rule, section 1848(c)(8)(B)(i) of the Act requires us to develop, through rulemaking, a process to gather information needed to value surgical services from a representative sample of physicians. The statute requires that the collected information include the number and level of medical visits furnished during the global period and other items and services related to the surgery and furnished during the global period, as appropriate. In addition, section 1848(c)(2)(M) of the Act, which was added to the Act by section 220 of the PAMA, authorizes the Secretary to collect or obtain information on resources directly or indirectly related to furnishing services for which payment is made under the PFS. Such information may be collected or obtained from any eligible professional or any other source. Information may be collected or obtained from surveys of physicians, other suppliers, providers of services, manufacturers, and vendors. That section also authorizes the Secretary to collect information through any other mechanism determined appropriate. When using information gathered under this authority, the statute requires the Secretary to disclose the information source and discuss the use of such information in the determination of relative values through notice and comment rulemaking. As described in this section of the final rule, to gain information to assist CMS in determining the appropriate packages for global services and to revalue those services, CMS needs more information on the resources used in furnishing such services. Through the claims-based data collection and the study we are finalizing in this final rule, we would have better information about the actual number of services furnished to Medicare beneficiaries to use in valuation for these codes than has been typically available, such as from RUC surveys that reflect practitioner’s estimates of the number of services typically furnished. We anticipate that such efforts would inform how to more regularly collect data on the resources used in furnishing physicians’ services. To the extent that such mechanisms prove valuable, they may be used to collect data for valuing other services. To achieve this significant data collection, we proposed to collect data under the authority of both section 1848(c)(8)(B) and (c)(2)(M) of the Act. E:\FR\FM\15NOR2.SGM 15NOR2 80212 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 (2) Claims-Based Data Collection We proposed a claims-based data collection that would have required all those providing 10- or 90-day global services to report on services furnished during the global period using a series of G-codes specially created for this purpose, beginning January 1, 2017. In response to the comments submitted on the proposal, we are finalizing a claims-based data collection that differs from this proposal in the following significant ways: • CPT code 99024 will be used for reporting post-operative services rather than the proposed set of G-codes. Reporting will not be required for preoperative visits included in the global package or for services not related to patient visit. • Reporting will be required only for services related to codes reported annually by more than 100 practitioners and that are reported more than 10,000 times or have allowed charges in excess of $10 million annually. • Practitioners are encouraged to begin reporting post-operative visits for procedures furnished on or after January 1, 2017, but the mandatory requirement to report will be effective for services related to global procedures furnished on or after July 1, 2017. • Only practitioners who practice in groups with 10 or more practitioners in Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon, and Rhode Island will be required to report. Practitioners who only practice in smaller practices or in other geographic areas are encouraged to report data, if feasible. Given that the data collection will be limited to only some states, a subset of global services, and only to those who practice in larger practices the information collected through claims for global packages services will not parallel the claims data that are available in pricing other PFS services. However, we believe that the information collected through this data collection will be a significant improvement over the information currently available to value these services and will be supplemented with information obtained through other mechanisms. In the following sections, we discuss the comments on each element of our data collection proposal, our responses and our final decision. (a) Information To Be Reported A key element of claims-based reporting is using codes that appropriately reflect the services furnished. In response to the comment VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 solicitation in the CY 2016 PFS proposed rule and the input received via the January 2016 listening session, we received numerous recommendations for the information to be reported on claims. The most frequently recommended approach was for practitioners to report the existing CPT code for follow-up visits included in the surgical package (CPT 99024— Postoperative follow-up visit, normally included in the surgical package, to indicate that an E/M service was performed during a postoperative period for a reason(s) related to the original procedure). Others suggested using this code for outpatient visits and using length of stay data to estimate the number of inpatient visits during the global period. In response to our concerns that CPT code 99024 would provide only the number of visits and not the level of visits as required by the statute, one commenter suggested using modifiers in conjunction with CPT code 99024 to indicate the level of the visit furnished. Others recommended using existing CPT codes for E/M visits to report post-operative care. One commenter suggested that CMS analyze data from a sample of large systems and practices that are using electronic health records that require entry of some CPT code for every visit to capture the number of post-operative visits. After noting that the documentation requirements and PEs required for postoperative visits differ from those of E/ M visits outside the global period, one commenter encouraged us to develop a separate series of codes to capture the work of the post-operative services and to measure, not just estimate, the number and complexity of visits during the global period. Other commenters opposed the use of a new set of codes or the use of modifiers to report post-operative visits. Commenters also noted several issues for us to consider in developing data collection mechanisms, including that many post-operative services do not have CPT codes to bill separately, that surgeons perform a wide range of collaborative care services, and that patient factors, including disease severity and comorbidities, influence what post-operative care is furnished. To assist us in determining appropriate coding for claims-based reporting, we added a task to the RAND validation contract for developing a model to validate the RVUs in the PFS, which was awarded in response to a requirement in the Affordable Care Act. Comments that we received on the validation report suggested the models did not adequately address global surgery services due to the lack of PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 available data on visits included in the global package. Therefore, we modified the validation contract to include the development of G-codes that could be used to collect data about post-surgical follow-up visits on Medicare claims for valuing global services under MACRA so that this time could be included in the model for validating RVUs. To inform its work on developing coding for claims-based reporting, the contractor conducted interviews with surgeons and other physicians/nonphysician practitioners (NPP) who provide post-operative care. A technical expert panel (TEP), convened by the contractor, reviewed the findings of the interviews and provided input on how to best capture care provided in the post-operative period on claims. In summarizing the input from the interviews and the TEP, the contractor indicated that several considerations were important in developing a claimsbased method for capturing postoperative services. First, a simple system to facilitate reporting was needed. Since it was reported that a majority of post-operative visits are straightforward, the contractor found that a key for any proposed system is identifying the smaller number of complex post-operative visits. Another consideration was not using the existing CPT E/M structure to capture postoperative care because of concerns that E/M codes are inadequately designed to capture the full scope of post-operative care and that using such codes might create confusion. Another consideration was that the TEP was most enthusiastic about a set of codes that used site of care, time, and complexity to report visits. The contractor also believed it was important to distinguish—particularly in the inpatient setting—between circumstances where a surgeon is providing primary versus secondary management of a patient. Finally, a mechanism for reporting the postoperative care occurs outside of inperson visits and by clinical staff was needed. The report noted that in the inpatient setting in particular, surgeons spend considerable time reviewing test results and coordinating care with other practitioners. After reviewing various approaches, a set of time-based, post-operative visit codes that could be used for reporting care provided during the post-operative period was recommended. The recommended codes distinguish services by the setting of care and whether they are furnished by a physician/NPP or by clinical staff. All codes are intended to be reported in 10minute increments. A copy of the report E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations is available on the CMS Web site under downloads for the CY 2017 PFS proposed rule with comment period at https://www.cms.gov/physicianfeesched/ downloads/. We proposed the following no-pay codes be used for reporting on claims 80213 the services actually furnished but not paid separately because they are part of global packages. TABLE 9—PROPOSED GLOBAL SERVICE CODES Inpatient .......................................... Office or Other Outpatient .............. Via Phone or Internet ...................... GXXX1 GXXX2 GXXX3 GXXX4 GXXX5 GXXX6 GXXX7 GXXX8 (i) Coding for Inpatient Global Service Visits Our proposal included three codes for reporting inpatient pre- and postoperative visits that distinguish the intensity involved in furnishing the services. Under this proposal, visits that involve any combination or number of the services listed in Table 10, which were recommended by the contractor as those in a typical visit, would be reported using GXXX1. Based on the findings from the interviews and the TEP, the report indicated that the vast majority of inpatient post-operative visits would be expected to be reported using GXXX1. TABLE 10—ACTIVITIES INCLUDED IN TYPICAL VISIT (GXXX1 & GXXX5) mstockstill on DSK3G9T082PROD with RULES2 Review vitals, laboratory or pathology results, imaging, progress notes. Take interim patient history and evaluate post-operative progress. Assess bowel function. Conduct patient examination with a specific focus on incisions and wounds, post-surgical pain, complications, fluid and diet intake. Manage medications (for example, wean pain medications). Remove stitches, sutures, and staples. Change dressings. Counsel patient and family in person or via phone. Write progress notes, post-operative orders, prescriptions, and discharge summary. Contact/coordinate care with referring physician or other clinical staff. Complete forms or other paperwork. Under our proposal, inpatient preand post-operative visits that are more complex than typical visits but do not qualify as critical illness visits would be coded using GXXX2 (Inpatient visit, complex, per 10 minutes, included in surgical package). To report this code, the practitioner would be required to furnish services beyond those included in a typical visit and have VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Inpatient visit, typical, per 10 minutes, included in surgical package. Inpatient visit, complex, per 10 minutes, included in surgical package. Inpatient visit, critical illness, per 10 minutes, included in surgical package. Office or other outpatient visit, clinical staff, per 10 minutes, included in surgical package. Office or other outpatient visit, typical, per 10 minutes, included in surgical package. Office or other outpatient visit, complex, per 10 minutes, included in surgical package. Patient interactions via electronic means by physician/NPP, per 10 minutes, included in surgical package. Patient interactions via electronic means by clinical staff, per 10 minutes, included in surgical package. documentation that indicates what services were provided that exceeded those included in a typical visit. In the proposed rule, we noted some circumstances that might merit the use of the complex visit code are secondary management of a critically ill patient where another provider such as an intensivist is providing the primary management, primary management of a particularly complex patient such as a patient with numerous comorbidities or high likelihood of significant decline or death, management of a significant complication, or complex procedures outside of the operating room (For example, significant debridement at the bedside). The highest level of inpatient pre- and post-operative visits, critical illness visits (GXXX3—Inpatient visit, critical illness, per 10 minutes, included in surgical package) would be reported when the physician is providing primary management of the patient at a level of care that would be reported using critical care codes if it occurred outside of the global period. This involves acute impairment of one or more vital organ systems such that there is a high probability of imminent or life threatening deterioration in the patient’s condition. Similar to how time is now counted for the existing CPT critical care codes, we proposed that all time spent engaged in work directly related to the individual patient’s care would count toward the time reported with the inpatient visit codes; this includes time spent at the immediate bedside or elsewhere on the floor or unit, such as time spent with the patient and family members, reviewing test results or imaging studies, discussing care with other staff, and documenting care. PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 (ii) Coding for Office and Other Outpatient Global Services Visits For the three codes in our proposal that would be used for reporting postoperative visits in the office or other outpatient settings, codes, time would be defined as the face-to-face time with patient, which reflects the current rules for time-based outpatient codes. Like GXXX1, GXXX5 (Office or other outpatient visit, typical, per 10 minutes, included in surgical package) would be used for reporting any combination of activities in Table 10 under our proposal. We proposed only face-to-face time spent by the practitioner with the patient and their family members would count toward the time reported with the office visit codes. (iii) Coding for Services Furnished via Electronic Means Services that are furnished via phone, the internet, or other electronic means outside the context of a face-to-face visit would be reported using GXXX7 when furnished by a practitioner and GXXX8 when provided by clinical staff under our proposal. We proposed that practitioners would not report these services if they are furnished the day before, the day of, or the day after a visit as we believe these would be included in the pre- and post-service activities in the typical visit. However, we proposed that these codes be used to report nonface-to-face services provided by clinical staff prior to the primary procedure since global surgery codes are typically valued with assumptions regarding pre-service clinical labor time. Given that some practitioners have indicated that services they furnish commonly include activities outside the face-to-face service, we believed it was important to capture information about those activities in both the pre- and post-service periods. We also believed these requirements to report on clinical E:\FR\FM\15NOR2.SGM 15NOR2 80214 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations labor time are consistent with and no more burdensome than those used to report clinical labor time associated with chronic care management services, which similarly describe care that takes place over more than one patient encounter. In addition, we proposed for services furnished via interactive telecommunications that meet the requirements of a Medicare telehealth service visit, the appropriate global service G-code for the services would be reported with the GT modifier to indicate that the service was furnished ‘‘via interactive audio and video telecommunications systems.’’ mstockstill on DSK3G9T082PROD with RULES2 (iv) Rationale for Use of G-Codes After considering the contractor report, the comments in response to the comment solicitation in the CY 2016 proposed rule and other stakeholder input that we have received, and our needs for data to fulfill our statutory mandate and to value surgical services appropriately, we proposed this new set of codes because we believe it provides us the most robust data upon which to determine the most appropriate way and amounts to pay for PFS surgical services. We noted that these proposed codes would provide data of the kind that can reasonably collected through claims data and that reflect what we believe are key issues in the valuation of post-operative care—where the service is provided, who furnishes the service, its relative complexity, and the time involved in the service. We solicited public comments about all aspects of these codes, including the nature of the services described, the time increment, and any other areas of interest to stakeholders. We noted particular interest in any pre- or postoperative services furnished that could not be appropriately captured by these codes. We solicited comments on whether the proposed codes were appropriate for collecting data on preoperative services. We also sought comment on any activities that should be added to the list of activities in Table 10 to reflect typical pre-operative visit activities. (v) Alternative Approach to Coding In making the proposal for G-codes, we noted that many stakeholders had expressed strong support for the use of CPT code 99024 (Postoperative followup visit, normally included in the surgical package, to indicate that an evaluation and management service was performed during a post-operative period for a reason(s) related to the original procedure) to collect data on post-operative care. In response to VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 stakeholders noting that practitioners are familiar with this existing CPT code and the burden on practitioners would be minimized by only having to report that a visit occurred, not the level of the visit, we noted that we did not believe that this code alone would provide the information that we need for valuing surgical services nor do we believe it alone can meet the statutory requirement that we collect data on the number and level of visits. Given the strong support for the use of CPT code 99024, we solicited comments specifically on how we could use this code to capture the statutorily required data on the number and level of visits and the data that we would need to value global services in the future. We also discussed in the proposed rule our concern that using CPT code 99024 with modifiers to indicate to which of the existing levels of E/M codes the visit corresponds may not accurately capture what drives greater complexity in post-operative visits. We noted that as outlined in the contractor’s report, E/M billing requirements are built upon complexity in elements such as medical history, review of systems, family history, social history, and how many organ systems are examined. In the context of a post-operative visit, many of these elements may be irrelevant. The contractor’s report also notes that there was significant concern from interviewees and the expert panel about documentation that is required for reporting E/M codes. Specifically, they stated that documentation requirements for surgeons to support the relevant E/ M visit code would place undue administrative burden on surgeons given that many surgeons currently use minimal documentation when they provide a postoperative visit. We also noted that to value surgical packages accurately we need to understand the activities involved in furnishing postoperative care and as discussed above, we lack information that would demonstrate that activities involved in post-operative care are similar to those in E/M services. In addition, the use of modifiers to report levels of services is more difficult to operationalize than using unique HCPCS codes. However, we sought comments on whether, and if so, why, practitioners would find it easier to report CPT code 99024 with modifiers corresponding to the proposed G-code levels rather than the new G-codes, as proposed. We also sought comment on whether practitioners would find it difficult to use this for pre-operative visits since the CPT code descriptor specifically defines PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 it as a ‘‘post-operative follow-up’’ service. We also sought comment on whether time of visits could alone be a proxy for the level of visit. If pre- and postoperative care varies only by the time the practitioner spends on care so that time could be a proxy for complexity of the service, then we could use the reporting of CPT code 99024 in 10minute increments to meet the statutory requirement of collecting claims-based data on the number and level of visits. In addition to comments on whether time is an accurate proxy for level of visit, we solicited comment on the feasibility and desirability of reporting CPT code 99024 in 10-minute increments. The following is a summary of the comments that we received on our proposal to use G-codes for reporting the services furnished during the preand post-operative periods of 10- and 90-day global services. Comment: Many commenters offered critiques of the G-codes. Most objected to reporting using the proposed G-codes. Some commenters raised concerns with the code definitions. These included: Lack of alignment with clinical workflow, failure to adequately account for variation in complexity and medical decision-making, and use of the term ‘‘typical’’ to define visits in a different way than the term is generally used in PFS valuations. One commenter suggested that CMS should require care plans for outpatient visits in the postoperative period. It was also suggested that the complex visit code could be improved by using a term other than ‘‘complex’’ in the definition. A commenter questioned whether that vast majority of cases would be complex instead of ‘‘typical,’’ since the definition of ‘‘complex’’ included management of a patient with multiple comorbidities and most Medicare beneficiaries have multiple comorbidities. A commenter also suggested that CMS refine the G-codes to distinguish physician visits from NPP visits. In addition, several commenters objected to the proposed G-codes for on-line and telephone services because they believed it would be nearly impossible to track these data and extremely burdensome to do so. Commenters indicated that the G-codes were not well-defined overall and should not be used without testing to determine their validity. Response: We appreciate the detailed comments on the design of the G-codes and the concerns regarding their limitations in appropriately reflecting the services furnished in 10- and 90-day global periods. These comments provide information for how the G-codes could E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations be modified to better reflect services furnished in global periods, however, as is discussed at the outset of this section, we are not using the proposed G-codes for this data collection effort. Comment: Most commenters objected to using codes based on time increments and the proposed 10-minute increments, specifically. Some stated that reporting of services by time did not reflect the way surgeons practiced and would divert practitioners from patient care. One commenter stated that it was not feasible for practitioners to collect time data for every task that they or their clinical staff performed. Another stated that requesting physicians and/or their staff to use a stop-watch to, in effect, conduct time and motion studies for all their non-operating room patient care activities is an incredible burden. Another stated that reporting time in 10minute increments ‘‘is untenable,’’ noting that, except for a few specialties, physicians do not think of providing care in terms of timed increments. The commenter added that surgeons, in particular, are not accustomed to reporting time for all pre- and postoperative visits and to do so would be a huge disruption to workflow. In addition to objections about the burden of reporting time data, some commenters objected to the use of time data as a factor in valuations. Three organizations commented that it was appropriate to collect time data, but recommended that we do so based upon 15-minute increments as these were more familiar to physicians than the proposed 10-minue increments. In addition, some other groups, including MedPAC, agreed that data on time was needed for valuations. Response: Time is a key factor in valuing physician services under the physician fee schedule. Section 1848(c)(1) of the Act defines the work component as the portion of the resources used in furnishing the service that reflects physician time and intensity in furnishing the service. We also note that time-based codes are used by practitioners for a range of services in the PFS including psychotherapy, anesthesiology and critical care services. Critical care services are notable because these services are likely to be furnished intermittently as many commenters suggested is typical for post-operative follow-up services. Since issues have not been raised about the difficulty of using the current critical care codes, it is unclear why reporting of time would be burdensome and disruptive of care in this area. We have no reason to believe the documentation of time is more difficult or burdensome for those furnishing 10- and 90-day VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 global services than for other practitioners. However, based on the comments, it is clear that many practitioners would perceive reporting of time involved in furnishing these services to be a significant increase in burden relative to existing practice. Before implementing a change considered by so many to be so burdensome, we are exploring other ways of obtaining information that can be used to improve the accuracy of valuing these services. Accordingly, we are not finalizing, at this time, the requirement to use time-based codes. Comment: Many commenters stated that the use of these codes would be costly, requiring extensive education of practitioners and staff and necessitating updates to EHR systems and billing software. Some also noted the cost of processing additional claims. Many commenters noted that this would be particularly difficult as this additional administrative burden would come at the same time practitioners are adjusting the Merit-based Incentive Payment System (MIPS). One commenter provided the results of a survey of surgical practitioners in 20 specialties in which 30 percent of respondents stated that the cost of integrating the new Gcodes into their practice would cost more than $100,000 and only about 10 percent stated that it would cost less than $25,000. Some commenters expressed specific concern about the documentation burden that would come from using these codes. On the other hand, other commenters suggested that providers of visits during the global surgical services should be held to the same documentation standards as providers of E/M services. One stated that the ‘‘administrative burden on surgeons should be no different and certainly no less than that on non-surgeons when it comes to documenting a visit with a patient. If many surgeons currently use minimal documentation when they provide a post-operative visit that is no excuse for expecting the same inadequate level of documentation going forward. To require anything less than the same level of documentation for all clinicians providing E/M services would be irresponsible and unfair and would defeat the very purpose of documenting the actual types and extent of these services in the post-operative period.’’ Response: The need for accurate, complete and useful data must be balanced with administrative burden and cost. We articulated that using a select number of G-codes based on time would impose a burden on providers, but that burden is necessary for us to PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 80215 comply with the statutory requirement to gather the data necessary to value global procedures. We note that CPT routinely incorporates more than 100 new codes in annual updates, and for this reason we did not anticipate that the inclusion of eight new G-codes was likely to present significant challenges to EHR systems or other infrastructure. Based on the comments we received, however, it is clear that the majority of stakeholders believe the burden is much greater than we had assumed. In general, we agree with commenters that comparable documentation is appropriate for all physicians furnishing and being paid by Medicare for similar services. Comment: Several commenters noted that the difficulties of using these codes would affect the accuracy of the data reported. One commenter stated that the G-code proposal would be impossible to implement and ‘‘at the very least’’ would yield incomplete and unreliable results. Response: We agree with commenters that implementation burden is an important consideration in determining how practitioners should report on care provided in the post-operative period and that if practitioners find the reporting requirements to be excessive and require great expenditures to incorporate into their practice, the accuracy of the data could be undermined. We considered this in determining the final policy described below. Comment: Some commenters criticized the proposed G-codes because they were not directly linked to E/M codes or comparable to existing E/M codes. On the other hand, some commenters preferred the codes describing such visits not be linked or comparable to E/M codes to avoid confusion or unintentional, inappropriate payments. One commenter stated that the follow-up work performed within the global periods and the continuity work performed by cognitive physicians should not be represented by the same codes. Another commenter stated that the care required by a patient recovering from a procedure is fundamentally different from the typical follow-up of an established outpatient or inpatient, especially when there are multiple simultaneous interacting conditions, a single metastable chronic illness, or one or more acute exacerbated chronic illnesses that requires inpatient care and expertise. Response: Commenters’ belief that the work in follow-up visits included in the global package is not necessarily well described by the work of current E/M E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80216 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations codes is worth exploring. Current data does not allow us to determine the validity of these commenters’ assertion but given its importance, we believe it is critical to gather data on whether follow-up visits provided in the postoperative period are different than other E/M services. To the extent the services in the post-operative period are different from other E/M services, it would not make sense to use E/M codes in valuing global services as is ostensibly the case under the current process the RUC uses in developing recommended values for PFS services. Comment: Most commenters supported using CPT codes, rather than the proposed G-codes. A few pointed to the existing E/M codes, but most recommended that any claims-based reporting use CPT code 99024, an existing CPT code that describes postoperative services in a global period. Commenters noted that since this is a current CPT code the administrative burden would be much less than that associated with using the proposed new G-codes. These commenters suggest that practitioners are likely already familiar with the code, some already use it to track services within their practice, and some others already report it to other payers. Also, they suggest that because EHR and billing systems already include CPT code 99024, it will be less costly to implement than the proposal. Some also preferred using CPT code 99024 because unlike the proposed G-codes it does not require the reporting of time units. Most commenters disagreed that time could be a proxy for the complexity of the visit and objected to reporting time for the same reasons discussed above. These commenters did not agree that CPT code 99024 could be reported in time units as a proxy for collecting the required information about the level of visits. Three organizations disagreed, however, stating that time is a sufficient proxy for work relativity in postoperative visits and that the number units of CPT code 99024 could reflect the complexity involved. These commenters recommended reporting data in 15-minute intervals, rather than the proposed 10-minute increments, stating that physicians are familiar with 15-minute increments and thus the use of 15-minute increments would greatly reduce the administrative burden. They recommended that CMS clearly define how time is to be reported and suggested that the 8-minute rule is already a familiar concept that could be used. Many commenters suggested that other approaches, such as a survey, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 clinical registries, or on-line portals be used to collect data on level of visits. Several commenters stated that CMS should not collect data on the level of visits based on these commenters’ perspective that there is no problem with the level of visits currently used in the valuation of global packages. One commenter pointed out that only 1 percent of all established patient office visits used in valuing 10-day and 90-day global surgery packages have a visit level above a CPT code 99213. Another commenter suggested that the survey be used to collect data on the level of visits. Others suggested that RUC surveys be used to measure level of visits. Response: We understand that stakeholders believe that using CPT code 99024 rather than the proposed Gcodes will significantly lower administrative burden and lower costs related to the collection of this data. We do not have data showing that the level of visits used in valuation of global packages are correct or incorrect; to the best of our knowledge, this has never been assessed outside of the RUC process. While the current valuations for global packages rely primarily on CPT codes 99212 and 99213 for the visit component, we do not agree that this means that the levels are accurate. Further, as some commenters have made clear, there is not consensus among stakeholders that the postoperative visits are equivalent to other E/M visits. Additionally, the relationship between the number and level of visits assumed to be in the global period and the overall work RVUs for the global codes is often unclear. For all of these reasons, we disagree with commenters that we do not need to collect data on the level of services. In addition to the statutory reference to collecting data on the level of visits, we believe that code valuations can be more accurate with more complete information. While we continue to believe that data only on the number of visits furnished would not provide data on both the number and level of visits needed for valuation of services, data on the number of visits alone is an important input in valuing global packages and having accurate data on the number of visits could be a useful first step in analyzing the global packages. After considering the comments, we are finalizing a requirement to report post-operative visits furnished during 10- and 90-day global periods. However, rather than using the proposed set of Gcodes for this reporting, we are requiring that CPT code 99024 be used PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 to report such visits. We will not, at this time, require time units or modifiers to distinguish levels of visits to be reported. Since this code is specifically limited to post-operative care, we are only requiring reporting of postoperative visits. We expect that the reporting of this information through Medicare claims will provide us with information about the actual number of visits furnished during the postoperative periods for many services reported using global codes. Because the number of visits is a major factor in valuation of global services, we believe that examination of such information, when available, can improve the accuracy of the global codes. The use of a simple code that practitioners are familiar with should facilitate the submission of accurate information. We expect practitioners to note the visit in the medical chart documenting the postoperative visit. Since CPT code 99024 will only provide data on the number of visits and no data on the level or resources used in furnishing the visit, we believe this is only the first step in gathering the data required by Section 1848(c)(8). The proposed G-codes could have provided information to better understand the resources used in furnishing services during global periods and in valuation of such services assuming that they could be accurately reported. However, widespread concerns from groups representing the practitioners that would be reporting these services, including concerns about the burdens regarding and the inability of physicians to track time and the need to learn a new 8-code coding system, persuade us that we should pursue less burdensome ways of obtaining information. We will assess whether these methods will lead to the collection of necessary data, including data on time and intensity, of these services. As suggested by commenters, we will explore whether the data collected from the survey that we are conducting, which is discussed later in this preamble, can provide information on the level of visits and other resources needed to value surgical services accurately. Stakeholders should be aware that since this a new approach for collecting data, and one that has not been used previously, we are concerned that additional or different reporting will be necessary to collect data on the number and level of visits and other information needed to value surgical services as required by Section 1848(c)(8). E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations b. Reporting of Claims We proposed that the G-codes detailed above would be reported for services related to and within 10- and 90-day global periods for procedures furnished on or after January 1, 2017. Services related to the procedure furnished following recovery and otherwise within the relevant global period would be required to be reported. These codes would be included on claims filed through the usual process. Through this mechanism, we would collect all of the information reported on a claim for services, including information about the practitioner, service furnished, date of service, and the units of service. By not imposing special reporting requirements on these codes, we proposed to allow practitioners the flexibility to report the services on a rolling basis as they are furnished or to report all of the services on one claim once all have been furnished, as long as the filed claims meet the requirements for filing claims. We did not propose any special requirements for inclusion of additional data on claims that could be used for linking the post-operative care furnished to a particular service. To use the data reported on post-operative visits for analysis and valuation, we proposed to link the data reported on post-operative care to the related procedure using date of service, practitioner, beneficiary, and diagnosis. While we believed this approach to matching would allow us to accurately link the preponderance of G-codes to the related procedure, we sought comment on the extent to which postoperative care may not be appropriately linked to related procedures whether we should consider using additional variables to link these aspects of the care, and whether additional data should be required to be reported to enable a higher percentage of matching. The following is summary of the comments we received on our proposal to require reporting on pre- and postoperative care associated with all procedures with 10- and 90-day global periods. Comment: Many commenters objected to the proposal to require reporting on post-operative services for all 10- or 90day global services. Some suggested that many of the global services are low volume and have little impact on Medicare spending. It was also noted that it would be difficult to obtain a meaningful sample of low-volume services. Others discussed the burden of reporting on all services. The RUC recommended that CMS only require reporting on services that are furnished VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 by more than 100 providers and that either are furnished more than 10,000 times or have allowed charges of more than $10 million annually to obtain meaningful data for valuation. The RUC noted that many procedures were infrequently furnished and thus useful data would not be obtained. This position was supported by a significant number of commenters. In response to the stated concern about having complete data when more than one surgical service is furnished during the global period, a commenter pointed out that a review of the 2014 Medicare 5 percent sample file shows that, two surgical global codes are performed on the same date of service, by the same physician, only 18 percent of the time. Response: The commenters are correct that the vast majority of 10- and 90-day procedures are furnished infrequently and thus have little effect on Medicare expenditures or direct impact on the valuations of other services under the PFS. We proposed to collect data on all procedures since we believed the data we collected would be more accurate if physicians reported on all services as it would be routine and would not have required physicians to determine at each pre- and post-operative visit whether or not reporting the service was required. Moreover, as pointed out by commenters, we believe that reporting on all applicable services would have provided more complete data when multiple surgeries occurred during the global period. Having specific data on all procedures would provide specific information for each service that Medicare pays for using a global period. In assessing the likely benefit of the additional data as compared to the burden of reporting based on the comments we received, we agree with commenters that collecting the data from high volume/high cost procedures could provide adequate information to improve the accuracy of valuation of global packages overall. Even if all practitioners reported data on all procedures, it is likely that we would not receive enough data on low-volume services for the data to be reliable for use in valuations. There are more than 1,500 services that are furnished less than 100 times per year. Because of this, data that we could collect on these services would be extremely limited. We also find that data on services with low volumes are not reliable due to variability from year to year. Since we often value related services by extrapolating data on one service to other services in the family, with adjustments as necessary to reflect variations in the procedure, the data gathered on high-volume services could PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 80217 similarly be used to value low-volume services in the same family. As a result we, believe that the data on highvolume services can improve the accuracy of values for all 10- and 90-day services. After consideration of the comments, we are implementing a requirement for reporting on services that are furnished by more than 100 practitioners and are either furnished more than 10,000 times or have allowed charges of more than $10 million annually as recommended by the RUC and many other commenters. Under this policy, we estimate that we would collect data on about 260 codes that describe approximately 87 percent of all furnished 10- and 90-day global services and about 77 percent of all Medicare expenditures for 10- and 90-day global services under the PFS. Given that this data would provide information on the codes describing the vast majority of 10and 90-day global services and expenditures, it will provide significant data for valuation. For 2017, we will use the CY 2014 claims data to determine the codes for which reporting is required and display the list on the CMS Web site. In subsequent years, we will update the list to reflect more recent claims data and publish a list of codes prior to the beginning of the reporting year. The services for which reporting is required will include successor codes to those deleted or modified since CY 2014 for which reporting would have been required if the code had not been deleted or modified. The following is summary of the comments we received on our proposal to require claims-based reporting for services related to procedures furnished on or after January 1, 2017. Comments: Many commenters expressed concerns regarding the difficulty of making the changes required to implement this new reporting by January 1, 2017. Some commenters noted that this change was coming at the same time as the new MIPS program. Some commenters stated that the statute required a process to be in place by January 1, 2017, but that CMS has flexibility regarding when to begin the required reporting. Some commenters suggested that CMS consider conducting the proposed survey before implementing any claimsbased reporting. Response: We proposed to begin required reporting on January 1, 2017, based upon the statutory language regarding both the collection and use of the data for revaluation of services. We understand that some practices will need to make modifications to their EHR and billing systems to report this data to E:\FR\FM\15NOR2.SGM 15NOR2 80218 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 us. We also acknowledge that an opportunity for testing the systems and training will enhance the quality of data that we receive. After consideration of comments, we are encouraging practitioners to begin reporting data on post-operative services for procedures furnished on or after January 1, 2017. However, the requirement to report will become mandatory for post-operative services related to procedures furnished on or after July 1, 2017 rather than as of January 1, 2017, as proposed. This delay will not negatively impact the use value of the collected data since we expect that data received early in the year might be less complete than data submitted once practitioners adjusted to the requirements. Also, by allowing time for practitioners to adjust EHR and billing software, to test such systems and to train staff, we think the quality of the data will be enhanced by providing flexibility with regard to the effective date of the requirement. Finally, because we are limiting required reporting to high-volume codes, meaningful data for CY 2017 should be available from 6 months of reporting. Our systems can now accept the post-operative visit data so practitioners can begin submitting such claims at any time. c. Special Provisions for Teaching Physicians We sought comment on whether special provisions are needed to capture the pre- and post-operative services provided by residents in teaching settings. If the surgeon is present for the key portion of the visit, should the surgeon report the joint time spent by the resident and surgeon with the patient? If the surgeon is not present for the key portion of the visit, should the resident report the service? If we value services without accounting for services provided by residents that would otherwise be furnished by the surgeon in non-teaching settings, subsequent valuations based upon the data we collect may underestimate the resources used, particularly for the types of surgeries typically furnished in teaching facilities. However, there is also a risk of overvaluing services if the reporting includes services that are provided by residents when those services would otherwise be furnished by a physician other than the surgeon, such as a hospitalist or intensivist, and as such, should not be valued in the global package. Comment: We received only a few comments on this issue. Some commenters suggested using the CMS policies that apply to other services that VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 teaching surgeons report to CMS for the reporting of CPT code 99024. More specifically, when the appropriate conditions are met they would use the GC or GE modifier to identify those services in which surgical residents are involved. One of these suggested that once we have the data we discuss with stakeholders how to use the data involving residents in future valuations. Others suggested that we capture data on resident’s time as it could be important for valuation, especially for the more complex cases in a teaching facility setting. Some urged that we provide clear guidance on when the resident’s time could be reported. One commenter stated that teaching physicians should be exempt from reporting requirements. Response: These comments reinforce the importance of collecting data from teaching physicians and to do so using the existing Medicare rules that teaching physicians use in reporting services in which residents are involved in furnishing. Because we are finalizing data collection using CPT code 99024, the issues regarding the reporting of time data are no longer relevant. After consideration of the comments, we are finalizing a requirement that teaching physicians will be subject to the reporting requirements in the same way that other physicians are. Such physicians should report CPT code 99024 only when the services furnished would meet the general requirements for reporting services and should use the GC or GE modifier as appropriate. e. Who Reports In both the comments on the CY 2016 proposed rule and in input from the January 2016 national listening session, there was a great deal of discussion regarding the challenges that we are likely to encounter in obtaining adequate data to support appropriate valuation. Some indicated that a broad sample and significant cooperation from physicians would be necessary to understand what is happening as part of the global surgical package. One commenter suggested that determining a representative sample would be difficult and, due to the variability related to the patient characteristics, it would be easier to have all practitioners report. Many suggested that we conduct an extensive analysis across surgical specialties with a sample that is representative of the entire physician community and covers the broad spectrum of the various types of physician practice to avoid problems that biased or inadequate data collection would cause. Suggestions of factors to account for in selecting a sample PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 include specialty, practice size (including solo practices), practice setting, volume of claims, urban, rural, type of surgery, and type of health care delivery systems. Another commenter pointed out that small sample sizes may lead to unreliable data. Some commenters stated that requiring all practitioners to report this information is unreasonable and would be an insurmountable burden. A participant acknowledged that it would be difficult for practitioners to report on only certain procedures, while another stated that this would not be an administrative burden. After considering the input of stakeholders on the CY 2016 proposed rule and at the January 2016 national listening session discussed above, we proposed that any practitioner who furnishes a procedure that is a 10- or 90day global service report the pre- and post-operative services furnished on a claim using the proposed G-codes. We agreed with stakeholders that it would be necessary to obtain data from a broad, representative sample. However, as we struggled to develop a nationally representative sampling approach that would result in statistically reliable and valid data, it became apparent that we do not have adequate information about how post-operative care is delivered, how it varies and, more specifically, what drives variation in post-operative care to develop a sampling frame. In its work to develop the coding used for its study, the contractor found a range of opinions on what drives variation in post-operative care. (The report is available on the CMS Web site under downloads for the CY 2017 PFS proposed rule with comment period at https://www.cms.gov/physicianfeesched/ downloads/.) Without information on what drives variation in pre- and postoperative care, we would have to speculate about the factors upon which to base a sample or assume that the variation in such care results from the same variables as are frequently identified for explaining variation in health care and clinical practice. In addition, we expressed concern about whether a sample could provide sufficient volume to value accurately the global package, except in the case of a few high-volume procedures. In addition to concerns about achieving a statistically representative sample of all practitioners nationally, we noted in the proposed rule significant operational concerns with limiting data collection to a subset of practitioners or a subset of services. These include how to gain sufficient information on practitioners to stratify the sample, how to identify the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations practitioners who must report, and for those who practice in multiple settings or with multiple groups in which settings the practitioner would report. We concluded that establishing the rules to govern which post-operative care should be reported based on our proposed G-codes would be challenging for us to develop and difficult for physicians to apply in the limited time between the issuance of the CY 2017 PFS final rule with comment period and the beginning of reporting on January 1, 2017. We do not believe that the same problems apply to the same extent to our final policy to use a single code that already exists to report services described only by codes reported in high volumes. For example, implementation of new sets of codes associated with annual PFS updates are often supported by informational and educational efforts undertaken by national organizations, like the national medical specialty societies. Given that many practitioners are already familiar with CPT code 99024 (as noted by many commenters), the need for such efforts is significantly mitigated. We also noted in the proposed rule that the more robust the reported data, the more accurate our ultimate valuations can be. We stated that given the importance of data on visits in accurate valuations for global packages, collecting data on all pre- and postoperative visits in the global period is the best way to accurately value surgical procedures with global packages. We recognized that reporting would require submission of additional claims by those practitioners furnishing global services, but indicated that we believed the benefits of accurate data for valuation of services merited the imposition of this requirement. By using the claims system to report the data, we believed the additional burden would be minimized and referred to stakeholder reports that many practitioners are already required by their practice or health care system to report a code for each visit for internal control purposes and some of these systems already submit claims for these services, which are denied. We noted that requiring only some physicians to report this information, or requiring reporting for only some codes, could actually be more burdensome to physicians than requiring this information from all physicians on all services because of the additional steps necessary to determine whether a report is required for a particular service and adopting a mechanism to assure that data is collected and reported when required. Moreover, we stated that the challenges with implementing a limited VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 approach at the practice level as compared to a requirement for all global services would result in less reliable data being reported. We noted that as we analyzed the data collected and made decisions about valuations, we would reassess the data needed and what should be required from whom. Through the data collected under our proposal, we indicated that we would have the information to assess whether the post-operative care furnished varies by factors such as specialty, geography, practice setting, and practice size, and thus, the information needed for a sample selection to be representative. While section 1848(c)(8)(B) of the Act requires us to collect data from a representative sample of physicians on the number and level of visits provided during the global period, we stated that it does not prohibit us from collecting data from a broad set of practitioners. In addition, section 1848(c)(2)(M) of the Act authorizes the collection of data from a wide range of physicians. Given the benefits of more robust data, including avoiding sample bias, obtaining more accurate data, and facilitating operational simplicity, we noted that we believed collecting data on all post-operative care initially is the best way to undertake an accurate valuation of surgical services in the future. The following is a summary of the comments that we received on our proposal to require all practitioners furnishing 10- or 90-day global services to submit claims for the pre- and postoperative services furnished. Comment: Commenters overwhelmingly opposed requiring all practitioners to submit claims for postoperative services. Several reasons were cited for the opposition. The most significant reason was the administrative burden and costs to physicians. Many commenters also stated that requiring all practitioners who furnish 10- or 90-day global services to report data is counter to the statute because the statute refers to collection of data from a representative sample of physicians. One commenter stated that requiring every practitioner to report these codes will be in many ways less representative than a targeted sample, explaining that given the limited time for education, only large, technologically rich practices will have the ability to properly report these services. The commenter noted that this will leave many, smaller or rural practices without the proper education and robust billing systems in place to adequately, if at all, report these G-codes. The commenter also noted that PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 80219 smaller, rural practices have smaller patient populations, which can often be older and sicker than the typical patient seen in a large practice and by creating a complex system that favors one type of practice, the collected data is more likely to be biased rather than representative. Another commenter suggested that a small number of representative practices could provide us with the same level of accuracy as collected data from all physicians. Response: In response to commenters’ opposition to our proposal to require all providers of covered services to report data, we acknowledge that the stakeholders describe a much larger burden from using the G-codes than we anticipated. On the other hand, we also believe that our final policy will result in a much lower burden than the proposed policy would have. As noted above, we are not finalizing the proposed requirements to use the Gcodes or the proposed requirement to report on all 10- and 90-day global procedures and thus, we believe that the overall administrative burden is significantly reduced. We do not agree with commenters that state that we do not have the statutory authority to require reporting by all practitioners furnishing certain services. We point commenters to section 1848(c)(2)(M) of the Act, which authorizes the collection of data to use in valuing PFS services. We continue to believe that section 1848(c)(8) of the Act requires us to collect data that is representative. We also continue to believe that requiring all practitioners to report is more likely to be representative than a sample given our lack of information about what drives variation in post-operative care. However, after considering the information presented by commenters regarding the difficulties that would be placed on many physicians by the proposal, we believe that requiring reporting by all practitioners for CY 2017 may present unforeseen, alternative impediments to the sample being nationally representative of all practitioners, such as practitioners being unable to report data accurately due to constraints of time, finances or technical ability. Comment: We did not receive any comments on the appropriate sample size. Nor did we receive data on variations in the delivery of postoperative care in response to our concern that we lacked data on how post-operative care was delivered to select a representative sample. Many commenters stated that it was possible to select a representative sample, but none provided details on how to do so. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80220 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Several commenters suggested broadly sampling using the characteristics that are frequently used for health care sampling generally, such as geographic areas, urban and rural, practice types, practice sizes, specialties and academic and non-academic. One commenter recommended that we select a sample using geographical data to identify a sample including practices of all sizes. The commenter suggested, for example, that large hospital-based practices often have practice patterns that are different from the majority of the practicing physicians in suburban and rural areas. Another commenter stated that we should not only collect data from MSAs but also from rural and less urban areas. One commenter suggested that we consider phasing in the requirement, perhaps starting with larger groups. The commenter stated that through one of these approaches we could avoid ‘‘burdening providers with unfunded work that has not yet been tested.’’ One commenter suggested that we use a geographic sampling approach similar to that one used for Comprehensive Care for Joint Replacement (CJR) model or the episode payment models proposed for cardiac and surgical hip/femur fraction and modify it to choose a geographic sampling unit of MSAs and non-MSAs. Response: We agree with commenters that we could select a sample using an approach typically used in health care surveys or in Medicare models and other programs. To the extent that the delivery of post-operative care varies only based upon the criteria we selected, a sample based on being representative for that criteria would be likely to produce valid data. However, instead of sampling by practice or practitioner or type of service, a geographic approach to sampling (for example, sampling all practitioners in a selected state) could help to alleviate the need to stratify the sample on a long list of criteria. By using broad geographical areas from varied areas of the country, we believe our sample will capture data from practitioners who practice in a variety of settings, single and multispecialty practices, urban and rural, a variety of medical specialties, and practitioners operating in both academic and nonacademic institutions. Surgeons interviewed for the G-code development suggested that post-operative care might vary across these dimensions. A geographic approach could also mitigate some of the practical operational barriers. For example, we believe that by having all practitioners in the practice participate in reporting, we avoid concerns about incomplete data when a VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 required reporter furnishes a procedure and another practitioner in the practice furnishes the post-operative visits. A geographic approach also makes it easier to educate practitioners on data collection requirements. Comment: In response to operational difficulties with a representative sample, such as how to make sure participants were aware of the requirement to report and how to do so, one commenter stated that notifying a small targeted sample is a much smaller task than notifying the entire population of participating Medicare practitioners. They also stated that a targeted approach will encourage open dialogue between the participating practices and CMS, ensuring the data collected are reliable. Others suggested providing compensation for a sample of physicians to submit detailed data, would lead to capturing accurate data because they would more likely to understand and prioritize reporting because of their participation in this type of study. Response: We disagree that it is operationally easier to notify a small segment of broadly diverse practitioners than the entire population of practitioners unless that small segment has a degree of cohesiveness, such as being in the same geographic area or specialty. We have long appreciated the stakeholder community’s collaboration in broad communication efforts. In general, we have found that when something affects a small number of providers it does not receive the same response from entities that are critical for widespread adoption such as associations, who are key purveyors of information, and those developing software systems. We appreciate the suggestion that interaction among those that need to report will facilitate compliance and the quality of the data. With regard to compensation, we note that the statute provided for a 5 percent withhold to encourage compliance and we chose not to propose to implement this provision. After consideration of the comments, we are finalizing a requirement for reporting that only applies to practitioners in selected states. In addition, those practicing only in small practices are excluded from required reporting. Those not required to report can do so voluntarily and we encourage them to do so. Geographic Sample As we noted in the proposed rule, we do not have adequate data on what drives variations in the delivery of preand post-operative care to design a sampling methodology that is certain to PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 be representative. We also believe that submission by all practitioners would be consistent with our extensive use of claims data for other PFS services. Additionally, we understand the statute directs us to gather data from more than a select group of practitioners based on any particular attributes, such as gathering data only from ‘‘efficient’’ practices, consistent with longstanding recommendations from MedPAC regarding limiting data collection. We also believed that there were significant operational impairments to data reporting by a limited sample of physicians. In consideration of these factors, we proposed to require reporting by all physicians to make sure that the data we obtained reflected all services furnished. In light of the comments regarding the burden that would be created by requiring reporting by all physicians and the data that was actually needed for valuation, we think that reporting by a subset of practitioners could provide us valuable information on the number of visits typically furnished in global periods. This data could enhance the information we currently use to establish values for these services. While we acknowledge that we believe the data under this less burdensome approach will provide less information than necessary for optimal valuation for these services, we believe that the information on the number of actual visits from a subset of practitioners is preferable to the information on which we currently rely, which is the results of survey data reflecting respondents’ assessment of the number of visits considered to be typical. One commenter suggested that we could develop a geographic sample using a similar approach used by the Center for Medicare and Medicaid Innovation for the Comprehensive Care for Joint Replacement (CJR) or other proposed episode payment models, with an adjustment that would make certain we received data from rural, as well as urban areas. We reviewed these approaches and concluded that such an approach for sample selection could maximize the variability of the sample, mitigate some of our concerns, and provide a robust set of data for consideration. Commenters suggested a sample should include geographic diversity. Studies show that health care delivery patterns often vary between geographic areas and while we have no specific information that the number of postoperative visits varies by geographic areas, it seems prudent to gather data from a variety of geographic areas to determine if there is such variation and E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations to account for it in our data collection if it exists. In order to maximize the variability of our limited sample, we are using a methodology that requires reporting from practices in 9 states of various sizes and from various geographic areas of the country. We are using whole states for the geographic areas rather than MSAs as are used for the CJR and proposed for other models for several reasons. First, MSAs are not used for geographic adjustments under the PFS. Indeed, practitioners in most states receive state-wide geographic adjustments under the PFS. Additionally, an MSA-based approach would, by definition, not include large rural areas, something mentioned by many commenters as an important factor in variation in medical practice, and therefore, a critical criterion for sampling. Also, due to a variety of governmental and institutional requirements, the practice of medicine is primarily a state-based activity and thus the use of states will reduce the number of practitioners for whom we have only partial data based on geographic location. In contrast, we believe that practitioners often practice across county lines or in more than one MSA. We also believe that the statewide approach will be helpful for compliance and education because there are state medical associations in every state and specialty associations in many. To make sure that we had states of a variety of sizes, we ranked states according to the number of Medicare beneficiaries in each state. We chose the number of Medicare beneficiaries to reflect the general need for Medicare services. We divided states into four groups: The top 5 states in terms of the number of Medicare beneficiaries (group 1); 6th through 15th largest states in terms Medicare beneficiaries (group 2); the 16th through 25th largest states in terms of Medicare beneficiaries (group 3); and all remaining states (26 including the District of Columbia, group 4). The states in each group are: • Group 1—California, Florida, New York, Pennsylvania & Texas. • Group 2—Georgia, Illinois, Massachusetts, Michigan, New Jersey, North Carolina, Ohio, Tennessee, Virginia, and Washington. • Group 3—Alabama, Arizona, Indiana, Kentucky, Louisiana, Maryland, Minnesota, Missouri, Wisconsin, and South Carolina. • Group 4—Alaska, Arkansas, Colorado, Connecticut, District of Columbia, Delaware, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Dakota, Utah, Vermont, West Virginia and Wyoming. We also recorded the Census region for each state using the Census Bureau’s nine regions (New England, Middle Atlantic, South Atlantic, East South Central, West South Central, East North Central, West North Central, Mountain, and Pacific). Puerto Rico and other territories were excluded. To ensure a mix of states in terms of size (measured by number of Medicare beneficiaries), we selected 1 state at random from group 1, followed by 2 states each at random from groups 2 and 3, and lastly 4 states from group four. After each random selection, we eliminated the remaining states in the same Census region from the remaining groups for which selection was pending to maximize geographic variation in the selection of states. In the event that this process resulted in fewer than 9 selected states (for example if none of the three Middle Atlantic states—all in Group 1 and 2—were selected in the first three picks), the last selection(s) were made randomly from states in the remaining Census region from which selections previously had not been made. Practitioners located in the following states who meet the criteria for required reporting will be required to report the data discussed in this section of the final rule: • Florida. • Kentucky. • Louisiana. • Nevada. • New Jersey. • North Dakota. • Ohio. • Oregon. • Rhode Island. Exclusion for Practitioners in Small Practices In response to comment about the burden of our proposed requirement and the concern that the burden would result in the submission of data of poor quality, we are exempting practitioners who only practice in practices with fewer than 10 practitioners from the reporting. Based upon the comments, we believe larger practices are more likely to currently require practitioners to track all visits and often use CPT code 99024 to do so. Moreover, larger practices are more likely to have coding and billing staff that can more easily adapt to this claims-based requirement. The combination of experience with reporting CPT code 99024 and the staff and resource base to devote to developing the infrastructure for such reporting will result in greater accuracy from such practitioners. By excluding practitioners who only practice in PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 80221 practices with fewer than 10 practitioners, we estimate that about 45 percent of practitioners will not be required to report. In defining small practices, we reviewed other programs. We chose 10 practitioners as the threshold for reporting as practices of this size are large enough to support coding and billing staff, which will make this reporting less burdensome. Also, this is the same threshold used by the value-based modifier program for its phase-in of a new requirement because of concerns about the burden of small practices. For this purpose, we define practices as a group of practitioners whose business or financial operations, clinical facilities, records, or personnel are shared by two or more practitioners. For the purposes of this reporting requirement, such practices do not necessarily need to share the same physical address; for example, if practitioners practice in separate locations but are part of the same delivery system that shares business or financial operations, clinical facilities, records, or personnel, all practitioners in the delivery system would be included when determining if the practice includes at least 10 practitioners. Because qualified nonphysician practitioners may also furnish procedures with global periods, the exception for reporting post-operative visits applies only to practices with fewer than ten physicians and qualified non-physician practitioners regardless of specialty. We are including all practitioners and specialties in the count because the exception policy uses practice size as a proxy for the likely ability of the practice to meet the reporting requirements without undue administrative burden. We recognize that physicians and qualified nonphysician practitioners furnish services under a variety of practice arrangements. In determining whether a practitioner qualifies for the exception based on size of the practice, all physicians and qualified non-physician practitioners that furnish services as part of the practice should be included. This would include all practitioners, regardless of whether they are furnishing services under an employment model, a partnership model, or an independent contractor model under which they practice as a group and share facility and other resources but continue to bill Medicare independently instead of reassigning benefits. We also recognize that practice size can fluctuate over the year and anticipate that practices will determine their eligibility for the exception based E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80222 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations on their expected staffing. Generally, practitioners in short-term locum tenens arrangements would not be included in the count of practitioners. When practitioners are also providing services in multiple settings, the count may be adjusted to reflect the estimated proportion of time spent in the group practice and other settings. Although this policy excludes a significant number of practitioners, a majority of the global procedures furnished will be included in the reporting requirements and thus we will have data on a majority of services. Several commenters also expressed concern that data from small practices be included to have complete information. If those practicing in small practices are motivated to report and either have the infrastructure to do so in place or the resources to develop such infrastructure, then, taken together, these attributes would minimize concerns with accuracy of data from small practices. Accordingly, we are encouraging, but not requiring, small practices to report the visits. As we collect data, we will explore mechanisms to appropriately use the voluntarily submitted claims data. Analysis of this and other data we are able to procure will allow us to assess whether the number of post-operative visits varies based upon the size of practice. To the extent that it does and that we do not have adequate data on the practice patterns in small practices from voluntarily submitted data and other sources, we will reconsider for future notice and comment rulemaking the exemption of practitioners in small practices from the reporting requirements. The claims data received from practitioners in these states will provide more information about the number of visits typically provided in postoperative periods than is available from any other source. Through analysis of this data, we hope to learn more about what drives variations in the delivery of post-operative care. Many of the characteristics that were suggested by commenters, such as size of practice, type of practice, geographic, urban/ rural, academic, hospital based, specialty, etc., will be able to be evaluated using the claims data. Moreover, we hope to be able to stratify the data received based upon comparisons to the national characteristics so that the submitted claims data can contribute to improved valuation of PFS services. In summary, our claims-based data collection policy requires that, for procedures furnished on or after July 1, 2017, practitioners who practice in VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 practices that includes of 10 or more practitioners in Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon, and Rhode Island will be required to report on claims data on post-operative visits furnished during the global period of a specified procedure using CPT code 99024. The specified procedures are those that are furnished by more than 100 practitioners and either are nationally furnished more than 10,000 times annually or have more than $10 million in annual allowed charges. The final list of codes subject to required reporting will be available on the CMS Web site. Although required reporting begins for global procedures furnished on or after July 1, 2017, we encourage all practitioners to begin reporting for procedures furnished on or after January 1, 2017, if feasible. Similarly, we encourage those practicing in practices with fewer than 10 practitioners to report data if they can do so. (1) Survey of Practitioners We agreed with commenters on the CY 2016 proposed rule and at the listening session that we need more information than is currently provided on claims and that we should utilize a number of different data sources and collection approaches to collect the data needed to assess and revalue global surgery services. In addition to the claims-based reporting, we proposed to survey a large, national sample of practitioners and their clinical staff in which respondents would report information about approximately 20 discrete pre-operative and postoperative visits and other global services like care coordination and patient training. This sample would be stratified based upon specialty and geography, as well as by physician volume (procedures billed) and practice setting. The proposed survey would produce data on a large sample of preoperative and post-operative visits and is being designed so that we could analyze the data collected in conjunction with the claims-based data that we would be collecting. We expect to obtain data from approximately 5,000 practitioners. We noted that, if our proposal was finalized, RAND would develop and conduct this survey. RAND would also assist us in collecting and analyzing data for this survey and the claimsbased data. While the primary data collection would be via a survey instrument, semi-structured interviews would be conducted and direct observations of post-operative visits would occur in a small number of pilot sites to inform survey design, validate PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 survey results, and collect information that is not conducive to survey-based reporting. Our proposed sampling approach would sample practitioners rather than specific procedures or visits to streamline survey data collection and minimize respondent burden. Specifically, we will use a random sample from a frame of practitioners who billed Medicare for more than a minimum threshold of surgical procedures with a 10- or 90-day global period (for example, 200 procedures) in the most recent available prior year of claims data. The sampling frame would provide responses from approximately 5,000 practitioners, stratified by specialty, geography, and practice type. Based upon preliminary analysis, we believe this number of participants will allow us to collect information on postoperative care following the full range of CPT level-2 surgical procedure code groups. For many common types of post-operative visits, we anticipate a standard deviation of the time distribution at around 9 minutes. To achieve a 95 percent confidence intervals with a width of 2 minutes, we would need 311 reported post-operative visits per procedure/procedure group. The most comprehensive approach would be to sample sufficient practitioners to observe 311 postoperative visits for each HCPCS procedure, but this approach would be cost- and time-prohibitive. Since postoperative care following similar procedures may involve similar activities and times even if there are differences in the number of visits, we proposed to sample differentially by specialty to maximize our ability to estimate attributes of post-operative care for the largest range of procedures. Sample sizes for each specialty will be determined on the basis of number of procedures billed by the specialty and number of practitioners billing, assuming a uniform distribution of procedures across the year, an average of 2 post-operative visits by each patient and an equal distribution of procedures across practitioners within a specialty. If the procedure represented only 5 percent of total billed procedures for the specialty, we could expect only one of 20 visits sampled and reported by each practitioner would be for the particular procedure, and thus we would need to sample 311 practitioners within the specialty to achieve the target precision level on estimated post-operative visit time. We propose targeting 311 reporting practitioners from each specialty which is the only specialty contributing at least 5 percent of billings for any one E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations procedure group code, defined as procedures sharing a CPT level 2 heading. For other specialties, the target will be defined by the maximum value of 311 divided by the number of specialties contributing at least 5 percent for any procedure group code for which that specialty contributes. The target sample size for a specialty will be capped at 25 percent of the eligible practitioners within the specialty. For example, if a specialty contributed to two procedure group codes, one of which had four contributing specialties and the other had three contributing specialties, the specialty of interest would have a target of 104 reporting practitioners (which is driven by the procedure group code that is tied to three specialties). These guidelines will target at least 311 reporting practitioners for each procedure group code, and result in a total target sample size of 4,872 providers. A smaller sample size would reduce the precision of estimates from the survey and more importantly risk missing important differences in post-operative care for specific specialties or following different types of surgical procedures. We expect a response rate in excess of 50 percent. Given this response rate (and some uncertainty in this response rate estimate), we will need to approach at least 9,722 practitioners for our target of 4,872 practitioners. Should the response rate be lower than expected, we will continue to sample in waves until we reach the target of approximately 4,872 practitioners. Non-response bias will be assessed by comparing available characteristics of non-respondents (for example, practice type, geography, procedure volume etc.) to those of respondents. We did not propose that respondents report on the entire period of postoperative care for individual patients, as a 90-day follow-up window (for surgeries currently with a 90-day global period) is too long to implement practically in this study setting and would be more burdensome to practitioners. Instead, we proposed to collect information on a range of different post-operative services resulting from surgeries furnished by the in-sample practitioner prior to or during a fixed reporting period. Practitioners will be asked to describe 20 post-operative visits furnished to Medicare beneficiaries or other patients during the reporting period. The information collected through the survey instrument, which will be developed based upon direct observation and discussions in a small number of pilot sites, will include contextual information to describe the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 background for the post-operative care, including, for example: • Procedure codes(s) and date of service for procedure upon which the global period is based. • Procedure place of service. • Whether or not there were complications during or after the procedure. • The number in sequence of the follow-up visit (for example, the first visit after the procedure). The survey instrument will also collect information on the visit in question including, for example: • Which level of visit using existing billing codes. • Specific face-to-face and non-faceto-face activities furnished on the day of the visit. • The total time spent on face-to-face and non-face-to-face activities on the day of the visit. • Direct practice expense items used during the visit, for example supplies like surgical dressings and clinical staff time. Finally, the instrument will ask respondents to report other prior or anticipated care furnished to the patient by the practice outside of the context of a post-operative visit, for example nonface-to-face services. The survey approach will complement the claims data collection by collecting detailed information on the activities, time, intensity, and resources involved in delivering global services. The resulting visit-level survey data would allow us to explore in detail the variation in activities, time, intensity, and resources associated with global services within and between physicians and procedures, and would help to validate the information gathered through claims. A summary of the work that RAND would be doing is available on the CMS Web site under downloads for the CY 2017 PFS proposed rule with comment period at https://www.cms.gov/physicianfeesched/ downloads/. The following is a summary of the comments that we received on our proposal to conduct a survey of practitioners furnishing 10- and 90-day global services to obtain information about the face-to-face activities and other activities included in postoperative care. Comment: Most commenters were generally supportive of the survey effort and noted that the provider survey will collect useful information on the level of visits, as well as important contextual detail that will not be available from the claims-based reporting. One commenter stated that a limited approach through surveys of physicians and practices PO 00000 Frm 00055 Fmt 4701 Sfmt 4700 80223 looking at a targeted selection of services, and using CPT code 99024 for the claims based component would yield meaningful and actionable data for the agency and stakeholders. Response: We agree that the survey portion of the data collection approach will provide useful information on level and context. The survey will complement claims-based reporting and will provide us with important information on non-face-to-face activities and other activities that are not reported with CPT code 99024. Comment: One commenter pointed out challenges in survey response and in estimating time for visits by aggregating practitioner time estimates for specific activities. Response: While we have not finalized the design of the survey instrument, we are aware of challenges in collecting detailed time estimates for specific activities. We do not intend to sum estimated times for specific activities to arrive at a total duration for the visit. We also recognize the challenges related to survey response rates and are working with our contractor accordingly. Comment: Several commenters suggested that the survey effort should not target all 4,200 procedure codes. Response: The survey component of the data collection effort is not designed to collect information on visits following all global procedure codes. Rather, we expect the sample to be stratified by specialty and to result in a sufficient qualitative data to address key procedures in each specialty furnishing procedures with global periods. Comment: Some commenters believed that the purpose of the direct observation component of the data collection effort was unclear. Response: The direct observation component will consist of external observers capturing the activities conducted in a sample of post-operative visits at a small number of practices. It is designed to provide additional context to inform future data collection efforts and to gauge where the practitioner survey does or does not capture the full range of activities. It is not a data collection activity per se. After consideration of the comments, we are finalizing our proposal to conduct a survey of practitioners to gain information on post-operative activities to supplement our claims-based data collection as proposed. We expect that the survey will be in the field mid-2017. (2) Required Participation in Data Collection Using the authority we are provided under sections 1848(c)(8) and E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80224 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 1848(c)(2)(M) of the Act, we proposed to require all practitioners who furnish a 10- or 90-day global service to submit a claim(s) providing information on all services furnished within the relevant global service period in the form and manner described in this section of the final rule, beginning with surgical or procedural services furnished on or after January 1, 2017. We also proposed to require participation by practitioners selected for the broad-based survey through which we proposed to gather additional data needed to value surgical services, such as the clinical labor and equipment involved that cannot be efficiently collected on claim (see below). Given the importance of the proposed survey effort, making sure that we get valid data is critical. By eliminating the bias that would be associated with using only data reported voluntarily, we stated that we expected to get more accurate and representative data. In addition to the potential bias inherent in voluntary surveys, we expressed concern that relying on voluntary data reporting would limit the adequacy of the volume of data we obtain, would require more effort to recruit participants, and may make it impossible to obtain data for valuation for CY 2019 as required by the statute. Based on our previous experience with requesting voluntary cooperation in data collection activity, voluntary participation poses a significant challenge in collection and use of data. Specifically, the Urban Institute’s work (under contract with us) to validate work RVUs by conducting direct observation of the time it took to furnish certain elements of services paid under the physician fee schedule provides evidence of this challenge. (See https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ PhysicianFeeSched/Downloads/RVUsValidation-Urban-Interim-Report.pdf for an interim report that describes challenges in securing participation in voluntary data collection.) Similarly, we routinely request invoices on equipment and supplies that are used in furnishing PFS services and often receive no more than one invoice. These experiences support the idea that mandatory participation in data collection activities is essential if we are to collect valid and unbiased data. Section 1848(a)(9) of the Act authorizes us, through rulemaking, to withhold payment of up to 5 percent of the payment for services on which the practitioner is required to report under section 1848(c)(8)(B)(i) of the Act until the practitioner has completed the required reporting. Some commenters VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 opposed the imposition of this payment consequence for failure to report, and others stated that it was too large a penalty. While withholding a portion of payment would encourage practitioners to report the required information, we did not propose to implement this option for CY 2017. We stated that requiring physicians to report the information on claims, combined with the incentive to report complete information so that revaluations of payment rates for global services are based on accurate data, would result in compliance with the reporting requirements. However, we noted that if we find that compliance with required claims-based reporting is not acceptable, we would consider in future rulemaking imposing up to a 5 percent payment withhold as authorized by the statute. Consistent with the requirements of section 1848(c)(2)(M) of the Act, should the data collected under this requirement be used to determine RVUs, we will disclose the information source and discuss the use of such information in such determination of relative values through future notice and comment rulemaking. The following is a summary of the comments we received on our proposal to require reporting in the claims-based survey and participation in the survey. Comment: Many commenters objected overall to the administrative burden of our proposal and questioned the need for some of the data we were proposing to collect, primarily through the claimsbased reporting, and made many recommendations for less burdensome data collection to achieve our goals. Some objected to any claims-based reporting at this time. A few recommended a different approach that involved collecting information from a small number of practices that agree to participate and that we pay such practices for participation. However, none recommended that we go forward with data collection on a totally voluntary basis. Some indicated concern that practitioners would not provide required information. Response: We appreciate the many ideas for how to improve our data collection effort, particularly those that provided information on how to collect the information that we need while imposing a lower administrative burden on practitioners. Comment: A few commenters supported our not proposing to implement the 5 percent withhold until claims on the post-operative care were submitted. Response: We appreciate the support of commenters. PO 00000 Frm 00056 Fmt 4701 Sfmt 4700 After considering the comments, we are finalizing our proposal to require participation in the claims-based reporting. It should be noted, however, due to our modifying the requirement to apply only to those identified as part of the geographic sample, on selected procedures, using one code, and exempting those practicing in groups with fewer than 10 practitioners, as discussed above, the impact of the requirement is significantly reduced overall, including for the subset of practitioners who will have to report under the finalized requirements. We are not implementing the statutory provision that authorizes a 5 percent withhold of payment for the global services until claims are filed for the post-operative care, if required. We reiterate that should we find that compliance with required claims-based reporting limits confidence in the use of the information for improving the accuracy of payments for the global codes, we would consider in future rulemaking imposing up to a 5 percent payment withhold as authorized by the statute. (3) Data Collection From Accountable Care Organizations (ACOs) We are particularly interested in knowing whether physicians and practices affiliated with ACOs expend greater time and effort in providing post-operative global services in keeping with their goal of improving care coordination for their assigned beneficiaries. ACOs are organizations in which practitioners and hospitals voluntarily come together to provide high-quality and coordinated care for their patients. Because such organizations share in the savings realized by Medicare, their incentive is to minimize post-operative visits while maintaining high quality post-operative care for patients. In addition, we believe that such organizations offer us the opportunity to gain more in-depth information about delivery of surgical services. We proposed to collect data on the activities and resources involved in delivering services in and around surgical events in the ACO context by surveying a small number of ACOs (Pioneer and Next Generation ACOs). Similar to the approach of the more general practitioner survey, this effort would begin with an initial phase of primary data collection using a range of methodologies in a small number of ACOs; development, piloting, and validation of an additional survey module specific to ACOs. A survey of practitioners participating in approximately 4 to 6 ACOs using the E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 survey instrument along with the additional ACO-specific module will be used to collect data from on pre- and post-operative visits. The following is summary of the comments we received about our proposal for data ACO data collection. Comment: Several commenters supported a separate survey of practitioners participating in ACOs. One commenter agreed with CMS that this data collection effort may provide a unique and useful perspective on the matter at hand. Several commenters indicated that there are likely differences in pre- and post-operative care between practitioners who do participate in ACOs and those that do not. One commenter cautioned against extrapolating information gathered from ACOs to value global surgery services that are provided outside of the ACO setting because ACOs are structured differently than other practice settings and data from ACOs may, therefore, be skewed [and] that ACO participants typically are larger practices and thus would underrepresent smaller or solo practitioners. Response: We agree that ACOs may be structured differently than other practice settings and that these differences may contribute to variations in the provision of outpatient care. By separately surveying ACOs we will be able to investigate whether there are differences in pre- and post-operative care in ACO settings compared to nonACO settings. After consideration of the comments received, we are finalizing our proposal for data collection in ACOs. We recognize and will continue to consider the concerns raised by commenters as we implement this project. (6) Re-Valuation Based Upon Collected Data We recognize that the some of the data collection activities being undertaken vary from how information is currently gathered to support PFS valuations for global surgery services. However, we believe the proposed claims-based data collection is generally consistent with how claims data is reported for other kinds of services paid under the PFS. We believe that the authority and requirements included in the statute through the MACRA and PAMA were intended to expand and enhance data that might be available to enhance the accuracy of PFS payments. In the proposed rule, we indicated that because these are new approaches to collecting data and in an area—global surgery—where very little data has previously been collected, we cannot describe exactly how this information VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 would be used in valuing services. What is clear is that the claims-based data would provide information parallel to the kinds of claims-data used in developing RVUs for other PFS services and that by collecting these data, we would know far more than we do now about how post-operative care is delivered and gain insight to support appropriate packaging and valuation. We would include any revaluation proposals based on these data in subsequent notice and comment rulemaking. Even though we did not make a proposal regarding how future revaluations would use the data collected under these proposals, we received several comments on such revaluations. The following is summary of the comments we received regarding use of the data we obtain through this threepronged data collection activity in future re-valuations. Comment: Some commenters stated that the RUC process worked well to value services and should continue to be used to value these and other services. Some of these objected to any claims-based data collection for a variety of reasons including that it was unlikely to provide valid and reliable data, that the RUC process worked well and should continue to be used, and the that since other codes would not be valued on the basis of similar data use of this data would harm the fee schedule’s relativity. Some suggested that we use the data obtained here to identify misvalued codes and refer them to the RUC for further evaluation under the usual process. Some commenters suggested that we not collect any data until we could describe how it would be used. Response: We believe that the Congress enacted the two data collection provisions included in the Act to further the accuracy of PFS rates by having additional data available to the RUC as it makes recommendations to us and to us to inform our evaluation of those recommendations. We do not believe this data collection was intended to replace the RUC or the processes that have been established over the last two decades for valuing physician services. We agree with commenters that one way the data might be used is to identify potentially misvalued codes for the RUC to evaluate. However, we also stress that we do not agree that the use of claims data to value services within global surgery packages would be inconsistent with the valuation of other PFS services. On the contrary, very few other PFS services include estimated work RVUs based on face-to-face patient encounters PO 00000 Frm 00057 Fmt 4701 Sfmt 4700 80225 over multiple days or months. Outside of these services, work RVUs are estimated per patient encounter (or in other cases over longer periods of time for non-face-to-face work). Therefore, the outer limit of any misvaluation between the estimated typical and the actual is the overall value for a single face-to-face service. Under the global packages, potential misvaluations can range from the difference between the estimated typical services for a full global period and the actual services furnished for a full global period for a given patient. We are not finalizing any provisions regarding valuation of global surgical services. Instead, such issues will be addressed in future rulemaking after we collect data and analyze data. E. Improving Payment Accuracy for Primary Care, Care Management and Patient-Centered Services 1. Overview In recent years, we have undertaken ongoing efforts to support primary care and patient-centered care management within the PFS as part of HHS’ broader efforts to achieve better care, smarter spending and healthier people through delivery system reform. We have recognized the need to improve payment accuracy for these services over several years, especially beginning in the CY 2012 PFS proposed rule (76 FR 42793) and continuing in each subsequent year of rulemaking. In the CY 2012 proposed rule, we acknowledged the limitations of the current code set that describes evaluation and management (E/M) services within the PFS. For example, E/M services represent a high proportion of PFS expenditures, but have not been recently revalued to account for significant changes in the disease burden of the Medicare patient population and changes in health care practice that are underway to meet the current population’s health care needs. These trends in the Medicare population and health care practice have been widely recognized in the provider community and by health services researchers and policymakers alike.1 We believe the focus of the 1 See, for example, https:// content.healthaffairs.org/content/25/5/w378.full; https://www.commonwealthfund.org/publications/ issue-briefs/2008/feb/how-disease-burdeninfluences-medication-patterns-for-medicarebeneficiaries—implications-for-polic; https:// www.hhs.gov/ash/about-ash/multiple-chronicconditions/; https://www.nejm.org/doi/ full/10.1056/NEJMp1600999#t=article; https:// www.pcpcc.org/about; https://www.cms.gov/ Medicare/Quality-Initiatives-Patient-AssessmentInstruments/Value-Based-Programs/MACRA-MIPSand-APMs/MACRA-MIPS-and-APMs.html. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80226 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations health care system has shifted to delivery system reforms, such as patient-centered medical homes, clinical practice improvement, and increased investment in primary and comprehensive care management/ coordination services for chronic and other conditions. This shift requires more centralized management of patient needs and extensive care coordination among practitioners and providers, often on a non-face-to-face basis across an extended period of time. In contrast, the current CPT code set is designed with an overall orientation to pay for discrete services and procedural care as opposed to ongoing primary care, care management and coordination, and cognitive services. It includes thousands of separately paid, individual codes, most of which describe highly specialized procedures and diagnostic tests, while there are relatively few codes that describe care management and cognitive services. The term ‘‘cognitive services’’ refers to the type of work that is usually classified and described under the current code set for E/M services, such as the critical thinking involved in data gathering and analysis, planning, management, decision-making, and exercising judgment in ambiguous or uncertain situations.2 It is often used to describe PFS services that are not procedural or strictly diagnostic in nature. Further, in the past, we have not recognized as separately payable many existing CPT codes that describe care management and cognitive services, viewing them as bundled and paid as part of other services including the broadly drawn E/ M codes that describe face-to-face visits billed by physicians and practitioners in all specialties. This has resulted in minimal service variation for ongoing primary care, care management and coordination, and cognitive services relative to other PFS services, and in potential misvaluation of E/M services under the PFS (76 FR 42793). Some stakeholders believe that there is substantial misvaluation of physician work within the PFS, and that the current service codes fail to capture the range and intensity of nonprocedural physician activities (E/M services) and the ‘‘cognitive’’ work of certain specialties (https:// www.nejm.org/doi/full/10.1056/ NEJMp1600999#t=article). Recognizing the inverse for specialties that furnish other kinds of services, MedPAC has noted that the PFS allows some specialties to more easily increase the volume of services they provide, and 2 https://www.nejm.org/doi/full/10.1056/ NEJMp1600999#t=article. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 therefore, their revenue from Medicare relative to other specialties, particularly those that spend most of their time providing E/M services. (MedPAC March 2015 Report to the Congress, available at https://www.medpac.gov/documents-/reports). We agree with this analysis, and we recognize that the current set of E/M codes limits Medicare’s ability under the PFS to appropriately recognize the relative resource costs of primary care, care management/coordination and cognitive services relative to specialized procedures and diagnostic tests. In recent years, we have been engaged in an ongoing incremental effort to update and improve the relative value of primary care, care management/ coordination, and cognitive services within the PFS by identifying gaps in appropriate payment and coding. These efforts include changes in payment and coding for a broad range of PFS services. This effort is particularly vital in the context of the forthcoming transition to the Quality Payment Program that includes the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) incentives under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114–10, enacted April 16, 2015), since MIPS and many APMs will adopt and build on PFS coding, RVUs and PFS payment as their foundation. In CY 2013, we began by focusing on post-discharge care management and transition of beneficiaries back into the community, establishing new codes to pay separately for transitional care management (TCM) services. Next we finalized new coding and separate payment beginning in CY 2015 for chronic care management (CCM) services provided by clinical staff. In the CY 2016 PFS proposed rule (80 FR 41708 through 41711), we solicited public comments on three additional policy areas of consideration: (1) Improving payment for the professional work of care management services through coding that would more accurately describe and value the work of primary care and other cognitive specialties for complex patients (for example, monthly timed services including care coordination, patient/ caregiver education, medication management, assessment and integration of data, care planning); (2) establishing separate payment for collaborative care, particularly, how we might better value and pay for robust inter-professional consultation between primary care physicians and psychiatrists (developing codes to describe and provide payment for the evidence-based psychiatric collaborative PO 00000 Frm 00058 Fmt 4701 Sfmt 4700 care model (CoCM)), and between primary care physicians and other (nonmental health) specialists; and (3) assessing whether current PFS payment for CCM services is adequate and whether we should reduce the administrative burden associated with furnishing and billing these services. We received substantial feedback on this comment solicitation, which we summarized in the CY 2017 PFS proposed rule and used to develop the following coding and payment proposals for CY 2017 (81 FR 46200 through 46215, and 46263 through 46265): • Separate payment for existing codes describing prolonged E/M services without direct patient contact by the physician (or other billing practitioner), and increased payment for prolonged E/M services with direct patient contact by the physician (or other billing practitioner) adopting the RUCrecommended values.3 • New coding and payment mechanisms for behavioral health integration (BHI) services including substance use disorder treatment, specifically three codes to describe services furnished as part of the psychiatric CoCM and one code to address other BHI care models. • Separate payment for complex CCM services, reduced administrative burden for CCM, and an add-on code to the visit during which CCM is initiated (the CCM initiating visit) to reflect the work of the billing practitioner in assessing the beneficiary and establishing the CCM care plan. • A new code for cognition and functional assessment and care planning, for treatment of cognitive impairment. • An adjustment to payment for routine visits furnished to beneficiaries for whom the use of specialized mobility-assistive technology (such as adjustable height chairs or tables, patient lifts, and adjustable padded leg supports) is medically necessary. We noted that the development of coding for these and other kinds of services across the PFS is typically an iterative process that responds to changes in medical practice and may be best refined over several years, with PFS rulemaking and the development of CPT codes as important parts of that process. We noted with interest that the CPT Editorial Panel and AMA/RUC restructured the former Chronic Care Coordination Workgroup to establish a 3 ‘‘Without direct patient contact’’ and ‘‘with direct patient contact’’ in this sentence are the terms used in the CPT code descriptor or prefatory language for these prolonged E/M services. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations new Emerging CPT and RUC Issues Workgroup that we hope will continue to consider the issues raised in this section of our CY 2017 proposed rule. At the time of publication of the proposed rule, we were aware that CPT had approved a code to describe assessment and care planning for treatment of cognitive impairment; however, it would not be ready in time for valuation in CY 2017. Therefore, we proposed to make payment using a Gcode (G0505 4) for this service in CY 2017. We were also aware that CPT had approved three codes that describe services furnished consistent with the psychiatric CoCM, but that they would also not be ready in time for valuation in CY 2017. We discuss these services in more detail in the next section of this final rule. To facilitate separate payment for these services furnished to Medicare beneficiaries during CY 2017, we proposed to make payment through the use of three G-codes (G0502, G0503, and G0504—see below) that parallel the new CPT codes, as well as a fourth G-code (G0507—see below) to describe services furnished using other models of BHI in the primary care setting. We intended for these to be temporary codes and would consider whether to adopt and establish values for the new CPT codes under our standard process, potentially for CY 2018. We anticipated continuing the multi-year process of implementing initiatives designed to improve payment for, and recognize long-term investment in, primary care, care management and cognitive services, and patient-centered services. While we recognized that there may be some overlap in the patient populations for the proposed new codes, we noted that time spent by a practitioner or clinical staff could not be counted more than once for any code (or assigned to more than one patient), consistent with PFS coding conventions. We expressed continued consideration of additional codes for CCM services that would describe the time of the physician or other billing practitioner. We also expressed interest in whether there should be changes under the PFS to reflect additional models of inter-professional collaboration for health conditions, in addition to those we proposed for BHI. We proposed to pay under the PFS for services described by new coding as follows (please note that the 4 We note that we used placeholder codes (GPPP1, GPPP2, GPPP3, GPPPX, GPPP6, GPPP7, and GDDD1) in the proposed rule. In order to avoid confusion, we have replaced those codes with those that have been finalized as part of the 2017 HCPCS set, even when describing the language in the proposed rule. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 descriptions included for G0502, G0503, and G0504 are from Current Procedural Terminology (CPT®) Copyright 2016 American Medical Association (and we understand from CPT that they will be effective as part of CPT codes January 1, 2018). All rights reserved): • G0502: Initial psychiatric collaborative care management, first 70 minutes in the first calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements: ++ Outreach to and engagement in treatment of a patient directed by the treating physician or other qualified health care professional; ++ Initial assessment of the patient, including administration of validated rating scales, with the development of an individualized treatment plan; ++ Review by the psychiatric consultant with modifications of the plan if recommended; ++ Entering patient in a registry and tracking patient follow-up and progress using the registry, with appropriate documentation, and participation in weekly caseload consultation with the psychiatric consultant; and ++ Provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies. • G0503: Subsequent psychiatric collaborative care management, first 60 minutes in a subsequent month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements: ++ Tracking patient follow-up and progress using the registry, with appropriate documentation; ++ Participation in weekly caseload consultation with the psychiatric consultant; ++ Ongoing collaboration with and coordination of the patient’s mental health care with the treating physician or other qualified health care professional and any other treating mental health providers; ++ Additional review of progress and recommendations for changes in treatment, as indicated, including medications, based on recommendations provided by the psychiatric consultant; ++ Provision of brief interventions using evidence-based techniques such as behavioral activation, motivational PO 00000 Frm 00059 Fmt 4701 Sfmt 4700 80227 interviewing, and other focused treatment strategies; ++ Monitoring of patient outcomes using validated rating scales; and relapse prevention planning with patients as they achieve remission of symptoms and/or other treatment goals and are prepared for discharge from active treatment. • G0504: Initial or subsequent psychiatric collaborative care management, each additional 30 minutes in a calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional (List separately in addition to code for primary procedure) (Use G0504 in conjunction with G0502, G0503). • G0507: Care management services for behavioral health conditions, at least 20 minutes of clinical staff time, directed by a physician or other qualified health care professional time, per calendar month. • G0505: Cognition and functional assessment using standardized instruments with development of recorded care plan for the patient with cognitive impairment, history obtained from patient and/or caregiver, by the physician or other qualified health care professional in office or other outpatient setting or home or domiciliary or rest home. • G0506: Comprehensive assessment of and care planning by the physician or other qualified health care professional for patients requiring chronic care management services, including assessment during the provision of a face-to-face service (billed separately from monthly care management services) (Add-on code, list separately in addition to primary service). • G0501: Resource-intensive services for patients for whom the use of specialized mobility-assistive technology (such as adjustable height chairs or tables, patient lifts, and adjustable padded leg supports) is medically necessary and used during the provision of an office/outpatient evaluation and management visit (Addon code, list separately in addition to primary procedure). Regarding the majority of these proposals, the public comments were broadly supportive, some viewing our proposals as a temporary solution to an underlying need to revalue E/M services, especially outpatient E/M. Several commenters recommended that CMS utilize the global surgery data collection effort or another major research initiative to distinguish and revalue different kinds of E/M work. E:\FR\FM\15NOR2.SGM 15NOR2 80228 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 The commenters made recommendations about the scope and definition of the proposed services, what types of individuals should be able to provide them, and potential alignment and overlap. The commenters agreed with the need to increase the relative value of primary care, care management and other cognitive care under the PFS and minimize administrative burden for such services, while ensuring value to the program and beneficiaries. The public comments raise or inform a number of issues around how to define and pay for care that is collaborative, integrative or continuous, and we discuss the comments in greater detail below. 2. Non-Face-to-Face Prolonged Evaluation & Management (E/M) Services In public comments on the CY 2016 PFS proposed rule, many commenters recommended that CMS should establish separate payment for non-faceto-face prolonged E/M service codes that we currently consider to be ‘‘bundled’’ under the PFS (CPT codes 99358, 99359). The CPT descriptors are: • CPT code 99358 (Prolonged evaluation and management service before and/or after direct patient care, first hour); and • CPT code 99359 (Prolonged evaluation and management service before and/or after direct patient care, each additional 30 minutes (List separately in addition to code for prolonged service). Commenters believed that separate payment for these existing CPT codes would provide a means for physicians and other billing practitioners to receive payment that more appropriately accounts for time that they spend providing non-face-to-face care. We agreed that these codes would provide a means to recognize the additional resource costs of physicians and other billing practitioners, when they spend an extraordinary amount of time outside of an E/M visit performing work that is related to that visit and does not involve direct patient contact (such as extensive medical record review, review of diagnostic test results or other ongoing care management work). We also believed that doing so in the context of the ongoing changes in health care practice to meet the current population’s health care needs would be beneficial for Medicare beneficiaries and consistent with our overarching goals related to patient-centered care. These non-face-to-face prolonged service codes are broadly described (although they include only time spent personally by the physician or other VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 billing practitioner) and have a relatively high time threshold (the time counted must be an hour or more beyond the usual service time for the primary or ‘‘companion’’ E/M code that is also billed). They are not reported for time spent in care plan oversight services or other non-face-to-face services that have more specific codes and no upper time limit in the CPT code set. We believed this made these codes sufficiently distinct from the other codes we proposed for CY 2017 as part of our primary care/cognitive care/care management initiative described in this section of our final rule. Accordingly, we proposed to recognize CPT codes 99358 and 99359 for separate payment under the PFS beginning in CY 2017. We noted that time could not be counted more than once towards the provision of CPT codes 99358 or 99359 and any other PFS service. We addressed their valuation in the valuation section of the CY 2017 proposed rule. Through a drafting error, we stated in the proposed rule that we would require these services to be furnished on the same day by the same physician or other billing practitioner as the companion E/M code. We intended to propose conformity with CPT guidance that requires that time counted towards the codes describe services furnished during a single day directly related to a discrete face-to-face service that may be provided on a different day, provided that the services are directly related to those furnished in a face-to-face visit. We also solicited public comment on our interpretation of existing CPT guidance governing concurrent billing or overlap of CPT codes 99358 and 99359 with complex CCM services (CPT codes 99487 and 99489) and TCM services (CPT codes 99495 and 99496). Specifically CPT provides, ‘‘Do not report 99358, 99359 during the same month with 99487–99489. Do not report 99358, 99359 when performed during the service time of codes 99495 or 99496.’’ Complex CCM services and TCM services are similar to the nonface-to-face prolonged services in that they include substantial non-face-to-face work by the billing physician or other practitioner. The TCM and CCM codes similarly focus on a broader episode of patient care that extends beyond a single day, although they have a monthly service period and the prolonged service codes do not. We sought public input on the intersection of the non-face-to-face prolonged service codes with CCM and TCM services, and with the proposed add-on code to the CCM initiating visit G0506 (Comprehensive assessment of and care PO 00000 Frm 00060 Fmt 4701 Sfmt 4700 planning for patients requiring CCM services). We also solicited comment regarding how distinctions could be made between time associated with prolonged services and the time bundled into other E/M services, particularly pre- and post-service times, which would continue to be bundled with the other E/M service codes. For all of these services, we expressed concern that there would potentially be program integrity risks as the same or similar non-face-to-face activities could be undertaken to meet the billing requirements for a number of codes. We solicited public comment to help us identify the full extent of program integrity considerations, as well as options for mitigating program integrity risks. Comment: Many commenters recommended that we adopt the CPT coding provision for CPT codes 99358 and 99359 that allows the prolonged services to be provided on a different day than the companion E/M code. At the same time, several commenters indicated that they request changes to the codes through the established processes of the CPT Editorial Panel. For example, some commenters suggested that CPT codes 99358 and 99359 should be revised so that they have a limited (calendar month) service period or measure shorter time increments (15 minutes). Some commenters recommended that a given physician should not be allowed to report CPT codes 99358 and 99359 for the same beneficiary during the same time he or she reported CCM, TCM, or G0506. These commenters stated that CCM, TCM, and proposed G0506 encompass non-face-to-face care provided to the beneficiary during a given period of time that would be duplicated if the physician is also allowed to report CPT codes 99358 and 99359 during the same time period. Other commenters stated that it would be unusual for G0506 and non-face-toface prolonged services (CPT codes 99358 and 99359) to be reported for services on the same day, but that both should be allowed if time thresholds are met. To facilitate determination of whether time thresholds are met for various potential code combinations, some commenters recommended that CMS establish a time for G0506 and publish typical times for the companion codes to the prolonged service codes. This would enable practitioners to determine when they have exceeded ‘‘usual’’ or average times for E/M services and may bill prolonged services. Some commenters recommended that CMS provide tables E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations showing times for E/M visits, CCM, G0506 and prolonged services with specific clinical examples for concurrent billing. Some commenters believed there might be some overlap between the proposed non-face-to-face prolonged service codes and the post-service work of G0505 (Cognition and functional assessment by the physician or other qualified health care professional in office or other outpatient). Some commenters believed there is a discrepancy between our proposal to allow G0505 to be a companion code to prolonged services, and CPT’s intent that G0505 should only be billed on the same day as another E/M visit if they are unrelated. MedPAC commented that the companion E/M codes should be revalued instead of providing separate payment for prolonged services associated with the companion codes. However, if we finalize as proposed, MedPAC recommended that we clarify what situations the prolonged codes are appropriate for, beyond average times. Another commenter recommended an alternative policy instead of the nonface-to-face prolonged service codes, namely several modifiers and add-on codes to E/M services, associated with increased work RVUs. A typical time for the primary service would not need to be established. This coding schema would focus on visits actively treating patients with four or more chronic conditions; patients with three or more chronic problems introducing an acute problem during their visit; unexpected abnormal studies; and electronic communication after visits with the patient, lab, and other clinicians. One commenter drew a distinction between prolonged service work and care management services, where care management does not include extensive review of medical records, review of diagnostic tests and further discussion with a caregiver. Response: We appreciate the comments. First, we had intended to propose to adopt the CPT coding provision for CPT codes 99358 and 99359 that allows the prolonged time to be provided on a different day than the companion E/M code, along with the rest of the CPT prefatory language for these codes. Our final policy will adopt the CPT guidance that allows the prolonged time to be reported for time on a different day than the companion E/M code, along with the rest of the CPT prefatory language for CPT codes 99358 and 99359. Second, the public comments elucidate that it is difficult to assess potential overlap between prolonged VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 services and many other codes because the included services, service periods and timeframes are not aligned. For example, most services paid under the PFS are valued based on assumptions regarding the typical pre-service, intraservice and post-service time, but do not have required thresholds for time spent. It is difficult to distinguish the times associated with these services from the times for codes that include time requirements in their descriptor. It is also difficult to distinguish the time and other work included in codes that generally describe services furnished during one day (prolonged services and E/M visits) with codes that describe time and work over substantially different service periods (such as the calendar month services like CCM or BHI services) or add-on codes with no pre or post-service time (such as G0506). In addition, because portions of many services are likely describing work that is furnished ‘‘incident to’’ a physician’s or practitioner’s services, the time and effort of the billing practitioner may not be the only relevant time and effort to consider. Moreover, the comments reflect a desire and intent on the part of stakeholders to alter the prolonged service codes in the near future, which would, in turn, alter their intersection with the codes proposed in this section of our 2017 rule and many other codes. The public comments also reflect a lack of consensus regarding appropriate medical practice and reporting patterns for prolonged services in relation to the services described by the CCM, TCM, proposed G0505 and proposed G0506 codes. Having considered this feedback, we have decided to finalize our proposal for separate payment of the non-face-to-face prolonged service codes (CPT 99358, 99359) and adopt the CPT code descriptors and prefatory language for reporting these services. We stress that we intend these codes to be used to report extended non-face-to-face time that is spent by the billing physician or other practitioner (not clinical staff) that is not within the scope of practice of clinical staff, and that is not adequately identified or valued under existing codes or the 2017 finalized new codes. We appreciate the commenters’ suggestion to display the typical times associated with relevant services. We have posted a file that notes the times assumed to be typical for purposes of PFS rate-setting. That file is available on our Web site under downloads for the CY 2017 PFS final rule at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ PhysicianFeeSched/PFS-Federal- PO 00000 Frm 00061 Fmt 4701 Sfmt 4700 80229 Regulation-Notices.html. We note that while these typical times are not required to bill the displayed codes, we would expect that only time spent in excess of these times would be reported under a non-face-to-face prolonged service code. Based on our analysis of comments, we do not believe there is significant overlap between CPT codes 99358 and 99359 and the CCM codes (CPT 99487, 99489, 99490) or our finalized BHI service codes (G0502, G0503, G0504, G0507 discussed below). The work of the billing practitioner in the provision of non-complex CCM and the BHI services is related to the direction of ongoing care management and coordination activities of other individuals, compared to the work of 99358 and 99359 which is described as personally performed and directly related to a face-to-face service. On that basis, we do not believe that there is significant overlap in the description of services or the valuation. The potential intersection of CPT codes 99358 and 99359 with the complex CCM codes is harder to assess because complex CCM explicitly includes medical decision-making of moderate to high complexity by the billing practitioner, which is not performed by clinical staff. The complex CCM codes, however, only measure or count the time of clinical staff. Similarly, TCM includes moderate to high complexity medical decisionmaking during the service period as well as a level 4 or 5 face-to-face visit, even though clinical staff may perform a number of other aspects of the service. For CY 2017, for administrative simplicity, we are adopting the CPT provision (and finalizing as proposed) that complex CCM cannot be reported during the same month as non-face-toface prolonged services, CPT codes 99358 and 99359 (by a single practitioner). Similarly, we are adopting the CPT provision that non-face-to-face prolonged services, CPT codes 99358 and 99359 may not be reported when performed during the service time of TCM (CPT codes 99495 and 99496) (by a single practitioner). We interpret the CPT provision to mean that CPT codes 99358 and 99359 cannot be reported during the TCM 30-day service period, by the same practitioner who is reporting the TCM. Regarding potential intersection of CPT codes 99358 and 99359 with proposed G0505 (Cognition and functional assessment by the physician or other qualified health care professional in office or other outpatient), we are finalizing our proposal that G0505 be designated as a E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80230 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations companion or ‘‘base’’ E/M code to nonface-to-face prolonged services (CPT codes 99358 and 99359) (see section II.E.5 for a detailed discussion of G0505). That is, for CY 2017 CPT codes 99358 and 99359 may be reported with G0505 as the associated companion code, whether furnished on the same day or a different day. We believe CPT intended the code on which G0505 is modeled to function like a specific E/M service, and that while the specificity of the service explicitly includes care planning unique to the needs of patients with particular conditions, there may well be circumstances where the pre- or post-time for a particular beneficiary may be prolonged. In their current form, the non-face-to-face prolonged service codes exist for the purpose of providing additional payment to account for the biller’s additional time related to E/M visits. Therefore, we believe the nonface-to-face prolonged service codes should be reportable when related to E/ M services, including those such as G0505 that describe more specific E/M work. We look forward to continued feedback on this issue, including through potential revisions to CPT guidance. Regarding intersection of CPT codes 99358 and 99359 with G0506, we note that G0506 is already an add-on code to another E/M service (the CCM initiating visit, which can be the AWV/IPPE or a qualifying face-to-face E/M visit). We are providing in section II.E.4.a that at this time (beginning in CY 2017), G0506 will be a code that is only billable one time, at the outset of CCM services. We agree with commenters that it would be unusual for physicians to spend enough time with a given beneficiary on a given day to warrant reporting all three codes (the initiating visit code, G0506, and a prolonged service code). We also believe that a simpler approach is preferable at this time (two related codes for CCM initiation, instead of possibly three). Therefore our final policy for CY 2017 is that prolonged services (whether faceto-face or non-face-to-face) cannot be reported in addition to G0506 in association with a companion E/M code that also qualifies as the CCM initiating visit. In association with the CCM initiating visit, a billing practitioner may choose to report either prolonged services or G0506 (if requirements to bill both prolonged services and G0506 are met), but cannot report both a prolonged service code and G0506. 3. Establishing Separate Payment for Behavioral Health Integration (BHI) In the CY 2016 PFS final rule with comment period (80 FR 70920), we stated that we believe the care and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 management for Medicare beneficiaries with behavioral health conditions often requires extensive discussion, information-sharing and planning between a primary care physician and a specialist. In CY 2016 rulemaking, we described that in recent years, many randomized controlled trials have established an evidence base for an approach to caring for patients with behavioral health conditions called the psychiatric Collaborative Care Model (CoCM). We sought information to assist us in considering refinements to coding and payment to address this model in particular. The psychiatric CoCM is one of many models for behavioral health integration or BHI, a term that refers broadly to collaborative care that integrates behavioral health services principally with primary care, but that may also integrate behavioral health care with inpatient and other clinical care. BHI is a team-based approach to care that focuses on integrative treatment of patients with medical and mental or behavioral health conditions. In the CY 2017 proposed rule (81 FR 46203 through 46205), we proposed four new G-codes for BHI services: Three describing the psychiatric CoCM specifically, and one generally describing related models of care. a. Psychiatric Collaborative Care Model (CoCM) A specific model for BHI, psychiatric CoCM typically is provided by a primary care team consisting of a primary care provider and a care manager who works in collaboration with a psychiatric consultant, such as a psychiatrist. Care is directed by the primary care team and includes structured care management with regular assessments of clinical status using validated tools and modification of treatment as appropriate. The psychiatric consultant provides regular consultations to the primary care team to review the clinical status and care of patients and to make recommendations. As we previously noted, several resources have been published that describe the psychiatric CoCM in greater detail and assess the impact of the model, including pieces from the University of Washington (https:// aims.uw.edu/), the Institute for Clinical and Economic Review (https://icerreview.org/announcements/icer-reportpresents-evidence-based-guidance-tosupport-integration-of-behavioralhealth-into-primary-care/), and the Cochrane Collaboration (https:// www.cochrane.org/CD006525/ DEPRESSN_collaborative-careforpeople-with-depression-and-anxiety). Because this particular kind of PO 00000 Frm 00062 Fmt 4701 Sfmt 4700 collaborative care model has been tested and documented in medical literature, in the CY 2016 proposed rule we expressed particular interest in how coding used to describe PFS services might facilitate appropriate valuation of the services furnished under this model. We solicited public comments to assist us in considering refinements to coding and payment to address this model in particular relative to current coding and payment policies, as well as information related to various requirements and aspects of these services. After consideration of the comments, we proposed in the CY 2017 PFS proposed rule to begin making separate payment for services furnished using the psychiatric CoCM, beginning January 1, 2017. We were aware that the CPT Editorial Panel, recognizing the need for new coding for services under this model of care, had approved three codes to describe the psychiatric collaborative care that is consistent with this model, but the codes would not be ready in time for valuation in CY 2017. Current CPT coding does not accurately describe or facilitate appropriate payment for the treatment of Medicare beneficiaries under this model of care. For example, under current Medicare payment policy, there is no payment made specifically for regular monitoring of patients using validated clinical rating scales or for regular psychiatric caseload review and consultation that does not involve face-to-face contact with the patient. We believed that these resources are directly involved in furnishing ongoing care management services to specific patients with specific needs, but they are not appropriately recognized under current coding and payment mechanisms. Because PFS valuation is based on the relative resource costs of the PFS services furnished to Medicare beneficiaries, we believed that appropriate coding for these services for CY 2017 will facilitate accurate payment for these and other PFS services. Therefore, we proposed separate payment for services under the psychiatric CoCM using three new Gcodes, as detailed below: G0502, G0503, and G0504, which would parallel the CPT codes that are being created to report these services. The proposed code descriptors were as follows (from Current Procedural Terminology (CPT®) Copyright 2016 American Medical Association (and we understand from CPT that they will be effective as part of CPT codes January 1, 2018). All rights reserved): • G0502: Initial psychiatric collaborative care management, first 70 minutes in the first calendar month of E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements: ++ Outreach to and engagement in treatment of a patient directed by the treating physician or other qualified health care professional; ++ Initial assessment of the patient, including administration of validated rating scales, with the development of an individualized treatment plan; ++ Review by the psychiatric consultant with modifications of the plan if recommended; ++ Entering patient in a registry and tracking patient follow-up and progress using the registry, with appropriate documentation, and participation in weekly caseload consultation with the psychiatric consultant; and ++ Provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies. • G0503: Subsequent psychiatric collaborative care management, first 60 minutes in a subsequent month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements: ++ Tracking patient follow-up and progress using the registry, with appropriate documentation; ++ Participation in weekly caseload consultation with the psychiatric consultant; ++ Ongoing collaboration with and coordination of the patient’s mental health care with the treating physician or other qualified health care professional and any other treating mental health providers; ++ Additional review of progress and recommendations for changes in treatment, as indicated, including medications, based on recommendations provided by the psychiatric consultant; ++ Provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies; ++ Monitoring of patient outcomes using validated rating scales; and relapse prevention planning with patients as they achieve remission of symptoms and/or other treatment goals and are prepared for discharge from active treatment. • G0504: Initial or subsequent psychiatric collaborative care VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 management, each additional 30 minutes in a calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional (List separately in addition to code for primary procedure) (Use G0504 in conjunction with G0502, G0503). We stated that we intend these to be temporary codes and would consider whether to adopt and establish values for the associated new CPT codes under our standard process once those codes are active. We proposed that these services would be furnished under the direction of a treating physician or other qualified health care professional during a calendar month. These services would be furnished when a patient has a diagnosed psychiatric disorder that requires a behavioral health care assessment; establishing, implementing, revising, or monitoring a care plan; and provision of brief interventions. The diagnosis could be either pre-existing or made by the billing practitioner. These services would be reported by the treating physician or other qualified health care professional and include the services of the treating physician or other qualified health care professional, the behavioral health care manager (see description below) who would furnish services incident to services of the treating physician or other qualified health care professional, and the psychiatric consultant (see description below) whose consultative services would be furnished incident to services of the treating physician or other qualified health care professional. We proposed that beneficiaries who are appropriate candidates for care reported using the psychiatric CoCM codes could have newly diagnosed conditions, need help in engaging in treatment, have not responded to standard care delivered in a non-psychiatric setting, or require further assessment and engagement prior to consideration of referral to a psychiatric care setting. Beneficiaries would be treated for an episode of care, defined as beginning when the behavioral health care manager engages in care of the beneficiary under the appropriate supervision of the billing practitioner and ending with: • The attainment of targeted treatment goals, which typically results in the discontinuation of care management services and continuation of usual follow-up with the treating physician or other qualified healthcare professional; or • Failure to attain targeted treatment goals culminating in referral to a PO 00000 Frm 00063 Fmt 4701 Sfmt 4700 80231 psychiatric care provider for ongoing treatment; or • Lack of continued engagement with no psychiatric collaborative care management services provided over a consecutive 6-month calendar period (break in episode). A new episode of care would start after a break in episode of 6 calendar months or more. The treating physician or other qualified health care professional would direct the behavioral health care manager and continue to oversee the beneficiary’s care, including prescribing medications, providing treatments for medical conditions, and making referrals to specialty care when needed. Medically necessary E/M and other services could be reported separately by the treating physician or other qualified health care professional, or other physicians or practitioners, during the same calendar month. Time spent by the treating physician or other qualified health care professional on activities for services reported separately could not be included in the services reported using G0502, G0503, and G0504. We proposed that the behavioral health care manager would be a member of the treating physician or other qualified health care professional’s clinical staff with formal education or specialized training in behavioral health (which could include a range of disciplines, for example, social work, nursing, and psychology) who provides care management services, as well as an assessment of needs, including the administration of validated rating scales,5 the development of a care plan, provision of brief interventions, ongoing collaboration with the treating physician or other qualified health care professional, maintenance of a registry,6 all in consultation with a psychiatric consultant. The behavioral health care manager would furnish these services both face-to-face and non-face-to-face, and consult with the psychiatric consultant minimally on a weekly basis. We proposed that the behavioral health care manager would be on-site at the location where the treating physician or other qualified health care professional furnishes services to the beneficiary. We proposed that the behavioral health care manager may or may not be a professional who meets all the requirements to independently furnish and report services to Medicare. If otherwise eligible, then that individual 5 For example, see https://aims.uw.edu/resourcelibrary/measurement-based-treatment-target. 6 For example, see https://aims.uw.edu/ collaborative-care/implementation-guide/planclinical-practice-change/identify-population-based. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80232 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations could report separate services furnished to a beneficiary receiving the services described by G0502, G0503, G0504, and G0507 in the same calendar month. These could include: Psychiatric evaluation (90791, 90792), psychotherapy (90832, 90833, 90834, 90836, 90837, 90838), psychotherapy for crisis (90839, 90840), family psychotherapy (90846, 90847), multiple family group psychotherapy (90849), group psychotherapy (90853), smoking and tobacco use cessation counseling (99406, 90407), and alcohol or substance abuse intervention services (G0396, G0397). Time spent by the behavioral health care manager on activities for services reported separately could not be included in the services reported using time applied to G0502, G0503, and G0504. The psychiatric consultant involved in the ‘‘incident to’’ care furnished under this model would be a medical professional trained in psychiatry and qualified to prescribe the full range of medications. The psychiatric consultant would advise and make recommendations, as needed, for psychiatric and other medical care, including psychiatric and other medical diagnoses, treatment strategies including appropriate therapies, medication management, medical management of complications associated with treatment of psychiatric disorders, and referral for specialty services, that are communicated to the treating physician or other qualified health care professional, typically through the behavioral health care manager. The psychiatric consultant would not typically see the patient or prescribe medications, except in rare circumstances, but could and should facilitate a referral to a psychiatric care provider when clinically indicated. In the event that the psychiatric consultant furnished services to the beneficiary directly in the calendar month described by other codes, such as E/M services or psychiatric evaluation (CPT codes 90791 and 90792), those services could be reported separately by the psychiatric consultant. Time spent by the psychiatric consultant on activities for services reported separately could not be included in the services reported using G0502, G0503, and G0504. We also noted that, although the psychiatric CoCM has been studied extensively in the setting of specific behavioral health conditions (for example, depression), we received persuasive comments in response to the CY 2016 proposed rule recommending that we not specify particular diagnoses required for use of the codes for several VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 reasons, including that: There may be overlap in behavioral health conditions; there are concerns that there could be modification of diagnoses to fit within payment rules which could skew the accuracy of submitted diagnosis code data; and for many patients for whom specialty care is not available, or who choose for other reasons to remain in primary care, primary care treatment will be more effective if it is provided within a model of integrated care that includes care management and psychiatric consultation. Comment: The public comments were very supportive of our creation of the three G-codes for CY 2017 to pay for services furnished using the psychiatric CoCM. The commenters offered a number of recommendations regarding valuation of the codes. Some commenters requested additional codes, sought clarification, or presented statements in favor of including the services of practitioners other than psychiatrists, especially psychologists and social workers, within the proposed codes. Response: We thank the commenters for their support of coding and valuation for services furnished using the psychiatric CoCM, and for their recommendations regarding appropriate valuation. We address the comments on valuation in section II.L of this final rule. We address the comments regarding payment for services of psychologists and social workers below. Comment: Several commenters expressed concern that making separate payment for psychiatric CoCM for the treatment of mood disorders might result in neglecting treatment for other mental health conditions. Other commenters expressed support for not designating a limited set of eligible behavioral health diagnoses. One commenter stated that requiring a diagnosed behavioral health condition might mean that subclinical issues or undiagnosed behavioral health conditions would be neglected. Response: We continue to believe that we should not limit billing and payment for the psychiatric CoCM codes to a limited set of behavioral health conditions. As we understand it, the psychiatric CoCM model of care may be used to treat patients with any behavioral health condition that is being treated by the billing practitioner, including substance use disorders. In the Collaborative Care literature reviewed by the Cochrane Collaboration and others, there is stronger evidence of effectiveness and cost-effectiveness for certain behavioral disorders, particularly mood and anxiety disorders, than for others. However, we PO 00000 Frm 00064 Fmt 4701 Sfmt 4700 continue to receive persuasive comments indicating that the psychiatric CoCM is recommended for broader incorporation into clinical practice, and recommending that we not specify the use of the psychiatric CoCM codes for only particular behavioral health diagnoses. Therefore we are not limiting billing and payment for the psychiatric CoCM codes to a specified set of behavioral health conditions. In response to the public comment regarding whether we should require a diagnosed psychiatric disorder (as opposed to a subclinical or undiagnosed condition), we are clarifying that as described, the services require that there must be a presenting psychiatric or behavioral health condition(s) that, in the clinical judgment of the treating physician or other qualified health professional, warrants ‘‘referral’’ to the behavioral health care manager for further assessment and treatment through provision of psychiatric CoCM services. ‘‘Referral’’ is placed in quotes because the behavioral health care manager may be located in the same practice as the treating physician or other qualified health professional, who in any event provides ongoing oversight and continues to treat the beneficiary. However, the referring diagnosis (or diagnoses) may be either pre-existing or made by the treating physician or other qualified health professional, and we are not establishing any specific list of eligible or included diagnoses or conditions. The treating physician or other qualified health professional may not be qualified or able to fully diagnose all relevant psychiatric or behavioral health condition(s) prior to referring the beneficiary for psychiatric CoCM services. If in the course of providing psychiatric CoCM services, it becomes clear that the referring condition(s) or other diagnoses cannot be addressed by psychiatric CoCM services, then we understand that the beneficiary should be referred for other psychiatric treatment or should continue usual follow-up care with the treating practitioner, because the episode of psychiatric CoCM services ends if there is failure to attain targeted treatment goals after or despite changes in treatment, as indicated. Beneficiaries receiving care reported using the psychiatric CoCM codes may, but are not required to have comorbid chronic or other medical condition(s) that are being managed by the treating practitioner. Comment: Several commenters who supported payment for the proposed codes for psychiatric CoCM services in primary care settings, raised questions about whether these codes could be E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations used to bill for services furnished in other settings that are not traditional primary care settings, such as inpatient or long-term care, oncology practices, or emergency departments. Some of these commenters recommended additional new codes to pay for services furnished in these other settings. Response: The psychiatric CoCM trials and real world implementation have mainly included primary care practice that broadly includes pediatrics, obstetrics/gynecology, and geriatrics as well as family practice and general internal medicine. The psychiatric CoCM has also been used in cardiology and oncology practice, and we believe it could be used in various medical specialty settings, as long as the specialist physician or practitioner is managing the beneficiary’s behavioral health condition(s) as well as other medical conditions (for example, cancer, status-post acute myocardial infarction and other conditions where co-morbid depression is common). Accordingly, we are not limiting the code to reporting by only ‘‘traditional’’ primary care specialties. We believe primary care practitioners will most frequently perform the services described by the new psychiatric CoCM codes, but if other specialist practitioners perform these services and meet all of the requirements to bill the code(s), then they may report the psychiatric CoCM codes. We are interested in receiving additional, more specific information from stakeholders regarding which specialties furnish psychiatric CoCM services. We note that we would generally not expect psychiatrists to bill the psychiatric CoCM codes, because psychiatric work is defined as a sub-component of the psychiatric CoCM codes. Regarding psychiatric CoCM services furnished to inpatients or beneficiaries in long-term care settings such as nursing or custodial care facilities, we note that the forthcoming CPT codes are not limited to office or other outpatient or domiciliary services. Moreover, our goal is to separately identify and pay for psychiatric CoCM services furnished to beneficiaries in any appropriate setting of care, whether inpatient or outpatient, in recognition of the associated time and service complexity. Care of beneficiaries who are admitted to a facility, are in long-term care, or are transitioning among settings during the month may be more complex than the care of other types of patients. While there is some overlap between psychiatric CoCM and CCM services, they are distinct services with differing patient populations, as discussed elsewhere in this section of our final rule. Therefore, we have VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 valued the psychiatric CoCM services in both facility and non-facility settings (see section II.L on valuation). We are not limiting the time that can be counted towards the monthly time requirement to bill the psychiatric CoCM code(s) to time that is spent in the care of an outpatient or a beneficiary residing in the community. However, we also stress that G0502, G0503 and G0504 can only be reported by a treating physician or other qualified health care professional when he or she has directed the psychiatric CoCM service for the duration of time that he or she is reporting it, and has a qualifying relationship with individuals providing the service under his or her direction and control. Also, time and effort that is spent managing care transitions for CCM or TCM patients and that is counted towards reporting TCM or CCM services, cannot also be counted towards reporting any transitional care management activities reported under a BHI service code(s), either the psychiatric CoCM codes or the code describing other BHI services. We welcome additional input from stakeholders regarding appropriate (or inappropriate) sites of service for G0502, G0503 and G0504. We note that for CY 2017, the facility PE RVU for psychiatric CoCM services will include the indirect PE allocated based on the work RVUs, but no direct PE (which is explicitly comprised of other labor, equipment and supplies). This is because historically, the PFS facility rate for a given professional service assumes that the billing practitioner is not bearing a significant resource cost in labor by other individuals, equipment or supplies. We generally assume that those costs are instead borne by the facility, and are adequately accounted for in a separate payment made to the facility to account for these costs and other costs incurred by the facility for the beneficiary’s facility stay. For BHI services and similar care management services such as CCM, we have been considering whether this approach to PFS valuation is optimal because the PFS service, in significant part, may be provided by the behavioral health care manager, clinical staff, or even other physicians under the employment of the billing practitioner or under contract to the billing practitioner. These individuals may provide much of the PFS service remotely, and are not necessarily employees or staff of the facility. Indeed, the BHI services are defined in terms of activities performed by individual(s) other than the billing practitioner and who may not be PO 00000 Frm 00065 Fmt 4701 Sfmt 4700 80233 affiliated with or located within the facility, even though as we discuss below the billing practitioner must also perform certain work. For this type of PFS service, there may be more direct practice expense borne by the billing practitioner even though the beneficiary is located, for part or all of the month, in a facility receiving institutional payment. We plan to consider these issues further in the future. Comment: One specialty association supported the proposed psychiatric CoCM codes, noting that although few of their members would use these codes, they set an important precedent to recognize interdisciplinary care that requires significant non-face-to-face work. This commenter anticipated that similar code series may be developed in the future to describe complex management in other specialties including neurology, and supported the adoption of language approved at CPT that carefully defined the roles of multiple professionals. Other commenters similarly expressed support for separate payment for additional collaborative care services, including inter-professional consultation in the treatment of other illnesses such as cancer or multiple sclerosis. Response: We continue to be interested in new coding that describes integrative, collaborative or consultative care among specialties other than primary care and behavioral health/ psychiatry. We are especially interested in new coding that describes such care in sufficient detail that distinguishes it from existing service codes, and that would further the appropriate valuation of cognitive services. We will continue to follow any new coding proposals at CPT relevant for the Medicare population. We note that we have followed CPT’s lead in finalizing proposed code G0505 for cognitive impairment assessment and care planning (see section II.E.5) as well as for psychiatric CoCM services. BHI is a unique type of service that we believe until now has not been well identified nor appropriately valued under existing codes. BHI is not comprised of mere consultation among professionals and has a unique evidence base, in addition to being recently addressed by forthcoming CPT coding. In addition, given the shortage of available psychiatric and other mental health professionals in many parts of the country, we believe it is important to identify and make accurate payment for models of care that facilitate access to psychiatric and other behavioral health specialty care through innovations in medical practice, like the ones described by these codes. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80234 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Comment: One commenter asked CMS to clarify inclusion of nurse practitioners who are primary care practitioners and, in the specialty of psychiatry, psychiatric nurse practitioners who can perform psychiatric evaluations and treat psychiatric problems. Response: Nurse practitioners are authorized to independently bill Medicare for their services, and can also bill Medicare for services furnished incident to their services. Therefore, nurse practitioners who furnish the psychiatric CoCM services as described may bill for the psychiatric CoCM codes. Nurse practitioners who meet our final qualifications to serve as the behavioral health care manager may provide the behavioral health care manager services incident to the services of another (billing) practitioner. Nurse practitioners who meet all of our final requirements to serve as the psychiatric consultant may provide the psychiatric consultant services incident to the services of the billing practitioner. Comment: Regarding the care planning requirements for psychiatric CoCM services, some commenters noted that there is not necessarily value in accumulating or enumerating a number of different types of care plans addressing different aspects of the beneficiary’s problems, such as a behavioral or psychiatric care plan, a CCM care plan, and a cognitive impairment care plan (see G0505 in section II.E.5). Response: While the proposed descriptors for the psychiatric CoCM services referred to an ‘‘individualized treatment plan,’’ not a ‘‘care plan,’’ we proposed in addition that the behavioral health care manager would ‘‘develop a care plan.’’ While any care planning should take into account the whole patient, our intent is that the care planning included in the CCM coding (and G0506, the CCM initiating visit add-on code) will be the most comprehensive in nature, addressing all health issues with particular focus on the multiple chronic conditions being managed by the billing practitioner. In that sense, the CCM care plan is an integrative care plan incorporating more comprehensive health information on all of the beneficiary’s health issues, or reconciling care plans of other practitioners. In contrast, the BHI care planning will focus on behavioral health or psychiatric issues, in particular, just as cognitive impairment care planning will focus on cognitive impairment issues, in particular (see section II.E.5). We are not requiring the psychiatric CoCM treating practitioner or behavioral health consultant to perform care VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 planning that incorporates comprehensive health information on all of the beneficiary’s health issues or reconciles the care plans of other practitioners, as would be expected for CCM care planning. We understand that adoption of EHRs may be lower among behavioral health practitioners 7 and note that resources are available to help inform how care plans can support team-based care and BHI.8 Our understanding from the public comments last year and subsequent discussions with experts on the psychiatric CoCM model of care, is that no specific electronic technology or format is necessary or indispensable to carry out the psychiatric CoCM model of care, or perform the services included in the codes we are creating to describe the services furnished using that model. We believe the format of the behavioral health care plan (or any care plan) is less important than having a process whereby feedback and expertise from all relevant practitioners and providers, whether internal or external to the billing practice, are integrated into the beneficiary’s treatment plan and goals; that this plan be regularly assessed and revisited by the practitioner who is assuming an overall care management role for the beneficiary in a given month; that the patient is engaged in the care planning process; and that the care planning be documented in the medical record (as with any required element of any PFS service). We are revising the requirement for care planning by the behavioral health care manager accordingly, that he or she will perform ‘‘behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes.’’ Comment: A number of commenters recommended that we should not require the behavioral health care manager for the psychiatric CoCM services to be located on site within the primary care practice. The commenters noted that in some settings, particularly rural areas or smaller practices, this may be especially important. Some commenters assumed that there is also a behavioral health care manager for G0507 (discussed below). These commenters compared BHI services (the 7 See for instance https://dashboard.healthit.gov/ quickstats/pages/physician-ehr-adoptiontrends.php and https:// www.thenationalcouncil.org/wp-content/uploads/ 2012/10/HIT-Survey-Full-Report.pdf. 8 For instance, AHRQ has a variety of resources on how shared care plans can support team-based care and behavioral health integration at https:// integrationacademy.ahrq.gov/playbook/developshared-care-plan. PO 00000 Frm 00066 Fmt 4701 Sfmt 4700 psychiatric CoCM services and G0507) to CCM and recommended that CMS adopt the same requirements for all the BHI codes as for CCM, regarding supervision, location of a behavioral health care manager, and third party outsourcing. Response: For the psychiatric CoCM services, we proposed that the behavioral health care manager would be a member of the treating physician or other qualified health care professional’s clinical staff, and would be required to be located on site but able to work under general supervision. In addition, we proposed that the behavioral health care manager provides his or her services both face-to-face and non-face-to-face. We believed that services provided using the psychiatric CoCM model of care commonly involve face-to-face interaction between the behavioral health care manager and the beneficiary on appropriate occasions, such as the outset of services (a ‘‘warm hand-off’’ from the treating physician or other qualified health care professional). In addition, whether face-to-face or nonface-to-face, many of the included behavioral health care manager duties could be performed while the treating practitioner is not in the office and could be performed after hours. We note that the behavioral health care manager duties are listed in full above, and include care management services, as well as an assessment of needs, including the administration of validated rating scales, behavioral health care planning, provision of brief interventions, ongoing collaboration with the treating physician or other qualified health care professional, and maintenance of a registry, all in consultation with a psychiatric consultant. The delivery of the psychiatric CoCM depends, in part, on continuity of care between a given patient and the assigned behavioral health care manager. Also it requires collaboration, integration and ongoing data flow between the behavioral health care manager and the treating practitioner the behavioral health care manager is supporting, as well as with the psychiatric consultant who is usually remotely located under the psychiatric CoCM model of care. As previously discussed, the psychiatric CoCM is an integrative model of care, and in considering our proposal we were concerned that allowing the behavioral health care manager to be located remotely would compromise their ability to collaborate, communicate, and timely treat and share information with the beneficiary and the rest of the care team. We are aware of many care E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations management companies and health information technology companies that may seek to provide remote care management and related services under all of the new BHI codes, as they have for CCM and similar services recently adopted under the PFS. We received public comments from several such stakeholders that indicated an interest in the provision of BHI services and related health information technology. We understand that there have been successful implementations (positive randomized controlled trials) of the psychiatric CoCM using remote call centers; however, in these implementations, call center staff were not randomly rotated among patients and there was ongoing data flow and connectivity between the behavioral health care manager and the other members of the care team, as well as the patient. Moreover, the behavioral health care manager would presumably have to be on site at least some of the time (even if under general supervision), in order to provide some of their services in-person with the beneficiary. The fact that we proposed and are finalizing general supervision for the psychiatric CoCM codes as we did for CCM services (see section II.E.3.b) does not mean that general supervision alone suffices to meet the requirements of the psychiatric CoCM for continuity, collaboration and integration among the care team members, including the beneficiary. General supervision means that the service is furnished under the overall direction and control of the practitioner billing the service, but without the presence of the practitioner being required during the performance of the service. This definition does not directly govern where individual(s) providing the service on an incident to basis are located, whether on site or remote. Rather, it governs the location and informs the involvement of the billing practitioner. For payment purposes, we are assigning general supervision to the psychiatric CoCM codes because we do not believe it is clinically necessary that the professionals on the team who provide services other than the treating practitioner (namely, the behavioral health care manager and the psychiatric consultant) must have the billing practitioner immediately available to them at all times, as would be required under a higher level of supervision. However, general supervision sets the minimum standard for supervision and does not, by itself, meet the requirements we are setting for billing new codes G0502, G0503 and G0504. While certain aspects of psychiatric CoCM services might be furnished VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 under general supervision, we do not believe the general supervision requirement adequately describes the nature of the relationship and interactions of the respective team members for services furnished using the psychiatric CoCM or the codes we are creating to describe those services. Moreover it only directly addresses the physical location of the billing practitioner, not the behavioral health care manager, necessarily. After considering the public comments, we are not finalizing our proposal that the behavioral health care manager must be a member of the treating physician or other qualified health care professional’s clinical staff. As some of the psychiatric CoCM services can be contracted out to a third party (subject to rules discussed below), the contracted individuals are not necessarily employees of the treating practitioner. Regarding the face-to-face provision of services by the behavioral health care manager, we are requiring that the behavioral health care manager must be available to provide services on a faceto-face basis, but not that face-to-face services must be provided. We are not finalizing the proposed requirement that the behavioral health care manager must be located on site, in order to allow for after-hours or appropriate remote provision of services. However, to ensure clinical integration with the treating practitioner and familiarity and continuity with the beneficiary, which are characteristic of services furnished under the psychiatric CoCM model of care, we are requiring that the behavioral health care manager must have a collaborative, integrated relationship with the rest of the care team members, and be able to perform all of the required elements of the psychiatric CoCM services delineated for the behavioral health care manager. The behavioral health care manager must have the ability to engage the beneficiary outside of regular clinic hours as necessary to perform their duties under the CoCM model, and have a continuous relationship with the beneficiary. This does not mean the behavioral health care manager is necessarily an employee of or always physically located within the practice, nor does it require provision of behavioral health care manager services to the beneficiary on site. The behavioral health care manager may provide his or her services from a remote location that is remote from the billing practitioner or remote from the beneficiary, subject to incident to rules and regulations in 42 CFR 410.26, if he or she has a qualifying relationship with PO 00000 Frm 00067 Fmt 4701 Sfmt 4700 80235 the rest of the care team including the beneficiary, and is available to provide services face-to-face. We will monitor this issue going forward, not just for the psychiatric CoCM but also for the general BHI service code (G0507) we are finalizing, as well as for TCM and CCM services. As we discuss in the final rule section on CCM below, we are continuing to consider whether outsourcing certain aspects of these services to a third party fragments care, leads to insufficient involvement and oversight of the billing practitioner or results in services that do not actually represent or facilitate continuous, seamless transitional care and other required aspects of these services. We will continue to consider how to best define the continuity of care that is required for services furnished and billed under all of these codes, and whether arrangements for remote provision of services whether by a case management company or another entity increases rather than reduces service fragmentation. Advances in health information technology provide opportunities for remote connectivity and interoperability that may assist and be useful, if not necessary, for reducing care fragmentation. However, remote provision of services by entities having only a loose association with the treating practitioner can detract from continuous, patient-centered care, whether or not those entities employ certified or other electronic technology. We note that while time spent by the treating practitioner is not explicitly counted for in codes G0502, G0503 and G0504, these codes are valued to include work performed directly by the treating practitioner. The treating practitioner directs the behavioral health care manager and continues to oversee the patient’s care, including prescribing medications, providing treatments for medical conditions, and making referrals to specialty care when needed. We are finalizing as proposed that some of these services may be separately billable. However, we wish to emphasize that the treating practitioner must remain involved in ongoing oversight, management, collaboration and reassessment as appropriate to bill the psychiatric CoCM codes. Comment: We received a number of comments requesting that we allow or recognize pharmacists, especially neurologic or psychiatric pharmacists, or doctoral-level clinical psychologists to serve as the psychiatric consultant. Some commenters were concerned that CMS is advocating pharmacotherapy over psychotherapy by requiring a psychiatric consultant who can prescribe medication. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80236 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Response: We agree with the commenters that there are multiple types of indicated treatment for behavioral health conditions, including psychotherapy and other psychosocial interventions as well as pharmacotherapy that are available and should be offered to beneficiaries receiving psychiatric CoCM services. Our intent is not to inappropriately steer beneficiaries into medication-based treatment, but rather that the psychiatric consultant be able to present and recommend the full range of treatment options including but not limited to medications, and to advise regarding any medications the beneficiary chooses to take. Under the psychiatric CoCM, the psychiatric consultant must be able to prescribe medication. As we discuss in section II.L on valuation of G0502, G0503 and G0504, we agree with the commenters who stated that the role of the psychiatric consultant under these codes is primarily evaluation and management, which is not within the scope of pharmacists or clinical psychologists under Medicare rules. Therefore, we are finalizing the role and qualifications of the psychiatric consultant as proposed. The general BHI code (G0507), which we are finalizing, was intended and may be used to report other models of care, where the beneficiary may not receive E/M services from the consultant and the consultant may only be authorized to provide psychotherapy or consultation regarding medications (see section II.E.3.b). Comment: We received a number of comments recommending various types of professionals as qualified to serve as the behavioral health care manager, such as licensed clinical social workers (LCSWs) and psychologists. Response: Unlike CCM and the general BHI service (code G0507), the psychiatric CoCM codes are used to report time that is spent in specified activities performed by a behavioral health care manager having formal education or specialized training in those activities, whether or not the behavioral health care manager is eligible to directly bill Medicare for other services. The behavioral health care manager may or may not be a professional who meets all the requirements to independently furnish and report services to Medicare. The behavioral health care manager must also meet any applicable licensure and state law requirements, which is required under 42 CFR 410.26 for all services provided under the PFS. LCSWs would meet these requirements, as would qualified registered nurses, clinical psychologists and other VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 qualified clinical staff. Time spent by administrative or clerical staff cannot be counted towards the time required to bill G0502, G0503 or G0504. Evaluation and management services (such as face-to-face E/M visits) may be separately billed during the service period or on the same day as the psychiatric CoCM services, provided time is not counted twice towards the same code. b. General Behavioral Health Integration (BHI) We recognize that the psychiatric CoCM is prescriptive and that much of its demonstrated success may be attributable to adherence to a set of elements and guidelines of care. We are finalizing the code set discussed above to pay accurately for care furnished using this specific model of care, given its widespread adoption and recognized effectiveness. However, we note that PFS coding, in general, does not dictate how physicians practice medicine and believe that it should, instead, reflect the practice of medicine. We also recognize that there are primary care practices that are incurring, or may incur, resource costs inherent to treatment of patients with similar conditions based on BHI models of care other than the psychiatric CoCM that may benefit beneficiaries with behavioral health conditions (see, for example, the approaches described at https://www.integration.samhsa.gov/ integrated-care-models). There are a variety of care models ranging from behavioral health professionals embedded within a primary care office for same-day treatment, to remote consultation, to assessment-and-referral (see, for example, https:// www.commonwealthfund.org/ publications/newsletters/qualitymatters/2014/august-september/ profiles; and https:// www.integration.samhsa.gov/integratedcare-models). These models of care have tended to arise from clinical practice as opposed to the research environment (https://psychnews.psychiatryonline.org/ doi/full/10.1176/appi.pn.2014.10b25), and include resource costs that differ in various respects from those associated with the psychiatric CoCM. To recognize the resource costs associated with furnishing such BHI services to Medicare beneficiaries, we also proposed to make payment using a new G-code that describes care management for beneficiaries with behavioral health conditions under other models of care. We believe that the resources associated with such care are not currently adequately recognized under the PFS. The proposed code was PO 00000 Frm 00068 Fmt 4701 Sfmt 4700 G0507 (Care management services for behavioral health conditions, at least 20 minutes of clinical staff time, directed by a physician or other qualified health care professional, per calendar month). We noted that we would expect this code to be refined over time as we receive more information about other BHI models being used and how they are implemented. We sought stakeholder input on whether we should consider different increments of time for this code, such as a base code plus an add-on code comprised of additional 20 minute increments. We recognized that BHI services furnished under the proposed code may range in resource costs. We believed that appropriate payment for these services would further the refinement and implementation of BHI models of care, and that having utilization data would inform future refinement of the proposed code’s valuation. Comment: The commenters were supportive of new coding to support payment for other BHI models of care. They believed G0507 could be used by some smaller or medium sized practices who could not conform to the strict parameters of the psychiatric CoCM but provide very similar services. They also stated that G0507 would be appropriate to report services furnished under other BHI models of care that may not require psychiatric services. We received a few comments describing particular models of care in great detail; a few commenters referenced the Veterans’ Administration BHI care models, the Primary Care Behavioral Health/Behavioral Health Consultation (PCBH/BHC) Model, or general models in place within other health care systems. However, there was consensus among the commenters that another code(s) in addition to the psychiatric CoCM codes would be useful to collect information on how other behavioral health care models are being used and implemented. Many commenters recommended that CMS provide more of a framework or description of included services and provider types without being unduly burdensome. Some commenters recommended service elements similar to the CCM service elements (continuity of care with a designated member of the care team; a written care plan; a comprehensive assessment of behavioral health or psychiatric and other medical conditions as well as any functional and psychosocial needs, updated as necessary; routine evaluation of patient progress using a tracking system; services should be documented in the medical record and available to other treating professionals). These E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations commenters recommended that eligible patients should have a diagnosed psychiatric or substance use disorder that requires care management services. Several commenters recommended that BHI payments be tied to the use of behavioral health assessment tools for screening and collection of treatment outcomes throughout the sessions of care in primary care. These commenters believed this would better position behavioral health to benefit from the movement toward value-based payment in the future. Some commenters assumed there is a designated behavioral health care manager for the service described by G0507, and recommended that we adopt similar rules for this care manager as apply for clinical staff providing CCM services. Response: We continue to believe that another code, or set of BHI codes, in addition to the psychiatric CoCM code set would be useful to pay appropriately for BHI services furnished to Medicare beneficiaries. We also believe that such payment could facilitate our ability to identify and collect data regarding similar or related BHI service models. We agree with the commenters that we should provide more specificity around the services eligible for reporting under this other code(s). One way to do this would be to create codes with tiered times. Some commenters supported such an approach, while others believed it would be premature. At this time, we are not creating multiple levels of codes distinguishing levels of general BHI services using time or any other metric, but we may reconsider this in the future (also see section II.L on G0507 valuation). Regarding included elements of the general BHI service (G0507), we agree with the commenters that we should be more specific in our definition of this service. We wish to provide greater specificity without being overly prescriptive, since a range of activities may be included in BHI models of care other than the psychiatric CoCM. We believe we should include a core set of service elements that are similar to core elements of the psychiatric CoCM, especially a systematic process for initial assessment and routine follow up evaluation, revising the treatment approach or methods for patients who are not progressing or whose status changes; facilitating and coordinating behavioral health expertise and treatment; and designating a member of the care team with whom the beneficiary has a continuous relationship. We may revisit the included services in future years, but for CY 2017 the required service elements VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 for the general BHI service (G0507) will be: • Initial assessment or follow-up monitoring, including the use of applicable validated rating scales; • Behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes; • Facilitating and coordinating treatment such as psychotherapy, pharmacotherapy, counseling and/or psychiatric consultation; and • Continuity of care with a designated member of the care team. Accordingly, the final code descriptor will be, G0507: Care management services for behavioral health conditions, at least 20 minutes of clinical staff time, directed by a physician or other qualified health care professional, per calendar month, with the following required elements: • Initial assessment or follow-up monitoring, including the use of applicable validated rating scales; • Behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes; • Facilitating and coordinating treatment such as psychotherapy, pharmacotherapy, counseling and/or psychiatric consultation; and • Continuity of care with a designated member of the care team. We are aware of a number of validated rating scales that are available for use for a number of conditions addressed by BHI models of care, such as those described by the Kennedy Forum (see https://thekennedyforum-dotorg.s3.amazonaws.com/documents/ MBC_supplement.pdf). We are requiring the use of such scales when applicable to the condition(s) that are being treated. Medication Assisted Treatment (MAT) may be a treatment that is facilitated under the facilitating treatment service element. Regarding diagnosis, we believe we should specify similar diagnostic criteria for G0507 and the psychiatric CoCM services (G0502, G0503 and G0504). Accordingly we are providing that beneficiaries who are appropriate candidates for services billed under G0507 will have an identified psychiatric or behavioral health condition(s) that requires a behavioral health care assessment, behavioral health care planning, and provision of interventions. Eligible beneficiaries must present with a condition(s) that in the treating practitioner’s clinical judgment, warrants the services included in G0507. The presenting PO 00000 Frm 00069 Fmt 4701 Sfmt 4700 80237 condition(s) may be pre-existing or newly diagnosed by the treating practitioner, and may be refined as treatment progresses. Beneficiaries receiving services reported under G0507 may, but are not required to have comorbid chronic or other medical condition(s) that are being managed by the treating practitioner. We are not limiting billing and payment for G0507 to a specified set of behavioral health conditions, because there may be overlap in behavioral health conditions; if we specified only certain diagnoses, practitioners might modify diagnoses to fit within payment rules; and for many beneficiaries for whom specialty care is not available, or who choose for other reasons to remain within primary care, their behavioral health condition(s) can be addressed using a model of integrated care. Regarding rules for clinical staff, we are clarifying that services included in the code G0507 may be provided directly by the treating practitioner or provided by other qualifying individuals (whom we term ‘‘clinical staff’’) under his or her direction, during the calendar month service period. Unlike the psychiatric CoCM codes, for G0507 there is not necessarily a specific individual designated as a ‘‘behavioral health care manager’’ with formal or specialized education in providing the services (although there could be). Similarly, there is not necessarily a psychiatric or other behavioral health specialist consultant (although there could be), and we note that G0507 is not valued to explicitly account for such a consultant. We will apply the same definition of the term ‘‘clinical staff’’ that we have applied for CCM to G0507, namely, the CPT definition of this term, subject to the incident to rules and regulations and applicable state law, licensure and scope of practice at 42 CFR 410.26. For G0507, then, we note that the term ‘‘clinical staff’’ will encompass or include a psychiatric or other behavioral health specialist consultant, if the treating practitioner obtains consultative expertise. Clinical staff that provide included services do not have to be employed by the treating practitioner or located on site, necessarily, and may or may not be a professional who is permitted to independently furnish and report services to Medicare. Time spent by administrative or clerical staff cannot be counted towards the time required to bill G0507. G0507 is valued to include minimal work by the treating practitioner; the bulk of the valuation is based on clinical staff time (see section II.L on valuation). However, we want to emphasize that the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80238 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations treating practitioner must direct the service, continue to oversee the beneficiary’s care, and perform ongoing management, collaboration and reassessment. If the service (or part thereof) is provided incident to the treating practitioner’s services, whether on site or remotely, the clinical staff providing services must have a collaborative, integrated relationship with the treating practitioner. They must also have a continuous relationship with the beneficiary. Evaluation and management services, such as face-to-face E/M visits, may be separately billed during the service period or on the same day as G0507, provided time is not counted twice towards the same code. For payment purposes, we are categorizing this service as a designated care management service assigned general supervision for purposes of ‘‘incident to’’ billing, because we do not believe it is clinically necessary for the individuals on the team who provide services other than the treating practitioner (namely, clinical staff) to have the treating practitioner immediately available to them at all times, as would be required under a higher level of supervision. However, general supervision sets the minimum standard for supervision and does not, by itself, meet the requirements we are setting for billing new code G0507. While certain aspects of G0507 might be furnished under general supervision, we do not believe the general supervision requirement adequately describes the nature of the relationship and interactions of the respective team members for services furnished using BHI models of care or the codes we are creating to describe those services. Moreover the general supervision requirement only directly addresses the physical location of the treating practitioner, not the location of clinical staff, necessarily. Comment: Regarding behavioral health care planning, some commenters noted that there is not necessarily value in accumulating or enumerating a number of different types of care plans addressing different aspects of the beneficiary’s problems, such as a behavioral or psychiatric care plan, a CCM care plan, and a cognitive impairment care plan (see G0505 in section II.E.5). Response: While any care planning should take into account the whole patient, our intent is that the care planning included in the CCM coding (and G0506, the CCM initiating visit add-on code) will be the most comprehensive in nature, addressing all health issues with particular focus on VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the multiple chronic conditions being managed by the treating practitioner. In contrast, the BHI care planning will focus on behavioral health or psychiatric issues, in particular, just as the cognitive impairment care planning will focus on cognitive impairment issues, in particular (see section II.E.5. of this final rule). However, we understand that adoption of EHRs may be lower among behavioral health practitioners 9 and note that resources are available to help inform how care plans can support team-based care and BHI.10 While we understand that practitioners, in general, are exploring a wide variety of innovative approaches and tools that facilitate care plan integration across clinical disciplines, at this time, there may not be sufficient adoption of interoperable health IT interoperability among all practitioners and providers treating a given beneficiary to necessarily have a single, master care plan that adequately addresses the progress of the beneficiary in relation to all of these issues. In general, practitioners are encouraged to pursue approaches that integrate health information from multiple sources into a single care plan, but we understand that practitioners may need to create separate documents or the relevant care planning may be documented in another format within the medical record. We believe the format of the care plan(s) is less important than having a process whereby feedback and expertise from all relevant practitioners and providers, whether internal or external to the billing practice, are integrated into the beneficiary’s treatment plan and goals; that this plan be regularly assessed and revisited by the practitioner who is assuming an overall care management role for the beneficiary in a given month; that the patient is engaged in the care planning process; and that the care planning be documented in the medical record (as with any required element of any PFS service). We have framed the care planning service element for G0507 accordingly, ‘‘Behavioral health care planning in relation to behavioral/ psychiatric health problems, including revision for patients who are not progressing or whose status changes.’’ 9 See for instance https://dashboard.healthit.gov/ quickstats/pages/physician-ehr-adoptiontrends.php and https:// www.thenationalcouncil.org/wp-content/uploads/ 2012/10/HIT-Survey-Full-Report.pdf. 10 For instance, AHRQ has a variety of resources on how shared care plans can support team-based care and behavioral health integration at https:// integrationacademy.ahrq.gov/playbook/developshared-care-plan. PO 00000 Frm 00070 Fmt 4701 Sfmt 4700 Comment: We received a few comments recommending codes in addition to the psychiatric CoCM codes that would pay for similar services to inpatients, or for behavioral health services by psychologists to psychologically and medically complex patients in skilled nursing facilities (SNF) and nursing homes. Some of these commenters stated that in SNF and long-term care settings, psychologists work closely with primary care physicians, psychiatrists, nurses, and other consultants to improve outcomes by reducing inappropriate use or dosing of psychotropic medications, improving activities of daily living, and preventing avoidable admissions/falls. These commenters stated that many health systems employ psychologists as BHI team leaders or coordinators, and sought clarification on how psychologist-led teams would operationalize the new BHI codes. These commenters believe that psychology training provides unique skills in facilitating interdisciplinary teams. While they acknowledged that psychologists are not qualified to perform the full range of BHI services and interventions, they believed psychologists should be able to separately report and bill for care coordination and BHI initiation activities. We received similar comments supporting the addition of psychiatric collaborative care services to the PFS, and other evidence-based models in a variety of primary care-based treatment settings. However, these commenters supported the inclusion of social workers at all levels of licensures as reimbursable providers of these services. Response: We appreciate the commenters’ descriptions of some particular working models of care, and we welcome additional information in this regard. We continue to believe it would be appropriate to have new coding for a range of BHI care models applicable to inpatient as well as outpatient and facility settings. Our goal in separately identifying and paying for BHI services is to prioritize accurate payment for these services, in recognition of the associated time and complexity of the services. We agree that beneficiaries who are admitted to a facility, are in long-term care, or are transitioning among settings during the month are likely to be more complex than other types of patients, and to warrant more- not less- BHI services. Therefore, we have valued G0507 in both facility and non-facility settings (see section II.L on valuation). We are not limiting the time that can be counted towards the monthly time E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations requirement to bill G0507 to time that is spent in the care of an outpatient or a beneficiary residing in the community. As we provide for the psychiatric CoCM services, G0507 may be reported by specialties that are not ‘‘traditional’’ primary care specialties, if such specialists furnish the included services. However, we stress that G0507 can only be reported by a treating physician or other qualified health care professional when he or she has directed the BHI service for the duration of time that he or she is reporting it, and has a qualifying relationship with individuals providing the service under his or her direction and control. Also, time and effort that is spent managing care transitions for CCM or TCM patients and that is counted towards reporting TCM or CCM services, cannot also be counted towards reporting any transitional care management activities reported under a BHI service code(s). We welcome additional input from stakeholders regarding appropriate (or inappropriate) settings of service for G0507. Since the BHI initiating visit that is required to bill G0507 is not within the scope of practice of a psychologist or social worker (see below), psychologists and social workers will not be able to report G0507 directly (although a psychiatrist may be able to do so). Psychologists and social workers may provide care management services included in G0507 incident to the services of another (billing) practitioner. They may also provide services that are separately billable during the service period. We appreciate the commenters’ support for team-based care, and we recognize the substantial role of various types of mental health professionals within a primary care team. We are interested in receiving additional input from stakeholders as to whether and why behavioral health care management services by a social worker, psychologist or similarly qualified professional should be reportable in its own right, rather than incident to the services of a practitioner authorized to bill Medicare for a BHI initiating visit. Consistent with our recent approaches to making proposals under PFS notice and comment rulemaking, we could consider adopting new coding under a different construct that was not defined as BHI, if stakeholders provided sufficient input on how to design, define and value the services. We would also consider such changes if adopted by the CPT Editorial Panel, per our usual process. BHI integrates behavioral health expertise into evaluation and management care. Therefore G0507 is VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 designed to include services that require the oversight and involvement of a practitioner who can perform evaluation and management services, including facilitation of any needed pharmacotherapy, referral for specialty care, and overall management of the beneficiary’s treatment in relation to primary care treatment. We note that G0507 would not be independently billed by psychologists or social workers, though from our understanding of various models of BHI, these professionals seem likely to be participants in team-based care for beneficiaries receiving these services. c. BHI Initiating Visit Similar to CCM services (see section II.E.4), we proposed to require an initiating visit for all of the BHI codes (G0502, G0503, G0504 and G0507) that would be billable separate from the BHI services themselves. We proposed that the same services that can serve as the initiating visit for CCM services (see section II.E.4.a. of this final rule) could serve as the initiating visit for the proposed BHI codes. The initiating visit would establish the beneficiary’s relationship with the billing practitioner (most aspects of the BHI services would be furnished incident to the billing practitioner’s professional services), ensure the billing practitioner assesses the beneficiary prior to initiating care management processes, and provide an opportunity to obtain beneficiary consent (discussed below). We solicited public comment on the types of services that are appropriate for an initiating visit for the BHI codes, and within what timeframe the initiating visit should be conducted prior to furnishing BHI services. Comment: The commenters were largely supportive of our proposal to allow the same services to qualify for the initiating visit to CCM as for the initiating visit to BHI services. We received a few comments stating that in addition to the qualifying E/M services (or an AWV or IPPE), initiating services should include in-depth psychological evaluations delivered by a psychologist including CPT codes 90791, 96116 or 96118 which, in turn, include care plan development. These commenters agreed that psychologists cannot personally furnish all BHI services (for example, medication reconciliation), but believe psychologists effectively coordinate care and perform other aspects of BHI services as part of a team under current practice models. They believe this approach would be particularly effective for reducing inappropriate use or dosing of psychotropic medications in elderly and complex patients, improving PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 80239 activities of daily living, and preventing avoidable admissions and falls. Response: We appreciate the commenters’ feedback. We agree that psychologists would be qualified to perform care coordination that is included in the psychiatric CoCM codes (G0502, G0503 and G0504) and the general BHI code (G0507) under the direction of a physician or other qualified health care professional. In addition, beneficiaries receiving BHI services under any of those codes may be referred to psychologists for psychotherapy or other services that are separately billable and within the scope of practice of psychologists, as discussed elsewhere in this section of our final rule. However many commenters acknowledged, and we agree, that a BHI initiating visit is necessary. The initiating visit is not, in its entirety, within the scope of psychologist practice. Therefore, we are finalizing our proposal that the same services that qualify as the initiating visit for CCM will also qualify as initiating services for BHI, and they do not include in-depth psychological evaluation by a psychologist. Also, we will require an initiating visit for BHI only for new patients or beneficiaries not seen within a year of commencement of BHI services (the same requirement we are finalizing for CCM, see section II.E.4.a). As more experience is gained with the psychiatric CoCM services and other models of BHI care, we may reassess these provisions. As discussed above, we are interested in receiving input from stakeholders regarding circumstances other than BHI in which behavioral health care management services by a psychologist, social worker or similarly qualified professional should be reportable in its own right, rather than incident to the services of a practitioner authorized to bill Medicare for a BHI initiating visit. Comment: Some commenters recommended that CMS establish an add-on code to the initiating visit for BHI services, parallel to G0506 (the proposed add-on code for the CCM initiating visit). Response: We do not believe we have enough information about practice patterns at this time to create an add-on code to the BHI initiating visit, and we did not propose such a code. We may re-examine this issue in the future. d. Beneficiary Consent for BHI Services Commenters to the CY 2016 PFS proposed rule indicated that they did not believe a specific patient consent for BHI services is necessary and indicated that requiring special informed consent E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80240 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations for these services may reduce access due to stigma associated with behavioral health conditions. Instead, the commenters recommended requiring a more general consent prior to initiating these services whereby the beneficiary gives the initiating physician or practitioner permission to consult with relevant specialists, which would include conferring with a psychiatric consultant. Accordingly, we proposed to require a general beneficiary consent to consult with relevant specialists prior to initiating these services, recognizing that applicable rules continue to apply regarding privacy. The proposed general consent would encompass conferring with a psychiatric consultant when furnishing the psychiatric CoCM codes (G0502, G0503, and G0504) or the proposed broader BHI code (G0507). Similar to the proposed beneficiary consent process for CCM services, we proposed that the billing practitioner must document in the beneficiary’s medical record that the beneficiary’s consent was obtained to consult with relevant specialists including a psychiatric consultant, and that, as part of the consent, the beneficiary is informed that there is beneficiary costsharing, including potential deductible and coinsurance amounts, for both inperson and non-face-to-face services that are provided. We solicited stakeholder comments on this proposal. We recognized that special informed consent could also be helpful in cases when a particular service is limited to being billed by a single practitioner for a particular beneficiary. We did not believe that there are circumstances where it would reasonable for multiple practitioners to be reporting these codes during the same month. However, we did not propose a formal limit at this time. We solicited comment on whether such a limitation would be beneficial or whether there are circumstances under which a beneficiary might reasonably receive BHI services from more than one practitioner during a given month. Comment: The commenters were largely supportive of our proposal regarding BHI consent, some noting that physician-to-physician communication as well as communication within treatment teams happens routinely, without an extra layer of formal written consent, for other medical conditions. A few commenters intimated that CMS might pursue a single broad consent that could be used across care management services; for example, applying for both CCM and BHI. We did not receive any public comments delineating the circumstances under which it would be appropriate to bill for services furnished using more than one BHI service model VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 per month, or appropriate for more than one practitioner (whether in the same practice or different practices) to bill for services furnished in a BHI care model per month. Response: We agree with the commenters that physician-to-physician communication as well as communication within treatment teams happens routinely, without an extra layer of formal written consent, for other medical conditions. However there are particular privacy concerns addressed by other rules and regulations for some behavioral health or substance use care. Also we are concerned that beneficiaries should not incur unexpected expenses for care that is largely, or in significant part, non-face-to-face in nature. Finally, there are issues to consider, that we considered for CCM, regarding prevention of duplicative practitioner billing, and whether BHI services can actually be furnished under the direction and control of any given practitioner if for a given service period, more than one practitioner is furnishing BHI services and billing them. The public comments were supportive of our proposal for a broad consent that could be verbally obtained but must be documented in the medical record, and we are finalizing as proposed. At this time, we do not believe a single consent process for both BHI and CCM is advisable. It is not clear how frequently BHI and CCM would or should be furnished concurrently. BHI and CCM are distinct, separate services, having significant differences in time thresholds, the nature of the services, types of individuals providing the services, and payment and cost sharing amounts. Therefore, at this time, we are maintaining separate consent processes for CCM and BHI, as provided in the respective sections of this final rule. Also, as discussed in section II.E.4 on CCM, CCM and BHI may be billed during the same service period. It remains unclear whether it would be reasonable and necessary for more than one practitioner (whether in the same practice or different practices) to bill BHI services for a given beneficiary for a given service period, given the lack of public response and input on this issue. It may depend on the conditions(s) being treated and whether specialty care, other than psychiatric or behavioral health specialty care, and primary care are both involved. We are not proposing a formal limit at this time, but we stress that BHI services can only be reported by a treating physician or other qualified health care professional when he or she has obtained the required beneficiary consent, directed the BHI services he or she reports for the PO 00000 Frm 00072 Fmt 4701 Sfmt 4700 duration of time reported, and has a qualifying relationship with individuals providing the reported services under his or her direction and control. We would not expect a single practitioner to furnish care to a given beneficiary under more than one BHI model of care during a given month. Therefore a single practitioner must choose whether to report psychiatric CoCM code(s) (G0502, G0503, and G0504 as applicable) or the general BHI code (G0507) for a given month for a given beneficiary. We remind stakeholders that time cannot be counted more than once towards any code(s), all services must be medically reasonable and necessary, and that beneficiary cost sharing and advance consent apply. We will be monitoring the claims data and studying the utilization patterns. We will continue to assess appropriate reporting patterns, and we expect that potential coding changes by the CPT Editorial Panel may inform this issue. Comment: We received a number of comments recommending that cost sharing be removed for all care management services, whether through legislative change, demonstration, waiver safe harbor, or designation as preventive services. Response: We appreciate commenters’ concerns and recognize many of the challenges associated with patient costsharing for these kinds of services. At this time, we do not have authority to waive cost sharing for the BHI or other care management services. We appreciate the commenters’ acknowledgement of our current limitations and we will continue to consider this issue. e. Summary of Final BHI Policies Beginning in CY 2017, we are providing separate payment for a range of BHI services. Specifically, we are providing payment for psychiatric CoCM services under the following codes: • G0502: Initial psychiatric collaborative care management, first 70 minutes in the first calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements: ++ Outreach to and engagement in treatment of a patient directed by the treating physician or other qualified health care professional; ++ Initial assessment of the patient, including administration of validated rating scales, with the development of an individualized treatment plan; E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations ++ Review by the psychiatric consultant with modifications of the plan if recommended; ++ Entering patient in a registry and tracking patient follow-up and progress using the registry, with appropriate documentation, and participation in weekly caseload consultation with the psychiatric consultant; and ++ Provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies. • G0503: Subsequent psychiatric collaborative care management, first 60 minutes in a subsequent month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements: ++ Tracking patient follow-up and progress using the registry, with appropriate documentation; ++ Participation in weekly caseload consultation with the psychiatric consultant; ++ Ongoing collaboration with and coordination of the patient’s mental health care with the treating physician or other qualified health care professional and any other treating mental health providers; ++ Additional review of progress and recommendations for changes in treatment, as indicated, including medications, based on recommendations provided by the psychiatric consultant; ++ Provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies; ++ Monitoring of patient outcomes using validated rating scales; and relapse prevention planning with patients as they achieve remission of symptoms and/or other treatment goals and are prepared for discharge from active treatment. • G0504: Initial or subsequent psychiatric collaborative care management, each additional 30 minutes in a calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional (List separately in addition to code for primary procedure) (Use G0504 in conjunction with G0502, G0503). These psychiatric CoCM services are reported by the treating physician or other qualified health care professional for services furnished during a calendar VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 month service period. These services may be furnished when a beneficiary has a psychiatric or behavioral health condition(s) that in the treating physician or other qualified health care professional’s clinical judgment, requires a behavioral health care assessment; establishing, implementing, revising, or monitoring a care plan; and provision of brief interventions. The diagnosis or diagnoses may be preexisting or made by the treating physician or other qualified health care professional, and may be refined over time. The psychiatric CoCM services may be furnished to beneficiaries with any psychiatric or behavioral health condition(s) that is being treated by the physician or other qualified health care professional, including substance use disorders. Beneficiaries receiving psychiatric CoCM services may, but are not required to have comorbid chronic or other medical condition(s) that are being managed by the treating practitioner. Psychiatric CoCM services include the services of the treating physician or other qualified health care professional, the behavioral health care manager (see description below) who provides services incident to services of the treating physician or other qualified health care professional, and the psychiatric consultant (see description below) whose consultative services are furnished incident to services of the treating physician or other qualified health care professional. Time spent by administrative or clerical staff cannot be counted towards the time required to bill the psychiatric CoCM service codes. Beneficiaries receiving psychiatric CoCM services may have newly diagnosed conditions, need help in engaging in treatment, have not responded to standard care delivered in a non-psychiatric setting, or require further assessment and engagement prior to consideration of referral to a psychiatric care setting. Beneficiaries are treated for an episode of care, defined as beginning when the behavioral health care manager engages in care of the beneficiary under the appropriate supervision of the billing practitioner and ending with: • The attainment of targeted treatment goals, which typically results in the discontinuation of care management services and continuation of usual follow-up with the treating physician or other qualified healthcare professional; or • Failure to attain targeted treatment goals culminating in referral to a psychiatric care provider for ongoing treatment; or PO 00000 Frm 00073 Fmt 4701 Sfmt 4700 80241 • Lack of continued engagement with no psychiatric collaborative care management services provided over a consecutive 6-month calendar period (break in episode). A new episode of care will start after a break in episode of 6 calendar months or more. The treating physician or other qualified health care professional directs the behavioral health care manager and continues to oversee the beneficiary’s care, including prescribing medications, providing treatments for medical conditions, and making referrals to specialty care when needed. The treating physician or other qualified health care professional must remain involved in ongoing oversight, management, collaboration and reassessment as appropriate to bill the psychiatric CoCM codes. The behavioral health care manager has formal education or specialized training in behavioral health (which could include a range of disciplines, for example, social work, nursing, and psychology). The behavioral health care manager provides care management services, as well as an assessment of needs, including the administration of validated rating scales; 11 behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes; provision of brief interventions; ongoing collaboration with the treating physician or other qualified health care professional; maintenance of a registry; 12 all in consultation with the psychiatric consultant. The behavioral health care manager is available to provide these services face-to-face and non-face-to-face, and consults with the psychiatric consultant minimally on a weekly basis. The behavioral health care manager must have a collaborative, integrated relationship with the rest of the care team members, and be able to perform all of the required elements of the service delineated for the behavioral health care manager. The behavioral health care manager must have the ability to engage the beneficiary outside of regular clinic hours as necessary to perform the behavioral health care manager’s duties under the psychiatric CoCM model, and must have a continuous relationship with the beneficiary. The behavioral health care manager may or may not be a 11 For example, see https://aims.uw.edu/resourcelibrary/measurement-based-treatment-target. 12 For example, see https://aims.uw.edu/ collaborative-care/implementation-guide/planclinical-practice-change/identify-population-based. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80242 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations professional who meets all the requirements to independently furnish and report services to Medicare. The behavioral health care manager is subject to the incident to rules and regulations and applicable state law, licensure and scope of practice (see 42 CFR 410.26). The psychiatric consultant is a medical professional trained in psychiatry and qualified to prescribe the full range of medications. The psychiatric consultant advises and makes recommendations, as needed, for psychiatric and other medical care, including psychiatric and other medical diagnoses, treatment strategies including appropriate therapies, medication management, medical management of complications associated with treatment of psychiatric disorders, and referral for specialty services, that are communicated to the treating physician or other qualified health care professional, typically through the behavioral health care manager. The psychiatric consultant does not typically see the beneficiary or prescribe medications, except in rare circumstances, but can and should facilitate referral for direct provision of psychiatric care when clinically indicated. The psychiatric consultant is subject to the incident to rules and regulations and applicable state law, licensure and scope of practice (see 42 CFR 410.26). Beginning in CY 2017, we are providing separate payment for BHI services furnished under models of care other than the psychiatric CoCM model, under HCPCS code G0507: Care management services for behavioral health conditions, at least 20 minutes of clinical staff time, directed by a physician or other qualified health care professional, per calendar month, with the following required elements: • Initial assessment or follow-up monitoring, including the use of applicable validated rating scales; • Behavioral health care planning in relation to behavioral/psychiatric health problems, including revision for patients who are not progressing or whose status changes; • Facilitating and coordinating treatment such as psychotherapy, pharmacotherapy, counseling and/or psychiatric consultation; and • Continuity of care with a designated member of the care team. G0507 is reported by the treating physician or other qualified health care professional for services furnished during a calendar month service period. This service may be furnished when the beneficiary has a psychiatric or behavioral health condition(s) that in VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the treating physician or other qualified health care professional’s clinical judgment, requires a behavioral health care assessment, behavioral health care planning, and provision of interventions. The presenting condition(s) may be pre-existing or newly diagnosed by the treating physician or other qualified health care professional, and may be refined over time. Beneficiaries receiving services reported under G0507 may have any psychiatric or behavioral health condition(s) that is being treated by the physician or other qualified health care professional, including substance use disorders. Beneficiaries receiving services reported under G0507 may, but are not required to have comorbid chronic or other medical condition(s) that are being managed by the treating practitioner. Services reported under G0507 may be provided directly by the treating physician or other qualified health care professional, or provided by clinical staff under his or her direction, during a calendar month service period. For G0507, there is not necessarily a specific individual designated as a ‘‘behavioral health care manager’’ with formal or specialized education in providing the services (although there could be). Similarly, there is not necessarily a psychiatric or other behavioral health specialist consultant (although there could be) and we note that G0507 is not valued to explicitly account for expert consultation. For G0507, the term ‘‘clinical staff’’ means the CPT definition of this term, subject to the incident to rules and regulations and applicable state law, licensure and scope of practice at 42 CFR 410.26. For G0507, then, we note that the term ‘‘clinical staff’’ will encompass or include any psychiatric or other behavioral health specialist consultant that may provide consultative services. Clinical staff providing services are not required to be employed by the treating practitioner or located on site, and these individuals may or may not be a professional permitted to independently furnish and report services to Medicare. Time spent by administrative or clerical staff cannot be counted towards the time required to report G0507. We emphasize that the physician or other qualified health care professional must direct the service, continue to oversee the beneficiary’s care, and perform ongoing management, collaboration and reassessment. If the service (or part thereof) is provided incident to services of the treating practitioner, whether on site or remotely, the clinical staff providing services must have a PO 00000 Frm 00074 Fmt 4701 Sfmt 4700 collaborative, integrated relationship with the treating practitioner. They must also have a continuous relationship with the beneficiary. For all of the BHI service codes (G0502, G0503, G0504 and G0507), we are requiring an initiating visit that is billable separate from the BHI services themselves. The same services that qualify as initiating visits for CCM services can serve as the initiating visit for BHI services (certain face-to-face E/ M services including the face-to-face visit required for TCM services, and the AWV or IPPE). The BHI initiating visit establishes the beneficiary’s relationship with the treating practitioner (BHI services may be furnished incident to the treating practitioner’s professional services); ensures that the treating practitioner assesses the beneficiary prior to initiating care management processes; and provides an opportunity to obtain beneficiary consent (consent may also be obtained outside of the BHI initiating visit, as long as it is obtained prior to commencement of BHI services). For all of the BHI service codes, we are also requiring prior beneficiary consent, recognizing that applicable rules continue to apply regarding privacy. The consent will include permission to consult with relevant specialists including a psychiatric consultant, and inform the beneficiary that cost sharing will apply to in-person and non-face-to-face services provided. Consent may be verbal (written consent is not required) but must be documented in the medical record. For payment purposes, we are assigning general supervision to all of the BHI service codes (G0502, G0503, G0504 and G0507). However we note that general supervision does not, by itself, comprise a qualifying relationship between the treating practitioner and other individuals providing BHI services under the incident to relationship. Also we note that we valued BHI services in both facility and non-facility settings. BHI services may be furnished to beneficiaries in any setting of care. Time that is spent furnishing BHI services to a beneficiary who is an inpatient or in any other facility setting during service provision or for any part of the service period may be counted towards reporting a BHI code(s). We refer the reader to our discussion above on this matter, as well as reporting by specialty, intersection with other services, and potential reporting by more than one practitioner for a given beneficiary within a service period. A single practitioner must choose whether to report psychiatric CoCM code(s) (G0502, G0503, and E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 G0504 as applicable) or the general BHI code (G0507) for a given month (service period) for a given beneficiary. 4. Reducing Administrative Burden and Improving Payment Accuracy for Chronic Care Management (CCM) Services Beginning in CY 2015, we implemented separate payment for CCM services under CPT code 99490 (Chronic care management services, at least 20 minutes of clinical staff time directed by a physician or other qualified health professional, per calendar month, with the following required elements: • Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; • Chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; • Comprehensive care plan established, implemented, revised, or monitored). In the CY 2015 final rule with comment period, we finalized a proposal to make separate payment for CCM services as one initiative in a series of initiatives designed to improve payment for, and encourage long-term investment in, care management services (79 FR 67715). In particular, we sought to address an issue raised to us by the physician community, which stated that the care management included in many of the existing E/M services, such as office visits, does not adequately describe the typical nonface-to-face care management work required by certain categories of beneficiaries (78 FR 43337). We began to re-examine how Medicare should pay under the PFS for non-face-to-face care management services that were bundled into the PFS payment for face-to-face E/ M visits, being included in the pre- and post-encounter work (78 FR 43337). In proposing separate payment for CCM, we acknowledged that, even though we had previously considered non-face-toface care management services as bundled into the payment for face-toface E/M visits, the E/M office/ outpatient visit CPT codes may not reflect all the services and resources required to furnish comprehensive, coordinated care management for certain categories of beneficiaries. We stated that we believed that the resources required to furnish complex chronic care management services to beneficiaries with multiple (that is, two or more) chronic conditions were not adequately reflected in the existing E/M codes. Medical practice and patient complexity required physicians, other practitioners and their clinical staff to VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 spend increasing amounts of time and effort managing the care of comorbid beneficiaries outside of face-to-face E/M visits, for example, complex and multidisciplinary care modalities that involve regular physician development and/or revision of care plans; subsequent report of patient status; review of laboratory and other studies; communication with other health care professionals not employed in the same practice who are involved in the patient’s care; integration of new information into the care plan; and/or adjustments of medical therapy. Therefore, in the CY 2014 PFS final rule with comment period, we established a separate payment under the PFS for CPT code 99490 (78 FR 43341 through 43342). We sought to include a relatively broad eligible patient population within the code descriptor, established a moderate payment amount, and established bundled payment for concurrently new CPT codes that were reserved for beneficiaries requiring ‘‘complex’’ CCM services (base CPT code 99487 and its add-on code 99489) (79 FR 67716 through 67719). We stated that we would evaluate the services reported under CPT code 99490 to assess whether the service is targeted to the right population and whether the payment amount is appropriate (79 FR 67719). We remind stakeholders that CMS did not limit the eligible population to any particular list of chronic conditions other than the language in the CPT code descriptor. Accordingly, one or more of the chronic conditions being managed through CCM services could be chronic mental health or behavioral health conditions or chronic cognitive disorders, as long as the chronic conditions meet the eligibility language in the CPT code descriptor for CCM services and the billing practitioner meets all of Medicare’s requirements to bill the code including comprehensive, patientcentered care planning for all health conditions. In finalizing separate payment for CPT code 99490, we considered whether we should develop standards to ensure that physicians and other practitioners billing the service would have the capability to fully furnish the service (79 FR 67721). We sought to make certain that the newly payable PFS code(s) would provide beneficiary access to appropriate care management services that are characteristic of advanced primary care, such as continuity of care; patient support for chronic diseases to achieve health goals; 24/7 patient access to care and health information; receipt of preventive care; PO 00000 Frm 00075 Fmt 4701 Sfmt 4700 80243 patient, family and caregiver engagement; and timely coordination of care through electronic health information exchange. Accordingly, we established a set of scope of service elements and payment rules in addition to or in lieu of those established in CPT guidance (in the CPT code descriptor and CPT prefatory language), that the physician or nonphysician practitioner must satisfy to fully furnish CCM services and report CPT code 99490 (78 FR 74414 through 74427, 79 FR 67715 through 67730, and 80 FR 14854). We established requirements to furnish a preceding qualifying visit, obtain advance written beneficiary consent, use certified electronic health record (EHR) technology to furnish certain elements of the service, share the care plan and clinical summaries electronically, document specified activities, and other items summarized in Table 11 of our CY 2017 proposed rule. For the CCM service elements for which we required use of a certified EHR, the billing practitioner must use, at a minimum, technology meeting the edition(s) of certification criteria that is acceptable for purposes of the EHR Incentive Programs as of December 31st of the calendar year preceding each PFS payment year. (For the CY 2017 PFS payment year, this would mean technology meeting the 2014 edition of certification criteria). These elements and requirements for separately payable CCM services are extensive and generally exceed those required for payment of codes describing procedures, diagnostic tests, or other E/M services under the PFS. In addition, both CPT guidance and Medicare rules specify that only a single practitioner who assumes the care management role for a given beneficiary can bill CPT code 99490 per service period (calendar month). Because the new CCM service closely overlapped with several Medicare demonstration models of advanced primary care (the Multi-Payer Advanced Primary Care Practice (MAPCP) demonstration and the Comprehensive Primary Care Initiative (CPCI)), we provided that practitioners participating in one of these two initiatives could not be paid for CCM services furnished to a beneficiary attributed by the initiative to their practice (79 FR 67729). Given the non-face-to-face nature of CCM services, we also sought to ensure that beneficiaries would receive advance notice that Part B cost sharing applies since we currently have no legislative authority to ‘‘waive’’ cost sharing for this service. Also since only one practitioner can bill for CCM each service period, we believed the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80244 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations beneficiary notice requirement would help prevent duplicate payment to multiple practitioners. Since the establishment of CPT code 99490 for separate payment of CCM services, in a number of forums and in public comments to the CY 2016 PFS final rule (80 FR 70921), many practitioners have stated that the service elements and billing requirements are burdensome, redundant and prevent them from being able to provide the services to beneficiaries who could benefit from them. Stakeholders have stated that CPT code 99490 is underutilized because it is underpaid relative to the resources involved in furnishing the services, especially given the extensive Medicare rules for payment, and they have suggested a number of potential changes to our current payment rules. Stakeholders continue to believe that many of the CCM payment rules are duplicative, and to recommend that we reduce the rules and expand CCM coding and payment to distinguish among different levels of patient complexity. We also note that section 103 of the MACRA requires CMS to assess and report to Congress (no later than December 31, 2017) on access to CCM services by underserved rural and racial and ethnic minority populations and to conduct an outreach/education campaign that is underway. The professional claims data for CPT code 99490 show that utilization is steadily increasing but may remain low considering the number of eligible Medicare beneficiaries. To date, approximately 513,000 unique Medicare beneficiaries received the service an average of four times each, totaling $93 million in total payments. Since CPT code 99490 describes a minimum of 20 minutes of clinical staff time spent furnishing CCM services during a month and does not have an upper time limit, and since we currently do not separately pay the other codes in the CCM family of CPT codes (which would provide us with utilization data on the number of patients requiring longer service times during a billing period), we do not know how often beneficiaries required more than 20 minutes of CCM services per month. We also do not know their complexity relative to one another, other than meeting the acuity criteria in the CPT code descriptor. Initial information from practitioner interviews conducted as part of our CCM evaluation efforts indicates that practitioners overwhelmingly meet and exceed the 20-minute threshold time for billing CCM. Typically, these practitioners reported spending between 45 minutes and an hour per month on VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 CCM services for each patient, with times ranging between 20 minutes and several hours per month. CCM beneficiaries tend to exhibit a higher disease burden, are more likely to be dually eligible for Medicare and Medicaid, and are older than the general Medicare fee-for-service population.13 However, absent multiple levels of CCM coding, we do not have comprehensive data on the relative complexity of the CCM services furnished to beneficiaries. In light of this stakeholder feedback and our mandate under MACRA section 103 to encourage and report on access to CCM services, we proposed several changes in the payment rules for CCM services. Our primary goal, and our statutory mandate, is to pay as accurately as possible for services furnished to Medicare beneficiaries based on the relative resources required to furnish PFS services, including CCM services. In so doing, we also expect to facilitate beneficiaries’ access to reasonable and necessary CCM services that improve health outcomes. First, for CY 2017 we proposed to more appropriately recognize and pay for the other codes in the CPT family of CCM services (CPT codes 99487 and 99489 describing complex CCM), consistent with our general practice to price services according to their relative ranking within a given family of services. We direct the reader to section II.L of this final rule for a discussion of valuation for base CPT code 99487 and its add-on CPT code 99489. The CPT code descriptors are: • CPT code 99487—Complex chronic care management services, with the following required elements: ++ Multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient; ++ Chronic conditions place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; ++ Establishment or substantial revision of a comprehensive care plan; ++ Moderate or high complexity medical decision making; ++ 60 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month. • CPT code 99489—Each additional 30 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month 13 Schurrer, John, and Rena Rudavsky. ‘‘Evaluation of the Diffusion and Impact of the Chronic Care Management (CCM) Fees: Third Quarterly Report.’’ Report submitted to the Center for Medicare and Medicaid Innovation. Washington, DC: Mathematica Policy Research, May 6, 2016. PO 00000 Frm 00076 Fmt 4701 Sfmt 4700 (List separately in addition to code for primary procedure). As CPT provides, less than 60 minutes of clinical staff time in the service period could not be reported separately, and similarly, less than 30 minutes in addition to the first 60 minutes of complex CCM in a service period could not be reported. We would require 60 minutes of services for reporting CPT code 99487 and 30 additional minutes for each unit of CPT code 99489. We proposed to adopt the CPT provision that CPT codes 99487, 99489 and 99490 may only be reported once per service period (calendar month) and only by the single practitioner who assumes the care management role with a particular beneficiary for the service period. That is, a given beneficiary would be classified as eligible to receive either complex or non-complex CCM during a given service period, not both, and only one professional claim could be submitted to the PFS for CCM for that service period by one practitioner. Comment: Several commenters were supportive of separate payment for complex CCM services. Response: We thank the commenters for their support and are finalizing separate payment for CPT codes 99487 and 99489 as proposed. As finalized, these separate payments for complex CCM services will support care management for the most complex and time-consuming cases of beneficiaries with multiple chronic conditions. Except for differences in the CPT code descriptors, we proposed to require the same CCM service elements for CPT codes 99487, 99489 and 99490. In other words, all the requirements in Table 11 of our proposed rule would apply, whether the code being billed for the service period is CPT code 99487 (plus CPT code 99489, if applicable) or CPT code 99490. These three codes would differ in the amount of clinical staff service time provided; the complexity of medical decision-making as defined in the E/M guidelines (determined by the problems addressed by the reporting practitioner during the month); and the nature of care planning that was performed (establishment or substantial revision of the care plan for complex CCM versus establishment, implementation, revision or monitoring of the care plan for non-complex CCM). Billing practitioners could consider identifying beneficiaries who require complex CCM services using criteria suggested in CPT guidance (such as number of illnesses, number of medications or repeat admissions or emergency department visits) or the profile of typical patients in the CPT E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 prefatory language, but these would not comprise Medicare conditions of eligibility for complex CCM. We proposed several changes to our current scope of service elements for CCM, and proposed that the same scope of service elements, as amended, would apply to all codes used to report CCM services beginning in 2017 (i.e., CPT codes 99487, 99489 and 99490). In particular, we proposed changes in the requirements for the initiating visit, 24/ 7 access to care and continuity of care, format and sharing of the care plan and clinical summaries, beneficiary receipt of the care plan, beneficiary consent and documentation. Comment: Commenters were broadly supportive of these proposals. We received several comments recommending changes to the scope of service for non-complex CCM that might improve the distinction between noncomplex and complex CCM and inform which ‘‘level’’ of service a given beneficiary is eligible for. For example, these commenters suggested changes to the time included in the code descriptor to reflect two or more time increments for CPT code 99490 using add-on codes, or retaining the current low time threshold while allowing practitioners to choose among certain service elements. Some commenters do not believe CPT code 99490 is intended for beneficiaries who require all the current service elements in a given month, and that only a more limited set of elements is medically necessary for the noncomplex population. Response: We appreciate the commenters’ recommendations about how we might better distinguish complex CCM services from noncomplex CCM services. The CPT Editorial Panel currently maintains the coding for CCM services. Further changes in codes and/or descriptors may be appropriately addressed by CPT and in subsequent PFS rulemaking. a. CCM Initiating Visit & Add-On Code (G0506) As provided in the CY 2014 PFS final rule with comment period (78 FR 74425) and subregulatory guidance (available at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/ Downloads/Payment_for_CCM_ Services_FAQ.pdf), CCM must be initiated by the billing practitioner during a ‘‘comprehensive’’ E/M visit, AWV or IPPE. This face-to-face, initiating visit is not part of the CCM service and can be separately billed to the PFS, but is required before CCM services can be provided directly or under other arrangements. The billing VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 practitioner must discuss CCM with the patient at this visit. While informed patient consent does not have to be obtained during this visit, the visit is an opportunity to obtain the required consent. The face-to-face visit included in transitional care management (TCM) services (CPT codes 99495 and 99496) qualifies as a ‘‘comprehensive’’ visit for CCM initiation. Levels 2 through 5 E/M visits (CPT codes 99212 through 99215) also qualify; CMS does not require the practice to initiate CCM during a level 4 or 5 E/M visit. However, CPT codes that do not involve a face-to-face visit by the billing practitioner or are not separately payable by Medicare (such as CPT code 99211, anticoagulant management, online services, telephone and other E/M services) do not qualify as initiating visits. If the practitioner furnishes a ‘‘comprehensive’’ E/M, AWV, or IPPE and does not discuss CCM with the patient at that visit, that visit cannot count as the initiating visit for CCM. We continued to believe that we should require an initiating visit in advance of furnishing CCM services, separate from the services themselves, because a face-to-face visit establishes the beneficiary’s relationship with the billing practitioner and most aspects of the CCM services are furnished incident to the billing practitioner’s professional services. The initiating visit also ensures collection of comprehensive health information to inform the care plan. We continued to believe that the types of face-to-face services that qualify as an initiating visit for CCM are appropriate. We did not propose to change the kinds of visits that can qualify as initiating CCM visits. However, we proposed to require the initiating visit only for new patients or patients not seen within one year instead of for all beneficiaries receiving CCM services. We believed this would allow practitioners with existing relationships with patients who have been seen relatively recently to initiate CCM services without furnishing a potentially unnecessary E/M visit. We solicited public comment on whether a period of time shorter than one year would be more appropriate. Comment: The commenters were generally supportive of requiring the CCM initiating visit only for beneficiaries who are new patients or have not been seen in a year. A few commenters suggested a 6-month timeframe, or adopting one year and reconsidering as we gain more experience with CCM. Some commenters misinterpreted our proposal as requiring face-to-face visits every year to periodically reassess the beneficiary or the appropriateness of PO 00000 Frm 00077 Fmt 4701 Sfmt 4700 80245 CCM services. Some recommended a similar coding structure for specialists managing a single condition, in place of prolonged services, or for BHI services. Response: Our intent was to revise the timeframe for the single CCM initiating visit that is required at the outset of services. We did not propose subsequent ‘‘re-initiation’’ of CCM services or face-to-face reassessment within a given timeframe. We discuss further below that we have some concerns about how to ensure that the billing practitioner remains involved in the beneficiary’s care and continually reassesses the beneficiary’s care, but at this time we do not believe we should require subsequent face-to-face visits within certain timeframes to address those concerns. We believe that the proposed one-year timeframe for the single, CCM initiating visit is appropriate for CY 2017, so we are finalizing as proposed. We will require the CCM initiating visit only for new patients or patients not seen within the year prior to commencement of CCM (instead of for all beneficiaries receiving CCM services). We will continue to consider in future years whether a different timeframe is warranted. The goal of our final policy is to allow practitioners with existing relationships with beneficiaries who have been seen relatively recently to initiate CCM services (for the first time) without furnishing a potentially unnecessary E/M visit. Regarding subsequent visits (after CCM services begin), practitioners are already permitted to furnish and separately bill subsequent E/M visits (or AWVs) for beneficiaries receiving CCM services. If a face-to-face reassessment is reasonable and necessary and furnished by the billing practitioner, then he or she may bill an appropriate code describing the face-to-face assessment of a beneficiary to whom they have previously furnished CCM services. We also proposed for CY 2017 to create a new add-on G-code that would improve payment for services that qualify as initiating visits for CCM services. The code would be billable for beneficiaries who require extensive face-to-face assessment and care planning by the billing practitioner (as opposed to clinical staff), through an add-on code to the initiating visit, G0506 (Comprehensive assessment of and care planning by the physician or other qualified health care professional for patients requiring chronic care management services (billed separately from monthly care management services) (Add-on code, list separately in addition to primary service)). We proposed that when the billing practitioner initiating CCM personally E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80246 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations performs extensive assessment and care planning outside of the usual effort described by the billed E/M code (or AWV or IPPE code), the practitioner could bill G0506 in addition to the E/M code for the initiating visit (or in addition to the AWV or IPPE), and in addition to the CCM CPT code 99490 (or proposed 99487 and 99489) if all requirements to bill for CCM services are also met. We proposed valuation for G0506 in a separate section of our proposed rule. The code G0506 would account specifically for additional work of the billing practitioner in personally performing a face-to-face assessment of a beneficiary requiring CCM services, and personally performing CCM care planning (the care planning could be face-to-face and/or non-face-to-face) that is not already reflected in the initiating visit itself (nor in the monthly CCM service code). We believed G0506 might be particularly appropriate to bill when the initiating visit is a less complex visit (such as a level 2 or 3 E/M visit), although G0506 could be billed along with higher level visits if the billing practitioner’s effort and time exceeded the usual effort described by the initiating visit code. It could also be appropriate to bill G0506 when the initiating visit addresses problems unrelated to CCM, and the billing practitioner does not consider the CCMrelated work he or she performs in determining what level of initiating visit to bill. We believed that this proposal would more appropriately recognize the relative resource costs for the work of the billing practitioner in initiating CCM services, specifically for extensive work assessing the beneficiary and establishing the CCM care plan that is reasonable and necessary, and that is not accounted for in the billed initiating visit or in the unit of the CCM service itself that is billed for a given service period. In addition, we believed this proposal would help ensure that the billing practitioner personally performs and meaningfully contributes to the establishment of the CCM care plan when the patient’s complexity warrants it. Comment: Several commenters were supportive of the add-on code (G0506) to the CCM initiating visit to describe physician assessment and care planning for patients requiring CCM services. Some commenters raised questions about whether G0506 should be a onetime service or could also be billed as an add-on code to subsequent reassessments by the billing practitioner (whether E/M visits or subsequent AWVs). VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Response: At this time, we do not believe we should permit billing of G0506 more than once by the billing practitioner for a given beneficiary. G0506 was proposed as an add-on code to the single initiating visit, to help ensure the billing practitioner’s assessment and involvement at the outset of CCM services. At this time there are no requirements for the billing practitioner to ‘‘re-initiate’’ CCM services; therefore we do not believe we should create an add-on code for a CCM ‘‘re-initiation’’ service. We would have to define ‘‘re-initiation’’ and develop rules regarding when subsequent E/M visits or AWVs are related to the performance of CCM. We do not believe beneficiaries would understand why they are incurring additional cost sharing for an add-on code to a ‘‘reinitiation’’ visit that has not been required or defined by CMS. As we stated in the CY 2017 proposed rule, we were very interested in coding that was presented to the CPT Editorial Panel, but not adopted, to create code(s) that would separately identify and account for monthly CCM work by the billing practitioner. Such coding may be a better means of separately identifying and valuing the subsequent work of the billing practitioner after CCM is initiated. We want to establish policies that help ensure that the billing practitioner is not merely handing the beneficiary off to a remote care manager under general supervision while no longer remaining involved in their care. We believe that the practitioner billing CCM services should be actively reassessing the beneficiary’s chronic conditions, reviewing whether treatment goals are being met, updating the care plan, performing any medical decision-making that is not within the scope of practice of clinical staff, performing any necessary face-to-face care, and performing other related work. However, it would be more straightforward to separately identify this CCM-related work under code(s) that in their own right describe it, instead of add-on codes to very broadly drawn E/M codes where it becomes difficult to assess the relationship between the two services. Also for beneficiaries receiving complex CCM, some of this work is explicitly included in the complex CCM service codes (i.e., medical decision-making of moderate to high complexity). Therefore, at this time, G0506 will only serve as an addon code to describe work performed by the billing practitioner once, in conjunction with the start or initiation of CCM services. We note that despite the role of the billing practitioner in the initiation and PO 00000 Frm 00078 Fmt 4701 Sfmt 4700 provision of CCM services provided by clinical staff, non-complex CCM (CPT code 99490) is described based on the time spent by clinical staff. Complex CCM (CPT codes 99487 and 99489) similarly counts only clinical staff time, although it also includes complex medical decision-making by the billing practitioner. This raises issues regarding appropriate valuation in the facility setting that we will continue to consider in future rulemaking. The facility PE RVU for CCM includes indirect PE (which is an allocation based on physician work), but no direct PE (which would be comprised of other labor, supplies and equipment). This is because historically, the PFS facility rate assumes that the billing practitioner is not bearing a significant resource cost in labor by other individuals, equipment or supplies. Medicare assumes that those costs are instead borne by the facility and adequately accounted for in a separate payment made to the facility. The PFS non-facility rate generally does include such costs, assuming that the billing practitioner bears the resource costs in clinical and other staff labor, supplies and equipment. For CCM, we have been considering whether this approach to valuation remains appropriate, because the service, in whole or in significant part, is provided by clinical staff under the direction of the billing practitioner. These individuals may provide the service or part thereof remotely, and are not necessarily employees or staff of the facility. Under this construct, there may be more direct practice expense borne by the billing practitioner that should be separately identified and valued over and above any institutional payment to the facility for its staff and infrastructure. We plan to explore these issues in future rulemaking and consider other approaches to valuation that would recognize the accurate relative resource costs to the billing practitioner for CCM and similar services furnished to beneficiaries who remain or reside in a facility setting during some or all of the service period. Consistent with general coding guidance, we proposed that the work that is reported under G0506 (including time) could not also be reported under or counted towards the reporting of any other billed code, including any of the monthly CCM services codes. The care plan that the practitioner must create to bill G0506 would be subject to the same requirements as the care plan included in the monthly CCM services, namely, it must be an electronic patient-centered care plan based on a physical, mental, cognitive, psychosocial, functional and environmental (re)assessment and an E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations inventory of resources and supports; a comprehensive care plan for all health issues. This would distinguish it from the more limited care planning included in the BHI codes G0502, G0503, G0504 or G0507 which focus on behavioral health issues, or the care planning included in G0505 which focuses on cognitive status. We sought public input on potential overlap among these codes and further clinical input as to how the assessments and care planning that is included in them would differ. We received a number of comments regarding the relationship between proposed G0506, G0505 (Cognition and functional assessment by the physician or other qualified health care professional in office or other outpatient), prolonged non-face-to-face services, and BHI. We address these comments in the sections of this final rule regarding G0505, prolonged nonface-to-face services and BHI services (sections II.E.5, II.E.2 and II.E.3). In brief, we are not allowing G0506 and G0505 to be billed the same day (by a single practitioner). G0506 will not be an add-on code for the BHI initiating visit or BHI services. G0506 will be a one-time service code for CCM initiation, and the billing practitioner must choose whether to report either G0506 or prolonged services in association with CCM initiation (if requirements to bill both are met). The CCM and BHI service codes differ substantially in potential diagnosis and comorbidity, the expected duration of the condition(s) being treated, the kind of care planning performed (comprehensive care planning versus care planning focused on behavioral/ mental health issues), service elements and who performs them, and the interventions the beneficiary needs and receives apart from the CCM and BHI services themselves. The BHI codes include a more focused process than CCM for the clinical integration of primary care and behavioral health/ psychiatric care, and for continual reassessment and treatment progression to a target or goal outcome that is specific to mental and behavioral health or substance abuse issues. However there is no explicit BHI service element for managing care transitions or systematic assessment of receipt of preventive services; there is no requirement to perform comprehensive care planning for all health issues (not just behavioral health issues); and there are different emphases on medication management or medication reconciliation, if applicable. In deciding which code(s) to report for services furnished to a beneficiary who is eligible for both CCM and BHI services, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 practitioners should consider which service elements were furnished during the service period, who provided them, how much time was spent, and should select the code(s) that most accurately and specifically identifies the services furnished without duplicative time counting. Practitioners should generally select the more specific code(s) when an alternative code(s) potentially includes the services provided. We are not precluding use of the CCM codes to report, or count, behavioral health care management if it is provided as part of a broader CCM service by a practitioner who is comprehensively overseeing all of the beneficiary’s health issues, even if there are no imminent non-behavioral health needs. However, such behavioral care management activities could not also be counted towards reporting a BHI code(s). If a BHI service code more specifically describes the service furnished (service time and other relevant aspects of the service being equal), or if there is no focus on the health of the beneficiary outside of a narrower set of behavioral health issues, then it is more appropriate to report the BHI code(s) than the CCM code(s). Similarly, it may be more appropriate for certain specialists to bill BHI services than CCM services, since specialists are more likely to be managing the beneficiary’s behavioral health needs in relation to a narrow subset of medical condition(s). CCM and BHI services can only be billed the same month for the same beneficiary if all the requirements to bill each service are separately met. We will monitor the claims data, and we welcome further stakeholder input to inform appropriate reporting rules. b. 24/7 Access to Care, Continuity of Care, Care Plan and Managing Transitions We proposed several revisions to the scope of service elements of 24/7 Access to Care, Continuity of Care, Care Plan and Managing Transitions. We continued to believe these elements are important aspects of CCM services, but that we should reduce the requirements for the use of specified electronic health information technology (IT) in their provision. In sum, we proposed to retain a core requirement to use a certified electronic health record (EHR), but allow fax to count for electronic transmission of clinical summaries and the care plan; no longer require access to the electronic care plan outside of normal business hours to those providing CCM services; and remove standards for clinical summaries in managing care transitions. PO 00000 Frm 00079 Fmt 4701 Sfmt 4700 80247 We sought to improve alignment with CPT provisions by removing the requirement for the care plan to be available remotely to individuals providing CCM services after hours. Studies have shown that after-hours care is best implemented as part of a larger practice approach to access and continuity (see for example, the peerreview article available at https:// www.ncbi.nlm.nih.gov/pmc/articles/ PMC3475839/). There is substantial local variation in how 24/7 access and continuity of care are achieved, depending on the contractual relationships among practitioners and providers in a particular geographic area and other factors. Care models include various contractual relationships between physician practices and afterhours clinics, urgent care centers and emergency departments; extended primary care office hours; physician call-sharing; telephone triage systems; and health information technology such as shared EHRs and systematic notification procedures (https:// www.ncbi.nlm.nih.gov/pmc/articles/ PMC3475839/). Some or all of these may be used to provide access to urgent care on a 24/7 basis while maintaining information continuity between providers. We recognized that some models of care require more significant investment in practice infrastructure than others, for example resources in staffing or health information technology. In addition, we believed there is room to reduce the administrative complexity of our current payment rules for CCM services to accommodate a range of potential care models. In re-examining what should be included in the CCM scope of service elements for 24/7 Access to Care and Continuity of Care, we believed the CPT language adequately and more appropriately describes the services that should, at a minimum, be included in these service elements. Therefore, we proposed to adopt the CPT language for these two elements. For 24/7 Access to Care, the scope of service element would be to provide 24/7 access to physicians or other qualified health care professionals or clinical staff including providing patients/caregivers with a means to make contact with health care professionals in the practice to address urgent needs regardless of the time of day or day of week. We believed the CPT language more accurately reflects the potential role of clinical staff or callsharing services in addressing afterhours care needs than our current language does. In addition, the 24/7 access would be for ‘‘urgent’’ needs E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80248 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations rather than ‘‘urgent chronic care needs,’’ because we believed after-hours services typically would and should address any urgent needs and not only those explicitly related to the beneficiary’s chronic conditions. We recognized that health information systems that include remote access to the care plan or the full EHR after hours, or a feedback loop that communicates back to the primary care physician and others involved in the beneficiary’s care regarding after-hours care or advice provided, are extremely helpful (https://www.ncbi.nlm.nih.gov/ pmc/articles/PMC3475839/#CR25). They help ensure that the beneficiary receives necessary follow up, particularly if he or she is referred to the emergency department, and follow up after an emergency department visit is required under the CCM element of Management of Care Transitions. Accordingly, we continued to support and encourage the use of interoperable EHRs or remote access to the care plan in providing the CCM service elements of 24/7 Access to Care, Continuity of Care, and Management of Care Transitions. However, adoption of such technology would be optimal not only for CCM services, but also for a number of other PFS services and procedures (including various other care management services), and we have not required adoption of any certified or non-certified health information technology as a condition of payment for any other PFS service. We noted that there are incentives under other Medicare programs to adopt such information technology, and were concerned that imposing too many EHRrelated requirements at the service level as a condition of PFS payment could create disparities between these services and others under the fee schedule. Lastly, we recognized that not all afterhours care warrants follow-up or a feedback loop with the practitioner managing the beneficiary’s care overall, and that under particular circumstances feedback loops can be achieved through oral, telephone or other less sophisticated communication methods. Therefore, we proposed to remove the requirement that the individuals providing CCM after hours must have access to the electronic care plan. This proposal reflected our understanding that flexibility in how practices can provide the requisite 24/ 7 access to care, as well as continuity of care and management of care transitions, for their CCM patients could facilitate appropriate access to these services for Medicare beneficiaries. This proposal was not intended to undermine the significance of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 standardized communication methods as part of effective care. Instead, we recognized that other CMS initiatives (such as MIPS and APMs under the Quality Payment Program) may be better mechanisms to incentivize increased interoperability of health information systems than conditions of payment assigned to particular services under the PFS. We also anticipated that improved accuracy of payment for care management services and reduced administrative burden associated with billing for them would contribute to practitioners’ capacity to invest in the best tools for managing the care of Medicare beneficiaries. For Continuity of Care, we currently require the ability to obtain successive routine appointments ‘‘with the practitioner or a designated member of the care team,’’ while CPT only references successive routine appointments ‘‘with a designated member of the care team.’’ We do not believe there is any practical difference between these two phrases and therefore proposed to omit the words ‘‘practitioner or’’ from our requirement. The billing practitioner is a member of the CCM care team, so the CPT language already allows for successive routine appointments either with the billing practitioner or another appropriate member of the CCM care team. Based on review of extensive public comment and stakeholder feedback, we had also come to believe that we should not require individuals providing the beneficiary with the required 24/7 access to care for urgent needs to have access to the care plan as a condition of CCM payment. As discussed above, we believed that in general, provision of effective after-hours care of the beneficiary would require access to the care plan, if not the full EHR. However, we have heard from rural and other practices that remote access to the care plan is not always necessary or possible because urgent care needs after-hours are often referred to a practitioner or care team member who established the care plan or is familiar with the beneficiary. In some instances, the care plan does not need to be available to address urgent patient needs after business hours. In addition, we have not required the use of any certified or noncertified health information technology in the provision of any other PFS services (including various other care management services). We were concerned that imposing EHR-related requirements at the service level as a condition of PFS payment could distort the relative valuation of services priced under the fee schedule. Therefore, we proposed to change the CCM service PO 00000 Frm 00080 Fmt 4701 Sfmt 4700 element to require timely electronic sharing of care plan information within and outside the billing practice, but not necessarily on a 24/7 basis, and to allow transmission of the care plan by fax. We acknowledged that it is best for practitioners and providers to have access to care plan information any time they are providing services to beneficiaries who require CCM services. This proposal was not intended to undermine the significance of electronic communication methods other than fax transmission in providing effective, continuous care. On the contrary, we believed that fax transmission, while commonly used, is much less efficient and secure than other methods of communicating patient health information, and we encouraged practitioners to adopt and use electronic technologies other than fax for transmission and exchange of the CCM care plan. We continued to believe the best means of exchange of all relevant patient health information is through standardized electronic means. However, we recognized that other CMS initiatives (such as MIPS and APMs under the Quality Payment Program) may be better mechanisms to incentivize increased interoperability of health information systems than conditions of payment assigned to particular services under the PFS. We believed our proposal would still allow timely availability of health information within and outside the practice for purposes of providing CCM, and would simplify the rules governing provision of the service and improve access to the service. The proposed revisions would better align the service with appropriate CPT prefatory language, which may reduce unnecessary administrative complexity for practitioners in navigating the differences between CPT guidance and Medicare rules. The CCM scope of service element Management of Care Transitions includes a requirement for the creation and electronic transmission and exchange of continuity of care documents referred to as ‘‘clinical summaries’’ (see Table 11 of the CY 2017 PFS proposed rule). We patterned our requirements regarding clinical summaries after the EHR Incentive Program requirement that an eligible professional who transitions their patient to another setting of care or provider of care, or refers their patient to another provider of care, should provide a summary care record for each transition of care or referral. This clinical summary includes demographics, the medication list, medication allergy list, problem list, and a number of other data elements if the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations practitioner knows them. As a condition of CCM payment, we required standardized content for clinical summaries (that they must be created/ formatted according to certified EHR technology). For the exchange/transport function, we did not require the use of a specific tool or service to exchange/ transmit clinical summaries, as long as they are transmitted electronically (this can include fax only when the receiving practitioner or provider can only receive by fax). Based on review of extensive public comment and stakeholder feedback, we had come to believe that we should not require the use of any specific electronic technology in managing a beneficiary’s care transitions as a condition of payment for CCM services. Instead, we proposed more simply to require the billing practitioner to create and exchange/transmit continuity of care document(s) timely with other practitioners and providers. To avoid confusion with the requirements of the EHR Incentive Programs, and since we would no longer require standardized content for the CCM continuity of care document(s), we would refer to them as continuity of care documents instead of clinical summaries. We would no longer specify how the billing practitioner must transport or exchange these document(s), as long as it is done timely and consistent with the Care Transitions Management scope of service element. We welcomed public input on how we should refer to these document(s), noting that CPT does not provide model language specific to CCM services. The proposed term ‘‘continuity of care document(s)’’ draws on CPT prefatory language for TCM services, which CPT provides may include ‘‘obtaining and reviewing the discharge information (for example, discharge summary, as available, or continuity of care document).’’ Again, this proposal was not intended to undermine the significance of a standardized, electronic format and means of exchange (other than fax) of all relevant patient health information, for achieving timely, seamless care across settings especially after discharge from a facility. On the contrary, we believed that fax transmission, while commonly used, is much less efficient and secure than other methods of communicating patient health information, and we encourage practitioners to adopt and use electronic technologies other than fax for transmission and exchange of continuity of care documents in providing CCM services. We continued to believe the best means of exchange of all relevant patient health information is through standardized electronic means. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 However, as we discussed above regarding the CCM care plan, we have not applied similar requirements to other PFS services specifically (including various other care management services) and had concerns about how doing so may create disparities between these services and others under the PFS. We also recognized that other CMS initiatives (such as MIPS and APMs under the Quality Payment Program) may be better mechanisms to incentivize increased interoperability of health information systems than conditions of payment assigned to particular services under the PFS. Comment: Most of the commenters supported our proposed revisions to the health IT use requirements for billing the CCM code. They shared CMS’ goal of interoperability but believed the changes were necessary to improve CCM uptake. Some commenters favored hardship exceptions or rural or small practice exceptions instead of changes to the current requirements that would apply to all practitioners alike. Some commenters expressed particular concern about relaxing the current rules in instances where CCM outsourcing reduces clinical integration. These commenters noted that CCM is commonly outsourced to third party companies that provide remote care management services (including after hours) via telephone and online contact only, using staff who have no established relationship with the beneficiary or other members of the care team and have no interaction with the office staff and physicians other than electronic communication. These commenters were concerned that our proposed changes to the health IT requirements for CCM payment would result in little to no oversight or guidance of the third party, and recommended that CMS make the proposed changes cautiously. One of these commenters recommended in addition that CMS should seek to increase access to CCM services and reduce administrative burden by pursuing alignment between the provision of CCM and other programs and incentives, such as the Quality Payment Program. Other commenters recommended further reduction in payment rules, such as removing all requirements to use a certified EHR, or movement away from timed codes that require documentation in short time increments and disrupt workflow. Response: We continue to believe that other Medicare initiatives and programs (such as MIPS and APMs under the Quality Payment Program) are better suited to advance use of interoperable PO 00000 Frm 00081 Fmt 4701 Sfmt 4700 80249 health IT systems than establishing code-level conditions of payment, unique to CCM or other primary care or cognitive services. We also believe that a hardship, rural or small practice exception would greatly increase rather than decrease administrative complexity for practitioners and CMS, and CCM uptake has been relatively high among solo practices. We believe that reducing code-level conditions of payment is necessary to improve beneficiary access to appropriate CCM services. Therefore, we are finalizing revisions to the CCM scope of service elements as proposed. However, we appreciate the commenters’ feedback that relaxing the health IT use requirements may be of particular concern in situations where CCM is outsourced to a third party, reducing clinical integration. As we discuss in the section of this final rule on BHI services (section II.E.3.b), health IT holds significant promise for remote connectivity and interoperability that may assist and be useful (if not necessary) for reducing care fragmentation. However, we agree that remote provision of services by entities having only a loose association with the treating practitioner can detract from continuous, patient-centered care, whether or not those entities employ certified or other electronic technology. We will continue to consider the potential impacts of remote provision of CCM and similar types of services by third parties. We wish to emphasize for CCM, as we did for BHI services, that while the CCM codes do not explicitly count time spent by the billing practitioner, they are valued to include work performed by the billing practitioner, especially complex CCM. We emphasize that the practitioner billing for CCM must remain involved in ongoing oversight, management, collaboration and reassessment as appropriate to bill CCM services. If there is little oversight by the billing practitioner or a lack of clinical integration between a third party providing CCM and the billing practitioner, we do not believe that the CCM service elements are actually being furnished and therefore, in such cases, the practitioner should not bill for CCM. Finally, we note that activities undertaken as part of participation in MIPS or an APM under the Quality Payment Program may support the ability of a practitioner to meet our final requirements for the continuity of care document(s) and the electronic care plan. Comment: Several commenters recommended that we define the proposed term ‘‘timely’’ for the creation and transmission of care plan and care E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80250 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations transitions health information. Several commenters believed that ‘‘timely’’ implies a time period of 30 to 90 days, or believed some third party vendors would interpret the term in this manner. Response: Our proposal of the term ‘‘timely’’ originated from the use of this term in the CPT prefatory language for Care Management services, which includes, for example, ‘‘provide timely access and management for follow-up after an emergency department visit’’ and ‘‘timely access to clinical information.’’ We do not believe we should specify a timeframe, because it would vary for individual patients and CCM service elements, we are not aware of any clinical standards referencing specific times, and we are seeking to allow appropriate flexibility in how CCM is furnished. We note that dictionary meanings of the term ‘‘timely’’ include quickly; soon; promptly; occurring at a suitable time; done or occurring at a favorable or useful time; opportune. ‘‘Timely’’ does not necessarily imply speed, and means doing something at the most appropriate moment. Therefore we believe ‘‘timely’’ is an appropriate term to use to govern how quickly the health information in question is transmitted or available. We note that even the current requirements for use of specific electronic technology do not necessarily impact how quickly the health information in question is used to inform care, and addition of the word ‘‘timely’’ implies more regarding actual use of the information. We are monitoring CCM uptake and diffusion through claims analysis and are pursuing claims-based outcomes analyses, to help inform whether the service is being provided as intended and improving health outcomes. We believe these evaluation activities will help us assess moving forward whether health information is being shared or made available timely enough under our revised CCM payment policies. As we stated in the CY 2017 proposed rule, the policy changes for CCM health IT use are not intended to undermine the importance of interoperability or electronic data exchange. These changes are driven by concerns that we have not applied similar requirements to other PFS services specifically, including various other care management services, and that such requirements create disparities between CCM services and other PFS services. We believe that other CMS initiatives may be better mechanisms to incentivize increased use and interoperability of health information systems than conditions of payment assigned to particular services under the PFS. We anticipate that these CCM policy changes will improve VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 practitioners’ capacity to invest in the best tools for managing the care of Medicare beneficiaries. c. Beneficiary Receipt of Care Plan We proposed to simplify the current requirement to provide the beneficiary with a written or electronic copy of the care plan, by instead adopting the CPT language specifying more simply that a copy of the care plan must be given to the patient or caregiver. While we believe beneficiaries should and must be provided a copy of the care plan, and that practitioners may choose to provide the care plan in hard copy or electronic form in accordance with patient preferences, we do not believe it is necessary to specify the format of the care plan that must be provided as a condition of CCM payment. Additionally, we recognize that there may be times that sharing the care plan with the caregiver (in a manner consistent with applicable privacy and security rules and regulations) may be appropriate. Comment: The commenters who provided comments on this particular proposal were supportive of it. In particular, several commenters expressed appreciation for appropriate inclusion of caregivers. Response: We thank the commenters for their support and are finalizing as proposed. d. Beneficiary Consent We continue to believe that obtaining advance beneficiary consent to receive CCM services is important to ensure the beneficiary is informed, educated about CCM services, and is aware of applicable cost sharing. We also believe that querying the beneficiary about whether another practitioner is already providing CCM services helps to reduce the potential for duplicate provision or billing of the services. However, we believe the consent process could be simplified, and that it should be left to the practitioner and the beneficiary to decide the best way to establish consent. Therefore, we proposed to continue to require billing practitioners to inform the beneficiary of the currently required information (that is, inform the beneficiary of the availability of CCM services; inform the beneficiary that only one practitioner can furnish and be paid for these services during a calendar month; and inform the beneficiary of the right to stop the CCM services at any time (effective at the end of the calendar month)). However, we proposed to specify that the practitioner could document in the beneficiary’s medical record that this information was explained and note whether the PO 00000 Frm 00082 Fmt 4701 Sfmt 4700 beneficiary accepted or declined CCM services instead of obtaining a written agreement. We also proposed to remove the language requiring beneficiary authorization for the electronic communication of his or her medical information with other treating providers as a condition of payment for CCM services, because under federal regulations that implement the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule (45 CFR 164.506), a covered entity is permitted to use or disclose protected health information for purposes of treatment without patient authorization. Moreover, if such disclosure is electronic, the HIPAA Security Rule requires secure transmission (45 CFR 164.312(e)). In previous regulations we have reminded practitioners that for all electronic sharing of beneficiary information in the provision of CCM services, HIPAA Privacy and Security Rule standards apply in the usual manner (79 FR 67728). Comment: The commenters were largely supportive of our proposed policy changes. The commenters were supportive of verbal instead of written beneficiary consent if a clear requirement remains to transparently inform the beneficiary about the nature and benefit of the services, applicable cost sharing, and document that this information was conveyed; current written agreements qualify; and practitioners can elect to obtain written consent. Some commenters believed that obtaining written consent might be preferable as a means of resolving who is eligible for payment, if more than one practitioner bills. A few commenters suggested CMS require written educational materials about CCM, or conduct beneficiary outreach and education. Response: We appreciate the commenters’ support and recommendations. We are finalizing changes to the beneficiary consent requirements as proposed and clarifying that a clear requirement remains to transparently inform the beneficiary about the nature and benefit of the services, applicable cost sharing, and to document that this information was conveyed. The final beneficiary consent requirements do not affect any written agreements that are already in place for CCM services, and we note that practitioners can still elect to obtain written consent rather than verbal consent. e. Documentation We have heard from practitioners that the requirements to document certain E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations information in a certified EHR format are redundant because the CCM billing rules already require documentation of core clinical information in a certified EHR format. Specifically, we already require structured recording of demographics, problems, medications and medication allergies, and the creation of a clinical summary record, using a qualifying certified EHR; and that a full list of problems, medications and medication allergies in the EHR must inform the care plan, care coordination and ongoing clinical care. Therefore, we proposed to no longer specify the use of a qualifying certified EHR to document communication to and from home- and community-based providers regarding the patient’s psychosocial needs and functional deficits and to document beneficiary consent. We would continue to require documentation in the medical record of beneficiary consent (discussed above) and of communication to and from home- and community-based providers regarding the patient’s psychosocial needs and functional deficits. Comment: Many commenters were supportive of these proposals. Response: We thank the commenters for their support and are finalizing changes to the documentation requirements as proposed. We continue to encourage practitioners to utilize health IT solutions for obtaining and documenting health information from sources external to their practice, noting that the 2015 edition of ONC certification criteria (see 80 FR 62601) includes criteria which specifically relate to obtaining information from non-clinical sources and the capture of structured data relating to social, psychological, and behavioral attributes. f. Summary of Final CCM Policies We are finalizing changes to the CCM scope of service elements discussed above that will apply for both complex and non-complex CCM services beginning in CY 2017. The final CY 2017 service elements for CCM are 80251 summarized in Table 11. We believe these changes will retain elements of the CCM service that are characteristic of the changes in medical practice toward advanced primary care, while eliminating redundancy, simplifying provision of the services, and improving access to the services. For payment of complex CCM services beginning in CY 2017, we are adopting the CPT code descriptors for CPT codes 99487 and 99489 as well as the service elements in Table 11. We are providing separate payment for complex CCM (CPT 99487, 99489) using the RUC-recommended payment inputs for those services. We may reconsider the role of health information technology in CCM service provision in future years. We anticipate that improved accuracy of payment for CCM services, and reduced administrative burden associated with billing CCM services, will contribute to practitioners’ capacity to invest in the best tools for managing the care of Medicare beneficiaries. mstockstill on DSK3G9T082PROD with RULES2 TABLE 11—SUMMARY OF CY 2017 CHRONIC CARE MANAGEMENT SERVICE ELEMENTS AND BILLING REQUIREMENTS Initiating Visit—Initiation during an AWV, IPPE, or face-to-face E/M visit (Level 4 or 5 visit not required), for new patients or patients not seen within 1 year prior to the commencement of chronic care management (CCM) services. Structured Recording of Patient Information Using Certified EHR Technology—Structured recording of demographics, problems, medications and medication allergies using certified EHR technology. A full list of problems, medications and medication allergies in the EHR must inform the care plan, care coordination and ongoing clinical care. 24/7 Access & Continuity of Care: • Provide 24/7 access to physicians or other qualified health care professionals or clinical staff including providing patients/caregivers with a means to make contact with health care professionals in the practice to address urgent needs regardless of the time of day or day of week. • Continuity of care with a designated member of the care team with whom the beneficiary is able to schedule successive routine appointments. Comprehensive Care Management—Care management for chronic conditions including systematic assessment of the beneficiary’s medical, functional, and psychosocial needs; system-based approaches to ensure timely receipt of all recommended preventive care services; medication reconciliation with review of adherence and potential interactions; and oversight of beneficiary self-management of medications. Comprehensive Care Plan: • Creation, revision and/or monitoring (as per code descriptors) of an electronic patient-centered care plan based on a physical, mental, cognitive, psychosocial, functional and environmental (re)assessment and an inventory of resources and supports; a comprehensive care plan for all health issues. • Must at least electronically capture care plan information, and make this information available timely within and outside the billing practice as appropriate. Share care plan information electronically (can include fax) and timely within and outside the billing practice to individuals involved in the beneficiary’s care. • A copy of the plan of care must be given to the patient and/or caregiver. Management of Care Transitions: • Management of care transitions between and among health care providers and settings, including referrals to other clinicians; follow-up after an emergency department visit; and follow-up after discharges from hospitals, skilled nursing facilities or other health care facilities. • Create and exchange/transmit continuity of care document(s) timely with other practitioners and providers. Home- and Community-Based Care Coordination: • Coordination with home and community based clinical service providers. • Communication to and from home- and community-based providers regarding the patient’s psychosocial needs and functional deficits must be documented in the patient’s medical record. Enhanced Communication Opportunities—Enhanced opportunities for the beneficiary and any caregiver to communicate with the practitioner regarding the beneficiary’s care through not only telephone access, but also through the use of secure messaging, Internet, or other asynchronous non-face-to-face consultation methods. Beneficiary Consent: • Inform the beneficiary of the availability of CCM services; that only one practitioner can furnish and be paid for these services during a calendar month; and of their right to stop the CCM services at any time (effective at the end of the calendar month). • Document in the beneficiary’s medical record that the required information was explained and whether the beneficiary accepted or declined the services. Medical Decision-Making—Complex CCM services require and include medical decision-making of moderate to high complexity (by the physician or other billing practitioner). VerDate Sep<11>2014 22:56 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00083 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80252 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 5. Assessment and Care Planning for Patients with Cognitive Impairment (GPPP6) For CY 2017 we proposed a G-code that would provide separate payment to recognize the work of a physician (or other appropriate billing practitioner) in assessing and creating a care plan for beneficiaries with cognitive impairment, such as from Alzheimer’s disease or dementia, at any stage of impairment, G0505 (Cognition and functional assessment using standardized instruments with development of recorded care plan for the patient with cognitive impairment, history obtained from patient and/or caregiver, in office or other outpatient setting or home or domiciliary or rest home). We understand that a similar code was recently approved by the CPT Editorial Panel and is scheduled to be included in the CY 2018 CPT code set. We intended for G0505 to be a temporary code, perhaps for only one year, to be replaced by the CPT code in CT 2018. We will consider whether to adopt and establish relative value units for the new CPT code under our standard process, presumably for CY 2018. We reviewed the list of service elements that were considered by the CPT Editorial Panel, and proposed the following as required service elements of G0505: • Cognition-focused evaluation including a pertinent history and examination. • Medical decision making of moderate or high complexity (defined by the E/M guidelines). • Functional assessment (for example, Basic and Instrumental Activities of Daily Living), including decision-making capacity. • Use of standardized instruments to stage dementia. • Medication reconciliation and review for high-risk medications, if applicable. • Evaluation for neuropsychiatric and behavioral symptoms, including depression, including use of standardized instrument(s). • Evaluation of safety (for example, home), including motor vehicle operation, if applicable. • Identification of caregiver(s), caregiver knowledge, caregiver needs, social supports, and the willingness of caregiver to take on caregiving tasks. • Advance care planning and addressing palliative care needs, if applicable and consistent with beneficiary preference. • Creation of a care plan, including initial plans to address any neuropsychiatric symptoms and referral VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 to community resources as needed (for example, adult day programs, support groups); care plan shared with the patient and/or caregiver with initial education and support. The proposed valuation of G0505 (discussed in section II.E.1) assumed that this code would include services that are personally performed by the physician (or other appropriate billing practitioner, such as a nurse practitioner or physician assistant) and would significantly overlap with services described by certain E/M visit codes, advance care planning services, and certain psychological or psychiatric service codes that are currently separately payable under the PFS. Accordingly, we proposed that G0505 must be furnished by the physician (or other appropriate billing practitioner) and could not be billed on the same date of service as CPT codes 90785 (Psytx complex interactive), 90791 (Psych diagnostic evaluation), 90792 (Psych diag eval w/med srvcs), 96103 (Psycho testing admin by comp), 96120 (Neuropsych tst admin w/comp), 96127 (Brief emotional/behav assmt), 99201– 99215 (Office/outpatient visits new), 99324–99337 (Domicil/r-home visits new pat), 99341–99350 (Home visits new patient), 99366–99368 (Team conf w/pat by hc prof), 99497 (Advncd care plan 30 min), 99498 (Advncd care plan addl 30 min)), since these codes all reflect face-to-face services furnished by the physician or other billing practitioner for related separately billable services that overlap substantially with G0505. In addition, we proposed to prohibit billing of G0505 with other care planning services, such as care plan oversight services (CPT code 99374), home health care and hospice supervision (G0181, G0182), or our proposed add-on code for comprehensive assessment and care planning by the billing practitioner for patients requiring CCM services (GPPP7). We solicited comment on whether there are circumstances where multiple care planning codes could be furnished without significant overlap. We proposed to specify that G0505 may serve as a companion or primary E/M code to the prolonged service codes (those that are currently separately paid, and those we proposed to separately pay beginning in 2017), but were interested in public input on whether there is any overlap among these services. We solicited comment on how to best delineate the post-service work for G0505 from the work necessary to provide the prolonged services code. We did not believe the services described by G0505 would significantly overlap with proposed or current PO 00000 Frm 00084 Fmt 4701 Sfmt 4700 medically necessary CCM services (CPT codes 99487, 99489, 99490); TCM services (CPT codes 99495, 99496); or the proposed behavioral health integration service codes (HCPCS codes GPPP1, GPPP2, GPPP3, GPPPX). Therefore, we proposed that G0505 could be billed on the same date-ofservice or within the same service period as these codes (CPT codes 99487, 99489, 99490, 99495, 99496, and HCPCS codes GPPP1, GPPP2, GPPP3, and GPPPX). There may be overlap in the patient population eligible to receive these services and the population eligible to receive the services described by G0505, but we believed there would be sufficient differences in the nature and extent of the assessments, interventions and care planning, as well as the qualifications of individuals providing the services, to allow concurrent billing for services that are medically reasonable and necessary. We solicited public comment on potential overlap between G0505 and other codes currently paid under the PFS, as well as the other primary care/cognitive services addressed in this section of the final rule. Comment: Many commenters were supportive of the proposal, including the provisions regarding scope of service elements, conditions of payment, and overlap with other services under the PFS. Response: We thank commenters for their support of the proposed scope of service, conditions of payment, and overlap with other services under the PFS for G0505. We believe that by improving payment accuracy by paying separately for this service, practitioners will be able to accurately assess patients for cognitive impairment, particularly in early stages. Comment: We received numerous comments stating that assessment and staging for dementia is very sensitive and should only be conducted by neuropsychologists, who would be unable to bill G0505. Commenters were concerned that untrained professionals conducting assessments for dementia would lead to errors in diagnosis and inappropriate treatment. Commenters encouraged CMS to not finalize this code and maintain the current coding for psychological and neuropsychological assessment or suggested that CMS remove the bullet points associated with medication management or medical decision making so that G0505 could be billed by psychologists. Response: While we acknowledge and support the work of psychologists and neuropsychologists in the care of Medicare beneficiaries, we continue to E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations believe that this code describes a distinct PFS service that may be reasonable and necessary in the diagnosis and treatment of a beneficiary’s illness. We remind interested stakeholders that we routinely examine the valuation and coding for existing services under the potentially misvalued code initiative, and that there is a the process for public nomination of particular codes. If stakeholders have information to suggest that the current coding for neuropsychological and psychological testing is inaccurate, we welcome nominations under the established process. Comment: A few commenters encouraged CMS to avoid adopting scope of service elements that are exhaustive as these may create barriers to utilization, while other commenters made the following recommendations regarding the scope of service provisions: • Expand scope of service elements related to medication management. • Include occupational therapy in the scope of service element pertaining to community resources. • Rewrite ‘‘Creation of a care plan, including initial plans to address any neuropsychiatric symptoms and referral to community resources as needed (for example, adult day programs, support groups); care plan shared with the patient and/or caregiver with initial education and support’’ to include ‘‘identification of caregiver(s), caregiver knowledge, caregiver needs, social supports, and the willingness and availability of caregiver to voluntarily take on caregiving tasks.’’ • Make sure that non-paid or informal caregivers are included in care planning and provide resources and support for care givers so as to improve care givers ability to provide care for the beneficiary. • Require the inclusion of caregiver names in care plan and patients medical record, require that caregivers be assessed for stress and depressive symptoms, as well as care giver skill and education needs. • State that consultations with the caregiver are permissible under HIPAA and that such conversations may be necessary in the development of a care plan. • Specify that any advance care planning is consistent with beneficiary preference and addresses any palliative care needs of the patient, and include establishment of durable power of attorney. • Clarify that diagnosis of dementia is not part of the scope of service by deleting ‘‘cognition focused evaluation VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 including pertinent history’’ from the scope of service. • Clarify that ‘‘functional assessment’’ is separate from decision making assessments, and that this is a non-legal assessment of competency. • Stipulate that other decision makers should be identified. • Consider deleting ‘‘use of standardized instruments to stage dementia’’ because the care plan is the most important aspect of the service and many standardized instruments are not very effective at staging. • Clarify that the care plan address both medical and non-medical issues, and includes follow-up scheduling for monitoring and evaluation. • Provide a copy of the written care plan to the patient. • Refer to the care plan as a ‘‘personcentered care plan.’’ • Include evaluation of medical problems including review of lab or imaging tests, review of co-morbidities, especially those which are dependent on self-care, evaluation the risk of falls and recommendations for fall prevention, evaluation of possible elder abuse, and documentation of financial issues, as part of the scope of service. Response: We appreciate the information provided by commenters on the best practices associated with furnishing this service and would encourage stakeholders to adopt any or all of these scope of service provisions, such as the inclusion of caregivers in care planning. The scope of service for assessment and care planning service for patients with cognitive impairment does not prohibit stakeholders from adopting any additional scope of service provisions which may be beneficial for the treatment of the patient. However, we do not believe that the ability to fully furnish this service and establish an appropriate value for it is contingent on meeting such conditions. Therefore, we do not believe they should be added to the scope of service. We concur with commenters on the necessity of avoiding the imposition of overly burdensome restrictions within the scope of service. Comment: Some commenters requested that CMS clarify that not all elements in the scope of service need to be provided by the billing practitioner and many can be provided by others incident to the billing practitioner’s services. One commenter stated that there are circumstances where the best practitioner to provide a specific service element does not work in the same practice as the billing practitioner, and therefore the billing practitioner should be able to contract out for provision of some aspects, provided that the billing PO 00000 Frm 00085 Fmt 4701 Sfmt 4700 80253 practitioner remain in oversight. Other commenters stated that CMS should make G0505 billable by other practitioners, such as occupational therapists, or community based entities. Response: G0505 is a service that includes central elements, which must be performed by the billing practitioner subject to established E/M guidelines. Only those practitioners eligible to report E/M services should report this service. Outside of the specified elements, the regular incident-to rules apply consistent with other E/M services. We believe that physicians and eligible non-physician practitioners, such as a nurse practitioners and physician assistants should exclusively bill for this code. Comment: Many commenters suggested that CMS expand HCPCS code G0505 or pay separately for similar services furnished to patients with other advanced or life threatening illnesses. Response: We appreciate the comments on other conditions that could benefit from assessment and care planning and will consider these for future rulemaking. We are finalizing the G0505 code to pay separately for the assessment and care plan creation for beneficiaries with cognitive impairment, such as from Alzheimer’s disease or dementia, at any stage of impairment. Comment: Commenters provided many examples of how CMS could develop appropriate quality and outreach measures to ensure appropriate utilization of G0505. Commenters encouraged CMS to closely monitor use of G0505 for a few years following implementation, so as to ascertain whether patient eligibility is an issue in uptake for the code. Response: We appreciate the information on quality and outreach measures. CMS is engaged in the use of measures to improve quality and access to care. CMS intends to monitor utilization and will consider how conditions of payment align with best practices and quality measures. Comment: One commenter urged CMS to make the proposed coding and payment changes available to physicians in total cost of care models, such as ACOs and bundled payment programs. Response: Our proposal relates only to payment for services under the Medicare PFS. We note that the codes and payment amounts that we finalize for services will be available for billing and payment under the PFS for CY 2017. In general, we do not address in this final rule, and instead defer to the policies regarding billing and payment for these services that are applicable within individual Center for Medicare & E:\FR\FM\15NOR2.SGM 15NOR2 80254 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 Medicaid Innovation models and other programs. However, as our policies regarding payment for new primary care codes are applicable beginning in CY 2017, we note that models may need to update their policies to prevent potential duplication of payment between the PFS and the models. For example, where CCM services have been excluded from separate payment under existing models, newly established care management services (including complex CCM, psychiatric CoCM, and BHI) may likewise be excluded. Comment: One commenter stated that many small practices do not have the infrastructure to support a multidisciplinary team of practitioners and urged CMS to allow flexibility for solo and small group practices to share resources. The commenter also suggested that CMS offer a one-time incentive for practices to integrate service elements into workflow. Response: In general, the coding under the PFS is intended to describe services as they are furnished and are valued using typical resource costs. We appreciate the concern of commenters regarding access, and we are eager to hear from stakeholders regarding concerns related to access for these and other PFS services. 6. Improving Payment Accuracy for Care of People With Disabilities (GDDD1) We estimate that about 7 percent of all Medicare beneficiaries have a potentially disabling mobility-related diagnosis (the Medicare-only prevalence is 5.5 percent and the prevalence for Medicare-Medicaid dual eligible beneficiaries is 11 percent), using 2010 Medicare (and for dual eligible beneficiaries, Medicaid) claims data. When a beneficiary with a mobilityrelated disability goes to a physician or other practitioner’s office for an E/M visit, the resources associated with providing the visit can exceed the resources required for the typical E/M visit. An E/M visit for a patient with a mobility-related disability can require more physician and clinical staff time to provide appropriate care because the patient may require skilled assistance throughout the visit to carefully move and adjust his/her body. Furthermore, an E/M visit for a patient with a mobility-related disability commonly requires specialized equipment such as a wheel chair accessible scale, floor and overhead lifts, a movable exam table, padded leg supports, a stretcher and transfer board. The current E/M visit payment rates, based on an assumption of ‘‘typical’’ resources involved in furnishing an E/M visit to a ‘‘typical’’ patient, do not accurately reflect these VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 additional resources associated with furnishing appropriate care to many beneficiaries with mobility-related disabilities. When furnishing E/M services to beneficiaries with mobility-related disabilities, practitioners face difficult choices in deciding whether to take the extra time necessary and invest in the required specialized equipment for these visits even though the payment rate for the service does not account for either expense; potentially providing less than optimal care for a beneficiary whose needs exceed the standard appointment block of time in the standard equipped exam room reflected in the current E/M visit payment rate; or declining to accept appointments altogether for beneficiaries who require additional time and specialized equipment. Each of these scenarios is potentially problematic. The first two scenarios suggest that the quality of care for this beneficiary population might be compromised by assumptions under the PFS regarding relative resource costs in furnishing services to this population. The third scenario reflects an obvious access problem for these beneficiaries. To improve payment accuracy and help ameliorate potential disparity in access and quality for beneficiaries with mobility-related disabilities, we proposed to create a new add-on Gcode, effective for CY 2017, to describe the additional services furnished in conjunction with E/M services to beneficiaries with disabilities that impair their mobility: G0501: Resource-intensive services for patients for whom the use of specialized mobility-assistive technology (such as adjustable height chairs or tables, patient lifts, and adjustable padded leg supports) is medically necessary and used during the provision of an office/outpatient evaluation and management service visit (Add-on code, list separately in addition to primary procedure). Effective January 1, 2017, we proposed that this add-on code could be billed with new and established patient office/outpatient E/M codes (CPT codes 99201 through 99205, and 99212 through 99215), as well as transitional care management codes (CPT codes 99495 and 99496), when the additional resources described by the code are medically necessary and used in the provision of care. In addition to seeking comment on this proposal, we are also sought comment on other HCPCS codes that may be appropriate base codes for this proposed add-on code, including those describing preventive visits and services. We reminded potential PO 00000 Frm 00086 Fmt 4701 Sfmt 4700 commenters that the rationale for this proposal is based in large part on the broad use and lack of granularity in coding for E/M services relative to other PFS services in conjunction with the additional resources used. We received many thoughtful comments on this proposal and thank commenters for their input. Comments received are summarized below. Comment: Most commenters agreed with the proposed rule’s statement of disability disparities and discussed a variety challenges that individuals with disabilities face in accessing the health care system. Several of these commenters cited evidence of existing challenges for individuals with mobility-related disabilities, including a lack of physically accessible equipment within physician offices, barriers to communication, and a lack of existing tools to recognize, track, and consistently meet specialized needs. Commenters applauded CMS for offering a concrete proposal with significant funding to meaningfully address this problem and noted that 26 years after passage of the Americans with Disabilities Act, it is alarming that physical and communication barriers in physicians’ and other health care professionals’ offices still exist across the country. However, some commenters suggested that the root cause and scope of these issues are not well characterized, and suggested that CMS work with stakeholders to conduct additional studies and gain information as to the underlying reasons for barriers to access to care and lower quality scores on certain measures. Generally, commenters noted that they appreciate CMS’ efforts to address health disparities based on disability, and some then supported this proposal as a first step in providing medically necessary services to patients with disabilities, while others recommended that CMS not finalize the proposal and raised legal, access, and equity concerns. Response: We agree with commenters that individuals with disabilities face additional barriers to access health care, an issue that contributes to widespread disparities in outcomes. We also agree with commenters that the underlying reasons for these disparities are multifaceted and can include payment challenges, physical accessibility and communication barriers, a lack of awareness among health care providers in assessing and fully addressing the needs and preferences of people with disabilities, and others issues. As a result of all these factors, individuals with disabilities can face challenges in scheduling appointments, and in E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 finding and maintaining a primary care provider, an essential foundation for accessing the health system. Although there was near universal agreement among commenters regarding problems in health care disparities and barriers to access among individuals with disabilities, there was disagreement about whether establishing payment for code G0501 as proposed was a good solution to help solve these problems. While we believe that improving the payment accuracy of physicians’ services is necessary and appropriate, and can help to address the underlying access issues for individuals with disabilities, we also acknowledge that implementation of new or revised payments can result in unanticipated, and potentially undesirable, consequences. Before implementing payment for code G0501, we plan to further analyze and address the concerns raised by commenters. As such, we are not finalizing payment for code G0501 at this time. We appreciate commenters’ insights, and our commitment to promoting better primary care for people with disabilities remains strong. Over the next 6 months we will engage with interested beneficiaries, advocates, and practitioners to continue to explore improvements in payment accuracy for care of people with disabilities. We intend to discuss this issue again in future rulemaking. While we are not finalizing separate payment for code G0501 for CY 2017, we are including the code in the CY 2017 code set as G0501. The HCPCS code G0501 will not be payable under the Medicare PFS for CY 2017, though practitioners will be able to report the code, should they be inclined to do so. a. Soliciting Comment on Other Coding Changes To Improve Payment Accuracy for Care of People With Disabilities When furnishing care to a beneficiary with a mobility-related disability, the current E/M visit payment rates may not fully reflect the associated resource costs that are being incurred by practitioners. We recognize that there are other populations for which payment adjustment may be appropriate. Our proposal regarding beneficiaries with mobility-related disabilities reflected the discrete nature of the additional resource costs for this population, the clear lack of differentiation in resource costs regarding particular kinds of frequentlyfurnished services, and the broad recognition of access problems. We recognize that some physician practices may frequently furnish services to particular populations for which the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 relative resource costs are similarly systemically undervalued and we sought comment regarding other circumstances where these dynamics can be discretely observed. Comment: Multiple commenters suggested additional coding changes to improve payment accuracy for services for people with disabilities. Several commenters requested that CMS broaden the scope of G0501 and the codes with which it may be billed, for example by allowing G0501 to be billed with preventive services, such as the Initial Preventive Physical Examination (IPPE) or ‘‘Welcome to Medicare Visit’’, the Annual Wellness Visit, or other preventive services including those that have been assigned a grade of A or B by the United States Preventive Services Task Force. One commenter suggested that CMS also establish payment for a lower-level, lower payment add-on code for use with patients with a mobilityrelated disability that may not require the use of specialized equipment. Commenters also suggested that CMS establish certain forms of physician payment incentives, which might more effectively address the accessibility needs of individuals with disabilities and ultimately reduce healthcare disparities. Specifically, one commenter suggested CMS incentivize physicians to establish record-keeping to inquire into patients’ accessibility and accommodation needs, record the needs of their patients, and take action to meet those needs over time. Response: We thank commenters for their thoughtful responses. We reiterate our commitment to addressing disparities for individuals with disabilities and advancing health equity, and will continue to explore and revisit potential solutions for overcoming these significant challenges, including the appropriate changes in payment. 7. Regulation Text Our current regulations in 42 CFR 410.26(b) provide for an exception to assign general supervision to CCM services (and similarly, for the non-faceto-face portion of TCM services), because these are generally non-face-toface care management/care coordination services that would commonly be provided by clinical staff when the billing practitioner (who is also the supervising practitioner) is not physically present; and the CPT codes are comprised solely (or in significant part) of non-face-to-face services provided by clinical staff. A number of codes that we proposed to establish for separate payment in CY 2017 under our initiative to improve payment accuracy for primary care and care management PO 00000 Frm 00087 Fmt 4701 Sfmt 4700 80255 are similar to CCM services, in that a critical element of the services is nonface-to-face care management/care coordination services provided by clinical staff or other qualified individuals when the billing practitioner may not be physically present. Accordingly, we proposed to amend 42 CFR 410.26(a)(3) and 410.26(b) to better define general supervision and to assign general supervision not only to CCM services and the non-face-to-face portion of TCM services, but also to proposed codes G0502, G0503, G0504, G0507, CPT code 99487, and CPT code 99489. Instead of adding each of these proposed codes assigned general supervision to the regulation text on an individual basis, we proposed to revise our regulation under 42 CFR 410.26(b)(1) to assign general supervision to the non-face-toface portion of designated care management services, and we would designate the applicable services through notice and comment rulemaking. We did not receive any public comments on our proposed regulation text. However we received a number of comments regarding a related proposal to require behavioral health care managers to be located on site. Also for psychiatric CoCM services (G0502, G0503 and G0504), we are finalizing a requirement that the behavioral health care manager is available to perform his or her duties face-to-face and non-faceto-face with the beneficiary. We address these issues at length in the BHI section of this final rule (section II.E.3). Since we are assigning general supervision to psychiatric CoCM behavioral health care manager services that may be provided face-to-face with the beneficiary, we are omitting the phrase ‘‘non-face-to-face portion of’’ in ‘‘the non-face-to-face portion of designated care management services.’’ Accordingly, the final amended regulation text in 42 CFR 410.26(b) assigns general supervision to ‘‘designated care management services’’ that we will designate through notice and comment rulemaking. The services that we are newly designating (finalizing) for general supervision in this final rule are G0502, G0503, G0504, G0507, CPT code 99487 and CPT code 99489. We had initially proposed adding a cross-reference to the existing definition of ‘‘general supervision’’ in current regulations at § 410.32(b)(3)(i), but to better describe general supervision in the context of these services, we are specifying at § 410.26(a)(3) that general supervision means the service is furnished under the physician’s (or other practitioner’s) E:\FR\FM\15NOR2.SGM 15NOR2 80256 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 overall direction and control, but the physician’s (or other practitioner’s) presence is not required during the performance of the service. At § 410.26(b)(5), we specify that, in general, services and supplies must be furnished under the direct supervision of the physician (or other practitioner). Designated care management services can be furnished under general supervision of the physician (or other practitioner) when these services or supplies are provided incident to the services of a physician (or other practitioner). The physician (or other practitioner) supervising the auxiliary personnel need not be the same physician (or other practitioner) who is treating the patient more broadly. However, only the supervising physician (or other practitioner) may bill Medicare for incident to services. 8. CCM Requirements for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs). RHCs and FQHCs have been authorized to bill for CCM services since January 1, 2016, and are paid based on the Medicare PFS national average nonfacility payment rate when CPT code 99490 is billed alone or with other payable services on a RHC or FQHC claim. The RHC and FQHC requirements for billing CCM services have generally followed the requirements for practitioners billing under the PFS, with some adaptations based on the RHC and FQHC payment methodologies. To assure that CCM requirements for RHCs and FQHCs are not more burdensome than those for practitioners billing under the PFS, we proposed revisions for CCM services furnished by RHCs and FQHCs similar to the revisions proposed under the section above entitled, ‘‘Reducing Administrative Burden and Improving Payment Accuracy for Chronic Care Management (CCM) Services’’ for RHCs and FQHCs. Specifically, we proposed to: • Require that CCM be initiated during an AWV, IPPE, or comprehensive E/M visit only for new patients or patients not seen within one year. This would replace the requirement that CCM could only be initiated during an AWV, IPPE, or comprehensive E/M visit where CCM services were discussed. • Require 24/7 access to a RHC or FQHC practitioner or auxiliary personnel with a means to make contact with a RHC or FQHC practitioner to address urgent health care needs regardless of the time of day or day of week. This would replace the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 requirement that CCM services be available 24/7 with health care practitioners in the RHC or FQHC who have access to the patient’s electronic care plan to address his or her urgent chronic care needs, regardless of the time of day or day of the week. • Require timely electronic sharing of care plan information within and outside the RHC or FQHC, but not necessarily on a 24/7 basis, and expands the circumstances under which transmission of the care plan by fax is allowed. This would replace the requirement that the electronic care plan be available on a 24/7 basis to all practitioners within the RHC or FQHC whose time counts towards the time requirement for the practice to bill the CCM code, and removes the restriction on allowing the care plan to be faxed only when the receiving practitioner or provider can only receive clinical summaries by fax. • Require that in managing care transitions, the RHC or FQHC creates, exchanges, and transmits continuity of care document(s) in a timely manner with other practitioners and providers. This would replace the requirements that clinical summaries must be created and formatted according to certified EHR technology, and the requirement for electronic exchange of clinical summaries by a means other than fax. • Require that a copy of the care plan be given to the patient or caregiver. This would remove the description of the format (written or electronic) and allows the care plan to be provided to the caregiver when appropriate (and in a manner consistent with applicable privacy and security rules and regulations). • Require that the RHC or FQHC practitioner documents in the beneficiary’s medical record that all the elements of beneficiary consent (for example, that the beneficiary was informed of the availability of CCM services; only one practitioner can furnish and be paid for these services during a calendar month; the beneficiary may stop the CCM services at any time, effective at the end of the calendar month, etc.) were provided, and whether the beneficiary accepted or declined CCM services. This would replace the requirement that RHCs and FQHCs obtain a written agreement that these elements were discussed, and removes the requirement that the beneficiary provide authorization for the electronic communication of his or her medical information with other treating providers as a condition of payment for CCM services. • Require that communication to and from home- and community-based PO 00000 Frm 00088 Fmt 4701 Sfmt 4700 providers regarding the patient’s psychosocial needs and functional deficits be documented in the patient’s medical record. This would replace the requirement to document this patient health information in a certified EHR format. We noted that we did not propose an additional payment adjustment for patients who require extensive assessment and care planning as part of the initiating visit, as payments for RHC and FQHC services are not adjusted for length or complexity of the visit. We stated that we believe these proposed changes would keep the CCM requirements for RHCs and FQHCs consistent with the CCM requirements for practitioners billing under the PFS, simplify the provision of CCM services by RHCs and FQHCs, and improve access to these services without compromising quality of care, beneficiary privacy, or advance notice and consent. We received 31 comments on the proposed revisions to the CCM requirements for RHCs and FQHCs. The following is a summary of the comments we received: Comment: Commenters stated that they support CMS’s efforts to ensure that CCM requirements for RHCs and FQHCs are not more burdensome than those for practitioners billing under the Medicare PFS. Response: We appreciate the support of the commenters. Comment: One commenter sought clarification on the requirements for initiating CCM with patients that have been seen in the RHC within the past year. The commenter asked if CCM could be initiated if the patient had any type of visit within the past year, or if the visit within the past year had to be an AWV, IPPE, or comprehensive E/M visit. Response: To initiate CCM with a patient that has been seen in the RHC or FQHC within the past year, an AWV, IPPE, or comprehensive E/M visit must have taken place within the past year in the RHC or FQHC that is billing for the CCM service. No other type of visit would meet the requirement for initiating CCM services. Comment: A few commenters were concerned that RHCs and FQHCs were charging beneficiaries for coinsurance for non-face-to-face services, and recommended that the copayment be waived or that CMS pursue waivers of cost-sharing for care coordination codes. One of these commenters stated that patients are often unwilling to pay the patient share of the CCM services since rural providers often have already been E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations providing similar services without additional cost to the patients. Response: As previously stated, we do not have the authority to waive the copayment requirements for CCM services. While many practitioners, including those in rural areas, have always provided some care management services, we believe that payment for CCM services will enable many RHCs and FQHCs to furnish comprehensive and systematic care coordination services that were previously unavailable or only sporadically offered. Comment: A commenter asked for clarification on how claims for patients in RHCs and FQHCs with pre-existing care management plans should be handled, and suggested that CMS permit claims for services for these patients. Response: We are not entirely clear what this commenter is suggesting. RHCs and FQHCs that bill for CCM services must develop a comprehensive care plan that includes all the elements previously described and also listed in Table 11. When all the requirements for furnishing CCM services are met, including the development of the comprehensive care plan, the RHC or FQHC would submit a claim for CCM payment using CPT code 99490. Only the time spent furnishing CCM services after CCM is initiated with the patient is counted toward the minimum 20 minutes required for CCM billing. There is no additional payment for a preexisting care plan, and if a comprehensive care plan that meets the CCM requirements was developed before the initiation of CCM services, the time spent developing the plan would not be counted toward the 20 minute minimum requirement. Comment: A few commenters requested clarification on whether RHCs and FQHCs could bill the new CCM codes for either complex CCM services (CPT 99487 and 99489) or the separately billable comprehensive CCM assessment and care planning (G0506). Response: As we noted in the proposed rule, we did not propose to adopt codes to provide for an additional payment for patients who require extensive assessment or care planning because payments for RHC and FQHC services are not adjusted for the length or complexity of the visit. Therefore, the codes identified by the commenters are not separately billable by an RHC or FQHC. Comment: A few commenters recommended that CMS allow RHCs and FQHCs to bill for the new CCM codes, and to allow safety net providers to bill for preventive services in addition to the all-inclusive rate for RHCs and the PPS rate for FQHCs. The VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 commenters stated that the payment structure for RHCs and FQHCs are a disincentive to provide preventative services in addition to E/M services at the same visit. Response: RHCs and FQHCs are paid for CCM services when CPT code 99490 is billed either alone or with other payable services on a RHC or FQHC claim. The RHC and FQHC payment structures and payment for preventive services is outside the scope of this final rule. Comment: Several commenters recommended that CMS provide separate payment for psychiatric collaborative care management services furnished in RHCs and FQHCs, including CPT codes G0502, G0503, G0504 and G0507. The commenters stated that allowing RHCs and FQHCs to bill for these services will ensure that their patients who have been diagnosed with a mental health or substance use disorder have access to high-quality care tailored to their individual condition and circumstances. Response: To be eligible for CCM services, a Medicare beneficiary must have two or more chronic conditions that are expected to last at least 12 months (or until the death of the patient), and place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline. While CCM is typically associated with primary care conditions, patient eligibility is determined by the RHC or FQHC practitioner, and mental health conditions are not excluded. We invite comments on whether an additional code specifically for mental health conditions is necessary for RHCs and FQHCs that want to include beneficiaries with mental health conditions in their CCM services. After considering the comments, we are finalizing as proposed the revisions to the requirements for CCM services furnished by RHCs and FQHCs. F. Improving Payment Accuracy for Services: Diabetes Self-Management Training (DSMT) Section 1861(s)(2)(S) of the Act specifies that medical and other health services include DSMT services as defined in section 1861(qq) of the Act. DSMT services are intended to educate beneficiaries in the successful selfmanagement of diabetes. DSMT includes, as applicable, instructions in self-monitoring of blood glucose; education about diet and exercise; an insulin treatment plan developed specifically for the patient who is insulin-dependent; and motivation for patients to use the new skills for self- PO 00000 Frm 00089 Fmt 4701 Sfmt 4700 80257 management (see 42 CFR 410.144(a)(5)). DSMT services are reported under HCPCS codes G0108 (Diabetes outpatient self-management training services, individual, per 30 minutes) and G0109 (Diabetes outpatient selfmanagement training services, group session (2 or more), per 30 minutes). The benefit, as specified at 42 CFR 410.141, consists of 1 hour of individual and 9 hours of group training unless special circumstances warrant more individual training or no group session is available within 2 months of the date the training is ordered. Section 1861(qq) of the Act specifies that DMST services are furnished by a certified provider, defined as a physician or other individual or entity that also provides, in addition to DSMT, other items or services for which payment may be made under Medicare. The physician, individual or entity that furnishes the training also must meet certain quality standards. The physician, individual or entity can meet standards established by us or standards originally established by the National Diabetes Advisory Board and subsequently revised by organizations who participated in their establishment, or can be recognized by an organization that represents individuals with diabetes as meeting standards for furnishing the services. We require that all those who furnish DSMT services be accredited as meeting quality standards by a CMS-approved national accreditation organization (NAO). In accordance with § 410.144, a CMS-approved NAO may accredit an individual, physician or entity to meet one of three sets of DSMT quality standards: CMS quality standards; the National Standards for Diabetes SelfManagement Education Programs (National Standards); or the standards of an NAO that represents individuals with diabetes that meet or exceed our quality standards. Currently, we recognize the American Diabetes Association and the American Association of Diabetes Educators as approved NAOs, both of whom follow National Standards. Medicare payment for outpatient DSMT services is made in accordance with 42 CFR 414.63. An article titled ‘‘Use of Medicare’s Diabetes Self-Management Training Benefit’’ was published in Health Education Behavior on January 23, 2015. The article noted that only 5 percent of Medicare beneficiaries with newly diagnosed diabetes used DSMT services. The article recommended that future research identify barriers to DSMT access. In the CY 2017 PFS proposed rule (81 FR 45215), we identified issues that the E:\FR\FM\15NOR2.SGM 15NOR2 80258 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 DSMT community had brought to our attention which may contribute to the low utilization of these services, and indicated that we plan to address and clarify those issues through Medicare program instructions as appropriate. We also solicited public comment as to other access barriers—including whether Medicare payment for these services is accurate—to help us identify and address them. We appreciate the many comments regarding many issues in response to our solicitation. Comment: Many commenters stated that the payment rates were too low but did not suggest specific changes in the inputs used to develop payment rates under the PFS for particular services (specifically, work RVUs and direct PE inputs). We also received additional comments identifying multiple other possible barriers to access. These commenters’ recommendations primarily addressed issues related to regulatory and statutory DSMT requirements, such as: (a) Expanding of the definition of diabetes to include hemoglobin A1C as one of the criteria for diagnosing diabetes; (b) modifying the definition of certified provider to include the certified diabetes educator (CDE) to permit them to bill for DSMT; (c) allowing physicians and NPPs, other than the one treating the beneficiary’s diabetes, as required by regulation, to order DSMT services; and, (d) eliminating the copays and deductible for DSMT services. Response: We appreciate the comments received and will consider changes in valuation of these services and other regulatory issues raised by commenters for future rulemaking. We also appreciate commenters’ feedback on several subregulatory guidelines and other operational issues that we will consider addressing outside of rulemaking. G. Target for Relative Value Adjustments for Misvalued Services Section 1848(c)(2)(O) of the Act establishes an annual target for reductions in PFS expenditures resulting from adjustments to relative values of misvalued codes. Under section 1848(c)(2)(O)(ii) of the Act, if the estimated net reduction in expenditures for a year as a result of adjustments to the relative values for misvalued codes is equal to or greater than the target for that year, reduced expenditures attributable to such adjustments shall be redistributed in a budget-neutral manner within the PFS in accordance with the existing budget neutrality requirement under section 1848(c)(2)(B)(ii)(II) of the Act. The provision also specifies that the amount VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 by which such reduced expenditures exceeds the target for a given year shall be treated as a net reduction in expenditures for the succeeding year, for purposes of determining whether the target has been met for that subsequent year. Section 1848(c)(2)(O)(iv) of the Act defines a target recapture amount as the difference between the target for the year and the estimated net reduction in expenditures under the PFS resulting from adjustments to RVUs for misvalued codes. Section 1848(c)(2)(O)(iii) of the Act specifies that, if the estimated net reduction in PFS expenditures for the year is less than the target for the year, an amount equal to the target recapture amount shall not be taken into account when applying the budget neutrality requirements specified in section 1848(c)(2)(B)(ii)(II) of the Act. Under section 1848(c)(2)(O)(v) of the Act, the target that applies to calendar years (CYs) 2017 and 2018 is calculated as 0.5 percent of the estimated amount of expenditures under the PFS for the year. In CY 2016 PFS rulemaking, we proposed and finalized a methodology to implement this statutory provision. Because the annual target is calculated by measuring changes from one year to the next, for CY 2016, we considered how to account for changes in values that are best measured over 3 years, instead of 2 years. As we described in the CY 2016 final rule with comment period (80 FR 70932), our general valuation process for potentially misvalued, new, and revised codes was to establish values on an interim final basis for a year in the PFS final rule with comment period. Then, during the 60-day period following the publication of the final rule with comment period, we would accept public comment about those valuations. In the final rule with comment period for the subsequent year, we would consider and respond to public comments received on the interim final values, and make any appropriate adjustments to values based on those comments. Under that process for revaluing new, revised, and misvalued codes, we believe the overall change in valuation for many codes would best be measured across values for 3 years: between the original value in the first year; the interim final value in the second year; and the finalized value in the third year. However, the target calculation for a year would only be comparing changes in RVUs between 2 years and not among 3 years, so the contribution of a particular change towards the target for any single year would be measured against only the preceding year without regard to the overall change that takes place over 3 years. PO 00000 Frm 00090 Fmt 4701 Sfmt 4700 For recent years, interim final values for misvalued codes (year 2) have generally reflected reductions relative to original values (year 1), and for most codes, the interim final values (year 2) are maintained and finalized (year 3). However, when values for particular codes have changed between the interim final (year 2) and final values (year 3) based on public comment, the general tendency has been that codes increase in the final value (year 3) relative to the interim final value (year 2), even in cases where the final value (year 3) represents a decrease from the original value (year 1). Therefore, for these codes, the year 2 changes compared to year 1 would risk over-representing the overall reduction, while the year 3 to year 2 changes would represent an increase in value. We noted that if there were similar targets in every PFS year, and a similar number of misvalued code changes made on an interim final basis, the incongruence in measuring what is really a 3-year change in 2-year increments might not be particularly problematic since each year’s calculation would presumably include a similar number of codes measured between years 1 and 2 and years 2 and 3. However, including changes that take place over 3 years generated challenges in calculating the target for CY 2016. Because there was no target for CY 2015, any reductions that occurred on an interim final basis for CY 2015 were not counted toward achievement of a target. If we had then included any upward adjustments made to these codes based on public comment as ‘‘misvalued code’’ changes for CY 2016, we would effectively be counting the service-level increases for 2016 (year 3) relative to 2015 (year 2) against achievement of the target without any consideration to the service-level changes relative to 2014 (year 1), even in cases where the overall change in valuation was negative. Therefore, we proposed and finalized the decision to exclude code-level input changes for CY 2015 interim final values from the calculation of the CY 2016 misvalued code target since the misvalued change occurred over multiple years, including years not applicable to the misvalued code target provision. For the CY 2017 final rule, we will be finalizing values (year 3) for codes that were interim final in CY 2016 (year 2). Unlike codes that were interim final for CY 2015, the codes that are interim final for CY 2016 were included as misvalued codes and will fall within the range of years for which the misvalued code target provision applies. Thus, overall changes in values for these codes would E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations be measured in the target across 3 full years: The original value in the first year (CY 2015); the interim final value in the second year (CY 2016); and the finalized value in the third year (CY 2017). The changes in valuation for these CY 2016 interim final codes were previously measured and counted towards the target during their initial change in valuation between years 1 and 2. As such, we proposed to include changes in values of the CY 2016 interim final codes toward the CY 2017 misvalued code target. We believe that this is consistent with the approach that we finalized in the CY 2016 PFS final rule with comment period. The changes in values of CY 2015 interim final codes were not counted towards the misvalued code target in CY 2016 since the valuation change occurred over multiple years, including years not applicable to the misvalued code target provision. However, both of the changes in valuation for the CY 2016 interim final codes, from year 1 to year 2 (CY 2015 to CY 2016) and from year 2 to year 3 (CY 2016 to CY 2017), have taken place during years that occur within the misvalued code target provision. We therefore believe that any adjustments made to these codes based on public comment should be considered towards the achievement of the target for CY 2017, just as any changes in valuation for these same CY 2016 interim final codes previously counted towards the achievement of the target for CY 2016. We solicited comments regarding this proposal. We also reminded commenters that we revised our process for revaluing new, revised and misvalued codes so that we will be proposing and finalizing values for most of the misvalued codes during a single calendar year. After this year, there will be far fewer instances of interim final codes and changes that are best measured over 3 years. We refer readers to the regulatory impact analysis section of this final rule for the net reduction in expenditures relative to the 0.5 percent target for CY 2017, and the resulting adjustment required to be made to the conversion factor. Additionally, we refer readers to the public use file that provides a comprehensive description of how the target is calculated, as well as the estimated impact by code family on the CMS Web site under the supporting data files for the CY 2017 PFS final rule at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ PhysicianFeeSched/. The following is summary of the comments we received regarding the target for relative value adjustments for misvalued services. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment: Several commenters expressed support for the CMS estimate that there would be no target recapture amount by which to reduce payments made under the PFS in CY 2017. Response: We appreciate the comments. We remind stakeholders that the final determination of the target recapture amount is based on finalized RVUs for the relevant codes. We refer readers to the regulatory impact analysis section of this final rule for the net reduction in expenditures relative to the 0.5 percent target for CY 2017, and the resulting adjustment that is required to be made to the conversion factor. Comment: One commenter urged CMS to broaden its approach to counting misvalued code payment adjustments in the final rule. The commenter stated that CMS was taking a narrow approach to the misvalued code target. Response: We finalized our methodology for calculating the estimated net reduction relative to the misvalued code target in the CY 2016 final rule with comment period (80 FR 70921–70927). For CY 2017, we proposed a modification to that methodology that only addressed how changes to interim final codes would be addressed when both first and second year changes could be counted towards a misvalued code target since CY 2017 is the first year for that circumstance. We did not make a proposal on the more general issue of the methodology used to calculate the net reductions for the misvalued code target, which, as noted above, was finalized in the CY 2016 PFS final rule with comment period. We did not receive any public comments on our proposal to include changes in values of the CY 2016 interim final codes toward the CY 2017 misvalued code target. After consideration of comments received, we are finalizing our proposal to count any adjustments to interim final codes towards the misvalued code target when both first and second year changes can be counted towards a misvalued codes target. H. Phase-In of Significant RVU Reductions Section 1848(c)(7) of the Act specifies that for services that are not new or revised codes, if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, the applicable adjustments in work, PE, and MP RVUs shall be phased in over a 2-year period. In the CY 2016 PFS rulemaking, we proposed and finalized a methodology to implement this statutory provision. PO 00000 Frm 00091 Fmt 4701 Sfmt 4700 80259 To determine which services are described by new or revised codes for purposes of the phase-in provision, we apply the phase-in to all services that are described by the same, unrevised code in both the current and update year, and exclude codes that describe different services in the current and update year. Because the phase-in of significant reductions in RVUs falls within the budget neutrality requirements specified in section 1848(c)(2)(B)(ii)(II) of the Act, we estimate the total RVUs for a service prior to the budget-neutrality redistributions that result from implementing phase-in values. In implementing the phase-in, we consider a 19 percent reduction as the maximum 1-year reduction for any service not described by a new or revised code. This approach limits the year one reduction for the service to the maximum allowed amount (that is, 19 percent), and then phases in the remainder of the reduction. The statute provides that the applicable adjustments in work, PE, and MP RVUs shall be phased in over a 2year period when the RVU reduction for a code for a year is estimated to be equal to or greater than 20 percent. Since CY 2016 was the first year in which we applied the phase-in transition, CY 2017 will be the first year in which a single code could be subject to RVU reductions greater than 20 percent for 2 consecutive years. Under our finalized policy, the only codes that are not subject to the phasein are those that are new or revised, which we defined as those services that are not described by the same, unrevised code in both the current and update year, or by the same codes that describe different services in the current and update year. Since CY 2016 was the first year for which the phase-in provision applied, we did not address how we would handle codes with values that had been partially phased in during the first year, but that have a remaining phase-in reduction of 20 percent or greater. The significant majority of codes with reductions in RVUs that are greater than 20 percent in year one would not be likely to meet the 20 percent threshold in a consecutive year. However, in a few cases, significant changes (for example, in the input costs included in the valuation of a service) could produce reductions of 20 percent or greater in consecutive years. As stated in the CY 2017 PFS proposed rule, we believed that a consistent methodology regarding the phase-in transition should be applied to these cases. We proposed to reconsider E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80260 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations in each year, for all codes that are not new or revised codes and including codes that were assigned a phase-in value in the previous year, whether the total RVUs for the service would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year. Under this proposed policy, the 19 percent reduction in total RVUs would continue to be the maximum one-year reduction for all codes (except those considered new and revised), including those codes with phase-in values in the previous year. In other words, for purposes of the 20 percent threshold, every service is evaluated anew each year, and any applicable phase-in is limited to a decrease of 19 percent. For example, if we were to adopt a 50 percent reduction in total RVUs for an individual service, the reduction in any particular year would be limited to a decrease of 19 percent in total RVUs. Because we do not set rates 2 years in advance, the phase-in transition would continue to apply until the year-to-year reduction for a given code does not meet the 20 percent threshold. We solicited comments regarding this proposal. The list of codes subject to the phasein and the associated proposed RVUs that result from this methodology is available on the CMS Web site under downloads for the CY 2017 PFS final rule at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ PhysicianFeeSched/PFS-FederalRegulation-Notices.html. The following is summary of the comments we received regarding the phase-in of significant RVU reductions. Comment: Many commenters supported the proposal that a 19 percent reduction in total RVUs would continue to be the maximum one-year reduction for all codes that are not new or revised. These commenters urged CMS to finalize the proposal. Response: We appreciate the support from the commenters. Comment: Several commenters suggested that CMS should extend the threshold for triggering the phase-in provision, by using a lower single-year maximum reduction (such as 10 percent), at a rate different than what the statute stipulates. The commenters stated that a lower threshold would provide a greater safeguard against payment cuts and disruption of services. Response: Section 1848(c)(7) of the Act requires the phase-in if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or larger. We do not believe that we have the statutory authority to establish a different threshold value for when the phase-in applies. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment: One commenter objected to CMS’ decision to exclude from the phase-in codes with a reduction of 20 percent or more that fall within a family with significant coding revisions. The commenter requested that CMS reconsider this policy. Response: We understand the commenters’ concerns. In the CY 2016 final rule with comment period (80 FR 70927–70931), we finalized a policy to identify services that are not subject to the phase-in because they are new or revised codes. As we wrote at the time, we excluded as new and revised codes those codes that describe a different set of services in the update year when compared to the current year by virtue of changes in other, related codes, or codes that are part of a family with significant coding revisions. Significant coding revisions within a family of codes can change the relationships among codes to the extent that it changes the way that all services in the group are reported, even if some individual codes retain the same number or, in some cases, the same descriptor. We continue to believe that this is the most accurate methodology to use in identifying new and revised codes for the purposes of the phase-in transition. We also note that we did not make a proposal to change how we identify services to which the phase-in does not apply. Comment: A commenter requested that CMS apply the phase-in policy to services in the PFS with year-to-year reductions of 20 percent or more in payment amount due to the statutory cap that requires payment for the technical component (TC) of certain imaging services furnished in the office setting to be made the lesser of the PFS or OPPS rates. The commenter stated that this application would capture the spirit of the phase-in legislation in dampening the impact of significant payment reductions on a year to year basis. Response: Section 1848(c)(7) of the Act requires the phase-in of reductions of 20 percent or more in the total RVUs for individual services. The OPPS cap, required under section 1848(b)(4)(A) of the Act, specifies that if the PFS payment rate for the TC of certain imaging services exceeds the OPPS payment amount for the services, the OPPS payment amount must be substituted for the PFS TC payment amount. The OPPS cap refers to, and requires substitution of, payment rates for individual imaging services, and not a reduction in the total RVUs for those services. As such, services that are subject to the OPPS cap are not subject to the phase-in on that basis. PO 00000 Frm 00092 Fmt 4701 Sfmt 4700 Comment: One commenter opposed the phase-in proposal. The commenter stated that the proposal twisted a plain reading of the law to effectively extend the phase-in period well beyond the 2 years prescribed by the statute. The commenter questioned why Medicare beneficiaries should have to pay a higher fee for overvalued services when identified as such, and pointed out that in the budget-neutral environment of the fee schedule, the proposal would delay the benefit of these RVU reductions to the rest of the services listed in the PFS. Response: We appreciate the concerns raised by the commenter. As we have addressed over several rulemaking cycles, we are concerned about the impact of misvalued services in creating distortions in relativity across the fee schedule. However, we have already finalized through notice and comment rulemaking and continue to believe that limiting reductions to 19 percent as the maximum 1-year decrease for all codes (except those considered new and revised) is the best and most fair way to apply the phase-in. Additionally, because we do not set rates 2 years in advance, we believe there are significant obstacles to implementing an alternative methodology. For example, codes may be reviewed multiple times in a short period of time, and may have further decreases in total RVUs for a subsequent year due to a variety of reasons in addition to any change inputs from the initial year phase-in. These might include supply and equipment price updates in non-reviewed years, significant changes in specialty mix of practitioners reporting the service, or changes in other PFS ratesetting policies which could lead to several consecutive years of RVU reductions. In any such cases, it would be impractical to identify with certainty what portion of reductions in code values are due to input changes established in a prior year versus input or policy changes from the current year. We also note that all of these circumstances are relatively rare since it is unusual for changes in code inputs to result in reductions of greater than 40 percent. Therefore, while we appreciate the importance of improving payment accuracy as soon as can be practicable for the reasons stated by the commenter, we also believe that, on balance, the best and most fair approach to implementing the required phase-in of RVU reductions over multiple years is to re-examine eligible codes for the phase-in on an annual basis, in conjunction with our annual ratesetting. After consideration of comments received, we are finalizing the policy as proposed. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 I. Geographic Practice Cost Indices (GPCIs) 1. Background Section 1848(e)(1)(A) of the Act requires us to develop separate Geographic Practice Cost Indices (GPCIs) to measure relative cost differences among localities compared to the national average for each of the three fee schedule components (that is, work, PE, and malpractice (MP)). The PFS localities are discussed in section II.E.3. of this final rule. Although the statute requires that the PE and MP GPCIs reflect the full relative cost differences, section 1848(e)(1)(A)(iii) of the Act requires that the work GPCIs reflect only one-quarter of the relative cost differences compared to the national average. In addition, section 1848(e)(1)(G) of the Act sets a permanent 1.5 work GPCI floor for services furnished in Alaska beginning January 1, 2009, and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE GPCI floor for services furnished in frontier states (as defined in section 1848(e)(1)(I) of the Act) beginning January 1, 2011. Additionally, section 1848(e)(1)(E) of the Act provided for a 1.0 floor for the work GPCIs, which was set to expire on March 31, 2015. Section 201 of the MACRA amended the statute to extend the 1.0 floor for the work GPCIs through CY 2017 (that is, for services furnished no later than December 31, 2017). Section 1848(e)(1)(C) of the Act requires us to review and, if necessary, adjust the GPCIs at least every 3 years. Section 1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed since the date of the last previous GPCI adjustment, the adjustment to be applied in the first year of the next adjustment shall be half of the adjustment that otherwise would be made. Therefore, since the previous GPCI update was implemented in CY 2014 and CY 2015, we proposed to phase in 1/2 of the latest GPCI adjustment in CY 2017. We have completed a review of the GPCIs and proposed new GPCIs in this final rule. We also calculate a geographic adjustment factor (GAF) for each PFS locality. The GAFs are a weighted composite of each area’s work, PE and malpractice expense GPCIs using the national GPCI cost share weights. While we do not actually use GAFs in computing the fee schedule payment for a specific service, they are useful in comparing overall areas costs and payments. The actual effect on payment for any actual service would deviate from the GAF to the extent that the proportions of work, PE and MP VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 RVUs for the service differ from those of the GAF. As noted above, section 201 of the MACRA extended the 1.0 work GPCI floor for services furnished through December 31, 2017. Therefore, the proposed CY 2017 work GPCIs and summarized GAFs reflect the 1.0 work floor. Additionally, as required by sections 1848(e)(1)(G) and 1848(e)(1)(I) of the Act, the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI floor for frontier states are permanent, and therefore, applicable in CY 2017. See Addenda D and E to this final rule for the CY 2017 GPCIs and summarized GAFs available on the CMS Web site under the supporting documents section of the CY 2017 PFS final rule located at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ PhysicianFeeSched/. 2. GPCI Update The proposed updated GPCI values were calculated by a contractor. There are three GPCIs (work, PE, and MP), and all GPCIs are calculated relative to the national average for each measure. Additionally, each of the three GPCIs relies on its own data source(s) and methodology for calculating its value as described below. Additional information on the CY 2017 GPCI update may be found in our contractor’s draft report, ‘‘Draft Report on the CY 2017 Update of the Geographic Practice Cost Index for the Medicare Physician Fee Schedule,’’ which is available on our Web site. It is located under the supporting documents section for the CY 2017 PFS final rule located at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ PhysicianFeeSched/. a. Work GPCIs The work GPCIs are designed to reflect the relative costs of physician labor by Medicare PFS locality. As required by statute, the work GPCI reflects one quarter of the relative wage differences for each locality compared to the national average. To calculate the work GPCIs, we use wage data for seven professional specialty occupation categories, adjusted to reflect one-quarter of the relative cost differences for each locality compared to the national average, as a proxy for physicians’ wages. Physicians’ wages are not included in the occupation categories used in calculating the work GPCI because Medicare payments are a key determinant of physicians’ earnings. Including physician wage data in calculating the work GPCIs would potentially introduce some circularity to PO 00000 Frm 00093 Fmt 4701 Sfmt 4700 80261 the adjustment since Medicare payments typically contribute to or influence physician wages. That is, including physicians’ wages in the physician work GPCIs would, in effect, make the indices, to some extent, dependent upon Medicare payments. The work GPCI updates in CYs 2001, 2003, 2005, and 2008 were based on professional earnings data from the 2000 Census. However, for the CY 2011 GPCI update (75 FR 73252), the 2000 data were outdated and wage and earnings data were not available from the more recent Census because the ‘‘long form’’ was discontinued. Therefore, we used the median hourly earnings from the 2006 through 2008 Bureau of Labor Statistics (BLS) Occupational Employment Statistics (OES) wage data as a replacement for the 2000 Census data. The BLS OES data meet several criteria that we consider to be important for selecting a data source for purposes of calculating the GPCIs. For example, the BLS OES wage and employment data are derived from a large sample size of approximately 200,000 establishments of varying sizes nationwide from every metropolitan area and can be easily accessible to the public at no cost. Additionally, the BLS OES is updated regularly, and includes a comprehensive set of occupations and industries (for example, 800 occupations in 450 industries). For the CY 2014 GPCI update, we used updated BLS OES data (2009 through 2011) as a replacement for the 2006 through 2008 data to compute the work GPCIs. Because of its reliability, public availability, level of detail, and national scope, we believe the BLS OES data continue to be the most appropriate source of wage and employment data for use in calculating the work GPCIs (and as discussed in section II.E.2.b the employee wage component and purchased services component of the PE GPCI). Therefore, for the proposed CY 2017 GPCI update, we used updated BLS OES data (2011 through 2014) as a replacement for the 2009 through 2011 data to compute the work GPCIs. b. Practice Expense GPCIs The PE GPCIs are designed to measure the relative cost difference in the mix of goods and services comprising practice expenses (not including malpractice expenses) among the PFS localities as compared to the national average of these costs. Whereas the physician work GPCIs (and as discussed later in this section, the MP GPCIs) are comprised of a single index, the PE GPCIs are comprised of four component indices (employee wages; purchased services; office rent; and equipment, supplies and E:\FR\FM\15NOR2.SGM 15NOR2 80262 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 other miscellaneous expenses). The employee wage index component measures geographic variation in the cost of the kinds of skilled and unskilled labor that would be directly employed by a physician practice. Although the employee wage index adjusts for geographic variation in the cost of labor employed directly by physician practices, it does not account for geographic variation in the cost of services that typically would be purchased from other entities, such as law firms, accounting firms, information technology consultants, building service managers, or any other third-party vendor. The purchased services index component of the PE GPCI (which is a separate index from employee wages) measures geographic variation in the cost of contracted services that physician practices would typically buy. (For more information on the development of the purchased service index, we refer readers to the CY 2012 PFS final rule with comment period (76 FR 73084 through 73085)). The office rent index component of the PE GPCI measures relative geographic variation in the cost of typical physician office rents. For the medical equipment, supplies, and miscellaneous expenses component, we believe there is a national market for these items such that there is not significant geographic variation in costs. Therefore, the equipment, supplies and other miscellaneous expense cost index component of the PE GPCI is given a value of 1.000 for each PFS locality. For the previous update to the GPCIs (implemented in CY 2014) we used 2009 through 2011 BLS OES data to calculate the employee wage and purchased services indices for the PE GPCI. As discussed in section II.E.2.a., because of its reliability, public availability, level of detail, and national scope, we continue to believe the BLS OES is the most appropriate data source for collecting wage and employment data. Therefore, in calculating the proposed CY 2017 GPCI update, we used updated BLS OES data (2011 through 2014) as a replacement for the 2009 through 2011 data for purposes of calculating the employee wage component and purchased service index component of the PE GPCI. c. Malpractice Expense (MP) GPCIs The MP GPCIs measure the relative cost differences among PFS localities for the purchase of professional liability insurance (PLI). The MP GPCIs are calculated based on insurer rate filings of premium data for $1 million to $3 million mature claims-made policies (policies for claims made rather than VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 services furnished during the policy term). For the CY 2014 GPCI update (seventh update) we used 2011 and 2012 malpractice premium data (78 FR 74382). The proposed CY 2017 MP GPCI update reflects 2014 and 2015 premium data. Additionally, the proposed CY 2017 MP GPCI update reflects several proposed technical refinements to the MP GPCI methodology as discussed later in section 5. d. GPCI Cost Share Weights For CY 2017 GPCIs, we proposed to continue to use the current cost share weights for determining the PE GPCI values and locality GAFs. We refer readers to the CY 2014 PFS final rule with comment period (78 FR 74382 through 74383), for further discussion regarding the 2006-based MEI cost share weights revised in CY 2014 that were also finalized for use in the CY 2014 (seventh) GPCI update. The GPCI cost share weights for CY 2017 are displayed in Table 12. TABLE 12—COST SHARE WEIGHTS FOR CY 2017 GPCI UPDATE Expense category Work ......................... Practice Expense ...... —Employee Compensation ........... —Office Rent ........ —Purchased Services .................... —Equipment, Supplies, Other ........ Malpractice Insurance Current cost share weight (%) 50.866 44.839 Proposed CY 2017 cost share weight (%) 50.866 44.839 50161). There are no changes in the states identified as Frontier States for the CY 2017 final rule. The qualifying states are: Montana, Wyoming, North Dakota, South Dakota, and Nevada. In accordance with statute, we would apply a 1.0 PE GPCI floor for these states in CY 2017. f. Proposed GPCI Update As explained above in the background section, the periodic review and adjustment of GPCIs is mandated by section 1848(e)(1)(C) of the Act. At each update, the proposed GPCIs are published in the PFS proposed rule to provide an opportunity for public comment and further revisions in response to comments prior to implementation. As discussed later in this section, we are finalizing the GPCIs as proposed (except where we correct technical errors). The final CY 2017 updated GPCIs for the first and second year of the 2-year transition, along with the GAFs, are displayed in Addenda D and E to this final rule available on our Web site under the supporting documents section of the CY 2017 PFS final rule Web page at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ PhysicianFeeSched/. 3. Payment Locality Discussion a. Background The current PFS locality structure was developed and implemented in 1997. 16.553 16.553 There are currently 89 total PFS 10.223 10.223 localities; 34 localities are statewide 8.095 8.095 areas (that is, only one locality for the entire state). There are 52 localities in 9.968 9.968 the other 16 states, with 10 states having 4.295 4.295 2 localities, 2 states having 3 localities, 1 state having 4 localities, and 3 states Total ...................... 100.000 100.000 having 5 or more localities. The combined District of Columbia, e. PE GPCI Floor for Frontier States Maryland, and Virginia suburbs; Puerto Rico; and the Virgin Islands are the Section 10324(c) of the Affordable remaining three localities of the total of Care Act added a new subparagraph (I) 89 localities. The development of the under section 1848(e)(1) of the Act to establish a 1.0 PE GPCI floor for current locality structure is described in physicians’ services furnished in detail in the CY 1997 PFS final rule (61 frontier states effective January 1, 2011. FR 34615) and the subsequent final rule In accordance with section 1848(e)(1)(I) with comment period (61 FR 59494). We of the Act, beginning in CY 2011, we note that the localities generally applied a 1.0 PE GPCI floor for represent a grouping of one or more physicians’ services furnished in states constituent counties. determined to be frontier states. In Prior to 1992, Medicare payments for general, a frontier state is one in which physicians’ services were made under at least 50 percent of the counties are the reasonable charge system. Payments ‘‘frontier counties,’’ which are those that were based on the charging patterns of have a population per square mile of physicians. This resulted in large less than 6. For more information on the differences in payment for physicians’ criteria used to define a frontier state, services among types of services, we refer readers to the FY 2011 geographic payment areas, and Inpatient Prospective Payment System physician specialties. Recognizing this, (IPPS) final rule (75 FR 50160 through the Congress replaced the reasonable PO 00000 Frm 00094 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations charge system with the Medicare PFS in the Omnibus Budget Reconciliation Act (OBRA) of 1989, and the PFS went into effect January 1, 1992. Payments under the PFS are based on the relative resources involved with furnishing services, and are adjusted to account for geographic variations in resource costs as measured by the GPCIs. Payment localities originally were established under the reasonable charge system by local Medicare carriers based on their knowledge of local physician charging patterns and economic conditions. These localities changed little between the inception of Medicare in 1967 and the beginning of the PFS in 1992. Shortly after the PFS took effect, we undertook a study in 1994 that culminated in a comprehensive locality revision that was implemented in 1997 (61 FR 59494). The revised locality structure reduced the number of localities from 210 to the current 89, and the number of statewide localities increased from 22 to 34. The revised localities were based on locality resource cost differences as reflected by the GPCIs. For a full discussion of the methodology, see the CY 1997 PFS final rule with comment period (61 FR 59494). The current 89 fee schedule areas are defined alternatively by state boundaries (for example, Wisconsin), metropolitan areas (for example, Metropolitan St. Louis, MO), portions of a metropolitan area (for example, Manhattan), or rest-of-state areas that exclude metropolitan areas (for example, Rest of Missouri). This locality configuration is used to calculate the GPCIs that are in turn used to calculate payments for physicians’ services under the PFS. As stated in the CY 2011 PFS final rule with comment period (75 FR 73261), changes to the PFS locality structure would generally result in changes that are budget neutral within a state. For many years, before making any locality changes, we have sought consensus from among the professionals whose payments would be affected. In recent years, we have also considered more comprehensive changes to locality configuration. In 2008, we issued a draft comprehensive report detailing four different locality configuration options (https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ PhysicianFeeSched/downloads/ ReviewOfAltGPCIs.pdf). We refer readers to the CY 2014 PFS final rule with comment period for further discussion regarding that report, as well as a discussion about the Institute of Medicine’s empirical study of the Medicare GAFs established under sections 1848(e) (PFS GPCI) and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 1886(d)(3)(E) (IPPS wage index) of the Act. The following is a summary of the comments we received regarding the proposed CY 2017 GPCI update. Comment: A few commenters including a major specialty society expressed support for using more current data in calculating all three GPCIs. Response: We thank the commenters for their support. Comment: One commenter expressed support for the elimination of all geographic adjustment factors under the PFS, except those designed to achieve a specific public policy goal, such as to encourage physicians to practice in underserved areas. Another commenter opposed any decrease in the GPCI. Response: As previously discussed, section 1848(e)(1)(A) of the Act requires us to develop separate GPCIs to measure resource cost differences among localities compared to the national average for each of the three GPCI components, and section 1848(e)(1)(C) of the Act requires us to review and, if necessary, adjust the GPCIs at least every 3 years; and based on new data, GPCI values may increase or decrease. Comment: A few commenters expressed concern regarding payment for rural localities and recommended that CMS monitor how the GPCI calculation changes affect the sustainability of health services in rural communities. One commenter requested that CMS consider the ongoing data issues regarding the GPCIs raised by stakeholders in the Midwest, and establish 1.0 work and PE GPCI values for Wisconsin and Iowa. Response: As discussed previously in this section, we are required to update the GPCIs at least every 3 years to reflect the relative cost differences of operating a medical practice in each locality compared to the national average costs. Additionally, as previously discussed in this section, sections 1848(e)(1)(G) and 1848(e)(1)(I) of the Act established the permanent 1.5 work GPCI floor for Alaska and the permanent 1.0 PE GPCI floor for frontier States. We do not otherwise have the authority to establish similar GPCI floors or other policies that do not take into consideration the differences in physicians’ resource costs among localities. Comment: One commenter supported the continuation of the 1.0 PE GPCI floor for frontier states. Response: As previously discussed, beginning January 1, 2011 section 1848(e)(1)(I) of the Act set a permanent 1.0 PE GPCI floor for services furnished in frontier states (as defined in section 1848(e)(1)(I) of the Act). PO 00000 Frm 00095 Fmt 4701 Sfmt 4700 80263 Comment: Several commenters stated their objection to the use of residential rents as a proxy for physician office space costs, and stated that CMS should collect commercial rent data and use it either as the basis for measuring geographic differences in physician office rents or, if this is not feasible, use it to validate the residential rents as a proxy. A few commenters requested that CMS provide a specific explanation on the barriers to gaining better commercial rent data. Response: Because Medicare is a national program, and section 1848(e)(1)(A) of the Act requires us to establish GPCIs to measure relative cost differences among localities compared to the national average, we believe it is important to use the best data that is available on a nationwide basis, that is regularly updated, and retains consistency area-to-area, year-to-year. Since there is currently no national data source available for physician office or other comparable commercial rents, we continue to use county-level residential rent data from the American Community Survey (ACS) as a proxy for the relative cost differences in commercial office rents. The ACS is administered by the United States Census Bureau, which is a leading source of national, robust, quality, publicly available data. We agree that a commercial data source for office rent that provided for adequate representation of urban and rural areas nationally would be preferable to a residential rent proxy. We have previously discussed in the CY 2005, CY 2008, and CY 2011 (69 FR 66262, 72 FR 66376, and 75 FR 73257, respectively) final rules that we recognize that apartment rents may not be a perfect proxy for physician office rent. We have also conducted exhaustive searches for reliable commercial rent data sources that are publicly available in the past and have not found any reliable data that meets our accuracy needs, and we continue to conduct such searches. With regards to suggestion that CMS should collect commercial rent data, we note that we discussed this issue in the CY 2012 PFS final rule with comment period (76 FR 73088) and stated with reference to surveying physicians directly to gather data to compute office rent, we note that the development and implementation of a survey could take several years. Additionally, we have historically not sought direct survey data from physicians related to the GPCI to avoid issues of circularity and self-reporting bias. In the CY 2011 PFS final rule with comment period (75 FR 73259), we E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80264 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations solicited public comments regarding the benefits of utilizing physician cost reports to potentially achieve greater precision in measuring the relative cost difference among Medicare localities. We also asked for comments regarding the administrative burden of requiring physicians to routinely complete these cost reports and whether this should be mandatory for physicians’ practices. We did not receive any feedback related to that comment solicitation during the open public comment period for the CY 2011 final rule with comment period. We continue to have concerns that physician cost reports could be prohibitively expensive, and as well about the administrative burden this approach would place on physician’s office staff. We reiterate that the GPCIs are not an absolute measure of practice costs, rather they are a measure of the relative cost differences for each of the three GPCI components. The U.S. Census Bureau is a federal agency that specializes in data collection, accuracy, and reliability, and we continue to believe that where such a publicly available resource exists that can provide useful data to assess geographic cost differences in office rent, even though it is a proxy for the exact data we seek, that we should utilize that available resource. Therefore, given its national representation, reliability, high response rate and frequent updates, we continue to believe the ACS residential rent data is the most appropriate data source available at this time for the purposes of calculating the rent index of the PE GPCI. Comment: One commenter stated that it objects to the 8 percent weight that the rent expense category has been given by CMS in calculating the PE GPCI, and stated that office rent should be given a much larger weight to more accurately reflect its impact on physician practice expenses, and CMS should commit resources to update this data since it is based on 10-year old data from the 2006 AMA Physician Practice Information Survey (AMA PPIS). Response: We would like to clarify that the office rent expense category has a cost share weight of 10.223 percent, not 8 percent as indicated by the commenter. The MEI cost share weights were derived from data collected by the AMA on the AMA PPIS. CMS has previously stated that we believe the AMA PPIS is a reliable data source, however the AMA PPIS is not an ongoing data source that is regularly published. We continued to use the AMA PPIS data source in the CY 2014 revisions to the MEI which have not been further updated since, and therefore, as discussed above, the 2006- VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 based MEI cost share weights finalized for use in the CY 2014 (seventh) GPCI update, were proposed for the CY 2017 (eighth) GPCI update. The AMA is no longer conducting the AMA PPIS survey, and CMS’ Office of the Actuary continues to look into viable options for updating the MEI cost share weights going forward. In the CY 2014 PFS final rule with comment period (78 FR 74275), we stated that we continue to investigate possible data sources to use for the purpose of rebasing the MEI in the future. Comment: A few commenters expressed concern with the use of unrelated proxy data for physician wages in geographic adjustment. The commenters expressed concern about GPCI proxy inputs that result in downward payment adjustments, which they believe do not reflect the actual cost of physician practices. The commenters stated that better data exist for measuring the real physician compensation rates, such as recruitment compensation surveys and wages for physicians employed at federally qualified health centers. The commenters also stated that MedPAC studies have confirmed that the data sources currently relied upon for geographic adjustment bear no correlation to physician earnings. One commenter also stated that CMS has acknowledged that the proxies utilized for the purposes of geographic adjustment have never been validated and there never has been a new data source utilized in the twenty years since the fee schedule was implemented. The commenters urged CMS to undertake the necessary studies to identify reference occupations that will accurately reflect the higher input costs of rural physician earnings, and implement the resulting corrections to the geographic adjustment of the fee schedule as soon as possible. Response: We appreciate the comments regarding the professional occupations used to determine the relative cost differences in physician earnings for purposes of calculating the work GPCI. In consideration of the ongoing concerns regarding the reference occupations and other proxy data used to calculate the GPCIs, we also note that in the past we received comments suggesting the use of survey data to determine GPCI values, and stated that we would continue to consider the possibility of establishing a physician cost report and requiring a sufficiently large sample of physicians in each locality to report data on actual costs incurred. However we also stated that we believed that a physician cost report could take years to develop and PO 00000 Frm 00096 Fmt 4701 Sfmt 4700 implement, and could be prohibitively expensive (75 FR 73259). We solicited public comment regarding the potential benefits to be gained from establishing a physician cost report and whether this approach is appropriate to achieve potentially greater precision in measuring the relative cost differences in physicians’ practices among PFS localities. We also solicited public comments on the potential administrative burden of requiring physicians to routinely complete and submit a cost report. We did not receive any feedback specifically related to that comment solicitation (76 FR 73088). As noted previously in this section, physicians’ wages are not included in the occupation categories (reference occupations) used in calculating the work GPCI because Medicare payments are a key determinant of physicians’ earnings. We have long maintained that including physician wage data in calculating the work GPCIs would potentially introduce some circularity to the adjustment since Medicare payments typically contribute to physician wages. In other words, including physicians’ wages in the physician work GPCI would, in effect, make the indices, to some extent, dependent upon Medicare payments, which in turn are impacted by the indices. We reiterate that the work GPCI is not an absolute measure of physician earnings; rather it is a measure of the relative wage differences for each locality as compared to the national average; additionally, the work GPCI reflects only one quarter of those relative wage differences consistent with the statutory requirement as discussed previously in this section. Comment: We received a few comments on the PFS locality structure that were not within the scope of the CY 2017 proposed rule. For example, several commenters requested that Prince William and Loudoun counties in Virginia be changed from the Rest of Virginia locality into the DC + MD/VA Suburbs locality. Another commenter stated that it believes large cuts to rural and rest-of-State areas should be avoided or minimized, but locality boundaries with large payment differences should not be in the middle of urban areas, because they create payment cliffs where payment can change by up to eight percent if an office location is moved across a street or down a block. The commenter stated that CMS should act quickly to create locality definitions that are not constrained by county boundaries, and advocated implementing locality E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations definition changes based on Metropolitan Statistical Areas. Response: We appreciate the suggestions for revisions to the PFS locality structure. As discussed above, we did not propose changes to the PFS locality structure; we note that the update to the California Fee Schedule Areas discussed later in this section is the result of a statutory requirement. Additionally, we would like to note that, absent statutory provisions like those that pertain to California, changes to the locality configuration within a state would lead to significant redistributions in payments within that state. It has been our practice, and we have stated in previous rulemaking (72 FR 38139, and 73 FR 38513), that we have not considered making changes to localities without the support of a State medical association(s) to demonstrate consensus for the change among the professionals whose payments would be affected (with some increasing and some decreasing). Also, we would like to clarify that, just as the localities under the Fee Schedule areas used in the PFS are comprised of one or more constituent counties, so are Metropolitan Statistical Areas. Therefore the concept of a payment cliff between neighboring counties as described by the commenter would not necessarily be mitigated by a change from PFS fee schedule areas to Metropolitan Statistical Areas. After consideration of the public comments received regarding the proposed CY 2017 GPCI data update, we are finalizing as proposed. b. California Locality Update to the Fee Schedule Areas Used for Payment Under Section 220(h) of the Protecting Access to Medicare Act mstockstill on DSK3G9T082PROD with RULES2 (1) General Discussion and Legislative Change Section 220(h) of the PAMA added a new section 1848(e)(6) to the Act, that modifies the fee schedule areas used for payment purposes in California beginning in CY 2017. Currently, the fee schedule areas used for payment in California are based on the revised locality structure that was implemented in 1997 as previously discussed. Beginning in CY 2017, section 1848(e)(6)(A)(i) of the Act VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 requires that the fee schedule areas used for payment in California must be Metropolitan Statistical Areas (MSAs) as defined by the Office of Management and Budget (OMB) as of December 31 of the previous year; and section 1848(e)(6)(A)(ii) of the Act requires that all areas not located in an MSA must be treated as a single rest-of-state fee schedule area. The resulting modifications to California’s locality structure would increase its number of localities from 9 under the current locality structure to 27 under the MSAbased locality structure. However, section 1848(e)(6)(D) of the Act defines transition areas as the fee schedule areas for 2013 that were the rest-of-state locality, and locality 3, which was comprised of Marin County, Napa County, and Solano County. Section 1848(e)(6)(B) of the Act specifies that the GPCI values used for payment in a transition area are to be phased in over 6 years, from 2017 through 2021, using a weighted sum of the GPCIs calculated under the new MSA-based locality structure and the GPCIs calculated under the current PFS locality structure. That is, the GPCI values applicable for these areas during this transition period are a blend of what the GPCI values would have been under the current locality structure, and what the GPCI values would be under the MSA-based locality structure. For example, in the first year, CY 2017, the applicable GPCI values for counties that were previously in rest-of-state or locality 3 and are now in MSAs are a blend of 1/6 of the GPCI value calculated for the year under the MSAbased locality structure, and 5/6 of the GPCI value calculated for the year under the current locality structure. The proportions shift by 1/6 in each subsequent year so that, by CY 2021, the applicable GPCI values for counties within transition areas are a blend of 5/6 of the GPCI value for the year under the MSA-based locality structure, and 1/ 6 of the GPCI value for the year under the current locality structure. Beginning in CY 2022, the applicable GPCI values for counties in transition areas are the values calculated under the new MSAbased locality structure. For the sake of clarity, we reiterate that this incremental phase-in is only applicable PO 00000 Frm 00097 Fmt 4701 Sfmt 4700 80265 to those counties that are in transition areas that are now in MSAs, which are only some of the counties in the 2013 California rest-of state locality and locality 3. Additionally, section 1848(e)(6)(C) of the Act establishes a hold harmless for transition areas beginning with CY 2017 whereby the applicable GPCI values for a year under the new MSA-based locality structure may not be less than what they would have been for the year under the current locality structure. There are a total of 58 counties in California, 50 of which are in transition areas as defined in section 1848(e)(6)(D) of the Act. Therefore, 50 counties in California are subject to the hold harmless provision. The other 8 counties, which are metropolitan counties that are not defined as transition areas, are not held harmless for the impact of the new MSA-based locality structure, and may therefore potentially experience slight decreases in their GPCI values as a result of the provisions in section 1848(e)(6) of the Act, insofar as the locality in which they are located now newly includes data from adjacent counties that decreases their GPCI values relative to those that would have applied had the new data not been incorporated. Therefore, the GPCIs for these eight counties under the MSA-based locality structure may be less than they would have been under the current GPCI structure. The eight counties that are not within transition areas are: Orange; Los Angeles; Alameda; Contra Costa; San Francisco; San Mateo; Santa Clara; and Ventura counties. We emphasize that while transition areas are held harmless from the impact of the GPCI changes using the new MSA-based locality structure, because we proposed other updates for CY 2017 as part of the eighth GPCI update, including the use of updated data, transition areas would still be subject to impacts resulting from those other updates. Table 13 illustrates using GAFs, for CY 2017, the isolated impact of the MSA-based locality changes and hold-harmless for transition areas required by section 1848(e)(6) of the Act, the impact of the use of updated data for GPCIs, and the combined impact of both of these changes. E:\FR\FM\15NOR2.SGM 15NOR2 80266 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 13—IMPACT ON CALIFORNIA GAFS AS A RESULT OF SECTION 1848(e)(6) OF THE ACT AND UPDATED DATA BY FEE SCHEDULE AREA [Sorted alphabetically by locality name] Transition area Medicare fee schedule area Bakersfield ..................................................................... Chico .............................................................................. El Centro ........................................................................ Fresno ............................................................................ Hanford-Corcoran .......................................................... Los Angeles-Long Beach-Anaheim (Los Angeles Cnty) Los Angeles-Long Beach-Anaheim (Orange Cnty) ....... Madera ........................................................................... Merced ........................................................................... Modesto ......................................................................... Napa ............................................................................... Oxnard-Thousand Oaks-Ventura ................................... Redding .......................................................................... Rest of California ........................................................... Riverside-San Bernardino-Ontario ................................. Sacramento-Roseville-Arden-Arcade ............................. Salinas ........................................................................... San Diego-Carlsbad ....................................................... San Francisco-Oakland-Hayward (Alameda/Contra Costa Cnty) San Francisco-Oakland-Hayward (Marin Cnty) ............. San Francisco-Oakland-Hayward (San Francisco Cnty) San Francisco-Oakland-Hayward (San Mateo Cnty) .... San Jose-Sunnyvale-Santa Clara (San Benito Cnty) .... San Jose-Sunnyvale-Santa Clara (Santa Clara Cnty) .. San Luis Obispo-Paso Robles-Arroyo Grande .............. Santa Cruz-Watsonville ................................................. Santa Maria-Santa Barbara ........................................... Santa Rosa .................................................................... Stockton-Lodi ................................................................. Vallejo-Fairfield .............................................................. Visalia-Porterville ........................................................... Yuba City ....................................................................... 2016 GAF 2017 GAF w/o 1848(e)(6) % change due to new GPCI data 2017 GAF w/ 1848(e)(6) % change due to 1848(e)(6) Combined impact of PAMA and new GPCI data (%) 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1.036 1.036 1.036 1.036 1.036 1.092 1.111 1.036 1.036 1.036 1.137 1.089 1.036 1.036 1.036 1.036 1.036 1.036 1.031 1.031 1.031 1.031 1.031 1.090 1.104 1.031 1.031 1.031 1.128 1.083 1.031 1.031 1.031 1.031 1.031 1.031 ¥0.48 ¥0.48 ¥0.48 ¥0.48 ¥0.48 ¥0.18 ¥0.63 ¥0.48 ¥0.48 ¥0.48 ¥0.79 ¥0.55 ¥0.48 ¥0.48 ¥0.48 ¥0.48 ¥0.48 ¥0.48 1.031 1.031 1.031 1.031 1.031 1.091 1.101 1.031 1.031 1.031 1.128 1.083 1.031 1.031 1.032 1.031 1.033 1.035 0.00 0.00 0.00 0.00 0.00 0.09 ¥0.27 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 0.00 0.19 0.39 ¥0.48 ¥0.48 ¥0.48 ¥0.48 ¥0.48 ¥0.09 ¥0.90 ¥0.48 ¥0.48 ¥0.48 ¥0.79 ¥0.55 ¥0.48 ¥0.48 ¥0.39 ¥0.48 ¥0.29 ¥0.10 0 1 0 0 1 0 1 1 1 1 1 1 1 1 1.124 1.137 1.191 1.182 1.036 1.175 1.036 1.036 1.036 1.036 1.036 1.137 1.036 1.036 1.125 1.128 1.194 1.187 1.031 1.176 1.031 1.031 1.031 1.031 1.031 1.128 1.031 1.031 0.09 ¥0.79 0.25 0.42 ¥0.48 0.09 ¥0.48 ¥0.48 ¥0.48 ¥0.48 ¥0.48 ¥0.79 ¥0.48 ¥0.48 1.142 1.129 1.175 1.171 1.053 1.175 1.031 1.042 1.036 1.037 1.031 1.128 1.031 1.031 1.51 0.09 ¥1.59 ¥1.35 2.13 ¥0.09 0.00 1.07 0.48 0.58 0.00 0.00 0.00 0.00 1.60 ¥0.70 ¥1.34 ¥0.93 1.64 0.00 ¥0.48 0.58 0.00 0.10 ¥0.48 ¥0.79 ¥0.48 ¥0.48 mstockstill on DSK3G9T082PROD with RULES2 Note: the Los Angeles-Long Beach-Anaheim; San Francisco-Oakland-Hayward; and San Jose-Sunnyvale-Santa Clara Medicare localities are represented at a sub-locality level for the purpose of demonstrating the variation of the GAF within the locality. The variation in the Los-AngelesLong Beach-Anaheim locality exists only in CY 2017 and results from the two-year 50/50 phase in of the GPCI. The GAF variation in San Francisco-Oakland-Hayward and San Jose-Sunnyvale-Santa Clara results from the localities containing both transition area and non-transition area counties. For the remainder of Medicare localities, the GAF is consistent throughout the entire locality. Additionally, for the purposes of calculating budget neutrality and consistent with the PFS budget neutrality requirements as specified under section 1848(c)(2)(B)(ii)(II) of the Act, we proposed to start by calculating the national GPCIs as if the current localities are still applicable nationwide; then for the purposes of payment in California, we override the GPCI values with the values that are applicable for California consistent with the requirements of section 1848(e)(6) of the Act. This approach is consistent VerDate Sep<11>2014 16:32 Nov 12, 2016 Jkt 241001 with the implementation of the GPCI floor provisions that have previously been implemented—that is, as an afterthe-fact adjustment that is implemented for purposes of payment after both the GPCIs and PFS budget neutrality have already been calculated. (2) Operational Considerations As discussed above, under section 1848(e)(6) of the Act, counties that were previously in the rest-of-state locality or locality 3 and are now in MSAs would have their GPCI values under the new MSA-based locality structure phased in PO 00000 Frm 00098 Fmt 4701 Sfmt 4700 gradually, in increments of one-sixth over 6 years. Section 1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed since the date of the last previous GPCI adjustment, the adjustment to be applied in the first year of the next adjustment shall be 1/2 of the adjustment that otherwise would be made. While section 1848(e)(6)(B) of the Act establishes a blended phase-in for the MSA-based GPCI values, it does not explicitly state whether or how that provision is to be reconciled with the requirement at section 1848(e)(1)(C) of E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the Act. We believe that since section 1848(e)(6)(A) of the Act requires that we must make the change to MSA-based fee schedule areas for California GPCIs notwithstanding the preceding provisions of section 1848(e) of the Act, and subject to the succeeding provisions of section 1848(e)(6) of the Act, that applying the two-year phase-in specified by the preceding provisions simultaneously with the six-year phasein would undermine the incremental 6year phase-in specified in section 1848(e)(6)(B) of the Act. Therefore, we proposed that the requirement at section 1848(e)(1)(C) of the Act to phase in 1/ 2 of the adjustment in year 1 of the GPCI update would not apply to counties that were previously in the rest-of-state or locality 3 and are now in MSAs, and therefore, are subject to the blended phase-in as described above. Since section 1848(e)(6)(B) of the Act provides for a gradual phase in of the GPCI values under the new MSA-based locality structure, specifically in one-sixth increments over 6 years, if we were to also apply the requirement to phase in 1/2 of the adjustment in year 1 of the GPCI update then the first year increment would effectively be onetwelfth. We note that this issue is only of concern if more than 1 year has elapsed since the previous GPCI update, and would only be applicable through CY 2021 since, beginning in CY 2022, the GPCI values for such areas in an MSA would be fully based on the values calculated under the new MSA-based locality structure for California. As previously stated, the resulting modifications to California’s locality structure increase its number of localities from 9 under the current locality structure to 27 under the MSAbased locality structure. However, both the current localities and the MSAbased localities are comprised of various component counties, and in some localities only some of the component counties are subject to the blended phase-in and hold harmless provisions required by section 1848(e)(6)(B) and (C) of the Act. Therefore, the application of these provisions may produce differing GPCI values among counties within the same fee schedule area under the MSAbased locality structure. For example, the MSA-based San Jose-SunnyvaleSanta Clara locality, is comprised of 2 constituent counties—San Benito County, and Santa Clara County. San Benito County is in a transition area (2013 rest-of-state), while Santa Clara County is not. Hence, although the counties are in the same MSA, the requirements of section 1848(e)(6)(B) and (C) of the Act may produce differing GPCI values for each county. To address this issue, we proposed to assign a unique locality number to the counties that would be impacted in the aforementioned manner. As a result, although the modifications to California’s locality structure increase the number of localities from 9 under the current locality structure to 27 under the MSA-based locality structure, for purposes of payment, the actual number of localities under the MSAbased locality structure would be 32 to account for instances where unique locality numbers are needed as described above. Additionally, while the fee schedule area names are consistent with the MSAs designated by OMB, we proposed to maintain 2-digit locality numbers to correspond to the 80267 existing fee schedule areas. Pursuant to the implementation of the new MSAbased locality structure for California, the total number of PFS localities would increase from 89 to 112. Table 14 displays the current fee schedule areas in California, and Table 15 displays the MSA-based fee schedule areas in California required by section 1848(e)(6) of the Act. Additional information on the California locality update may be found in our contractor’s draft report, ‘‘Draft Report on the CY 2017 Update of the Geographic Practice Cost Index for the Medicare Physician Fee Schedule,’’ which is available on the CMS Web site. It is located under the supporting documents section of the CY 2017 PFS final rule located at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ PhysicianFeeSched/. TABLE 14—CURRENT FEE SCHEDULE AREAS IN CALIFORNIA [Sorted alphabetically by locality name] Locality number Fee schedule area 26 ......... 07 ......... Anaheim/Santa Ana. Los Angeles ..... Marin/Napa/Solano. Oakland/Berkley 05 06 09 17 99 San Francisco .. San Mateo ....... Santa Clara ...... Ventura ............ Rest of State .... 18 ......... 03 ......... ......... ......... ......... ......... ......... Counties Orange. Los Angeles. Marin, Napa, And Solano. Alameda and Contra Costa. San Francisco. San Mateo. Santa Clara. Ventura. All Other Counties. TABLE 15—MSA-BASED FEE SCHEDULE AREAS IN CALIFORNIA [Sorted alphabetically by locality name] mstockstill on DSK3G9T082PROD with RULES2 Current locality number New locality number Fee schedule area (MSA name) Counties Kern ........................................................ Butte ....................................................... Imperial ................................................... Fresno ..................................................... Kings ....................................................... Los Angeles ............................................ Orange .................................................... Madera .................................................... Merced .................................................... Stanislaus ............................................... Napa ....................................................... Ventura ................................................... Shasta ..................................................... All Other Counties .................................. Riverside, And San Bernardino .............. El Dorado, Placer, Sacramento, And Yolo. Monterey ................................................. San Diego ............................................... 99 ........... 99 ........... 99 ........... 99 ........... 99 ........... 18 ........... 26 ........... 99 ........... 99 ........... 99 ........... 3 ............. 17 ........... 99 ........... 99 ........... 99 ........... 99 ........... 54 55 71 56 57 18 26 58 59 60 51 17 61 75 62 63 Bakersfield, CA .......................................................................... Chico, CA ................................................................................... El Centro, CA ............................................................................. Fresno, CA ................................................................................. Hanford-Corcoran, CA ............................................................... Los Angeles-Long Beach-Anaheim, CA (Los Angeles County) Los Angeles-Long Beach-Anaheim, CA (Orange County) ........ Madera, CA ................................................................................ Merced, CA ................................................................................ Modesto, CA .............................................................................. Napa, CA .................................................................................... Oxnard-Thousand Oaks-Ventura, CA ........................................ Redding, CA ............................................................................... Rest of State .............................................................................. Riverside-San Bernardino-Ontario, CA ...................................... Sacramento—Roseville—Arden-Arcade, CA ............................. 99 ........... 99 ........... 64 72 Salinas, CA ................................................................................ San Diego-Carlsbad, CA ............................................................ VerDate Sep<11>2014 16:32 Nov 12, 2016 Jkt 241001 PO 00000 Frm 00099 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 Transition area YES. YES. YES. YES. YES. NO. NO. YES. YES. YES. YES. NO. YES. YES. YES. YES. YES. YES. 80268 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 15—MSA-BASED FEE SCHEDULE AREAS IN CALIFORNIA—Continued [Sorted alphabetically by locality name] Current locality number New locality number Fee schedule area (MSA name) 7 3 ............. 5 ............. 6 ............. 99 ........... 9 ............. 99 ........... 99 ........... 99 ........... 99 ........... 99 ........... 3 ............. 99 ........... 99 ........... mstockstill on DSK3G9T082PROD with RULES2 7 ............. 52 5 6 65 9 73 66 74 67 73 53 69 70 Counties San Francisco-Oakland-Hayward, CA (Alameda County/ Contra Costa County). San Francisco-Oakland-Hayward, CA (Marin County) .............. San Francisco-Oakland-Hayward, CA (San Francisco County) San Francisco-Oakland-Hayward, CA (San Mateo County) ..... San Jose-Sunnyvale-Santa Clara, CA (San Benito County) ..... San Jose-Sunnyvale-Santa Clara, CA (Santa Clara County) ... San Luis Obispo-Paso Robles-Arroyo Grande, CA ................... Santa Cruz-Watsonville, CA ...................................................... Santa Maria-Santa Barbara, CA ................................................ Santa Rosa, CA ......................................................................... Stockton-Lodi, CA ...................................................................... Vallejo-Fairfield, CA ................................................................... Visalia-Porterville, CA ................................................................ Yuba City, CA ............................................................................ Alameda, Contra Costa .......................... NO. Marin ....................................................... San Francisco ......................................... San Mateo .............................................. San Benito .............................................. Santa Clara ............................................. San Luis Obispo ..................................... Santa Cruz .............................................. Santa Barbara ........................................ Sonoma .................................................. San Joaquin ............................................ Solano ..................................................... Tulare ...................................................... Sutter, and Yuba .................................... YES. NO. NO. YES. NO. YES. YES. YES. YES. YES. YES. YES. YES. We received few comments regarding the California locality update to the fee schedule areas used for payment under section 220(h) of PAMA. Comment: One commenter stated that it supports the proposed California payment locality implementation plan. The commenter stated that based on its analysis the calculations are accurate except for a few errors. Specifically, the commenter stated that the CY 2016 GAFs for 3 fee schedule areas [Los Angeles-Long Beach-Anaheim (Orange County), San Francisco-OaklandHayward (Alameda/Contra Costa County), and San Francisco-OaklandHayward (San Francisco County)] in Table 13 of the proposed rule (81 FR 46221 through 46222) were incorrect. The commenter also requested that all of the 2016 GAFs in the table be reported to three decimal places to avoid confusion with rounding. Additionally, the commenter indicated that Sierra County in California was missing from the CY 2017 Proposed GPCI County Data File in the CY 2017 Proposed Rule GPCI Public Use Files available on our Web site under the supporting documents section of the CY 2017 PFS proposed rule Web page at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ PhysicianFeeSched/. Response: We thank the commenter for its support of our proposed California payment locality implementation plan. With regard to the errors noted by the commenter, we thank the commenter for bringing this issue to our attention. We agree that the CY 2016 GAFs for Los Angeles-Long Beach-Anaheim (Orange County), San Francisco-Oakland-Hayward (Alameda/ Contra Costa County), and San Francisco-Oakland-Hayward (San VerDate Sep<11>2014 16:32 Nov 12, 2016 Jkt 241001 Francisco County) were incorrect in Table 13 of the proposed rule, and have been corrected in Table 13 in this final rule. We have also updated all of the 2016 GAFs in Table 13 to reflect 3 decimal places as to avoid confusion with rounding as requested. Additionally, we note that while the GAFs for these 3 fee schedule areas were incorrect in Table 13 of the proposed rule, the GAF values were correct in Addendum D to the proposed rule available on our Web site under the supporting documents section of the CY 2017 PFS Proposed Rule Web page at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ PhysicianFeeSched/. Moreover, GAF values are an analysis tool, and are not used to determine service level payment. Additionally, we note Sierra County was omitted from the CY 2017 Proposed GPCI County Data File because we removed counties with 0 total RVUs in 2014. However, for the final rule we have revised the file to include all counties, even those with 0 total RVUs in 2014. The updated file can be viewed in the CY 2017 Final GPCI County Data File in the CY 2017 Final Rule GPCI Public use files available on our Web site. Comment: One commenter requested that CMS implement the California locality update requirement in a manner that does not require the Medicare Administrative Contractor (MAC) for California to make changes to the enrollment process for physician groups in California or changes in the way that physician groups submit claims to the MAC. Response: While we note that there are several internal administrative burdens that result from the implementation of the California PO 00000 Frm 00100 Fmt 4701 Sfmt 4700 Transition area locality update, we do not believe there should be related burden on practitioners, and California practitioners will continue to follow the existing process for submitting claims. After consideration of the public comments received regarding the proposed California payment locality implementation plan, we are finalizing as proposed. 4. Update to the Methodology for Calculating GPCIs in the U.S. Territories In calculating GPCIs within U.S. states, we use county-level wage data from the Bureau of Labor Statistics (BLS) Occupational Employment Statistics Survey (OES), county-level residential rent data from the American Community Survey (ACS), and malpractice insurance premium data from state departments of insurance. In calculating GPCIs for the U.S. territories, we currently use three distinct methodologies—one for Puerto Rico, another for the Virgin Islands, and a third for the Pacific Islands (Guam, American Samoa, and Northern Marianas Islands). These three methodologies were adopted at different times based primarily on the data that were available at the time they were adopted. At present, because Puerto Rico is the only territory where countylevel BLS OES, county-level ACS, and malpractice premium data are available, it is the only territory for which we use territory-specific data to calculate GPCIs. For the Virgin Islands, because county-level wage and rent data are not available, and insufficient malpractice premium data are available, CMS has set the work, PE, and MP GPCI values for the Virgin Islands payment locality at the national average of 1.0 even though, like Puerto Rico, the Virgin Islands is its E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations own locality and county-level BLS OES data are available for the Virgin Islands. For the U.S. territories in the Pacific Ocean, we currently crosswalk GPCIs from the Hawaii locality for each of the three GPCIs, and incorporate no local data from these territories into the GPCI calculations even though county-level BLS OES data does exist for Guam, but not for American Samoa or the Northern Mariana Islands. As noted above, currently Puerto Rico is the only territory for which we calculate GPCIs using the territoryspecific information relative to data from the U.S. States. For several years stakeholders in Puerto Rico have raised concerns regarding the applicability of the proxy data in Puerto Rico relative to their applicability in the U.S. states. We believe that these concerns may be consistent across island territories, but lack of available, appropriate data has made it difficult to quantify such variation in costs. For example, some stakeholders previously indicated that shipping and transportation expenses increase the cost of acquiring medical equipment and supplies in islands and territories relative to the mainland. While we have previously attempted to locate data sources specific to geographic variation in such shipping costs, we found no comprehensive national data source for this information (we refer readers to 78 FR 74387 through 74388 for the detailed discussion of this issue). Therefore, we have not been able to quantify variation in costs specific to island territories in the calculation of the GPCIs. For all the island territories other than Puerto Rico, the lack of comprehensive data about unique costs for island territories has had minimal impact on GPCIs because we have used either the Hawaii GPCIs (for the Pacific territories) or used the unadjusted national averages (for the Virgin Islands). In an effort to provide greater consistency in the calculation of GPCIs given the lack of comprehensive data regarding the validity of applying the proxy data used in the States in accurately accounting for variability of costs for these island territories, we proposed to treat the Caribbean Island territories (the Virgin Islands and Puerto Rico) in a consistent manner. We proposed to do so by assigning the national average of 1.0 to each GPCI index for both Puerto Rico and the Virgin Islands. We did not propose any changes to the GPCI methodology for the Pacific Island territories (Guam, American Samoa, and Northern Marianas Islands) where we already consistently assign the Hawaii GPCI values for each of the three GPCIs. Additional information on the Proposed VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Update to the Methodology for Calculating GPCIs in the U.S. Territories may be found in our contractor’s draft report, ‘‘Draft Report on the CY 2017 Update of the Geographic Practice Cost Index for the Medicare Physician Fee Schedule,’’ which is available on our Web site. It is located under the supporting documents section of the CY 2017 PFS final rule located at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ PhysicianFeeSched/. The following is a summary of the comments we received regarding the proposed update to the methodology for calculating GPCIs in the U.S. territories. Comment: Several commenters expressed support for CMS’ proposal to assign the national average of 1.0 to each GPCI in Puerto Rico, stating that the physicians in Puerto Rico who treat patients enrolled in fee-for-service Medicare will be reimbursed in a manner that more closely aligns with the manner in which physicians in the other U.S. territories are reimbursed, and better reflects the cost of practicing medicine in Puerto Rico. Other commenters supporting the proposal also suggested that there has been a need for revision of Medicare payment in Puerto Rico, and that the territories of the U.S. have not been treated similarly even though the territories are much alike. Another commenter stated that the existing fee schedule for Puerto Rico does not correlate with the cost of caring for patients, and that the proposed policy is long overdue. Some commenters also stated that increasing the GPCI’s for Puerto Rico is an important and necessary first step in trying to salvage Puerto Rico’s deteriorated health system. Response: We thank the commenters for their support. Comment: A few commenters requested that CMS consider raising the GPCI values in Puerto Rico to 1.25. Response: We proposed assigning the national average of 1.0 to each GPCI index for both Puerto Rico and the Virgin Islands, in an effort to provide greater consistency in the calculation of GPCIs among these island territories, given the lack of information on the validity of applying the proxy data used in the States to accurately account for variability of costs in these territories as compared to the national average costs. Ultimately we proposed to treat the Caribbean Island territories (the Virgin Islands and Puerto Rico) in a consistent manner by assigning the national average of 1.0 to each GPCI index. We do not believe that it would be appropriate to raise the value to 1.25 in the absence of data demonstrating that PO 00000 Frm 00101 Fmt 4701 Sfmt 4700 80269 would be an accurate reflection of costs in those territories relative to national average costs. Comment: We received several comments that are outside of the scope of the Physician Fee Schedule, requesting that CMS explore every option to determine whether a one-time correction can be made to the Medicare Advantage (MA) regulatory cycle so that the per-person monthly payment to Puerto Rico MA Plans in CY 2017 will reflect the increase to the fee-for-service spending in the territory as a result of the proposed GPCI increase. Some commenters stated that it is imperative that CMS see that the increased physician fees reach the actual providers and are not diverted away from patient care by third parties such as Medicare Advantage Organizations. Some commenters requested that CMS clarify that the new GPCIs will be incorporated into the MA benchmarks in CY 2018. Response: We appreciate the concerns raised by the commenters. Consistent with the statute, we published the final CY 2017 Rate Announcement for Medicare Advantage on April 4, 2016. Medicare Advantage actuarial bids and benefit packages for 2017 have been approved by CMS and sponsors have begun marketing plan to beneficiaries. Thus, a change in to CY 2017 benchmark would be disruptive to beneficiaries. In future years, including CY 2018, we will follow our normal process for calculating rates. This process incorporates historical Fee for Service expenditures, which would include any updates to Fee for Service payment rates, such as an adjustment to the Puerto Rico GPCI. CMS will not be making any adjustments to CY 2017 Medicare Advantage rates as a result of this final rule. Finally, we note that according to the statute, we are prohibited from interfering or directing the contracting between Medicare Advantage Organizations (MAOs) and contracted providers. As such, we are not permitted to dictate to MAOs how any increase in payment rates can be spent, including on provider rates. Comment: One commenter suggested that if the MA benchmark cannot be adjusted for CY 2017 that CMS should postpone the applicability of the GPCI change in Puerto Rico until CY 2018 when such an effect is also reflected in the MA benchmarks. Response: We do not agree that the proposal to update to the methodology for calculating GPCIs in the U.S. territories, which will provide greater consistency in the calculation of GPCIs for these areas, should be delayed based on when the MA benchmarks will E:\FR\FM\15NOR2.SGM 15NOR2 80270 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations reflect the increases as a result of this policy. After consideration of the public comments received regarding our proposal to treat the Caribbean Island territories (the Virgin Islands and Puerto Rico) in a consistent manner, by assigning the national average of 1.0 to each GPCI index for both Puerto Rico and the Virgin Islands, we are finalizing as proposed. mstockstill on DSK3G9T082PROD with RULES2 5. Refinement to the MP GPCI Methodology In the process of calculating MP GPCIs for the purposes of this final rule, we identified several technical refinements to the methodology that yield improvements over the current method. We also proposed refinements that conform to our proposed methodology for calculating the GPCIs for the U.S. Territories described above. Specifically, we proposed modifications to the methodology to account for missing data used in the calculation of the MP GPCI. Under the methodology used in the CY 2014 GPCI update (78 FR 74380 through 74391), we first calculated the average premiums by insurer and specialty, then imputed premium values for specialties for which we did not have specific data, before adjusting the specialty-specific premium data by market share weights. We proposed to revise our methodology to instead calculate the average premiums for each specialty using issuer market share for only available companies. This proposed methodological improvement would reduce potential bias resulting from large amounts of imputation, an issue that is prevalent for insurers that only write policies for ancillary specialties for which premiums tend to be low. The current method would impute the low premiums for ancillary specialties across the remaining specialties, and generally greater imputation leads to less accuracy. Additional information on the MP GPCI methodology, and the proposed refinement to the MP GPCI methodology may be found in our contractor’s draft report, ‘‘Draft Report on the CY 2017 Update of the Geographic Practice Cost Index for the Medicare Physician Fee Schedule,’’ which is available on our Web site. It is located under the supporting documents section of the CY 2017 PFS final rule located at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/ index.html. We did not receive any comments regarding the proposed technical refinements to the MP GPCI VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 methodology, and we are finalizing as proposed. J. Payment Incentive for the Transition From Traditional X-Ray Imaging to Digital Radiography and Other Imaging Services Section 502(a)(1) of Division O, Title V of the Consolidated Appropriations Act, 2016 (Pub. L. 114–113) amended section 1848(b) of the Act by adding new paragraph (b)(9). Effective for services furnished on or after January 1, 2017, section 1848(b)(9)(A) of the Act reduces by 20 percent the payment amounts under the PFS for the technical component (TC) (including the TC portion of a global services) of imaging services that are X-rays taken using film. The reduction is made prior to any other adjustment under this section and without application of this new paragraph. Section 1848(b)(9) of the Act allows for the implementation of the payment reduction through appropriate mechanisms which may include use of modifiers. In accordance with section 1848(c)(2)(B)(v)(X), the adjustments under section 1848(b)(9)(A) of the Act are exempt from budget neutrality. To implement this provision, in the CY 2017 PFS proposed rule (81 FR 46224), we proposed to establish a new modifier to be used on claims that include imaging services that are X-rays (including the imaging portion of a service) taken using film. Since the display of the proposed rule, modifier FX has been established for that purpose. Effective January 1, 2017, the modifier must be used on claims for Xrays that are taken using film. The use of this modifier will result in a 20 percent reduction for the X-ray service, as specified under section 1848(b)(9)(A) of the Act. The proposed rule preamble stated that the applicable HCPCS codes describing imaging services that are Xray services could be found on the PFS Web site. However, we did not intend this to indicate that we would be developing or displaying an exhaustive list of applicable codes. Instead, we intended to refer to the several lists of PFS imaging codes, including those that describe imaging services that are Xrays. Comment: Many commenters commented on the merits of the statutory provision. The commenters stated that the reduction of Medicare film-based x-ray payments by 20 percent will have unintended consequences on patient care. Response: We believe our proposal would implement the required statutory provision and we do not believe that we PO 00000 Frm 00102 Fmt 4701 Sfmt 4700 have the authority to alter the application of the provision based on these comments. Comment: An overwhelming majority of the commenters requested CMS implement an alternative policy to improve quality of imaging services. The recommended policy would require registered radiologic technicians to perform all Medicare film or digital radiography procedures. Other commenters countered this recommended alternative by stating that it would exclude otherwise qualified professionals who have undergone education to acquire limited scope licenses or certification programs demonstrating As Low As Reasonably Achievable (ALARA) safety practices by either a third party, vendor training, or another didactic course deemed acceptable by any of the four accreditation organizations. One commenter also referenced 35 states that have an entry level certification for Xray technicians and that throughout the US, there are x-ray technicians and limited scope X-ray machine operators that are also licensed and certified. Response: We appreciate commenters’ interests in standards that might improve quality of care for Medicare beneficiaries, but we did not propose a policy regarding standards for radiologic technicians in the proposed rule. Also, as previously stated, we do not believe we have the authority to implement conditions of payment regarding radiologic technicians as an alternative to the adjustments required by the statutory provision. Comment: A commenter recommended that a financial incentive be provided for physicians to convert to digital machines as had been done in the case of electronic medical records. Response: The legislation does not authorize any financial incentive in the form of increased payment, but provides an incentive to use digital images to avoid the 20 percent reduction that applies to imaging services that are Xrays taken using film. Comment: One commenter requested that in the absence of a meaningful opportunity to comment on the list of codes for which the policy applies, the provision should be limited to traditional diagnostic X-ray procedures only. Two commenters presented separate lists of codes for which the payment reduction should apply. One commenter also provided codes that should be explicitly excluded from the payment reduction, for example, radiographic-fluoroscopic, vascular and mammography X-ray imaging services, radioscopic, radioscopic and radiography services provided in a E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations single examination. Other commenters also provided a list of procedures that should be excluded. The commenter also requested that we publish the list of applicable codes as soon as possible. Response: As previously stated, we did not publish an exhaustive list of applicable codes, and previously intended to point to existing lists of PFS imaging services. We believe that physicians and non-physician practitioners are in the best position to determine whether a particular imaging service is an X-ray taken using film. Comment: One commenter suggested that if at least half of the number of discrete X-ray exposures required for the radiographic exam are captured using a DR detector, then the examination should be considered as digital and the payment differential should not be applied. Another commenter requested that we clarify that the law only applies (and requires use of a modifier) to sites that use X-ray as a single method for image capture. The commenter also seeks clarification that if a site uses both X-ray film and electronic capture of images and maintains digital archives, by a picture archiving communication system or other electronic method, that the site is not required to report the modifier. Response: At this time, in accordance with the statute, we are requiring the FX modifier to be used whenever an imaging service is an X-ray taken using film. As stated, the statute requires that if an imaging service is an X-ray taken using film, a reduction in payment is to occur. The statutory requirement applies at the service level, not based on where the service is furnished or the method used to store images. There is no provision for an exception to the payment reduction based on the availability of various technologies or the use of certain image archiving technology at a particular site. After consideration of the public comments we received, we are finalizing the establishment of new modifier ‘‘FX’’ to be reported on claims for imaging services that are X-rays that are taken using film. Beginning January 1, 2017, claims for imaging services that are X-rays taken using film must include the modifier ‘‘FX.’’ The use of this modifier will result in a 20 percent reduction for the X-ray service, as specified under section 1848(b)(9)(A) of the Act. K. Procedures Subject to the Multiple Procedure Payment Reduction (MPPR) and the OPPS Cap Effective January 1, 2012, we implemented an MPPR of 25 percent on VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the professional component (PC) of advanced imaging services. The reduction applies when multiple imaging procedures are furnished by the same physician (or physician in the same group practice) to the same patient, in the same session, on the same day. Full payment is made for the PC of the highest priced procedure. Payment for the PC of subsequent services is reduced by 25 percent. Section 502(a)(2)(A) of Division O, Title V of the Consolidated Appropriations Act, 2016 (Pub. L. 114– 113, enacted on December 18, 2015) added a new section 1848(b)(10) of the Act which revises the payment reduction from 25 percent to 5 percent, effective January 1, 2017. Section 502(a)(2)(B) added a new subclause at section 1848(c)(2)(B)(v)(XI) which exempts the reduced expenditures attributable to the revised 5 percent MMPR on the PC of imaging from the PFS budget neutrality provision. We proposed to implement these provisions for services furnished on or after January 1, 2017. We refer readers to section VI.C of this final rule regarding the necessary adjustment to the proposed PFS conversion factor to account for the mandated exemption from PFS budget neutrality. We note that the lists of services for the upcoming calendar year that are subject to the MPPR on diagnostic cardiovascular services, diagnostic imaging services, diagnostic ophthalmology services, and therapy services; and the list of procedures that meet the definition of imaging under section 5102(b) of the Deficit Reduction Act (DRA), and therefore, are subject to the OPPS cap, are displayed in the public use files for the PFS proposed and final rules for each year. The public use files for CY 2017 are available on our Web site under downloads for the CY 2017 PFS final rule with comment period at https://www.cms.gov/MedicareFee-for-Service-Payment/ PhysicianFeeSched/PFSFederalRegulation-Notices.html. Comment: Commenters supported the proposal to implement the statutory provision. Response: We our finalizing our CY 2017 proposal to revise the MPPR on the PC of diagnostic imaging services. L. Valuation of Specific Codes 1. Background: Process for Valuing New, Revised, and Potentially Misvalued Codes Establishing valuations for newly created and revised CPT codes is a routine part of maintaining the PFS. Since inception of the PFS, it has also PO 00000 Frm 00103 Fmt 4701 Sfmt 4700 80271 been a priority to revalue services regularly to make sure that the payment rates reflect the changing trends in the practice of medicine and current prices for inputs used in the PE calculations. Initially, this was accomplished primarily through the 5-year review process, which resulted in revised work RVUs for CY 1997, CY 2002, CY 2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY 2011. Under the 5-year review process, revisions in RVUs were proposed and finalized via rulemaking. In addition to the 5-year reviews, beginning with CY 2009, CMS and the RUC have identified a number of potentially misvalued codes each year using various identification screens, as discussed in section II.D.4 of this final rule. Historically, when we received RUC recommendations, our process had been to establish interim final RVUs for the potentially misvalued codes, new codes, and any other codes for which there were coding changes in the final rule for a year. Then, during the 60-day period following the publication of the final rule, we accepted public comment about those valuations. For services furnished during the calendar year following the publication of interim final rates, we paid for services based upon the interim final values established in the final rule. In the final rule with comment period for the subsequent year, we considered and responded to public comments received on the interim final values, and typically made any appropriate adjustments and finalized those values. In the CY 2015 PFS final rule with comment period, we finalized a new process for establishing values for new, revised and potentially misvalued codes. Under the new process, we include proposed values for these services in the proposed rule, rather than establishing them as interim final in the final rule with comment period. Beginning with the CY 2017 proposed rule, the new process is applicable to all codes, except for new codes that describe truly new services. For CY 2017, we proposed new values in the CY 2017 proposed rule for the vast majority of new, revised, and potentially misvalued codes for which we received complete RUC recommendations by February 10, 2016. To complete the transition to this new process, for codes where we established interim final values in the CY 2016 PFS final rule with comment period, we reviewed the comments received during the 60-day public comment period following release of the CY 2016 PFS final rule with comment period, and re-proposed E:\FR\FM\15NOR2.SGM 15NOR2 80272 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 values for those codes in the CY 2017 proposed rule. We considered public comments received during the 60-day public comment period for the proposed rule before establishing final values in this final rule. As part of our established process we will adopt interim final values only in the case of wholly new services for which there are no predecessor codes or values and for which we do not receive recommendations in time to propose values. For CY 2017, we are not aware of any new codes that describe such wholly new services. Therefore, we are not establishing any code values on an interim final basis. However, we remind stakeholders that we continually review stakeholder information regarding the valuation of codes under the potentially misvalued code initiative and, under our existing process, could consider proposing any particular changes as early as CY 2018 rulemaking. 2. Methodology for Proposing Work RVUs We conduct a review of each code identified in this section and review the current work RVU (if any), RUCrecommended work RVU, intensity, time to furnish the preservice, intraservice, and postservice activities, as well as other components of the service that contribute to the value. Our review of recommended work RVUs and time inputs generally includes, but is not limited to, a review of information provided by the RUC, HCPAC (Health Care Professionals Advisory Committee), and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the federal government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation (see the CY 2011 PFS final rule with comment period for more information). When referring to a survey, unless otherwise noted, we mean the surveys conducted by specialty societies as part of the formal RUC process. The building block methodology is used to construct, or deconstruct, the work RVU for a CPT VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 code based on component pieces of the code. Components used in the building block approach may include preservice, intraservice, or postservice time and post-procedure visits. When referring to a bundled CPT code, the building block components could be the CPT codes that make up the bundled code and the inputs associated with those codes. Magnitude estimation refers to a methodology for valuing work that determines the appropriate work RVU for a service by gauging the total amount of work for that service relative to the work for a similar service across the PFS without explicitly valuing the components of that work. In addition to these methodologies, we have frequently utilized an incremental methodology in which we value a code based upon its incremental difference between another code or another family of codes. The statute specifically defines the work component as the resources in time and intensity required in furnishing the service. Also, the published literature on valuing work has recognized the key role of time in overall work. For particular codes, we refine the work RVUs in direct proportion to the changes in the best information regarding the time resources involved in furnishing particular services, either considering the total time or the intraservice time. Several years ago, to aid in the development of preservice time recommendations for new and revised CPT codes, the RUC created standardized preservice time packages. The packages include preservice evaluation time, preservice positioning time, and preservice scrub, dress and wait time. Currently there are six preservice time packages for services typically furnished in the facility setting, reflecting the different combinations of straightforward or difficult procedure, straightforward or difficult patient, and without or with sedation/anesthesia. Currently, there are three preservice time packages for services typically furnished in the nonfacility setting, reflecting procedures without and with sedation/anesthesia care. We have developed several standard building block methodologies to value services appropriately when they have common billing patterns. In cases where a service is typically furnished to a beneficiary on the same day as an E/M service, we believe that there is overlap between the two services in some of the activities furnished during the preservice evaluation and postservice time. Our longstanding adjustments have reflected a broad assumption that PO 00000 Frm 00104 Fmt 4701 Sfmt 4700 at least one-third of the work time in both the preservice evaluation and postservice period is duplicative of work furnished during the E/M visit. Accordingly, in cases where we believe that the RUC has not adequately accounted for the overlapping activities in the recommended work RVU and/or times, we adjust the work RVU and/or times to account for the overlap. The work RVU for a service is the product of the time involved in furnishing the service multiplied by the intensity of the work. Preservice evaluation time and postservice time both have a longestablished intensity of work per unit of time (IWPUT) of 0.0224, which means that 1 minute of preservice evaluation or postservice time equates to 0.0224 of a work RVU. Therefore, in many cases when we remove 2 minutes of preservice time and 2 minutes of postservice time from a procedure to account for the overlap with the same day E/M service, we also remove a work RVU of 0.09 (4 minutes × 0.0224 IWPUT) if we do not believe the overlap in time has already been accounted for in the work RVU. The RUC has recognized this valuation policy and, in many cases, now addresses the overlap in time and work when a service is typically furnished on the same day as an E/M service. We note that many commenters and stakeholders have expressed concerns with our ongoing adjustment of work RVUs based on changes in the best information we have regarding the time resources involved in furnishing individual services. We are particularly concerned with the RUC’s and various specialty societies’ objections to our approach given the significance of their recommendations to our process for valuing services and since much of the information we have used to make the adjustments is derived from their survey process. As explained in the CY 2016 PFS final rule with comment period (80 FR 70933), we recognize that adjusting work RVUs for changes in time is not always a straightforward process, so we apply various methodologies to identify several potential work values for individual codes. However, we want to reiterate that we are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. We have observed that for many codes reviewed by the RUC, final recommended work RVUs appear to be incongruous with recommended assumptions regarding the resource costs in time. This is the case for a significant portion of codes for which we have recently established or proposed work RVUs that are based on E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations refinements to the RUC-recommended values. When we have adjusted work RVUs to account for significant changes in time, we begin by looking at the change in the time in the context of the RUC-recommended work RVU. When the recommended work RVUs do not appear to account for significant changes in time, we employ the different approaches to identify potential values that reconcile the recommended work RVUs with the recommended time values. Many of these methodologies, such as survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation have long been used in developing work RVUs under the PFS. In addition to these, we sometimes use the relationship between the old time values and the new time values for particular services to identify alternative work RVUs based on changes in time components. In so doing, rather than ignoring the RUC-recommended value, we are using the recommended values as a starting reference and then applying one of these several methodologies to account for the reductions in time that we believe have not otherwise been reflected in the RUCrecommended value. When we believe that such changes in time have already been accounted for in the RUC recommendation, then we do not make such adjustments. Likewise, we do not arbitrarily apply time ratios to current work RVUs to calculate proposed work RVUs. We use the ratios to identify potential work RVUs and consider these work RVUs as potential options relative to the values developed through other options. We clarify that we are not implying that the decrease in time as reflected in survey values must equate to a one-toone or linear decrease in newly valued work RVUs. Instead, we believe that, since the two components of work are time and intensity, absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure has increased, significant decreases in time should be reflected in decreases to work RVUs. If the RUC recommendation has appeared to disregard or dismiss the changes in time, without a persuasive explanation of why such a change should not be accounted for in the overall work of the service, then we generally use one of the aforementioned referenced methodologies to identify potential work RVUs, including the methodologies intended to account for the changes in the resources involved in furnishing the procedure. Several commenters, including the RUC, in general have objected to our use of these methodologies and deemed our VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 actions in adjusting the recommended work RVUs as inappropriate. We received several specific comments regarding this issue in response to the CY 2016 PFS final rule with comment period and those comments are summarized below. Comment: Several commenters, including the RUC, stated that our methodology for adjusting work RVUs appears to be contrary to the statute. Response: We disagree with these comments. Since section 1848(c)(1)(A) of the Act explicitly identifies time as one of the two types of resources that encompass the work component of the PFS payment, we do not believe that our use of the aforementioned methodologies to adjust the work RVU to account for the changes in time, which is one of the resources involved, is inconsistent with the statutory requirements related to the maintenance of work RVUs, and we have regularly used these and other methodologies in developing values for PFS services. In selecting which methodological approach will best determine the appropriate value for a service, we consider the current and recommended work and time values, as well as the intensity of the service, all relative to other services. In our review of RUC recommended values, we have observed that the RUC also uses a variety of methodologies to develop work RVUs for individual codes, and subsequently validates the results of these approaches through magnitude estimation or crosswalk to established values for other codes. Comment: Several commenters, including the RUC, stated that we could not take one element of the services that has changed such as intra-service time, and apply an overall ratio for reduction to the work RVU based on changes to time, as that renders the value no longer resource-based in comparison to the RUC-recommended values. Response: We disagree with the commenters and continue to believe that the use of time ratios is one of several reasonable methods for identifying potential work RVUs for particular PFS services, particularly when the alternative values do not account for information that suggests the amount of time involved in furnishing the service has changed significantly. We reiterate that, consistent with the statute, we are required to value the work RVU based on the relative resources involved in furnishing the service, which include time and intensity. When our review of recommended values determines that changes in the resource of time have been unaccounted for in a PO 00000 Frm 00105 Fmt 4701 Sfmt 4700 80273 recommended RVU, then we believe we have the obligation to account for that change in establishing work RVUs since the statute explicitly identifies time as one of the two elements of the work RVUs. We recognize that it would not be appropriate to develop work RVUs solely based on time given that intensity is also an element of work, but in applying the time ratios we are using derived intensity measures based on current work RVUs for individual procedures. Were we to disregard intensity altogether, the work RVUs for all services would be developed based solely on time values and that is definitively not the case. Furthermore, we reiterate that we use time ratios to identify potential work RVUs, and then use other methods (including estimates of work from CMS medical personnel and crosswalks to key reference or similar codes) to validate these RVUs. We also disagree with several commenters’ implications that a work RVU developed through such estimation methods is only resource-based through the RUC process. Comment: Several commenters, including the RUC, stated that our inconsistent use of the time ratio methodology has rendered it ineffective for valuation purposes and that by choosing the starting base work value and/or physician time at random, we are essentially reverse engineering the work value we want under the guise of a standard algorithm. Response: We do not choose a starting base work value and/or physician time at random as suggested by the commenters. We use the RUC recommended values or the existing values as the base values; essentially, we are taking one of those values and applying adjustments to account for the change in time that based on our analysis of the RUC recommendation, we determine has not been properly accounted for to determine an appropriate work RVU. In circumstances where adjustments to time and the corresponding work RVU are relatively congruent or persuasively explained, our tendency has been to use those values as recommended. Where the RUC recommendations do not account for changes in time, we have made changes to RUC-recommended values to account for the changes in time. Comment: Commenters, including the RUC, also stated that the use of time ratio methodologies distills the valuation of the service into a basic formula with the only variable being either the new total physician time or the new intra-service physician time, and that these methodologies are based E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80274 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations on the incorrect assumption that the per minute physician work intensity established is permanent regardless of when the service was last valued. Other commenters have suggested that previous assumed times are inaccurate. Response: We agree with commenters that per minute intensity for a given service may change over time. If we believed that the per-minute intensity for a given service were immutable, then a reverse-building block approach to revaluation based on new time data could be appropriate. However, we have not applied such an approach specifically because we agree that the per-minute intensity of work is not necessarily static over time or even necessarily during the course of a procedure. Instead, we utilize time ratios to identify potential values that account for changes in time and compare these values to other PFS services for estimates of overall work. When the values we develop reflect a similar derived intensity, we agree that our values are the result of our assessment that the relative intensity of a given service has remained similar. Regarding the validity of comparing new times to the old times, we, too, hope that time estimates have improved over many years especially when many years have elapsed since the last time the service in question was valued. However, we also believe that our operating assumption regarding the validity of the pre-existing values as a point of comparison is critical to the integrity of the relative value system as currently constructed. Pre-existing times are a very important element in the allocation of indirect PE RVUs by specialty, and had the previously recommended times been overestimated, the specialties that furnish such services would be benefitting from these times in the allocation of indirect PE RVUs. As long time observers of the RUC process, we also recognize that the material the RUC uses to develop overall work recommendations includes the data from the surveys about time. We have previously stated concerns regarding the validity of much of the RUC survey data. However, we believe additional kinds of concern would be warranted if the RUC itself were operating under the assumption that its pre-existing data were typically inaccurate. We understand stakeholders’ concerns regarding how best to consider changes in time in improving the accuracy of work RVUs and have considered all of the issues raised by commenters. In conjunction with our review of recommended code values for CY 2017, we conducted a preliminary VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 analysis to identify general tendencies in the relationship between changes in time and changes in work RVUs for CY 2014 and CY 2015. We looked at services for which there were no coding changes to simplify the analysis. The intent of this preliminary analysis was to examine commenters’ beliefs that CMS is only considering time when making refinements to RUC recommended work values. For CY 2014, we found that in the aggregate, the average difference between the RUC recommended intraservice time and existing intraservice time was ¥17 percent, but the average difference between the RUC recommended work RVU and existing work RVU was only ¥4 percent. However, the average difference between the CMS refined work RVU and existing work RVU was ¥7 percent. For CY 2015, the average difference between the RUC recommended intraservice time and existing intraservice time was ¥17 percent, but the average difference between the RUC recommended work RVU and existing work RVU was 1 percent, and the average difference between the CMS refined work RVU and existing work RVU was ¥6 percent. This preliminary analysis demonstrates that we are not making refinements solely in consideration of time, if that were the case, the changes in the work RVU values that we adopted would be comparable to the changes in the time that we adopted, but that is not the case. We believe that we should account for efficiencies in time when the recommended work RVU does not account for those efficiencies, otherwise relativity across the PFS can be significantly skewed over periods of time. For example, if when a code is first valued, a physician was previously able to do only 5 procedures per day, but due to new technologies, the same physician can now do 10 procedures per day, resource costs in time have empirically been lessened, and we believe that relative reduction in resources involved in furnishing that service should be accounted for in the assignment of work RVUs for that service, since the statute explicitly identifies time as one of the two components of work. Of course, if more resource intensive technology has allowed for the increased efficiency in furnishing the procedure, then the nonfacility PE RVUs for the service should also be adjusted to account for this change. Additionally, we believe it may be that the intensity per minute of the procedure may have changed with the greater efficiency in time. Again, that is why we do not generally reduce PO 00000 Frm 00106 Fmt 4701 Sfmt 4700 work RVUs in strict proportion to changes in time. We understand that intensity is not entirely linear, and that data related to time as obtained in the RUC survey instrument may improve over time, and that the number of survey respondents may improve over time. However, we also understand time as a tangible resource cost in furnishing PFS services, and a cost that by statute, is one of the two kinds of resources to be considered as part of the work RVU. Therefore, in the proposed rule, we stated that we were interested in receiving comments on whether, within the statutory confines, there are alternative suggestions as to how changes in time should be accounted for when it is evident that the survey data and/or the RUC recommendation regarding the overall work RVU does not reflect significant changes in the resource costs of time for codes describing PFS services. We solicited comment on potential alternatives, including the application of the reverse building block methodology, to making the adjustments that would recognize overall estimates of work in the context of changes in the resource of time for particular services. The following is a summary of the comments we received in response to our solicitation regarding potential alternatives, including the application of the reverse building block methodology, to making the adjustments that would recognize overall estimates of work in the context of changes in the resource of time for particular services. Comment: One commenter stated that it continues to support CMS in its efforts to adjust work RVUs commensurate with changes in intraservice and total time, as well as postoperative visits despite RUC recommendations to the contrary. The commenter agreed with our changes and encouraged CMS to continue to identify and address such incongruities. The commenter stated that it is routine to encounter recommended decreases in physician time and/or post-procedure visits combined with RUC recommendations to maintain or increase the work RVUs. The commenter agreed that when physician time decreases, physician work should decrease comparatively, absent a compelling argument that the intensity of the service has increased sufficiently to offset the decrease in physician time. The commenter did not have alternative suggestions for how CMS should make these adjustments, and believes the approaches that CMS has taken are reasonable and defensible. Another commenter stated that it appreciates that CMS provided E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations information about how it reviews recommendations for work RVUs that come from the RUC. Additionally, one commenter stated appreciation for the consideration and effort that CMS gives in valuing the work RVUs for a service. The commenter stated that the accuracy of RVU estimates has improved as a result of CMS’ various validation processes for collecting data and its consideration of feedback from the RUC and public commenters. The commenter stated that CMS should account for efficiencies in the resource costs of time when the recommended work RVU does not account for emerging efficiencies, such as advances in surgical techniques, and that by considering time in these situations, CMS will be able to effectively adjust both emerging technological trends and their impact on resource costs needed to deliver care to beneficiaries. Response: We appreciate the commenters’ support for our ongoing adjustment of work RVUs based on changes in the best information we have regarding the time resources involved in furnishing individual services. We also agree that CMS should account for efficiencies in the resource costs of time, as indicated by one commenter, and will endeavor to do so when we consider the work RVU and how the effect of advancements such as emerging technology and improvements in surgical techniques impact the resource costs of time. Comment: A few commenters, including the RUC, stated that all adjustments to work RVUs should be solely based on the resources involved in performing each procedure or service. The commenters stated that all adjustments to work RVUs should either be work neutral to the family or result in budget neutral adjustment to the conversion factor, and that broadly redistributing work RVUs would distort the relative value system and create unintended consequences. Response: We agree that adjustments to work RVUs should be based on the resources involved with each procedure or service, and consistent with the statute, the work RVUs should reflect the relative resources costs of time and intensity. We also agree with the commenter regarding how changes in work RVUs affect PFS relativity. We have a long-standing practice of making an adjustment to the CF to account for increases or decreases in work RVUs across the PFS instead of scaling the work RVUs to maintain overall relativity. The practical effect of a positive adjustment to the CF is that the value of a single work RVU is greater than it previously had been. In other VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 words, the relative value of the other work RVUs has increased, across the PFS, whenever we apply a positive budget neutrality adjustment to the CF to account for an overall decrease in work RVUs. Comment: A few commenters, including the RUC, stated that they appreciate CMS agreeing with the RUC’s assertion that the usage of time ratios to reduce work RVUs is typically not appropriate, as often a change in physician time coincides with a change in the physician work intensity per minute. The commenters stated that CMS acknowledges that physician work intensity per minute is typically not linear and also that making reductions in RVUs in strict proportion to changes in time is inappropriate. Response: We do not agree with the commenters’ characterization of our statements, and believe it misinterprets our view on this matter. We specifically stated in the CY 2017 proposed rule that we are not implying that the decrease in time as reflected in survey values must necessarily equate to a one-to-one or linear decrease in newly valued work RVUs, given that intensity for any given procedure may change over several years or within the intraservice period. Nevertheless, we believe that since the two components of work are time and intensity, that absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure has specifically increased or that the reduction in time is disproportionally from less-intensive portions of the procedure, that significant decreases in time should generally be reflected in decreases to work RVUs. Comment: A few commenters, including the RUC, stated that they wanted to remind CMS of the Agency’s and the RUC’s longstanding position that treating all components of physician time as having identical intensity is incorrect, and inconsistently applying this treatment to only certain services under review creates inherent payment disparities in a payment system that is based on relative valuation. The commenters stated that when physician times are updated in the fee schedule, the ratio of intraservice time to total time, the number and level of bundled post-operative visits, the length of pre-service, and the length of immediate post-service time may all potentially change for the same service. These changing components of physician time result in the physician work intensity per minute often changing when physician time also changes, and the commenters recommended that CMS always account for these nuanced variables. A few PO 00000 Frm 00107 Fmt 4701 Sfmt 4700 80275 commenters also stated that the RUC recommendations now explicitly state when physician time has changed and address whether and to what magnitude these changes in time impact the work involved. Response: We appreciate the commenters’ feedback. We understand that not all components of physician time have identical intensity and are mindful of this point when we are determining what the appropriate work RVU values should be. We also agree that the nuanced variables involved in the changing components of physician time must be accounted for, and it is our goal to do so when determining the appropriate valuation. We appreciate when the RUC recommendations provide as much detailed information regarding the recommended valuations as possible, including thorough discussions regarding physician time changes and how the RUC believes such changes should or should not impact the work involved, and we consider that information when conducting our review of each code. Comment: A few commenters stated that CMS places undue emphasis on time and not enough emphasis on intensity or whether a value is appropriately ranked in the Medicare fee schedule. The commenters stated that CMS ignores compelling evidence that work has changed if the time has not also changed, and that CMS uses codes as supporting references for new lower values that make no clinical sense. The commenters urged CMS to always consider all elements of relative work in every review, including time, relative intensity and relative work. Response: We disagree with commenters’ statement that CMS ignores compelling evidence that work has changed if the time has not also changed. As previously stated, we are not making refinements solely in consideration of time, and if that were the case, changes in work RVU values that we adopted would consistently be comparable to the changes in the time that we adopted, and that is not the case. It is our practice to consider all elements of the relative work when we are reviewing and determining work RVU valuations. Additionally, our review of recommended work RVUs and time inputs generally includes review of various sources such as information provided by the RUC, other public commenters, medical literature, and comparative databases. Comment: A few commenters, including the RUC, stated that they do not agree with any suggested methodology to use a reverse building block methodology to systematically E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80276 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations reduce work RVUs for services. The commenters stated that any purely formulaic approach should never be used as the primary methodology to value services, and that it is highly inappropriate due to the fact that magnitude estimation was used to establish work RVUs for services. Response: We note that a formulaic approach is not being used as the primary methodology to value services. Instead, we use various methodologies to identify values to consider relative to other PFS services. We reiterate that we use the RUC-recommended values or the existing values as the base values. We then apply adjustments to the RUCrecommended values where, for example, the RUC’s recommendations do not account for changes in time. Comment: Another commenter stated that the establishment of a time formula or use of reverse building block methodology as the primary method for valuation would completely disregard the possibility that physicians actually get better at what they do in favor of the erroneous conclusion that physicians only find new ways to cut corners. The commenter provided an example to demonstrate why time alone does not create value, and it is instead just one component of valuation. The commenter described an example of two watchmakers that make watches at different rates—one makes two watches per day, the other makes four watches per day. Each watch involves the same number of gears, sprockets, jewels, and escapements. One watchmaker is faster than the other: More focused, more experienced, more agile, and able to accomplish fastidious work more efficiently. At the end of one workday, the first watchmaker has two finished watches on the bench, while the other has four. The commenter questioned that if the watches are identical, why should the faster (better) watchmaker be paid half the price for each watch? Response: We understand some stakeholders’ interest in the maintenance of work RVUs regardless of efficiencies gained. The work RVU is not a measure of our appreciation for the work ethic of the physician. Instead, the work RVU reflects the time and intensity of a particular service relative to others on the PFS. For this reason, we do not agree with the implication that we should ignore efficiencies in time, and instead believe that we are obligated to recognize when efficiencies change the relative resource costs involved in particular procedures. Of course, such efficiencies can occur as physicians become more proficient and can therefore complete a service or procedure in less time. We believe that VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 time is a tangible resource, particularly the time of a physician or other practitioner paid on the PFS, and the statute specifically identifies it as such. Comment: A few commenters urged CMS to always enlist the assistance of medical officers familiar with procedures under review to examine CMS staff recommendations that reject the RUC recommendation. Similarly, a few commenters also urged CMS to work with the RUC to ensure that the robust discussions and key points that are discussed during RUC meetings are transferred to CMS in a way that is meaningful to staff to develop the proposed relative value recommendations. Response: We note that the values proposed by CMS are developed through consultation with, and input from CMS staff including medical officers, who often attend RUC meetings as observers, and therefore, have had the opportunity to listen to the discussions that take place and key points that are raised during the RUC meetings. Comment: One commenter stated that the recent rejections of RUC recommendations by CMS to instead reduce the work RVUs for almost every code, even if only by one or two percent, are illogical. Response: We do not agree with the suggestion that we reject the RUCrecommended values for most codes. Furthermore, given the numerical specificity of the RUC-recommended values and that so many PFS services reviewed under the misvalued code initiative are high-volume, we do not believe that relatively minor adjustments are unimportant or illogical because a minor adjustment to the work RVU of a high-volume code may have a significant dollar impact. However, we would be interested to know if stakeholders generally agree that the RUC-recommended values represent only rough estimates, and because of that belief, minor refinements would be considered illogical, as indicated by the commenter. Comment: A few commenters stated that they are concerned with the CMS trend to discredit intensity when assigning work RVUs to procedures. These commenters stated that intensity is a key factor when specialties are making work RVU recommendations and needs to remain an equal force along with time in the relative value system. One commenter stated that it is concerned that CMS is repeatedly ignoring intensity discussions and picking arbitrary crosswalks to justify lowering work RVU values. One commenter stated that by placing the same value on clearly different services PO 00000 Frm 00108 Fmt 4701 Sfmt 4700 that vary both in intensity and in types of patients treated, CMS ignores its statutory requirement to consider time and intensity in the valuation of services. One commenter stated that CMS does not mention how it considers, weights or measures intensity, and there is no validity to the assumption that reduced time equals less work. The commenter stated that it found no published evidence supporting this, and states that if the same amount of work is performed for a shorter period of time, it is logical that the intensity of work per unit of time increases. The commenter stated that CMS must be transparent and demonstrate why current intensity measurements are not appropriate, and if there is a more accurate way to measure intensity, this must be clearly elucidated with evidence for superiority of the alternative proposal. Response: We disagree that we discredit intensity when we establish work RVUs for procedures. We reiterate that we use RUC-recommended values or existing values, which we understand to incorporate an assessment of intensity, as the base values, and then subsequently apply adjustments as necessary. Additionally, as we have previously stated, we recognize that it would not be appropriate to develop work RVUs solely based on time given that intensity is also an element of work. Additionally, if we were to disregard intensity altogether, the work RVUs for all services would be developed solely based on time values, and that is absolutely not the case. We have previously stated that in cases where the RUC’s recommendations do not account for changes in time, but do provide a persuasive explanation regarding why the time has drastically changed but the work RVU value has remained the same, our tendency has been to use those values as recommended. When the RUC’s recommendations do not account for changes in time, and provide no explanation as to why this is appropriate, we have made changes to the RUC-recommended values to account for changes in time. We also disagree that we ignore the statutory requirement to consider time and intensity in the valuation of services. Based on the assessments of CMS medical officers and other reviewers, as well as upon consideration of the survey results, and the rationales in the recommendations, we make determinations about the overall work valuations. We acknowledge that the degree to which intensity varies among different procedures is a relatively subjective assessment, and we understand that sometimes stakeholders E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations may have a different perspective in cases where the intensities of procedures differ. We recognize that the IWPUT measure is a derived value with specific uses for quantifying intensity. However, the limited way in which that derived value is used under the RUC valuation process, we believe reflects a general consensus that there are not widely accepted metrics for intensity. As a part of recommendations for misvalued codes, we welcome any information from stakeholders for us to more objectively measure intensity. Comment: A few commenters stated that they are concerned with the current implied methodology that the 25th survey percentile is the ceiling for RUC recommendations, and stated that if codes are continually sent forth for resurvey and the 25th percentile is the ceiling, a built in reduction is applied to all surveyed codes just by the nature of surveying the codes, regardless of other factors. Response: We disagree with commenters’ statement that the 25th survey percentile is the ceiling for RUC recommendations. We note that, as previously stated in the CY 2011 final rule with comment period (75 FR 73328), we had concerns that surveys conducted on existing codes produced predictable results, and upon clinical review of a number of these situations, we were concerned over the validity of the survey results since the survey values often were very close to the current code values. Increasingly, the RUC is choosing to recommend the 25th percentile survey value, potentially responding to the same concern we have identified, rather than recommending the median survey value that had historically been the most commonly used. We reiterate that this does not designate the 25th percentile as the ceiling, rather suggests that in many instances the 25th percentile is the most appropriate since it is more frequently being identified through the RUC process as the recommended value. Comment: One commenter stated that the time data obtained through the RUC survey process based on subjective physician perceptions of time, may not be the most accurate data available on intraoperative time. The commenter stated that CMS should be open to reviewing additional sources of objective validated time data, and that such sources might include peer reviewed and published studies of comparative surgery times amongst different procedures in the same institution using standardized metrics. Another commenter stated that if CMS seeks specific information to substantiate time and intensity changes VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 associated with services, they should specify these clearly so stakeholders can provide the necessary data detailing changes over time. Response: As previously discussed, our review of work RVUs and time inputs utilizes information from various resources. It generally includes, but is not limited to a review of information provided by the RUC, HCPAC, and other public commenters, medical literature, and comparative databases, as well as comparison with other codes with the PFS, consultation with other physicians and health care professionals within CMS and the federal government, as well as Medicare claims data. Additionally, we also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. However, we continue to seek information regarding the best sources of objective, routinelyupdated, auditable, and robust data regarding the resource costs of furnishing PFS services. We thank the commenters for their feedback. We did not receive any comments regarding specific potential alternatives to making the adjustments that would recognize overall estimates of work in the context of changes in the resource of time for particular services as requested. However, we appreciate the commenters’ sharing their concerns and suggestions and will continue to consider them as we continue examining the valuation of services, and as we explore the best way to address these issues. 3. Requests for Refinement Panel Consistent with the policy finalized in the CY 2016 PFS final rule with comment period, we have retained the Refinement Panel process for use with codes with interim final values where additional input by the panel is likely to add value as a supplement to notice and comment rulemaking. Because there are no codes with interim final values in this final rule, the refinement panel is not necessary for CY 2017. We note that many commenters requested inclusion of codes with proposed values for a refinement panel. While these requests are not consistent with our established process, given the number of requests we received, we are addressing them here. Many commenters appear to believe that that the purpose of the refinement panel process was to serve as a kind of ‘‘appeals’’ or reconsideration process outside of notice and comment rulemaking and that we have effectively eliminated a useful appeals process. We understand that the refinement panel PO 00000 Frm 00109 Fmt 4701 Sfmt 4700 80277 has been perceived as an appeals process by many stakeholders. However, as we have previously clarified, the purpose of the refinement panel process was to assist us in reviewing the public comments on CPT codes with interim final work RVUs and to consider more fully the interests of the specialty societies who provide input on RVU work time and intensity with the budgetary and redistributive effects that could occur if we accepted extensive increases in work RVUs across a broad range of services. From our perspective, the objective of the refinement panel has long been to provide a needed venue for stakeholders to present any new clinical information that was not available at the time of the RUC valuation for interim final values in order that we arrive at the most appropriate final valuation, especially since the initial values for such codes were generally established approximately 2 months prior to being used for Medicare payment. In recent years, we have continually observed that the material presented to the refinement panel largely raised and discussed issues and perspective already included as part of the RUC meetings and considered by us. We believe that our new process, in which we propose the vast majority of code values in the proposed rule for public comment on those proposed values prior to their taking effect, provides stakeholders and the public with several opportunities to present data or information that might affect code valuation. We believe that this is generally consistent with the purpose of the rulemaking process and reflects our efforts to increase transparency and accountability to the public. We also note that we continue to seek new information that is relevant to valuation of particular services, including those with values recently finalized, for use in future rulemaking. We believe that notice and comment rulemaking provides the most appropriate means for valuing services under the PFS. We note that in several instances in this final rule, thoughtful and informative comments have helped us to finalize values for CY 2017 that we believe are improved from those we had proposed. In many cases, these changes reflect the RUC-recommended value. Therefore, we urge commenters to review this information and continue to consider how we might continue to improve the notice and comment rulemaking process rather than establish a process outside of notice and comment rulemaking. Table 27 contains a list of codes for which we proposed work RVUs; this includes all RUC recommendations received by February 10, 2016, and E:\FR\FM\15NOR2.SGM 15NOR2 80278 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations codes for which we established interim final values in the CY 2016 PFS final rule with comment period. When the proposed work RVUs vary from those recommended by the RUC or for which we do not have RUC recommendations, we address those codes in the portions of this section that are dedicated to particular codes. The final work RVUs and work time and other payment information for all CY 2017 payable codes are available on the CMS Web site under downloads for the CY 2017 PFS final rule at https://www.cms.gov/ physicianfeesched/downloads/. mstockstill on DSK3G9T082PROD with RULES2 4. Methodology for Proposing the Direct PE Inputs To Develop PE RVUs a. Background On an annual basis, the RUC provides us with recommendations regarding PE inputs for new, revised, and potentially misvalued codes. We review the RUCrecommended direct PE inputs on a code by code basis. Like our review of recommended work RVUs, our review of recommended direct PE inputs generally includes, but is not limited to, a review of information provided by the RUC, HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with physicians and health care professionals within CMS and the federal government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. When we determine that the RUC’s recommendations appropriately estimate the direct PE inputs (clinical labor, disposable supplies, and medical equipment) required for the typical service, are consistent with the principles of relativity, and reflect our payment policies, we use those direct PE inputs to value a service. If not, we refine the recommended PE inputs to better reflect our estimate of the PE resources required for the service. We also confirm whether CPT codes should have facility and/or nonfacility direct PE inputs and refine the inputs accordingly. Our review and refinement of RUCrecommended direct PE inputs includes many refinements that are common across codes, as well as refinements that are specific to particular services. Table 28 details our finalized refinements of the RUC’s direct PE recommendations at the code-specific level. In this final rule, we address several refinements that are common across codes, and refinements VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 (2) Equipment Time clarified this principle over several years of rulemaking, indicating that we consider equipment time as the time within the intraservice period when a clinician is using the piece of equipment plus any additional time that the piece of equipment is not available for use for another patient due to its use during the designated procedure. For those services for which we allocate cleaning time to portable equipment items, because the portable equipment does not need to be cleaned in the room where the service is furnished, we do not include that cleaning time for the remaining equipment items, as those items and the room are both available for use for other patients during that time. In addition, when a piece of equipment is typically used during follow-up post-operative visits included in the global period for a service, the equipment time would also reflect that use. We believe that certain highly technical pieces of equipment and equipment rooms are less likely to be used during all of the preservice or postservice tasks performed by clinical labor staff on the day of the procedure (the clinical labor service period) and are typically available for other patients even when one member of the clinical staff may be occupied with a preservice or postservice task related to the procedure. We also note that we believe these same assumptions would apply to inexpensive equipment items that are used in conjunction with and located in a room with non-portable highly technical equipment items since any items in the room in question would be available if the room is not being occupied by a particular patient. For additional information, we refer readers to our discussion of these issues in the CY 2012 PFS final rule with comment period (76 FR 73182) and the CY 2015 PFS final rule with comment period (79 FR 67639). Prior to CY 2010, the RUC did not generally provide CMS with recommendations regarding equipment time inputs. In CY 2010, in the interest of ensuring the greatest possible degree of accuracy in allocating equipment minutes, we requested that the RUC provide equipment times along with the other direct PE recommendations, and we provided the RUC with general guidelines regarding appropriate equipment time inputs. We continue to appreciate the RUC’s willingness to provide us with these additional inputs as part of its PE recommendations. In general, the equipment time inputs correspond to the service period portion of the clinical labor times. We have (3) Standard Tasks and Minutes for Clinical Labor Tasks In general, the preservice, intraservice, and postservice clinical labor minutes associated with clinical labor inputs in the direct PE input database reflect the sum of particular tasks described in the information that accompanies the RUC-recommended direct PE inputs, commonly called the ‘‘PE worksheets.’’ For most of these described tasks, there are a standardized number of minutes, depending on the type of procedure, its typical setting, its global period, and the other procedures with which it is typically reported. The RUC sometimes recommends a number of minutes either greater than or less to particular codes are addressed in the portions of this section that are dedicated to particular codes. We note that for each refinement, we indicate the proposed impact on direct costs for that service. We note that, on average, in any case where the impact on the direct cost for a particular refinement is $0.32 or less, the refinement has no impact on the proposed PE RVUs. This calculation considers both the impact on the direct portion of the PE RVU, as well as the impact on the indirect allocator for the average service. We also note that nearly half of the proposed refinements listed in Table 28 result in changes under the $0.32 threshold and are unlikely to result in a change to the proposed RVUs. We also note that the final direct PE inputs for CY 2017 are displayed in the CY 2017 direct PE input database, available on the CMS Web site under the downloads for the CY 2017 final rule at www.cms.gov/ PhysicianFeeSched/. The inputs displayed there have also been used in developing the final CY 2017 PE RVUs as displayed in Addendum B. b. Common Refinements (1) Changes in Work Time Some direct PE inputs are directly affected by revisions in work time. Specifically, changes in the intraservice portions of the work time and changes in the number or level of postoperative visits associated with the global periods result in corresponding changes to direct PE inputs. The direct PE input recommendations generally correspond to the work time values associated with services. We believe that inadvertent discrepancies between work time values and direct PE inputs should be refined or adjusted in the establishment of proposed direct PE inputs to resolve the discrepancies. PO 00000 Frm 00110 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations than the time typically allotted for certain tasks. In those cases, we review the deviations from the standards and any rationale provided for the deviations. When we do not accept the RUC-recommended exceptions, we refine the proposed direct PE inputs to conform to the standard times for those tasks. In addition, in cases when a service is typically billed with an E/M service, we remove the preservice clinical labor tasks to avoid duplicative inputs and to reflect the resource costs of furnishing the typical service. In general, clinical labor tasks fall into one of the categories on the PE worksheets. In cases where tasks cannot be attributed to an existing category, the tasks are labeled ‘‘other clinical activity.’’ We believe that continual addition of new and distinct clinical labor tasks each time a code is reviewed under the misvalued code initiative is likely to degrade relativity between newly reviewed services and those with already existing inputs. This is because codes more recently reviewed would be more likely to have a greater number of clinical labor tasks as a result of the general tendency to increase the number of clinical labor tasks. To mitigate the potential negative impact of these additions, we review these tasks to determine whether they are fully distinct from existing clinical labor tasks, typically included for other clinically similar services under the PFS, and thoroughly explained in the recommendation. For those tasks that do not meet these criteria, we do not accept these newly recommended clinical labor tasks. mstockstill on DSK3G9T082PROD with RULES2 (4) Recommended Items That Are Not Direct PE Inputs In some cases, the PE worksheets included with the RUC recommendations include items that are not clinical labor, disposable supplies, or medical equipment or that cannot be allocated to individual services or patients. We have addressed these kinds of recommendations in previous rulemaking (78 FR 74242), and we do not use items included in these recommendations as direct PE inputs in the calculation of PE RVUs. (5) New Supply and Equipment Items The RUC generally recommends the use of supply and equipment items that already exist in the direct PE input database for new, revised, and potentially misvalued codes. Some recommendations, however, include supply or equipment items that are not currently in the direct PE input database. In these cases, the RUC has historically recommended that a new VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 item be created and has facilitated our pricing of that item by working with the specialty societies to provide us copies of sales invoices. For CY 2017, we received invoices for several new supply and equipment items. Tables 30 and 31 detail the invoices received for new and existing items in the direct PE database. As discussed in section II.A. of this final rule, we encourage stakeholders to review the prices associated with these new and existing items to determine whether these prices appear to be accurate. Where prices appear inaccurate, we encourage stakeholders to provide invoices or other information to improve the accuracy of pricing for these items in the direct PE database during the 60-day public comment period for this final rule. We expect that invoices received outside of the public comment period would be submitted by February 10th of the following year for consideration in future rulemaking, similar to our new process for consideration of RUC recommendations. We remind stakeholders that due to the relativity inherent in the development of RVUs, reductions in existing prices for any items in the direct PE database increase the pool of direct PE RVUs available to all other PFS services. Tables 30 and 31 also include the number of invoices received, as well as the number of nonfacility allowed services for procedures that use these equipment items. We provide the nonfacility allowed services so that stakeholders will note the impact the particular price might have on PE relativity, as well as to identify items that are used frequently, since we believe that stakeholders are more likely to have better pricing information for items used more frequently. A single invoice may not be reflective of typical costs and we encourage stakeholders to provide additional invoices so that we might identify and use accurate prices in the development of PE RVUs. In some cases, we do not use the price listed on the invoice that accompanies the recommendation because we identify publicly available alternative prices or information that suggests a different price is more accurate. In these cases, we include this in the discussion of these codes. In other cases, we cannot adequately price a newly recommended item due to inadequate information. Sometimes, no supporting information regarding the price of the item has been included in the recommendation. In other cases, the supporting information does not demonstrate that the item has been purchased at the listed price (for example, vendor price quotes instead of PO 00000 Frm 00111 Fmt 4701 Sfmt 4700 80279 paid invoices). In cases where the information provided on the item allows us to identify clinically appropriate proxy items, we might use existing items as proxies for the newly recommended items. In other cases, we have included the item in the direct PE input database without any associated price. Although including the item without an associated price means that the item does not contribute to the calculation of the proposed PE RVU for particular services, it facilitates our ability to incorporate a price once we obtain information and are able to do so. (6) Service Period Clinical Labor Time in the Facility Setting Generally speaking, our proposed inputs did not include clinical labor minutes assigned to the service period because the cost of clinical labor during the service period for a procedure in the facility setting is not considered a resource cost to the practitioner since Medicare makes separate payment to the facility for these costs. We address proposed code-specific refinements to clinical labor in the individual code sections. (7) Procedures Subject to the Multiple Procedure Payment Reduction (MPPR) and the OPPS Cap We note that the public use files for the PFS proposed and final rules for each year display both the services subject to the MPPR lists on diagnostic cardiovascular services, diagnostic imaging services, diagnostic ophthalmology services and therapy services and the list of procedures that meet the definition of imaging under section 1848(b)(4)(B) of the Act, and therefore, are subject to the OPPS cap for the upcoming calendar year. The public use files for CY 2017 are available on the CMS Web site under downloads for the CY 2017 PFS final rule at https://www.cms.gov/MedicareFee-for-Service-Payment/ PhysicianFeeSched/PFSFederalRegulation-Notices.html. 4. Specialty-Mix Assumptions for Proposed Malpractice RVUs The final CY 2017 malpractice crosswalk table is displayed in the public use files for the PFS final rule. The public use files for CY 2017 are available on the CMS Web site under downloads for the CY 2017 PFS final rule at https://www.cms.gov/MedicareFee-for-Service-Payment/ PhysicianFeeSched/PFSFederalRegulation-Notices.html. The table lists the CY 2017 HCPCS codes and their respective source codes used to set the final CY 2017 MP RVUs where the E:\FR\FM\15NOR2.SGM 15NOR2 80280 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations source code for this calculation deviates from the source code for the utilization otherwise used for purposes of PFS ratesetting. The MP RVUs for all PFS services and the utilization crosswalk used to identify the source codes for all other codes are reflected in Addendum B on the CMS Web site at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ PhysicianFeeSched/. 5. Valuation of Specific Codes mstockstill on DSK3G9T082PROD with RULES2 (1) Anesthesia Services Furnished in Conjunction With Lower Gastrointestinal (GI) Procedures (CPT Codes 00740 and 00810) CPT codes 00740 and 00810 are used to report anesthesia furnished in conjunction with lower gastrointestinal (GI) procedures. In the CY 2016 PFS proposed rule (80 FR 41686), we discussed that in reviewing Medicare claims data, a separate anesthesia service is typically reported more than 50 percent of the time that various colonoscopy procedures are reported. We discussed that given the significant change in the relative frequency with which anesthesia codes are reported with colonoscopy services, we believed the relative values of the anesthesia services should be reexamined. We proposed to identify CPT codes 00740 and 00810 as potentially misvalued and sought public comment regarding valuation for these services. The RUC recommended maintaining the base unit value of 5 as an interim base value for both CPT code 00740 and 00810 on an interim basis, due to their concerns about the specialty societies’ surveys. The RUC suggested that the typical patient vignettes used in the surveys for both CPT codes 00740 and 00810 were not representative of current typical practice and recommended that the codes be resurveyed with updated vignettes. We stated in the CY 2017 proposed rule that we believed it premature to propose any changes to the valuation of CPT codes 00740 and 00810, continued to believe that these services are potentially misvalued, and sought additional input from stakeholders for consideration during future rulemaking. Comment: Commenters were supportive of CMS’ proposal to maintain the current values for CPT codes 00740 and 00810 for CY 2017. One commenter requested that CMS ensure that reimbursement for anesthesia services remains adequate to compensate providers for the cost of furnishing these services. Commenters also stated that due to greater complexity of furnishing anesthesia VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 services compared to moderate sedation, payment for anesthesia services should not be lower than the values established for moderate sedation. One commenter stated that CMS’ perception that these codes are misvalued is related to the distinction between screening, diagnostic, and therapeutic endoscopies. The commenter further stated that there are no differences in the clinical risk and anesthesia preparation regardless of the indication for these procedures and suggested that the current base unit value of 5 units for CPT codes 00740 and 00810 is appropriate and should be maintained. Another commenter stated that the frequency of use of separate anesthesia services concurrent with colonoscopy procedures is not due to any potential misvaluation, but rather due to changes in Medicare coverage and payment policies that encourage Medicare beneficiaries to undergo screening colonoscopies. Response: We appreciate the information provided by commenters. We continue to encourage feedback from interested parties and specialty societies, all of which we will take under consideration for future rulemaking. (2) Soft Tissue Localization (CPT Codes 10035 and 10036) In the CY 2016 PFS final rule with comment period, we established the RUC-recommended work value as interim final for CPT codes 10035 and 10036. We also made standard refinements to remove duplicative clinical labor and utilize standard equipment time formulas for the PACS workstation proxy (ED050). Comment on the CY 2016 PFS final rule with comment period: A commenter stated that the clinical labor task ‘‘Review/read X-ray, lab, and pathology reports’’ occurs during the preservice period, and it is a separate activity than ‘‘Review examination with interpreting MD’’, which occurs during the service period. Response in the CY 2017 PFS proposed rule: We continued to believe that the clinical labor was duplicative with the clinical labor for ‘‘Review examination with interpreting MD’’ because we believed that the two descriptors detailed the same clinical labor activity taking place, rather than two separate and distinct tasks. In the CY 2017 proposed rule, we proposed to maintain our previous refinement to 0 minutes for this clinical labor task for CPT codes 10035 and 10036. We also proposed to maintain the interim final work RVUs for CPT codes 10035 and 10036. PO 00000 Frm 00112 Fmt 4701 Sfmt 4700 We did not receive any comments in response to our proposed valuation on CPT codes 10035 and 10036 and we are finalizing the clinical labor task and work RVUs as proposed. (3) Removal of Nail Plate (CPT Code 11730) We identified CPT code 11730 through a screen of high expenditures by specialty. The HCPAC recommended a work RVU of 1.10. We believed the recommendation for this service overestimates the work involved in performing this procedure, specifically given the decrease in physician intraservice and total time concurrently recommended by the HCPAC. We believed that a work RVU of 1.05, which corresponds to the 25th percentile of the survey results, more accurately represents the time and intensity of furnishing the service. To further support the validity of the use of the 25th percentile of the survey, we identified two crosswalk codes, CPT code 20606 (Arthrocentesis, aspiration and/or injection, intermediate joint or bursa), with a work RVU of 1.00, and CPT code 50389 (Removal of nephrostomy tube, requiring fluoroscopic guidance), with a work RVU of 1.10, both of which have identical intraservice times, similar total times and similar intensity. We noted that our proposed work RVU of 1.05 for CPT code 11730 falls halfway between the work RVUs for these two crosswalk codes. CPT code 11730 may be reported with add-on CPT code 11732 to report performance of the same procedure for each additional nail plate procedure. Since CPT code 11732 was not reviewed by the HCPAC for CY 2017, we proposed a new work value to maintain the consistency of this add-on code with the base code, CPT code 11730. We proposed to remove 2 minutes from the physician intraservice time to maintain consistency with the HCPAC-recommended reduction of 2 minutes from the physician intraservice time period for the base code. We are using a crosswalk from the value for CPT code 77001 (Fluoroscopic guidance for central venous access device placement, replacement (catheter only or complete), or removal (includes fluoroscopic guidance for vascular access and catheter manipulation, any necessary contrast injections through access site or catheter with related venography radiologic supervision and interpretation, and radiographic documentation of final catheter position) (List separately in addition to code for primary procedure)), which has similar physician intraservice and total time values; therefore, we proposed a E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations work RVU of 0.38 for CPT code 11732. As further support for this proposal, we noted that this proposed RVU reduction is similar to the value obtained by subtracting the incremental difference in the current and recommended work RVUs for the base code from the current value of CPT code 11732. We proposed to use the HCPACrecommended direct PE inputs for CPT code 11730. We proposed to apply some of the HCPAC-recommended refinements for CPT code 11730 to CPT code 11732, including the removal of the penrose drain (0.25 in × 4 in), lidocaine 1%–2% inj (Xylocaine), applicator (cotton-tipped, sterile) and silver sulfadiazene cream (Silvadene), as well as the reduction of the swab-pad, alcohol from 2 to 1. In addition, we proposed not to include the recommended supply items ‘‘needle, 30g, and syringe, 10–12ml’’ since other similar items are present, and we believe inclusion of these additional supply items would be duplicative. For clinical labor, we proposed to assign 8 minutes to ‘‘Assist physician in performing procedure’’ to maintain a reduction that is proportionate to that recommended for CPT code 11730. For the supply item ‘‘ethyl chloride spray,’’ we believed that the listed input price of $4.40 per ounce overestimates the cost of this supply item, and we solicited comment on the accuracy of this supply item price. Finally, we proposed to add two equipment items as was done in the base code, basic instrument pack and mayo stand, and proposed to adjust the times for all pieces of equipment to eight minutes to reflect the clinical service period time. Comment: A commenter states that the work for CPT code 11730 has not changed since the previous recommendation, thus maintenance of a work RVU of 1.10 is proper. Response: We continue to believe that the HCPAC-recommended reduction in intraservice and total time supports a reduction in our estimation of the physician work value of furnishing this service. Comment: The HCPAC stated that it did not support the proposed decrease in the work RVU for CPT code 11732. Response: We welcome any additional input as to the appropriate valuation of CPT code 11732. At this time, we continue to believe that a work RVU of 0.38 is appropriate, considering its relationship to CPT code 11730. We proposed values for CPT code 11732 based on its being an add-on code for CPT code 11730. We remind commenters and stakeholders that they may nominate this code family as potentially misvalued if they believe that both codes should be evaluated through the standard process, which would involve use of physician survey data and input from the HCPAC for both codes. We are finalizing work RVUs of 1.05 for CPT code 11730 and 0.38 for CPT code 11732, as well as the proposed PE refinements. (4) Bone Biopsy Excisional (CPT Code 20245) In CY 2014, CPT code 20245 was identified by the RUC’s 10-Day Global Post-Operative Visits Screen. For CY 2017, the RUC recommended a work RVU of 6.50 for CPT code 20245, including a change in global period from 10 to 0 days. We disagreed with this value given the significant reductions in the intraservice time, total time, and the change in the office visits assuming the change in global period. The intraservice and total times were decreased by approximately 33 and 53 percent respectively; while the elimination of three post-operative visits (one CPT code 99214 and two CPT code 99213 visits) alone would reduce the overall work RVU by at least 38 percent under the reverse building block methodology. We also note that the 80281 RUC-recommended work RVU of 6.50 only represents a 27 percent reduction relative to the previous work RVU of 8.95. To develop a work RVU for this service, we used a crosswalk from CPT code 19298 (Placement of radiotherapy after loading brachytherapy catheters (multiple tube and button type) into the breast for interstitial radioelement application following (at the time of or subsequent to) partial mastectomy, includes imaging guidance), since we believe the codes share similar intensity and total time and the same intraservice time of 60 minutes. Therefore, for CY 2017, we proposed a work RVU of 6.00 for CPT code 20245. Comments: Several commenters, including the RUC, stated their objection to the proposed crosswalk, indicating that it underestimated the total time by 10 minutes and the physician work involved in furnishing the service. Commenters recommended CMS accept the RUC-recommended work RVU of 6.50. The RUC also noted the current time of CPT code 20245 was based on a survey of 35 individuals more than 15 years ago and due to the previous flawed survey, the resulting IWPUT was almost zero. Given these discrepancies, the surveyed time of 60 minutes better reflects an appropriate level of intensity and complexity (IWPUT= 0.071) for this service relative to other 0-day global procedures. Another commenter stated concern that the values proposed by CMS have been arrived at using methodologies that are not consistent with the RUCrecommended values, and therefore, are not appropriately relative to other similar services. Response: Thank you for your comments. We present the information in Table 16 to illustrate the differences between the CMS crosswalked code and the additional RUC comparator codes. TABLE 16—CROSSWALK FOR CPT CODE 20245 CPT code 20245 19298 36247 43262 ........... ........... ........... ........... Intra-service time Descriptor Bone Biopsy Excisional ..................................................................................... Place Breast Rad Tube/Cath ............................................................................. Ins Cath ABDL/-Ext Art 3RD ............................................................................. Endocholangiopancreatograp ............................................................................ 60 60 60 60 Total time 160 169 131 138 Work RVU * 6.50 6.00 6.29 6.60 mstockstill on DSK3G9T082PROD with RULES2 * RUC recommended value. Although the total times for CPT codes 19298 and 20245 are not identical, we continue to believe it is a more accurate comparison than the additional codes submitted by the RUC, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 which have 22–29 minutes less total time. We note that according to the most recent survey, respondents lowered the work RVU of the 25th percentile, which we typically accept, from 6.06 RVUs to PO 00000 Frm 00113 Fmt 4701 Sfmt 4700 4.94 RVUs when the code was revalued with a 0-day global period. For CY 2017, we are finalizing the work RVU of 6.00 for CPT code 20245. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80282 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations (5) Insertion of Spinal Stability Distractive Device (CPT Codes 22867, 22868, 22869, and 22870) For CY 2016, the CPT Editorial Panel converted two Category III codes to Category I codes describing the insertion of an interlaminar/interspinous process stability device (CPT codes 22867 and 22869) and developed two corresponding add-on codes (CPT codes 22868 and 22870). The RUC recommended a work RVU of 15.00 for CPT code 22867, 4.00 for CPT code 22868, 7.39 for CPT code 22869, and 2.34 for CPT code 22870. We believe that the RUC recommendations for CPT codes 22867 and 22869 overestimate the work involved in furnishing these services. We believe that a crosswalk to CPT code 36832 (Revision, open, arteriovenous fistula; without thrombectomy, autogenous or nonautogenous dialysis graft (separate procedure)), which has a work RVU of 13.50 is a more accurate comparison. CPT code 36832 is similar in total time, work intensity, and number of visits to CPT code 22867. This crosswalk is supported by the ratio between total time and work in the key reference service, CPT code 63047 (Laminectomy, facetectomy and foraminotomy (unilateral or bilateral with decompression of spinal cord, cauda equina and/or nerve root[s], [eg, spinal or lateral recess stenosis]), single vertebral segment; lumbar). Therefore, we proposed a work RVU of 13.50 for CPT code 22867. For CPT code 22869, we believed that CPT code 29881 (Arthroscopy, knee, surgical; with meniscectomy (medial OR lateral, including any meniscal shaving) including debridement/shaving of articular cartilage (chondroplasty), same or separate compartment(s), when performed) is an appropriate crosswalk based on clinical similarity, as well as intensity and total time. CPT code 29881 has a work RVU of 7.03; therefore, we proposed a work RVU of 7.03 for CPT code 22869. We proposed the RUC-recommended work RVU for CPT codes 22868 and 22870 without refinement. Comment: Several commenters disagreed with our proposed valuation of the work RVU for CPT codes 22867 and 22869. They stated that the RUC crosswalk for each of these codes, respectively, is either identical to or a better match than the proposed CMS crosswalk. Response: We recognize that the RUC crosswalk of CPT code 29915 for CPT code 22867 has a total time that is more similar to the new code than the crosswalk we proposed (CPT code VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 36832). We consider multiple factors when identifying appropriate crosswalk codes. We note that RUC’s crosswalk, CPT code 29915, had very low service utilization, 355 in 2015, and was last reviewed by CMS and the RUC in April 2010. CPT code 36832, in contrast, had service utilization of 21,529 in 2015, and was most recently reviewed in October 2013. We considered the combination of these factors in choosing a crosswalk and determining a proposed work RVU. Commenters did not present any additional clinical information or data about this code that would lead us to reconsider our proposed valuation; therefore, we are finalizing the work RVU of 13.50 for CPT code 22867. With regard to CPT code 22869, we disagree that the RUC crosswalk to CPT code 29880 is a closer comparison than CPT code 29881. The intraservice time for the newly created CPT code 22869 (43 minutes) is between that of the RUC recommended crosswalk CPT code 29880 (45 minutes) and the CMS crosswalk CPTcode 29881 (40 minutes). Total time for CPT code 29881, however, is identical to total time for CPT code 22869 (194 minutes), whereas the RUC recommended crosswalk CPT code 29880 has a higher total time (199 minutes). We continue to believe, therefore, that our crosswalk is appropriate and we are finalizing the proposed work RVU of 7.03 for CPT code 22869. (6) Biomechanical Device Insertion (CPT Codes 22853, 22854, and 22859) For CY 2016, the CPT Editorial Panel established three new Category I add-on codes and deleted one code to provide a more detailed description of the placement and attachment of biomechanical spinal devices. For CPT code 22853, the RUC recommended a work RVU of 4.88. For CPT codes 22854 and 22859, the RUC-recommended work RVUs are 5.50 and 6.00, respectively. In reviewing the code descriptors, descriptions of work and vignettes associated with CPT codes 22854 and 22859, we concluded that the two procedures, in addition to having identical work time, contain many clinical similarities and do not have quantifiable differences in overall intensity. Therefore, we proposed the RUC-recommended work RVU of 5.50 for both CPT code 22854 and CPT code 22859. We believe that the RUCrecommended work RVU of 4.88 for CPT code 22853 overestimates the work in the procedure relative to the other codes in the family. We proposed a work RVU of 4.25 for CPT code 22853 based a crosswalk from CPT code 37237 (Transcatheter placement of an PO 00000 Frm 00114 Fmt 4701 Sfmt 4700 intravascular stent(s) (except lower extremity artery(s) for occlusive disease, cervical carotid, extracranial vertebral or intrathoracic carotid, intracranial, or coronary), open or percutaneous, including radiological supervision and interpretation and including all angioplasty within the same vessel, when performed; each additional artery (List separately in addition to code for primary procedure)), which is similar in time and intensity to the work described by CPT code 22853. Comment: Several commenters disagreed with our proposed valuation of the work RVU of 4.25 for CPT code 22853 rather than the RUCrecommended work RVU of 4.88. They requested clarification regarding our crosswalk for this new code to CPT code 37237 instead of the RUC-recommended crosswalk of CPT code 57267. Response: We take many factors into consideration when valuing a work RVU for a new code. We note that CPT code 57267 and CPT code 37237 have identical intraservice times and very similar total work times. We note that CPT code 37237 was most recently valued in April 2013, whereas the RUC crosswalk CPT code 57267 was last reviewed in 2004. We continue to believe that CPT code 37237 is an appropriate crosswalk for valuing the new CPT code 22859. Therefore, we are finalizing our proposed work RVU of 4.25 for CPT code 22853. Comment: We received several comments objecting to our proposed work RVU of 5.50 for CPT code 22859, which is identical to the work RVU proposed by the RUC and accepted by CMS for CPT code 22854. Commenters provided detailed descriptions of the two procedures in an effort to demonstrate the higher intensity required by CPT code 22859 compared with CPT code 22854, thereby justifying the RUC-recommended work RVU of 6.00 for CPT code 22859. Several commenters expressed confusion about the descriptors for all three of the new CPT codes (CPT codes 22853, 22854, and 22859), in general, and stated their concern that the code descriptors do not clearly differentiate the work involved in furnishing the services. Response: While we are somewhat persuaded by commenters’ detailed descriptions of the two procedures and the higher intensity of work involved in furnishing CPT code 22859 compared with CPT code 22854, we are concerned about a substantive disagreement between the RUC and survey respondents about the intensities of work involved in furnishing the services described by these new codes. The RUC and the survey respondents valued the E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 relative intensities of the two codes in the reverse order. The survey results indicated a work RVU of 8.16 (with 25th percentile of 7.0) for CPT code 22854 and a work RVU of 8.0 (with 25th percentile of 6.0) for CPT code 22859. The RUC reviewed the survey results and agreed that respondents overvalued the work involved in performing CPT code 22854. The RUC-recommended work RVU for CPT code 22854, which we are accepting as recommended, was established through a crosswalk to CPT code 37234. We agree that this is an appropriate crosswalk and valuation of this service. For CPT code 22859, the RUC also believed that the survey recommended work RVU of 8.0 was overvalued. The RUC recommended the 25th percentile of survey results, with a work RVU of 6.0. We find it difficult to reconcile the conflicting valuations by the survey and the RUC of the absolute and relative intensity of these new codes. In addition to the survey results and RUC recommendations, we reviewed the descriptors of these codes and agree with commenters who found them vague and unclear. We share the concern of stakeholders who indicated that the lack of differentiation in the codes may lead to inconsistent use and reporting. Given the disagreement between the RUC and survey respondents regarding the order and level of intensity of these services, along with confusion about the code descriptors, we find that valuing the services of 22854 and 22859 differently from each another is difficult to justify. Therefore, we are finalizing our proposed work RVU of 5.50 for CPT code 22859. (7) Repair Flexor Tendon (CPT Codes 26356, 26357, and 26358) In the CY 2016 PFS final rule with comment period, we established an interim final work RVU of 9.56 for CPT code 26356 after considering both its similarity in time to CPT code 25607 (Open treatment of distal radial extraarticular fracture) and the recommended reduction in time relative to the current times assumed for this procedure. We established an interim final work RVU of 10.53 for CPT code 26357 based on a direct crosswalk from CPT code 27654 (Repair, secondary, Achilles tendon, with or without graft), as we believed that this work RVU better reflected the changes in time for this procedure. For the last code in the family, we established an interim final work RVU of 12.13 for CPT code 26358, based on the RUC-recommended increment of 1.60 work RVUs relative to CPT code 26357. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment on the CY 2016 PFS final rule with comment period: We received several comments regarding the interim final work values for this family of codes. One commenter stated that it was inappropriate to use time ratios to evaluate CPT code 26356 as it was last valued in 1995, noting that there was an anomalous relationship between the current work RVU and the imputed time components in the RUC database. This commenter also pointed out that when the previous time was developed, fabrication of a splint was considered to be part of the intraservice work, while in the current survey instrument, the fabrication of the splint is considered to be part of the postservice work since it is a dressing. This commenter urged CMS to adopt the RUC recommendations. A different commenter agreed that the CMS crosswalk to CPT code 25607 was an appropriate crosswalk for CPT code 26356 and supported the CMS work RVU of 9.56. Response in the CY 2017 PFS proposed rule: We appreciate the support from the commenter. We continue to believe that our crosswalk for this code is an appropriate choice, due to our estimate of overall work between CPT code 26356 and CPT code 25607. We appreciate the commenters’ concerns regarding the time ratio methodologies and have responded to these concerns about our methodology in section II.L of this final rule. Although we note the commenter’s statement about how the service period in which fabrication of a splint takes place may have evolved over time, we do not agree that this task would be responsible for a decrease in intraservice survey time, as the postservice survey time for CPT code 26356 remained unchanged at 30 minutes. If the decrease in intraservice time had been due to the shift of splinting from the intraservice period to the postservice period, then we would have expected to see an increase in the postservice period minutes. However, they remained exactly the same in the physician survey for CPT 26356. As we wrote earlier in this section, we believe in the validity of using pre-existing time values as a point of comparison, and we believe that we should account for efficiencies in time when the recommended work RVU does not account for those efficiencies. After consideration of comments received, we proposed to maintain CPT code 26356 at its current work RVU of 9.56 for CY 2017. Comment on the CY 2016 PFS final rule with comment period: Several commenters disagreed with the work PO 00000 Frm 00115 Fmt 4701 Sfmt 4700 80283 RVU for CPT code 26357. One commenter stated that the CMS crosswalk to CPT code 27654 had less total time and resulted in an inappropriately lower derived intensity. This commenter urged CMS to adopt the RUC-recommended work value. Another commenter stated that a better crosswalk for CPT code 26357 would be CPT code 25608 (Open treatment of distal radial intra-articular fracture or epiphyseal separation), the next code in the same upper extremity family that CMS used for the initial crosswalk. This commenter stated that the CMS crosswalk for CPT code 26357 created a rank order anomaly in terms of intensity within this family, and that the commenter’s suggested crosswalk would create two pairs of matched codes, survey CPT codes 26356/26357 with crosswalk CPT codes 25607/25608. Response in the CY 2017 PFS proposed rule: We appreciate the suggested crosswalk from the commenters, and we agree that the choice of the initial CMS crosswalk creates a rank order anomaly within the family in terms of intensity. As a result, after consideration of comments received, we proposed to instead value CPT code 26357 at the 25th percentile survey work RVU of 11.00 for CY 2017. This valuation corrects the anomalous intensity within the Repair Flexor Tendon family of codes, and preserves the RUC-recommended increment between CPT codes 26356 and 26357. Comment on the CY 2016 PFS final rule with comment period: The commenters agreed that the RUCrecommended increment of 1.60 was appropriate for the work RVU of CPT code 26358 when added to the work RVU of CPT code 26357. However, commenters stated that this increment of 1.60 should be added to the RUCrecommended work value for CPT code 26357, and not the CMS refined value from the CY 2016 PFS final rule with comment period. Response in the CY 2017 PFS proposed rule: We also continue to believe that the increment of 1.60 is appropriate for the work RVU of CPT code 26358. After consideration of comments received, we therefore proposed to set the work RVU for this code at 12.60 for CY 2017, based on the increment of 1.60 from CPT code 26357’s proposed work RVU of 11.00. In the CY 2017 proposed rule, we proposed to maintain the current direct PE inputs for all three codes. The following is a summary of the comments we received regarding our proposed valuation of the Repair Flexor Tendon codes: E:\FR\FM\15NOR2.SGM 15NOR2 80284 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 Comment: One commenter expressed support for the proposed work RVU for the flexor tendon codes. Response: We appreciate the support from the commenters. After consideration of comments received, we are finalizing our proposed valuation of the Repair Flexor Tendon codes. (8) Closed Treatment of Pelvic Ring Fracture (CPT Codes 27197 and 27198) For CY 2017, the CPT Editorial Panel deleted CPT codes 27193 and 27194 and replaced them with new CPT codes 27197 and 27198. The RUC recommended a work RVU of 5.50 for CPT code 27193, and a work RVU of 9.00 for CPT code 27198. We proposed to change the global period for these services from 90 days to 0 days because these codes typically represent emergent procedures with which injuries beyond pelvic ring fractures are likely to occur; we believe it is typical that multiple practitioners would be involved in providing post-operative care and it is likely that a practitioner furnishing a different procedure is more likely to be providing the majority of post-operative care. If other practitioners are typically furnishing care in the post-surgery period, we believe that the six postservice visits included in CPT code 27197, and the seven post-service visits included in CPT code 27198, would likely not occur. This is similar to our CY 2016 review and valuation of CPT codes 21811 (Open treatment of rib fracture(s) with internal fixation, includes thoracoscopic visualization when performed, unilateral; 1–3 ribs), 21812 (Open treatment of rib fracture(s) with internal fixation, includes thoracoscopic visualization when performed, unilateral; 4–6 ribs), and 21813 (Open treatment of rib fracture(s) with internal fixation, includes thoracoscopic visualization when performed, unilateral; 7 or more ribs). In our valuation of those codes, we determined that a 0-day, rather than a 90-day global period was preferable, in part because those codes describe rib fractures that would typically occur along with other injuries, and the patient would likely already be receiving post-operative care because of the other injuries. We believe that the same rationale applies here. To establish a work RVU for CPT code 27197, we proposed crosswalking this code to CPT code 65800 (Paracentesis of anterior chamber of eye (separate procedure); with removal of aqueous), due to its identical intraservice time and similar total time, after removing the work associated with postoperative visits, and its similar level of intensity. Therefore, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 we proposed a work RVU of 1.53 for CPT code 27197. For CPT code 27198, we proposed crosswalking this code to CPT code 93452 (Left heart catheterization including intraprocedural injection(s) for left ventriculography, imaging supervision and interpretation, when performed) which has an identical intraservice time and similar total time, after removing the work associated with post-operative visits from CPT code 27198. We proposed a work RVU of 4.75 for CPT code 27198. Comment: Some commenters stated that the new coding for these services was designed, in part, to address the appropriateness of a 90-day global period by differentiating between higher energy and lower energy fractures. According to these commenters, the CPT Editorial Panel redefined these codes as treating injuries from higher energy and more unstable posterior pelvic ring injuries, and added a parenthetical directing physicians to use E/M billing for closed treatment of isolated lower energy fractures. These commenters say that the new coding clarifies when to use E/M coding for these services and when to bill these two codes. They state that these codes should thus remain valued with 90-day global periods while less complicated fractures will be billed with E/M coding. Response: We took into consideration many factors when determining the appropriate global period of this service. While we understand that the new coding was partly designed to address the appropriateness of a 90-day global period, we continue to believe that a 0day, rather than a 90-day, global period is more appropriate for this code, since we believe that the patient would likely already be receiving post-operative care because of other injuries. We also believe that the practitioner who performs the original procedure may not typically be performing the follow-up care, and shifting to a 0-day global period will allow the appropriate practitioner to report the follow up care, when appropriate. Comment: A commenter stated that assigning a 0-day global period to this code will cause these codes to be different from all other closed fracture codes, which the commenter believes will lead to confusion for physicians and rank order anomalies. Response: The commenter did not present sufficient information to explain why the variation in global periods for these kinds of services would uniquely cause rank order anomalies. We agree that it is preferable that codes for similar procedures have similar global periods; however, other factors specific to each PO 00000 Frm 00116 Fmt 4701 Sfmt 4700 code are taken into consideration when determining the appropriate global period. In the case of CPT codes 27197 and 27198, we continue to believe that the emergent nature inherent with the injuries considered typical would mean that other physicians would typically perform follow-up care. For detailed guidance on billing global surgical procedures, we direct readers to the Medicare Claims Processing Manual, Pub. 100–04; billing requirements and adjudication of claims requirements for global surgeries are under chapter 12, sections 40.2 and 40.4. We also note that if this procedure is billed concurrently with another procedure that is valued with a 10-day or 90-day global period, that the follow up visits associated with the latter procedure would occur as part of that package, while follow-up visits for these two codes would be reported using E/M coding. Comment: A commenter states that, for procedures valued as part of a 90day global period, the physician who is performing the primary portion of the treatment is obligated to follow the patient throughout the entire global period and furnish follow-up care. Response: We understand the commenter’s perspective that the treating physician is obligated to provide follow-up care within the global period; however, we do not believe that this necessitates the valuation of every surgical procedure with a 10-day or 90day global period. While the treating physician would ideally provide followup care for these codes were they to be assigned 90-day global periods, we continue to believe that this would be an atypical situation for these types of treatments and for these types of injuries. We note that the assignment of a global period occurs in the process of evaluation of codes and we take into consideration factors specific to each procedure. There may be many instances when codes with similar procedures have different global periods. We are finalizing as proposed the work RVUs of 1.53 for CPT code 27197 and 4.75 for CPT code 27198, as well as an assignment of 0-day global periods. (9) Bunionectomy (CPT Codes 28289, 28291, 28292, 28295, 28296, 28297, 28298, and 28299) The RUC identified CPT code 28293 as a 90-day global service with more than 6 office visits and CPT codes 28290–28299 as part of the family of services. In October 2015, the CPT Editorial Panel created two new CPT codes (28291, 28295), deleted CPT codes 28290, 28293, and 28294 and revised CPT codes 28289, 28292, 28296, E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 28297, 28298 and 28299 based on the rationale that more accurate descriptions of the services needed to be developed. For CPT codes 28289, 28292, 28296, 28297, 28298, and 28299, the RUC recommended and we proposed work RVUs of 6.90, 7.44, 8.25, 9.29, 7.75, and 9.29 respectively. For CPT code 28291, the RUC recommended a work RVU of 8.01 based on the 25th percentile of the survey. We believed the recommendation for this service overestimates the overall work involved in performing this procedure given the decrease in intraservice time, total time, and post-operative visits when compared to deleted predecessor CPT code 28293. Due to similarity in intraservice and total times, we believed a direct crosswalk of the work RVUs for CPT code 65780 (Ocular surface reconstruction; amniotic membrane transplantation, multiple layers) to CPT code 28291 more accurately reflects the time and intensity of furnishing the service. Therefore, for CY 2017, we proposed a work RVU of 7.81 for CPT code 28291. For CPT code 28295, the RUC recommended a work RVU of 8.57 based on the 25th percentile of the survey. We believed the recommendation for this service overestimates the work involved in performing this procedure given the similarity in the intensity of the services and identical intraservice and total times as CPT code 28296. Therefore, we proposed a direct RVU crosswalk from CPT code 28296 to CPT code 28295. For CY 2017, we proposed a work RVU of 8.25 for CPT code 28295. Comments: A few commenters, including the RUC, objected to the proposed work RVUs for CPT codes 28291 and 28295. Commenters noted that deleted CPT code 28293 was marked by the RUC as ‘‘not to use for validation of physician work’’. The RUC noted the previous time was based on Harvard time and when reviewed in 1995, the RUC maintained the physician work and Harvard time because there was no compelling evidence to revise the value at that time. The RUC acknowledged that the deleted CPT code 28293 had 30 minutes more intra-service time and a higher work RVU of 11.48 compared to the recommended work RVU of 8.01 for CPT code 28291. However, the RUC stated the differences in the physician work, time, intensity and the actual new service as described in CPT code 28291 were appropriately accounted for in its recommendation. The RUC also stated disagreement with the proposed crosswalk of work RVUs from CPT code 28291 to CPT code VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 65780. The RUC stated it compared the family and relative ranking and believed CPT code 28291 was more complex and intense than CPT code 28298. The relative difference in work and complexity was reviewed and correctly ranked by the survey respondents at the 25th percentile, which corresponds with the RUC-recommended value. One commenter stated that CPT code 28293 was deleted and a new CPT code was established because the two procedures were no longer synonymous. Also, the slight decrease in the intraoperative intensity with the new value is barely measurable, and therefore, the commenter does not agree with CMS that a work RVU of 7.81 is a more accurate valuation. One commenter stated that CPT code 28295 is more intense than CPT code 28296 because CPT code 28295 requires separate areas of dissection. With CPT code 28296, the osteotomy and soft tissue procedure are performed at the same anatomic location. The commenter stated this nuance in complexity is the rationale for separate codes and is similar to the rationale for separate cervical versus lumbar spine codes or artery versus vein codes for vascular work. Response: We appreciate additional information offered by the commenters. After consideration of comments received, we agreed with the additional information provided by commenters and are finalizing the RUC-recommend work RVUs of 6.90, 8.01, 7.44, 8.57, 8.25, 9.29, 7.75 and 9.29 for CPT codes 28289, 28291, 28292, 28295, 28296, 28297, 28298 and 28299; respectively. (10) Endotracheal Intubation (CPT Code 31500) In the CY 2016 PFS final rule with comment period (80 FR 70914), we identified CPT code 31500 as potentially misvalued. The specialty societies surveyed this code, and after reviewing the survey responses (which included increases in time) the RUC recommended a work RVU of 3.00 for CPT code 31500. After reviewing the RUC’s recommendation, we proposed a work RVU of 2.66, based on a direct crosswalk to CPT code 65855 (Trabeculoplasty by laser surgery), which has similar intensity and service times. Comment: Commenters requested that CMS finalize the RUC-recommended work RVU of 3.00 instead of CMS’ proposed 2.66 work RVUs. The RUC stated that the surveyed median intraservice time is 10 minutes, representing a doubling of the current intraservice time of 5 minutes. Commenters also disagreed with CMS’ PO 00000 Frm 00117 Fmt 4701 Sfmt 4700 80285 proposed crosswalk from CPT code 65855. The RUC stated that given the emergent nature of the services reported with CPT code 31500, there are few relevant physician work and time-based comparisons within the resource-based relative value scale (RBRVS). Response: We appreciate commenters’ feedback on our proposal. As pointed out by the commenters, the survey data shows increased intraservice and total times for these services. We agree with commenters that due to the emergent nature of these services, there are few relevant physician work and time-based comparisons for this service. Therefore, due to the emergent nature of these services and service time increases, for CY 2017, we are finalizing a work RVU of 3.00 for CPT code 31500. (11) Flexible Laryngoscopy (CPT Codes 31572, 31573, 31574, 31575, 31576, 31577, 31578, and 31579) After we identified CPT codes 31575 and 31579 as potentially misvalued (80 FR 70912–70914), the RUC referred the entire flexible laryngoscopy family of codes back to the CPT Editorial Panel for revision and the addition of several codes representing new technology within this family of services. At the May 2015 CPT meeting, the CPT Editorial Panel added three new codes to describe laryngoscopy with ablation or destruction of lesion and therapeutic injection. Based on the survey results, the time resources involved in furnishing the procedures described by this code family experienced a significant reduction in the intraservice period, yet the recommended work RVUs were not similarly reduced. Therefore, in reviewing the recommended values for this family of codes we looked for a rationale for increased intensity and absent such rationale, proposed to adjust the recommend work RVUs to account for significant changes in time. For CPT code 31575, we disagreed with the RUC-recommended work RVU of 1.00, and we instead proposed a work RVU of 0.94. We looked at the total time ratio for CPT code 31575, which is decreasing from 28 minutes to 24 minutes, and applied this ratio of 0.86 times the current work RVU of 1.10 to derive our proposed work RVU of 0.94. We supported this value for CPT code 31575 through a crosswalk to CPT code 64405 (Injection, anesthetic agent; greater occipital nerve), which shares 5 minutes of intraservice time and also has a work RVU of 0.94. We agreed with the RUC that CPT code 31575 serves as the base code for the rest of the Flexible Laryngoscopy family. As a result, we proposed to E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80286 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations maintain the same RUC-recommended increments for the rest of the codes in this family, measuring the increments from CPT code 31575’s refined work RVU of 0.94 instead of the RUCrecommended work RVU of 1.00. This meant that each of the work RVUs for the codes in the rest of the family decreased by 0.06 when compared to the RUC-recommended value. We therefore proposed a work RVU of 1.89 for CPT code 31576, a work RVU of 2.19 for CPT code 31577, a work RVU of 2.43 for CPT code 31578, a work RVU of 3.01 for CPT code 31572, a work RVU of 2.43 for CPT code 31573, a work RVU of 2.43 for CPT code 31574, and a work RVU of 1.88 for CPT code 31579. Regarding the direct PE inputs, we proposed to use refined clinical labor time for ‘‘Obtain vital signs’’ for CPT codes 31577 and 31579 from 3 minutes to 2 minutes. We believe that this extra clinical labor time is duplicative, as these codes are typically performed with a same day E/M service. Each procedure is only allotted a maximum of 5 minutes for obtaining vital signs, and since 3 minutes are already included in the E/M code, we proposed to reduce the time to 2 minutes for these services. Similarly, we proposed to remove the 3 minutes of clinical labor time for ‘‘Clean room/equipment by physician staff’’ from CPT codes 31575, 31577, and 31579. These procedures are typically reported with a same day E/M service, making the clinical labor minutes for cleaning the room in these procedure codes duplicative of the time already included in the E/M codes. For CPT code 31572, we proposed to remove the ‘‘laser tip, diffuser fiber’’ supply (SF030) and replace it with the ‘‘laser tip, bare (single use)’’ supply (SF029) already present in our direct PE database. We believe that the invoice for SF030 submitted with the RUC recommendation is not current enough to establish a new price for this supply; as a result, we substituted the SF029 supply for this input. We welcomed the submission of new invoices to accurately price the diffuser fiber with laser tip. We also proposed to make significant changes to the prices of several of the supplies and equipment related to Flexible Laryngoscopy, as well as to the prices of scopes more broadly. We proposed to set the price of the disposable biopsy forceps supply (SD318) at $26.84, based on the submission of an invoice with a price of $536.81 for a unit size of 20. In our search for additional information regarding scope inputs, we obtained a quote from a vendor listing the current price for several equipment items VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 related to the use of scopes. Since we believe that the prices in vendor quotes would typically be equal to or higher than prices actually paid by practitioners, we are updating the prices in our direct PE database to reflect this new information. As part of this process, we proposed to increase the price of the ‘‘light source, xenon’’ (EQ167) from $6,723.33 to $7,000 to reflect current pricing information. We also proposed to adjust the price of the ‘‘fiberscope, flexible, rhinolaryngoscopy’’ (ES020) from $6,301.93 to $4,250.00. In accordance with the wider proposal that we made involving the use of scope equipment, we proposed to separate the scopes used in these procedures from the scope video systems. In the course of researching different kinds of scopes, we obtained vendor pricing for two different types of scopes used in these procedures. We proposed to price the ‘‘rhinolaryngoscope, flexible, video, non-channeled’’ (ES063) at $8,000 and the ‘‘rhinolaryngoscope, flexible, video, channeled’’ (ES064) at $9,000 in accordance with our vendor quotes. We proposed to use the non-channeled scope for CPT codes 31575, 31579, and 31574 and the channeled scope for CPT codes 31576, 31577, 31578, 31572, and 31573 in accordance with the RUCrecommended video systems that stipulated channeled versus nonchanneled scope procedures. We believe that the ‘‘Video-flexible laryngoscope system’’ listed in the recommendations is not a new form of equipment, but rather constitutes a version of the existing ‘‘video system, endoscopy’’ equipment (ES031). We did not add a new equipment item to our direct PE database; instead, we proposed to use the submitted invoices to update the price of the ES031 endoscopy video system. As the equipment code for ES031 indicates, we proposed to define the endoscopy video system as containing a processor, digital capture, monitor, printer, and cart. We proposed to price ES031 at $15,045.00; this reflected a price of $2,000.00 for the monitor, $9,000.00 for the processor, $1,750.00 for the cart, and $2,295.00 for the printer. These prices were obtained from our vendor invoice, with the exception of the printer, which is a crosswalk to the ‘‘video printer, color (Sony medical grade)’’ equipment (ED036). We did not agree that there is a need for multiple different video systems for this collection of Flexible Laryngoscopy codes based on our understanding of the clinical differences among the codes. In keeping with this understanding, we PO 00000 Frm 00118 Fmt 4701 Sfmt 4700 proposed to use the same existing ‘‘video system, endoscopy’’ equipment (ES031) for the remaining codes in the family that included RUC recommendations for new equipment items named ‘‘Video-flexible channeled laryngoscope system’’ and ‘‘Videoflexible laryngoscope stroboscopy system.’’ For CPT codes 31576, 31577, 31578, 31572, and 31573, we proposed to replace the Video-flexible channeled laryngoscope system with the existing endoscopy video system (ES031) along with a channeled flexible video rhinolaryngoscope (ES064). For CPT code 31579, we proposed to rename the RUC-recommended ‘‘Video-flexible laryngoscope stroboscopy system’’ to the shortened ‘‘stroboscopy system’’ (ES065) and assign it a price of $19,100.00. This reflected the price of the StrobeLED Stroboscopy system included on the submitted invoice. We proposed to treat the stroboscopy system as a scope accessory, which was included along with the ‘‘video system, endoscopy’’ equipment (ES031) and the ‘‘rhinolaryngoscope, flexible, video, non-channeled’’ (ES063) for CPT code 31579. When the price of the scope, the scope video system, and the stroboscopy system were summed together, the total proposed equipment price was $42,145.00. We proposed to refine the recommended equipment times for several equipment items to conform to changes in clinical labor time. These are: The fiberoptic headlight (EQ170), the suction and pressure cabinet (EQ234), the reclining exam chair with headrest (EF008), and the basic instrument pack (EQ137). We proposed to use the standard equipment time formula for scope accessories for the endoscopy video system (ES031) and the stroboscopy scope accessory system (ES065). We also proposed to refine the equipment time for the channeled and non-channeled flexible video rhinolaryngoscopes to use the standard equipment time formula for scopes. For this latter pair of two new equipment items, this proposal resulted in small increases to their respective equipment times. The following is a summary of the comments we received regarding our proposed valuation of the Flexible Laryngoscopy codes: Comment: Several commenters disagreed with the proposed work RVU for CPT code 31575. Commenters stated that the use of a work/time ratio was inconsistent with the methodology of magnitude estimation, and that reducing work RVUs by mathematical formula can arbitrarily manipulate intensities without allowing input from survey E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations recommendations provided by experts who perform the service. Commenters indicated their disapproval for a reverse building block methodology that assumes that if times for individual services change, work values must also change. Response: We continue to believe that the use of these methodologies, including the use of time ratios, is an appropriate process for code valuation when recommended work RVUs do not appear to account for significant changes in time. As we stated earlier in our discussion on this topic in this final rule, we use time ratios to identify potential work RVUs and consider these work RVUs as potential options relative to the values developed through other methodologies for code valuation. We continue to believe that the decrease in total time for CPT code 31575 from 28 minutes to 24 minutes was not accounted for in the recommended work RVU, and as a result we proposed a work RVU of 0.94, supported by a crosswalk to CPT code 64405. We continue to believe that this valuation for CPT code 31575 more accurately captures the reduction in physician work caused by the decrease in the time required to perform the procedure, noting again that the statute specifically defines the work component as the resources in time and intensity required in furnishing the service. We believe that our crosswalk to CPT code 64405, which has very similar time and intensity values to CPT code 31575 at the same work RVU of 0.94, supports our valuation for this service. Comment: Several commenters objected to the application of the work RVU increment to the rest of the codes in this family, measuring the increments from CPT code 31575’s refined work RVU of 0.94 instead of the RUCrecommended work RVU of 1.00. Commenters stated that these codes were reviewed individually, not incrementally, and the use of an increment to reduce the work RVU of each code in the family by 0.06 was inappropriate. Commenters disagreed with the notion that when a base code’s value is modified or reduced all other codes in the family should be reduced accordingly. Response: We review codes individually for valuation. When we apply an increment from a base code to the rest of a code family, we do so only after reviewing each code individually and determining that the RUCrecommended relativity between the codes in the family is correct. For this particular family of codes, we stated our belief that the relativity between the codes in the family was accurate, and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 that the increment between the codes should be maintained after adjusting the work RVU for the base code (CPT code 31575) to account for its significant decrease in time. As we detailed in our discussion of code valuation methodologies earlier in this final rule, we use a variety of different methods, such as survey data, building blocks, crosswalks to key reference or similar codes, time ratios, and increments between codes within the same family. In our review of RUC-recommended values, we have observed that the RUC also uses a variety of methodologies to develop work RVUs for individual codes, and subsequently validates the results of these approaches through magnitude estimation or crosswalk to established values for other codes. We continue to believe that the use of an incremental methodology is the most accurate way to value this particular code family because it maintains the appropriate relativity among the Flexible Laryngoscopy codes. Comment: One commenter disagreed with our refinement to remove the clinical labor time for ‘‘Clean room/ equipment by physician staff’’ from the three codes in this family performed with a same day E/M service. The commenter stated that the clinical staff have to clean the equipment for procedure not used during the E/M service. According to the commenter, they clean that equipment separately and are assisting the physician during the entire procedure. Response: In response to the commenter, we investigated this issue and determined that in the past we have sometimes provided 1 minute of clinical labor time for cleaning additional equipment beyond what would be cleaned during the E/M visit. As a result, we are restoring 1 minute of clinical labor time for ‘‘Clean room/ equipment by physician staff’’ for CPT codes 31575, 31577, and 31579. Comment: One commenter stated that there was a lack of clarity regarding the removal of the laser tip, diffuser fiber supply (SF030) from CPT code 31572. The commenter stated that the commenter supplied an invoice for the fibers, believed the invoice price was accurate, and believed the invoice should be utilized to set the price for this item. Response: We continue to believe that the invoice for SF030 submitted with the RUC recommendation, which dates from 2009, is not current enough to establish a new price for this supply. We are continuing to maintain the laser tip, bare (single use) supply (SF029) in its place for CPT code 31572. As we discuss in the PE section of this final PO 00000 Frm 00119 Fmt 4701 Sfmt 4700 80287 rule (II.A), we have concerns that the pricing for the laser tip, diffuser fiber supply has become outdated, and we are requesting the submission of additional current pricing information. We are maintaining the current pricing for this supply at $850 pending the submission of additional data. We note as well that there were many comments addressing our proposal to reclassify scope equipment, as well as the proper pricing of the scope equipment utilized in this family of codes. These comments are summarized with responses in the PE section of this final rule (II.A). After consideration of comments received, we are finalizing the work RVUs of the codes in the Flexible Laryngoscopy family at the proposed values. We are also finalizing the proposed direct PE inputs, with the exception of the refinement to the ‘‘Clean room/equipment by physician staff’’ clinical labor detailed above. (12) Laryngoplasty (CPT Codes 31580, 31584, 31587, 31551–31554, 31591, and 31592) CPT code 31588 (Laryngoplasty, not otherwise specified (e.g., for burns, reconstruction after partial laryngectomy)) was identified as potentially misvalued based on the RUC’s 90-Day Global Post-Operative Visits screen. When this code family was reviewed by the RUC, it was determined that some codes in the family required revision to reflect the typical patient before a survey could be conducted and the code family was referred to the CPT Editorial Panel for revision. At its October 2015 meeting, the CPT Editorial Panel approved the creation of six new codes, revision of three codes, and deletion of three codes. For CPT codes 31580, 31587, 31551, 31552, 31553, 31554, and 31592, CMS proposed the RUC-recommended work RVUs. For CPT code 31584, the RUC recommended a work RVU of 20.00. We believed that the 25th percentile of the survey, which is a work RVU of 17.58, better represents the time and intensity involved with furnishing this service based on a comparison with and assessment of the overall intensity of other codes with similar instraservice and total time. This value is also supported by a crosswalk code of CPT code 42844 (Radical resection of tonsil, tonsillar pillars, and/or retromolar trigone; closure with local flap (e.g., tongue, buccal)), which has identical intraservice time and identical total time. Therefore, we proposed a work RVU of 17.58 for CPT code 31584. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80288 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Comment: Several commenters requested that we provide an explanation for our proposed work RVU of 17.58 for the revised CPT code 31584 instead of the RUC-recommended work RVU of 20.00. They stated that the modified code now represents the combination of two previously separate CPT codes (the existing CPT code 31584 combined with CPT code 31600) and that the work RVU should better reflect the sum of the total time for these combined procedures. Commenters further noted that the proposed work RVU of 17.58 is lower, even, than the existing work RVU for CPT code 31584. A commenter requested that CMS consider two additional codes for comparison: CPT code 37660 and CPT code 43280. Response: We take multiple factors into account when valuing a service that replaces two previously separate codes. We consider the efficiencies of combining two services, as reflected in the adjustment upwards of the intraservice and total time for this code. We also review the code description and identify a value that is consistent with other, similar, 90-day global codes. Our valuation is above the median work RVU for a group of 28 codes with similar intraservice and total time. Commenters have not provided any additional information that would suggest this code should be valued differently from other 90-day global codes with similar time and intensity. We reviewed the two additional codes that commenters recommended as comparisons. We note that CPT code 43280 (work RVU of 18.1) was most recently valued in 1997 and that for low-volume code CPT code 37660, physician intensity is considerably higher than that for CPT code 31584, suggesting a poor reference for comparing the work involved in furnishing the service. For these reasons, we do not believe this code is an appropriate comparison for CPT code 31584 and we are finalizing our work RVU of 17.58 for CPT code 31584. For CPT code 31591, the RUC recommended a work RVU of 15.60. We believed that the 25th percentile of the survey, which is a work RVU of 13.56, better represents the time and intensity involved with furnishing this service based on a comparison of the overall intensity of other codes with similar instraservice and total time. The 25th percentile of the survey is additionally bracketed by two crosswalk codes that we estimate have slightly lower and slighter higher overall intensities, CPT code 36819 (Arteriovenous anastomosis, open; by upper arm basilic vein transposition), which has a work RVU of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 13.29, and CPT code 49654 (Laparoscopy, surgical, repair, incisional hernia (includes mesh insertion, when performed); reducible), which has a work RVU of 13.76; both of these codes have identical intraservice time and similar total time. Therefore, we proposed a work RVU of 13.56 for CPT code 31591. Comment: Several commenters disagreed with our proposed work RVU of 13.56 for CPT code 31591, stating that the RUC-recommended work RVU of 15.60 better reflects the work required to perform the procedure. Response: In developing our proposed valuation, we looked at other 90-day global codes with identical intraservice time and similar total time (between 275 and 335), and we note that the median work RVU of the resulting values (reflecting 33 codes) is 13.76. We chose the 25th percentile of the survey because of its closeness to the median work RVU of comparable services. We recognize that the RUC’s crosswalk to CPT code 58544, with a work RVU of 15.60, has a lower total time than the codes we used as comparisons, but we note that this code has very low utilization, with 103 procedures billed in 2015. We continue to believe that two codes bracketing the 25th percentile of the work RVU for CPT code 31591 (CPT codes 36819 and 49654), as noted in the CY2017 PFS proposed rule, provide a better reference for valuing the new code, and that a work RVU of 13.56 adequately represents the time and intensity involved with furnishing the service. Therefore, we are finalizing our proposed work RVU of 13.56 for CPT code 31591. Additionally, the RUC forwarded invoices provided by a medical specialty society for the video-flexible laryngoscope system used in these services. We discussed our proposed changes to the items included in equipment item ES031 (video system, endoscopy) in the CY 2017 proposed rule (81 FR 46247). Consistent with those proposed changes, we proposed to add a Nasolaryngoscope, nonchanneled, to the list of equipment items used for CPT codes 31580, 31584, 31587, 31551–31554, 31591, and 31592, along with the modified equipment item ES031. Comment: We received several comments, including from the RUC, about our proposal to implement a separate pricing approach for equipment inputs for this family of codes. Commenters requested a delay in implementing our approach until the RUC convened a PE subcommittee and provided CMS with specific recommendations for these codes. PO 00000 Frm 00120 Fmt 4701 Sfmt 4700 Response: We appreciate the commenters’ interests in making certain that there is appropriate opportunity for stakeholders to provide feedback and recommendations on the reclassification and pricing of scopes. Because these codes are currently under review, however, we believe that they should be valued according to a scheme that accurately describes the scope equipment typically used in the services. We continue to believe that our proposed classification system for scopes is the more proper methodology to use for valuation of these codes for the CY 2017. Please refer to II.A of the final rule for additional discussion on the new pricing process. (13) Closure of Left Atrial Appendage With Endocardial Implant (CPT Code 33340) The CPT Editorial Panel deleted category III CPT code 0281T (Percutaneous transcatheter closure of the left atrial appendage with implant, including fluoroscopy, transseptal puncture, catheter placement(s), left atrial angiography, left atrial appendage angiography, radiological supervision and interpretation) and created new CPT code 33340 to describe percutaneous transcatheter closure of the left atrial appendage with implant. The RUC recommended a work RVU of 14.00. We proposed a work RVU of 13.00 for CPT code 33340, which is the minimum survey result. Based on our clinical judgment and that the key reference codes discussed in the RUC recommendations have higher intraservice and total service times than the median survey results for CPT code 33340, we stated in the CY 2017 proposed rule that we believe a work RVU of 13.00 would more accurately represent the work value for this service. Comment: We received several comments, including from the RUC. Commenters noted inaccuracies in CMS’ description of the RUC recommendations including descriptions of the relationship between the RUC-recommended work RVU, survey results, and service times for the two key reference codes. Commenters requested that CMS finalize the RUCrecommended work RVU of 14.00. Response: We appreciate the commenters’ feedback and acknowledge that we inadvertently mischaracterized the RUC’s recommendations related to this service. We agree that the survey results showed a 25th percentile survey result of 19.88 and that during the RUC meeting, this code was referred to the facilitation committee whereby the RUC identified two comparable codes with E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 14.00 work RVUs, which the RUC factored into its analysis and recommended valuation for this service. After consideration of the comments, we are finalizing the RUC-recommended work RVU of 14.00 for CPT code 33340. intraservice times and decreased total times compared to CPT code 33400. Therefore, for CY 2017, we are finalizing a work RVU of 35.00 for CPT code 33390 and a work RVU of 41.50 for CPT code 33391. (14) Valvuloplasty (CPT Codes 33390 and 33391) The CPT Editorial Panel created new codes to describe valvuloplasty procedures and deleted existing CPT code 33400 (Valvuloplasty, aortic valve; open, with cardiopulmonary bypass). New CPT code 33390 represents a simple valvuloplasty procedure and new CPT code 33391 describes a more complex valvuloplasty procedure. We proposed to use the RUC-recommended values for CPT code 33390. For CPT code 33391, the RUC recommended a work RVU of 44.00, the 25th percentile survey result. The RUC estimated that approximately 70 percent of the services previously reported using CPT code 33400 would be reported using CPT code 33391, with 30 percent reported using new CPT code 33390. Therefore, the typical service previously reported with CPT code 33400 ought to now be reported with CPT code 33391. Compared to deleted CPT code 33400, the survey results for CPT code 33391 showed similar median intraservice times and decreased total times. Therefore, we proposed a work RVU of 41.50 for CPT code 33391, which is the current value of CPT code 33400. Given that the typical service should remain consistent between the two codes, we stated that we believe the work RVUs should remain consistent as well. Comment: Commenters disagreed with CMS’ proposed valuation of CPT code 33391, citing increased intensity and complexity of the procedures. Commenters noted that more complex patients are undergoing valvuloplasty (for instance, adult cardiac patients) when historically these patients would have received aortic valve replacements. Response: As discussed in the CY 2017 proposed rule, the deleted CPT code 33400 is being replaced with two CPT codes that identify simple and complex procedures. The RUC’s utilization crosswalk suggests that approximately 70 percent of the services that would previously have been reported using the combined code (CPT code 33400) would now be reported with CPT code 33391, the complex procedure. Based on the RUC’s utilization crosswalk, the complex procedure would be the typical procedure reported under the combined code (CPT code 33400). The survey data for the complex procedure (CPT code 33391) showed similar median (15) Mechanochemical Vein Ablation (MOCA) (CPT Codes 36473 and 36474) At the October 2015 CPT meeting, the CPT Editorial Panel established two Category I codes for reporting venous mechanochemical ablation, CPT codes 36473 and 36474. We proposed the RUC-recommended work RVU of 3.50 for CPT code 36473. For CPT code 36474, we proposed a work RVU of 1.75 and stated that we believed the RUCrecommended work RVU of 2.25 does not accurately reflect the typical work involved in furnishing this procedure. The specialty society survey showed that this add-on code has half the work of the base code (CPT code 36473). This value is supported by the ratio between work and time in the key reference service (CPT code 36476: Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, radiofrequency; second and subsequent veins treated in a single extremity, each through separate access sites (List separately in addition to code for primary procedure)). The RUC-recommended direct PE inputs for CPT codes 36473 and 36474 included inputs for an ultrasound room (EL015). Based on the clinical nature of these procedures, we stated in our proposal that we do not believe that an ultrasound room would typically be used to furnish these procedures. We proposed to remove inputs for the ultrasound room and subsequently include a portable ultrasound (EQ250), power table (EF031), and light (EF014). The RUC also recommended that the ultrasound machine be allocated clinical staff time based on the PACS workstation formula. We stated that we did not believe that an ultrasound machine would be used like a PACS workstation, as images are generated and reviewed in real time. Therefore, we proposed to remove all direct PE inputs associated with the PACS workstation. Comment: We received several comments, including from the RUC. Commenters disagreed with CMS’ proposed work RVU of 1.75 for CPT code 36474 and requested that CMS finalize the RUC’s recommendation of 2.25 work RVUs. The RUC disagreed with CMS’ rationale for the proposed work RVU for CPT code 36474. The RUC stated that the ratio between CMS’ proposed physician time and physician work for the survey code is 0.058, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00121 Fmt 4701 Sfmt 4700 80289 whereas that same ratio for the key reference code used by the RUC is 0.0883, and that the divergent ratios between the two services are not comparable. Response: The commenters recommended that we accept the RUCrecommended ratio of 36 percent between the RUC-recommended work RVUs for CPT codes 36473 and 36474. We disagree. The RUC survey reported 79 minutes of total time for CPT code 36473 and 30 minutes of total time for CPT code 36474, a decrease of greater than 50 percent between the base code and the add-on code. As discussed in the proposed rule, our proposed work RVU of 1.75 for CPT code 36474 is supported by the ratio between work and time in the key reference service. The RUC recommendations made reference to two identical sets of services that use differing mechanisms for ablating the vein (radiofrequency procedures reported with CPT codes 36475 and 36476 (work RVUs of 5.30 and 2.65); laser procedures reported with CPT codes 36478 and 36479 (work RVUs of 5.30 and 2.65)). Both key reference code sets have a work RVU ratio of 50 percent (5.30 versus 2.65) between the base codes and the add-on codes. Therefore, for CY 2017, we are finalizing a work RVU of 3.50 for CPT code 36473 and a work RVU of 1.75 for CPT code 36474. Comment: Commenters requested that CMS restore the direct PE inputs for the ultrasound room, which includes the PACS workstation. Commenters stated that the PACS workstation is needed for these procedures to store and make images available for future use. Response: Commenters suggested that the ultrasound room was necessary for this procedure since the ultrasound room includes a PACS workstation that would allow for storage of the images and subsequent future use. As we discussed in the proposed rule, during the typical procedure, the images would be used in real time rather than being stored for subsequent interpretation. Further, the ultrasound room would not be typically used during these procedures. Our proposal included a portable ultrasound that allows for use of the images during the course of the procedure. Comment: One commenter requested that CMS include an additional direct PE input for a ClariVein catheter for both CPT codes 36473 and 36474, and included invoices related to this item. The commenter suggested that an additional catheter is necessary to prevent contamination during treatment of subsequent vessels if the catheter E:\FR\FM\15NOR2.SGM 15NOR2 80290 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 used in an initial vessel were reused in a subsequent vessel. Response: The invoice data submitted by the commenter appears to be applicable to the ClariVein catheters in some instances and in others to the ClariVein kits. Our review of the ClariVein kits indicated that the ClariVein catheters are part of the ClariVein kits. Because we lack clear product data regarding the cost of the ClariVein kits versus the ClariVein catheters and whether the catheters are included in the price of the kits, for CY 2017, we are finalizing our proposed direct PE inputs for the ClariVein kits for CPT codes 36473 and 36474 without modification. We welcome additional feedback from stakeholders regarding the product data and costs for the ClariVein catheters and ClariVein kits for consideration in future rulemaking. (16) Dialysis Circuit (CPT Codes 36901, 36902, 36903, 36904, 36905, 36906, 36907, 36908, 36909) In January 2015, a CPT/RUC workgroup identified the following CPT codes as being frequently reported together in various combinations: 35475 (Transluminal balloon angioplasty, percutaneous; brachiocephalic trunk or branches, each vessel), 35476 (Transluminal balloon angioplasty, percutaneous; venous), 36147 (Introduction of needle and/or catheter, arteriovenous shunt created for dialysis (graft/fistula); initial access with complete radiological evaluation of dialysis access, including fluoroscopy, image documentation and report), 36148 (Introduction of needle and/or catheter, arteriovenous shunt created for dialysis (graft/fistula); additional access for therapeutic intervention), 37236 (Transcatheter placement of an intravascular stent(s) (except lower extremity artery(s) for occlusive disease, cervical carotid, extracranial vertebral or intrathoracic carotid, intracranial, or coronary), open or percutaneous, including radiological supervision and interpretation and including all angioplasty within the same vessel, when performed; initial artery), 37238 (Transcatheter placement of an intravascular stent(s), open or percutaneous, including radiological supervision and interpretation and including angioplasty within the same vessel, when performed; initial vein), 75791 (Angiography, arteriovenous shunt (eg, dialysis patient fistula/graft), complete evaluation of dialysis access, including fluoroscopy, image documentation and report (includes injections of contrast and all necessary imaging from the arterial anastomosis and adjacent artery through entire VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 venous outflow including the inferior or superior vena cava), radiological supervision and interpretation), 75962 (Transluminal balloon angioplasty, peripheral artery other than renal, or other visceral artery, iliac or lower extremity, radiological supervision and interpretation), and 75968 (Transluminal balloon angioplasty, each additional visceral artery, radiological supervision and interpretation). These codes are frequently reported together for both dialysis circuit services and transluminal angioplasty services. At the October 2015 CPT Editorial Panel meeting, the panel approved the creation of nine new codes and deletion of four existing codes used to describe bundled dialysis circuit intervention services, and the creation of four new codes and deletion of 13 existing codes used to describe bundled percutaneous transluminal angioplasty services (see discussion of the latter code family in the next section). The Dialysis Circuit family of codes overlaps with the Open and Percutaneous Transluminal Angioplasty family of codes (CPT codes 37246–37249), as they are both being constructed from the same set of frequently reported together codes. We reviewed these two families of codes concurrently to maintain relativity between these clinically similar procedures based upon the same collection of deleted codes. For CPT code 36901, we proposed a work RVU of 2.82 instead of the RUCrecommended work RVU of 3.36. When we compared CPT code 36901 against other codes in the RUC database, we found that the RUC-recommended work RVU of 3.36 would be the highest value in the database among the 32 0-day global codes with 25 minutes of intraservice time. Generally speaking, we are particularly skeptical of RUCrecommended values for newly ‘‘bundled’’ codes that appear not to recognize the full resource overlap between predecessor codes. Since the recommended values would establish a new highest value when compared to other services with similar time, we believed it likely that the recommended value for the new code does not reflect the efficiencies in time. Of course, were there compelling evidence for this valuation accompanying the recommendation, we would consider such information. We also noted that the reference code selected by the survey participants, CPT code 36200 (Introduction of catheter, aorta), has a higher intraservice time and total time, but a lower work RVU of 3.02 We believe that there are more accurate CPT codes that can serve as a reference for PO 00000 Frm 00122 Fmt 4701 Sfmt 4700 CPT code 36901. As a result, we proposed to crosswalk CPT code 36901 to CPT code 44388 (Colonoscopy through stoma; diagnostic). CPT code 44388 has a work RVU of 2.82, and we believe it is a more accurate crosswalk for valuation due to its similar overall intensity and shared intraservice time of 25 minutes with 36901 and similar total time of 65 minutes. We proposed a work RVU of 4.24 for CPT code 36902 instead of the RUCrecommended work RVU of 4.83. The RUC-recommended work RVU is based upon a direct crosswalk to CPT code 43253 (Esophagogastroduodenoscopy, flexible, transoral), which shares the same 40 minutes of intraservice time with CPT code 36902. However, CPT code 43253 has significantly longer total time than CPT code 36902, 104 minutes against 86 minutes, which we believe reduces its utility for comparison. We instead proposed to crosswalk the work RVU for CPT code 36902 from CPT code 44408 (Colonoscopy through stoma), which has a work RVU of 4.24. In addition to our assessment that the two codes share similar intensities, CPT code 44408 also shares 40 minutes of intraservice time with CPT code 36902 but has only 95 minutes of total time and matches the duration of the procedure under review more closely than the RUC-recommended crosswalk to CPT code 43253. We also note that the RUC-recommended work increment between CPT codes 36901 and 36902 was 1.47, and by proposing a work RVU of 4.24 for CPT code 36902, we would maintain a very similar increment of 1.42. As a result, we proposed a work RVU of 4.24 for CPT code 36902, based on this direct crosswalk to CPT code 44408. For CPT code 36903, we proposed a work RVU of 5.85 instead of the RUC-recommended work RVU of 6.39. The RUC-recommended value is based on a direct crosswalk to CPT code 52282 (Cystourethroscopy, with insertion of permanent urethral stent). Like the previous pair of RUCrecommended crosswalk codes, CPT code 52282 shares the same intraservice time of 50 minutes with CPT code 36903, but has substantially longer total time (120 minutes against 96 minutes) which we believe limits its utility as a crosswalk. We proposed a work RVU of 5.85 based on maintaining the RUCrecommended work RVU increment of 3.03 as compared to CPT code 36901 (proposed at a work RVU of 2.82), the base code for this family of related procedures. We also point to CPT code 44403 (Colonoscopy through stoma; with endoscopic mucosal resection) as a reference point for this value. CPT code E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 44403 has a work RVU of 5.60, but also lower intraservice time (45 minutes as compared to 50 minutes) and total time (92 minutes as compared to 96 minutes) in relation to CPT code 36903, suggesting that a work RVU a bit higher than 5.60 would be an accurate valuation. Therefore, we proposed a work RVU of 5.85 for CPT code 36903, based on an increment of 3.03 from the work RVU of CPT code 36901. We proposed a work RVU of 6.73 instead of the RUC-recommended work RVU of 7.50 for CPT code 36904. Our proposed value comes from a direct crosswalk from CPT code 43264 (Endoscopic retrograde cholangiopancreatography), which shares the same intraservice time of 60 minutes with CPT code 36904 and has a higher total time. We also looked to the intraservice time ratio between CPT codes 36901 and 36904; this works out to 60 minutes divided by 25 minutes, for a ratio of 2.4, and a suggested work RVU of 6.77 (derived from 2.4 times CPT code 36901’s work RVU of 2.82). This indicates that our proposed work RVU of 6.73 maintains relativity within the Dialysis Circuit family. As a result, we proposed a work RVU of 6.73 for CPT code 36904, based on a direct crosswalk to CPT code 43264. We proposed a work RVU of 8.46 instead of the RUC-recommended work RVU of 9.00 for CPT code 36905. We looked at the intraservice time ratio between CPT codes 36901 and 36905 as one potential method for valuation, which is a 1:3 ratio (25 minutes against 75 minutes) for this case. This means that one potential value for CPT code 36905 would be triple the work RVU of CPT code 36901, or 2.82 times 3, which results in a work RVU of 8.46. We also investigated preserving the RUCrecommended work RVU increment between CPT code 36901 and 36905, which was an increase of 5.64. When this increment is added to the work RVU of 2.82 for CPT code 36901, it also resulted in a work RVU of 8.46 for CPT code 36905. Therefore, we proposed a work RVU of 8.46 for CPT code 36905, based on both the intraservice time ratio with CPT code 36901 and the RUCrecommended work increment with the same code. For CPT code 36906, we proposed a work RVU of 9.88 instead of the RUCrecommended work RVU of 10.42. We based the proposed value upon the RUC-recommended work RVU increment between CPT codes 36901 and 36906, which is 7.06. When added to the work RVU of 2.82 for CPT code 36901, the work RVU for CPT code 36906 would be 9.88. We are supporting this value through the use of two VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 crosswalks that both share the same 90 minutes of intraservice time with 36906. These are CPT code 31546 (Laryngoscopy, direct, with submucosal removal of non-neoplastic lesion(s) of vocal cord) at a work RVU of 9.73 and CPT code 61623 (Endovascular temporary balloon arterial occlusion, head or neck) at a work RVU of 9.95. The final three codes in the Dialysis Circuit family are all add-on codes, which make comparisons difficult to the global 0-day codes that make up the rest of the family. We proposed a work RVU of 2.48 instead of the RUCrecommended work RVU of 3.00 for CPT code 36907. Due to the difficulty of comparing CPT code 36907 with the non-add-on codes in the rest of the Dialysis Circuit family, we looked instead to compare the value to the addon codes in the Open and Percutaneous Transluminal Angioplasty family of codes (CPT codes 37246–37249). As we stated previously, both of these groups of new codes are being constructed from the same set of frequently reported together codes. We reviewed these two families of codes together to maintain relativity across the two families, and so that we could compare codes that shared the same global period. We proposed the RUC-recommended work RVUs for all four codes in the Open and Percutaneous Transluminal Angioplasty family of codes. As a result, we compared CPT code 36907 with the RUC-recommended work RVU of 2.97 for CPT code 37249, which is also an add-on code. These procedures should be clinically very similar, since both of them are performing percutaneous transluminal angioplasty on a central vein, and both of them are add-on procedures. We looked at the intraservice time ratio between these two codes, which was a comparison between 25 minutes for CPT code 36907 against 30 minutes for CPT code 37249. This produces a ratio of 0.83, and a proposed work RVU of 2.48 for CPT code 36907 when multiplied with the RUC-recommended work RVU of 2.97 for CPT code 37249. We noted as well that the intensity was markedly higher for CPT code 36907 as compared to CPT code 37249 when using the RUCrecommended work values, which did not make sense since CPT code 36907 would typically be a clinically less intense procedure. Using the intraservice time ratio results in the two codes having exactly the same intensity. As a result, we therefore proposed a work RVU of 2.48 for CPT code 36907, based on this intraservice time ratio with the RUC-recommended work RVU of CPT code 37249. PO 00000 Frm 00123 Fmt 4701 Sfmt 4700 80291 For CPT code 36908, we disagree with the RUC-recommended work RVU of 4.25, and we instead proposed a work RVU of 3.73. We did not consider the RUC work value of 4.25 to be accurate for CPT code 36908, as this was higher than our proposed work value for CPT code 36902 (4.24), and we did not believe that an add-on code should typically have a higher work value than a similar non-add-on code with the same intraservice time. We identified two appropriate crosswalks for valuing CPT code 36908: CPT code 93462 (Left heart catheterization by transseptal puncture through intact septum or by transapical puncture) and CPT code 37222 (Revascularization, endovascular, open or percutaneous, iliac artery). Both of these codes share the same intraservice time as CPT code 36908, and both of them also have the same work RVU of 3.73, which results in these codes also sharing the same intensity since they are all add-on codes. We therefore proposed a work value of 3.73 for CPT code 36908, based on a direct crosswalk to CPT codes 93462 and 37222. Finally, we proposed a work RVU of 3.48 for CPT code 36909 instead of the RUC-recommended work RVU of 4.12. The RUC-recommended value comes from a direct crosswalk from CPT code 38746 (Thoracic lymphadenectomy by thoracotomy). We compared the RUCrecommended work RVU for this procedure to other add-on codes with 30 minutes of intraservice time and found that the recommended work RVU of 4.12 would overestimate the overall intensity of this service relative to those with similar times. In reviewing the range of these codes, we believed that a more appropriate crosswalk is to CPT code 61797 (Stereotactic radiosurgery (particle beam, gamma ray, or linear accelerator)) at a work RVU of 3.48. We believed that this value is more accurate when compared to other add-on procedures with 30 minutes of intraservice time across the PFS. As a result, we proposed a work RVU of 3.48 for CPT code 36909 based on a direct crosswalk from CPT code 61797. We proposed to use the RUCrecommended direct PE inputs for these nine codes with several refinements. We did not propose to include the recommended additional preservice clinical labor for CPT codes 36904, 36905, and 36906. The preservice work description is identical for all six of the global 0-day codes in this family; there is no justification given in the RUC recommendations as to why the second three codes need additional clinical labor time beyond the minimal preservice clinical labor assigned to the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80292 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations first three codes. We do not believe that the additional staff time would be typical. Patient care already would have been coordinated ahead of time in the typical case, and the need for unscheduled dialysis or other unusual circumstances would be discussed prior to the day of the procedure. We therefore proposed to refine the preservice clinical labor for CPT codes 36904, 36905, and 36906 to match the preservice clinical labor of CPT codes 36901, 36902, and 36903. We proposed to refine the L037D clinical labor for ‘‘Prepare and position patient/monitor patient/set up IV’’ from 5 minutes to 3 minutes for CPT codes 36901–36906. The RUC recommendation included a written justification for additional clinical labor time beyond the standard 2 minutes for this activity, stating that the extra time is needed to prepare the patient’s arm for the procedure. We agreed that extra time may be needed for this activity as compared to the default standard of 2 minutes; however, we proposed to assign 1 extra minute for preparing the patient’s arm, resulting in a total of 3 minutes for this task. We did not believe that 3 extra minutes would be typically needed for arm positioning. We proposed to remove the ‘‘kit, for percutaneous thrombolytic device (Trerotola)’’ supply (SA015) from CPT codes 36904, 36905, and 36906. We believed that this thrombolytic device kit and the ‘‘catheter, thrombectomyFogarty’’ (SD032) provide essentially the same supply, and the use of only one of them would be typical in these procedures. We believed that each of these supplies can be used individually for thrombectomy procedures. We proposed to remove the SA015 supply and retain the SD032 supply, and we solicited additional comment and information regarding the use of these two supplies. We also proposed to remove the recommended supply item ‘‘covered stent (VIABAHN, Gore)’’ (SD254) and replace it with the ‘‘stent, vascular, deployment system, Cordis SMART’’ (SA103) for CPT codes 36903 and 36906. The Cordis SMART vascular stent was previously used in the past for CPT code 37238, which is the deleted code for transcatheter placement of an intravascular stent that CPT codes 36903 and 36906 are replacing. We did not have a stated rationale as to the need for this supply substitution, and therefore, we did not believe it would be appropriate to replace the current items with a significantly higher-priced item without additional information. We also proposed to refine the quantity of the ‘‘Hemostatic patch’’ VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 (SG095) from 2 to 1 for CPT codes 36904, 36905, and 36906. This supply was not included in any of the deleted base codes out of which the new codes are being constructed, and while we agreed that the use of a single hemostatic patch has become common clinical practice, we did not agree that CPT codes 36904–36906 would typically require a second patch. As a result, we proposed to refine the SG095 supply quantity from 2 to 1 for CPT codes 36904–36906, which also matches the supply quantity for CPT codes 36901–36903. Included in the RUC recommendation for the Dialysis Circuit family of codes were a series of invoices for a ‘‘ChloraPrep applicator (26 ml)’’ supply. We solicited comments regarding whether the Betadine solution has been replaced by a Chloraprep solution in the typical case for these procedures. We also solicited comments regarding whether the ‘‘ChloraPrep applicator (26 ml)’’ detailed on the submitted invoices is the same supply as the SH098 ‘‘chlorhexidine 4.0% (Hibiclens)’’ applicator currently in the direct PE database. Finally, we also solicited comments about the use of guidewires for these procedures. We requested feedback about which guidewires would be typically used for these procedures, and which guidewires are no longer clinically necessary. The following is a summary of the comments we received regarding our proposed valuation of the Dialysis Circuit codes. Due to the large number of comments we received for this code family, we will first summarize the comments related to general code valuation, followed by the comments related to specific work RVUs, and finally the comments related to direct PE inputs. Comment: Several commenters stated that the cumulative impact of reimbursement reductions for the Dialysis Circuit family of codes in physician work and practice expense would be quite dramatic. The commenters compared the total RVU of the old codes against the total RVU of the newly created codes and found a decrease of roughly 20–30 percent. Commenters expressed concern that if the proposed rates were to be implemented, many outpatient access centers that focus on providing care for ESRD patients might no longer be able to operate. Response: We share the concern of the commenters in maintaining access to care for Medicare beneficiaries. We believe that improved payment accuracy under the PFS generally facilitates PO 00000 Frm 00124 Fmt 4701 Sfmt 4700 access to reasonable and necessary physicians’ services. We note that a change in overall RVUs for particular services, regardless of the magnitude of the change, may reflect improved accuracy. For example, comparing the summed total RVU of CPT codes 36147, 36148, 36870, and 37238 against the total RVU of CPT code 36906 is an accurate method to describe the services taking place under the coding schema effective for 2016 and 2017, respectively. Through the bundling of these frequently reported services, it is reasonable to expect that the new coding system will achieve savings via elimination of duplicative assumption of the resources involved in furnishing particular servicers. For example, a practitioner would not be carrying out the full preservice work four separate times for CPT codes 36147, 36148, 36870, and 37238, but preservice times were assigned to each of the codes under the old coding. We believe the new coding assigns a more accurate preservice time and thus reflects efficiencies in resource costs that existed regardless of how the services were previously reported. Comment: Several commenters objected to the crosswalk codes used by CMS for proposed work valuation. Commenters stated that comparing the Dialysis Circuit codes to colonoscopy or endoscopic retrograde cholangiopancreatography (ERCP) codes was inappropriate, as it undervalued the technical skill and judgment necessary to furnish the services. In other words, the crosswalks chosen by CMS were invalid due to the differences in the procedures in question, with the Dialysis Circuit codes being more intensive procedures than the CMS crosswalks. Response: We disagree with the commenters that the choice of crosswalk codes is inappropriate for work valuation. We believe that, generally speaking, codes with similar intensity and time values are broadly comparable across the PFS, as the fee schedule is based upon a relative value system. For the Dialysis Circuit codes in particular, we provided a specific rationale for each crosswalk detailing why we believed it to be an appropriate selection. Regarding the statement from the commenters that colonoscopy codes, such as CPT code 44388, are inappropriate for use as crosswalks in this family of codes, we note that the RUC-recommended work RVU for CPT code 36901 was based upon a direct crosswalk to the work RVU of a colonoscopy code (CPT code 45378). We continue to believe that the crosswalks for this family of codes are appropriate E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations choices, since they share highly similar intensity and time values with the reviewed codes. Comment: Some commenters disagreed with the use of time ratios for work valuation. These commenters stated that the use of direct crosswalks based only on intraservice time comparison or ratios of intraservice time inappropriately discounted the variation in technical skill, judgment, and risk inherent to these procedures. Response: We continue to believe that the use of these methodologies, including the use of time ratios, is an appropriate process for identifying potential values for particular codes, especially when the recommended work RVUs do not appear to account for significant changes in time. As we stated earlier in our discussion on this topic in this final rule, we use time ratios to identify potential work RVUs and consider these work RVUs as potential options relative to the values developed through other methodologies for code valuation. We continue to believe our valuation for the Dialysis Circuit codes accurately captures the reduction in physician work caused by the efficiencies gained in both time and intensity through the bundling together of frequently reported services. Comment: One commenter disagreed with the use of CMS comparisons between the RUC-recommended work RVUs for the Dialysis Circuit codes and the work RVU for other codes with similar time values in the rest of the fee schedule, particularly for CPT code 36901. The commenter stated that whether or not CPT code 36901 had the highest work RVU among other 0-day global codes with 25 minutes of intraservice time was irrelevant. The commenter pointed out that some code must be the highest value because the RBRVS represents a range of services of varying intensity. The commenter stated that CMS’ reasoning undervalued the importance of work intensity in favor of the more easily quantifiable time variable, which was clinically inaccurate and contradictory to the principles of the relative value system. Response: We disagree with the commenter about the invalidity of comparing newly created codes to existing codes with similar time values on the PFS. While it is true that there must be a highest value for any particular subset of codes, we believe the best approach in establishing work RVUs for codes is to compare the service to other services with similar times and identify codes with similar overall intensities. As we wrote in the proposed rule with regards to CPT code 36901, we have reservations with RUC- VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 recommended values for newly ‘‘bundled’’ codes that appear not to recognize the full resource overlap between predecessor codes. Since the recommended values would establish a new highest value when compared to other services with similar time, we believe it likely that the recommended value for the new code does not reflect the efficiencies gained through bundling. We believe that these comparisons to other codes with similar time values and intensities are an important tool in helping to maintain relativity across the fee schedule. Comment: A commenter disagreed with the CMS valuation for these codes based on a clinical rationale pertaining to how the services are defined. The commenter stated that the dialysis access circuit is defined as originating in the artery adjacent to the arterial anastomosis and including all venous outflow (whether single or multiple veins) to the axillary-subclavian vein junction. While several different arteries and veins may be included in this definition, from a functional perspective it is a single ‘‘vessel’’. The commenter stated that because of this greater propensity for multiple lesions in these procedures, it is appropriate to define the access vessel as CPT has done and allow reporting of only a single angioplasty or stent in that entire conduit. However, the commenter reported that the survey built on the ‘‘typical patient’’ (51 percent of the cases) was unable to recognize the additional work of additional angioplasty or stent for the Dialysis Circuit family of codes, even though multiple or arterial lesions occur with significant frequency. Because the coding structure of the Dialysis Circuit family does not include a code for ‘‘additional vessels’’, the valuation of the codes needs to incorporate the resource cost of patient cases where multiple or arterial lesions occur. The commenter contended that this problem with the survey methodology affected the work intensity of these codes, and justifies a higher intensity for these procedures. Response: We share the commenter’s concerns with the survey data collected by the RUC. This is why we have long employed different approaches to identify potential values for work RVUs, such as time ratios, building blocks, and crosswalks to key reference or similar codes, in addition to the recommended survey data. We also note that our methodology generally values services based on assumptions regarding the typical case, not occasional complications that may require additional work when they occur. For PO 00000 Frm 00125 Fmt 4701 Sfmt 4700 80293 the particular case of the Dialysis Circuit family of codes, we do not agree with the commenter that the single ‘‘vessel’’ classification of these procedures supports a higher intensity compared to other related codes. These codes have been defined by CPT in a similar fashion to the lower extremity revascularization codes, in which the code is only billed a single time regardless of the number of lesions or number of stents placed. Due to the similarity with these existing codes located elsewhere in the PFS, we do not believe that it would be appropriate to value the Dialysis Circuit codes differently. Comment: Several commenters suggested that there was compelling evidence for the higher RUCrecommended work RVUs because the vignette developed by the CPT Editorial Panel does not accurately reflect the typical ESRD patient. Commenters stated that the vignette for the Dialysis Circuit codes significantly underestimated the age of the typical patient, and may have led survey respondents to report less time. According to commenters, the frail and elderly ESRD patients that constitute the typical patients for these procedures are much sicker than the typical patient in other codes on the PFS, and this serves to justify valuing these codes at a higher intensity. Response: We appreciate the submission of additional information regarding the patient population for these codes. We recognize that some services may require additional work due to an unusually difficult patient population. However, we do not agree at this time that the Dialysis Circuit family of codes has a uniquely different patient population that justifies an increase in valuation over other comparable codes on the PFS. We note that for CPT code 36901, the RUC recommended a work RVU of 3.36 based on a direct crosswalk to CPT code 45378, a flexible colonoscopy code. Our proposed work RVU of 2.82 for the same code was based on a direct crosswalk to CPT code 44388, which is another colonoscopy code. The patient population for these two crosswalk codes is similar, and both codes share similar time and intensity. We believe that our crosswalk code is a more appropriate choice given the time values and the efficiencies gained from bundling. However, based on this recommended crosswalk code, we believe that the RUC considers the patient population for CPT code 45378 to be appropriate for comparison to CPT code 36901, and that the reviewed code does not possess an unusually resourceintensive patient population. This same E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80294 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations pattern holds true for the other codes in the Dialysis Circuit family, which were valued using similar comparisons to established codes with typical patient populations. Comment: One commenter suggested that the difficulties posed by the patient population for the Dialysis Circuit codes were not sufficiently reflected in the RUC recommendations. The commenter stated that the patients receiving dialysis circuit services are extremely sick, and every step in the process of caring for those patients is more complex than those involved in caring for the average Medicare patient. The commenter stated that CMS underestimated the amount of time required to perform specific tasks and assumes that those tasks can be performed by individuals with lower levels of training and credentials than are used in typical practice. The commenter requested a series of direct PE refinements to this family of codes, many of which went above the original RUC recommendations, including clinical labor times significantly above the usual standards and using clinical labor staffing types outside the normal range. The commenter stated an intention to present data to support the recommendations at a later date. Response: We appreciate the additional information provided by the commenter about this family of codes. We emphasize that we do not believe that the RUC need be the exclusive source of information used in valuation of PFS services, and we are supportive of the submission of additional data that can aid in the process of determining the resources that are typically used to furnish these services. Because we did not receive data from the commenter to support these increases above the RUC recommendations, we are not incorporating these changes into the Dialysis Circuit codes at this time. However, we urge interested stakeholders to consider submitting robust data regarding costs for these and other services. We are also seeking information on how to reconcile situations where we have multiple sets of recommendations from the RUC and from other PFS stakeholders, both for this specific case and for the situation more broadly, given the need to maintain relativity among PFS services. The following comments address the proposed work valuation of individual codes in the family. Comment: A commenter contended that the proposed work RVU of 2.82 undervalues CPT code 36901. The commenter stated that compelling evidence regarding CPT’s inaccurate VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 description of the typical ESRD patient as 45 years old led to lower survey times and hence the ‘‘new highest value’’ problem mentioned by CMS. The commenter recommended that CMS should finalize the RUC work RVU of 3.36, or barring that, should finalize a work RVU of 3.02 based on a direct crosswalk to CPT code 36200. The commenter stated that this code is very similar clinically in work and intensity to CPT code 36901. Response: We summarized and responded to the general issues surrounding patient populations above. We disagree with the commenter that CPT code 36200 is a more appropriate choice for a crosswalk code for CPT code 36901. CPT code 36200 has 5 additional minutes of intraservice time (30 minutes as compared to 25 minutes) and 25 additional minutes of total time (91 minutes as compared to 66 minutes). In addition to this substantial difference in time values, the intensity of CPT code 36200 is also significantly lower than CPT code 36901. If we were to adopt the recommended crosswalk to a work RVU of 3.02, the intensity of CPT code 36901 would be 50 percent higher than the intensity CPT code 36200. Since we are statutorily obligated to base our valuation on time and intensity, we believe that this makes CPT code 36200 an inferior choice for a crosswalk code when compared to our choice of CPT code 44388, which shares very similar time and intensity with CPT code 36901. Comment: A commenter stated that CPT code 36902 should have a higher increment in work RVU from CPT code 36901 because it included work unable to be accounted for in a survey on the typical patient. The commenter indicated that according to published literature, more than one stenosis is present requiring angioplasty in 20–30 percent of dialysis access cases. A higher increment in work RVU from CPT code 36901 to 36902 would reflect the work of additional angioplasty on separate stenoses and arterial angioplasty that occurs in some cases, but cannot be reflected in a ‘‘typical’’ 51 percent case vignette. The commenter requested that CMS adopt the RUCrecommended work RVU for CPT code 36902. Response: We generally establish RVUs for services based on the typical case. If a particular patient case requires treatment outside the defined dialysis circuit code descriptor, then additional catheter placement and imaging may be reported, assuming that all of the proper requirements for separate billing are met. We do not believe that it would be appropriate to increase the work RVU PO 00000 Frm 00126 Fmt 4701 Sfmt 4700 for CPT code 36902 based on these nontypical situations. Comment: A commenter stated that the CMS proposed work RVU of 5.85 undervalues the work involved in the services described by CPT code 36903, based on the belief that the CPT patient vignette does not reflect the typical patient and that ‘‘additional vessel’’ angioplasty or stenting work is included in CPT code 36903 but was not able to be captured in a survey utilizing the ‘‘typical’’ patient. Response: We addressed these issues in previous comment responses. We continue to believe that the proposed work RVU for CPT code 36903 is accurate. Comment: A commenter disagreed with the proposed work RVUs for CPT codes 36904 and 36905. The commenter suggested that CMS should use time ratios from the base code in the family, CPT code 36901, starting from a work RVU of 3.02 instead of the proposed work RVU of 2.82. The commenter suggested that this would produce work RVUs for CPT codes 36904 and 36905 almost identical to the RUCrecommended values, which the commenter urged CMS to adopt. Response: We agree with the commenter that the use of time ratios is one potential method to use in the process of determining code valuation. However, since we stated previously that we believe our proposed work RVU of 2.82 is more accurate for CPT code 36901 than the commenter’s suggestion of 3.02, we do not believe that applying the same time ratios provides a rationale for adopting the RUC-recommended work RVUs for CPT codes 36904 and 36905. Comment: A commenter disagreed with CMS’ proposed work RVU of 9.88 for CPT code 36906 based upon the RUC-recommended increment of 7.06 from CPT code 36901. The commenter stated that the RUC value was well supported as the 25th percentile survey result and the survey times for the code were adversely impacted by CPT errors in the code descriptor and RUC survey limitations. Response: We do not agree that the RUC’s work valuation for CPT code 36906 maintains relativity within the fee schedule. We believe that the increment between CPT code 36901 and 36906 maintains relativity within the Dialysis Circuit family of codes, which is why we proposed to use it for valuation. However, we believe that the recommended work RVU for CPT code 36906 insufficiently accounted for the efficiencies in resource use achieved through bundling together its predecessor codes. We continue to E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations believe that the proposed work RVU of 9.88, bracketed between crosswalks to CPT codes 31546 and 61623, provides the most accurate valuation for this service. Comment: A commenter disagreed with the proposed work RVU of 2.48 for CPT code 36907, and stated that the work RVU should be identical to CPT code 37249 at a value of 2.97. The commenter stated these two services are clinically identical, and the CMS contention that CPT code 36907 would typically be a clinically less intense procedure is not correct. According to the commenter, the intensity involved in both of these add-on codes is the work and risk of crossing the central venous stenosis and performing intervention within the thorax where complications could be severe. The commenter stated that there is no difference in this work intensity based upon the direction of approach—from the dialysis access or from a native (femoral) vein. Both require advancing a long wire from the access site through the stenosis, superior and inferior vena cava, and right atrium, which is needed no matter which direction one is approaching the lesion. As a result, the commenter suggested that CPT code 36907 should have the same work RVU as CPT code 37249. Response: While we agree with the commenter that these two services are clinically similar procedures, we do not agree with the commenter that the work between the two is identical. In particular, we believe that the difference in the intraservice time (25 minutes for CPT code 36907 against 30 minutes for CPT code 37249) should be accounted for in the work valuation, as the former code takes 20 percent less time to perform. We note as well that under our proposed valuation, these two codes have exactly the same intensity, with the difference in the work value occurring solely as a result of the decreased time required to perform CPT code 36907. Since time is one of the resources we are obligated to use for code valuation, we believe that the proposed values for these two codes are more accurate than setting both of them to the same work RVU. Comment: One commenter supported the proposed work RVUs of 3.73 for CPT code 36908 and 3.48 for CPT code 36909. Response: We appreciate the support from the commenter. The following comments address the proposed direct PE inputs for the Dialysis Circuit family of codes. Comment: Several commenters urged CMS to accept the recommended additional preservice clinical labor for VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 CPT codes 36904, 36905, and 36906. Commenters stated that the patient presentation and the requisite preservice clinical labor is inherently different for CPT codes 36904–36906 when compared with CPT codes 36901– 36903. Commenters indicated that the latter group are elective procedures, which are scheduled and planned well in advance of the procedure and performed on days that do not conflict with the patient’s dialysis schedule. In contrast, the former group are urgent procedures typically done when a patient presents to their dialysis treatment with a thrombosed access. According to the commenters, the urgent nature of these procedures, the need for additional preoperative testing because of missed dialysis, and the need for arranging unscheduled dialysis treatment requires additional preservice time for the procedural staff. Response: We disagree with the commenters. We continue to note that the preservice work description is identical for all six of the 0-day global codes in this family. Generally speaking, we also typically provide less preservice clinical labor time for emergent procedures, not more preservice clinical labor time, as there is no time for these tasks to be performed. We continue to believe that all six of these codes are most accurately valued by sharing the same preservice clinical labor times. Comment: Several commenters stated that the recommended 5 minutes of clinical labor for ‘‘Prepare and position patient/monitor patient/set up IV’’ were reasonable because these cases are done on the upper extremity using portable c-arm fluoroscopy. According to commenters, the additional time includes prepping and positioning the arm, applying appropriate shielding to the patient’s torso, positioning the c-arm unit, and then positioning other radiation shielding devices. Commenters stated that each of these activities requires more time in the arm, which typically must be extended to the side to be accessible for access and imaging; this is different from procedures done in the long plane of the body including the torso and legs. The commenters stated that 5 minutes is a more accurate reflection of the required clinical labor time than the proposed 3 minutes. Response: We continue to believe that additional time may be needed for this activity as compared to the default standard of 2 minutes. However, we maintain that the commenter’s request for 3 additional minutes (for a total of 5 minutes) would not typically be required for arm positioning, as this additional clinical labor time is PO 00000 Frm 00127 Fmt 4701 Sfmt 4700 80295 generally not included in similar procedures. We do not agree that the additional tasks described by the commenters would require the requested 5 minutes of clinical labor time, and we are maintaining our proposed value of 3 minutes. Comment: Several commenters opposed the CMS proposal to remove the ‘‘kit, for percutaneous thrombolytic device (Trerotola)’’ supply (SA015) from the RUC recommended supplies for CPT code 36904, 36905, and 36906, under the belief that only one device would typically be used in these procedures. Commenters indicated that this understanding was incorrect. According to the commenters, a mechanical thrombectomy device and a Fogarty thrombectomy balloon serve different purposes and both are necessary to perform a dialysis access thrombectomy. Commenters provided lengthy clinical rationales to support their point of view, which can be summarized as follows: ‘‘The Fogarty balloon is small and highly compliant allowing it to be pulled through the artery and into the access without damaging the vessels. The thrombectomy device cannot be used safely for this function. This device is larger so risks pushing the fibrin plug into the artery if passed across the arterial anastomosis from the access—risking distal arterial embolization. The device is also much more rigid being made from metal and with irregular shape that risks damaging the endothelium of the artery causing arterial injury.’’ As a result, commenters requested that the listed devices ‘‘catheter, thrombectomy-Fogarty’’ (SD032) and ‘‘kit, for percutaneous thrombolytic device (Trerotola)’’ supply (SA015) both remain in the supply list for these codes. Response: We appreciated the detailed presentation of additional clinical information regarding the use of the percutaneous thrombolytic device kit from the commenters. After review of the comments and the contents of the kit, we believe that its inclusion in these three procedures is appropriate. According to the device literature, the kit contains a rotor for macerating the clot, a catheter for removing the clot, and a sheath for introducing the device. We will therefore restore the SA015 supply to CPT codes 36904, 36905, and 36906. However, we are removing the Fogarty catheter (SD032) and 1 of the 2 vascular sheaths (SD136), as these are contained within the kit. The literature for the percutaneous thrombolytic device kit clearly stipulates that there is no need for additional catheters to remove the clot, which makes the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80296 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Fogarty catheter a duplicative supply which can be removed. Comment: Several commenters disagreed with the CMS proposal to remove the recommended supply item ‘‘covered stent (VIABAHN, Gore)’’ (SD254) and replace it with the ‘‘stent, vascular, deployment system, Cordis SMART’’ (SA103) for CPT codes 36903 and 36906. Commenters stated that covered stents are the only stent devices that are FDA approved and supported by evidence from randomized controlled trials for use in dialysis access procedures. They are typically used in recurrent or elastic stenosis in dialysis access and have become the standard of care for these interventions. One commenter stated that Braid Forbes Health Research analyzed stent use in CPT code 37238 using CMS OPPS claims data, and found that the covered stent (VIABAHN, Gore), was used 67.5 percent of the time and the SA103, stent, vascular, deployment system, Cordis SMART, was used 32.5 percent of the time. Commenters stressed that bare metal stents, such as the Cordis SMART, are not indicated for use in the Dialysis Circuit procedures. Response: We appreciate the submission of this additional clinical information regarding the use of stents for these procedures. After consideration of the comments, we are restoring the covered stent (VIABAHN, Gore) (SD254) to CPT codes 36903 and 36906 as originally recommended. Because we are including the SD254 covered stent, we are not adding the stent, vascular, deployment system, Cordis SMART (SA103) supply to these procedures. Comment: Several commenters disagreed with the CMS proposal to reduce the quantity of the Hemostatic patch (SG095) from 2 to 1 for CPT codes 36904, 36905, and 36906. Commenters stated that two hemostatic patches are necessary in these procedures because they require two separate cannulations and sheaths. At the end of the case, both sheath sites are removed and covered with a hemostatic patch which aids in preventing bleeding and maintaining sterility. The commenters stressed that because there are two access sites, two hemostatic patches are required, one to cover each site. Response: We appreciate the additional clinical information submitted by the commenters. In response to this information, we are finalizing inclusion of the second Hemostatic patch (SG095) to CPT codes 36904, 36905, and 36906, as recommended by the RUC. Comment: In response to the CMS solicitation of feedback regarding the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Chloraprep applicator (26 ml) supply, commenters indicated that Chloraprep solution has replaced Betadine solution when performing sterile preparation of the dialysis access circuit due to its greater efficacy as preoperative skin prep. Commenters indicated that this supply was most accurately represented by the submitted invoice. Another commenter stated that studies have shown that preparation of central venous sites with a 2% aqueous chlorhexidine gluconate (in 70% alcohol) is superior for skin site preparation to either 10% povidoneiodine or 70% alcohol alone, and that in 2002, the CDC recommended that 2% chlorhexidine be used for skin antisepsis prior to catheter insertion. One commenter recommended that CMS replace the Betadine povidone soln (SJ041) with two units of swab, patient prep, 3.0 ml (Chloraprep) supply (SJ088) in the inputs for CPT codes 36901–36906. Response: We appreciate the submission of additional clinical information regarding the Chloraprep supply from the commenters. We agree with the recommended supply substitution, and we are therefore removing 60 ml of the Betadine solution (SJ041) and replacing it with two units of the swab, patient prep, 3.0 ml (Chloraprep) supply (SJ088) for CPT codes 36901–36906. We will add the Chloraprep applicator (26 ml) supply to the direct PE input database at a price of $8.48 based on an average of the three submitted invoices; it is not currently assigned to any codes. We also agree that it is a distinct supply from the ‘‘chlorhexidine 4.0% (Hibiclens)’’ (SH098) supply already located in the direct PE database. Comment: Several commenters provided additional information regarding the use of guidewires in these procedures. Commenters stated that the three wires used in the Dialysis Circuit codes are the minimum required for these interventions and frequently additional wires would be needed in more complicated cases or in cases in which more than one access must be used. Commenters stated that the guidewires submitted are the bare minimum needed for the typical case. Response: We appreciate the additional information from the commenters regarding the use of guidewires. We proposed to use the RUC-recommended quantities for these supplies, and we are not finalizing any changes. Comment: One commenter stated that vascular procedures involving fluoroscopy or radiography require the use of a radio-opaque ruler (SD249) to PO 00000 Frm 00128 Fmt 4701 Sfmt 4700 accurately size or locate tributaries and lesions beneath the skin. The commenter indicated that some of the base procedure codes (CPT codes 36903 and 36906) include this supply, while it is missing from CPT codes 36902 and 36905 and should be included. Response: Based upon recommendations from the RUC and specialties, we believe that the use of this supply is typical in stent procedures such as CPT codes 36903 and 36906. It was included in CPT code 37238, which is a predecessor code for these two procedures. However, the radio-opaque ruler does not appear to be typical in the other dialysis codes and we do not believe that it would be typically required in the non-stent procedures, as it was not included in any of the other predecessor codes. Comment: One commenter requested that CMS include additional miscellaneous supplies that were missing or underrepresented in the cost inputs. These supplies were not included in the RUC recommendations for these codes. The commenter also requested increasing the quantity of each category of gloves to 3 and the quantity of gowns to 3 for each of the base codes (CPT codes 36901–36906) to more accurately reflect the typical use of these items in the dialysis circuit procedures. Response: We believe the supplies as recommended are typical for these procedures. We also believe the proposed number of gloves and gowns would be sufficient for the typical case; we currently do not have any data to suggest that there is a need for additional gloves or gowns in these procedures. The remainder of the additional miscellaneous items appear to be new supplies with no included invoices. Many of these new items may have analogous supplies already present in our direct PE database. For the others, we will consider pricing them if invoices are submitted as part of our normal process for updating supply and equipment costs. After consideration of comments received, we are finalizing the work RVUs for the Dialysis Circuit codes as proposed. We are also finalizing the proposed direct PE inputs, with the refinements detailed above. (17) Open and Percutaneous Transluminal Angioplasty (CPT Codes 37246, 37247, 37248, and 37249) In January 2015, a CPT/RUC workgroup identified the following CPT codes as being frequently reported together in various combinations: 35475 (Transluminal balloon angioplasty, percutaneous; brachiocephalic trunk or E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations branches, each vessel), 35476 (Transluminal balloon angioplasty, percutaneous; venous), 36147 (Introduction of needle and/or catheter, arteriovenous shunt created for dialysis (graft/fistula); initial access with complete radiological evaluation of dialysis access, including fluoroscopy, image documentation and report), 36148 (Introduction of needle and/or catheter, arteriovenous shunt created for dialysis (graft/fistula); additional access for therapeutic intervention), 37236 (Transcatheter placement of an intravascular stent(s) (except lower extremity artery(s) for occlusive disease, cervical carotid, extracranial vertebral or intrathoracic carotid, intracranial, or coronary), open or percutaneous, including radiological supervision and interpretation and including all angioplasty within the same vessel, when performed; initial artery), 37238 (Transcatheter placement of an intravascular stent(s), open or percutaneous, including radiological supervision and interpretation and including angioplasty within the same vessel, when performed; initial vein), 75791 (Angiography, arteriovenous shunt (eg, dialysis patient fistula/graft), complete evaluation of dialysis access, including fluoroscopy, image documentation and report (includes injections of contrast and all necessary imaging from the arterial anastomosis and adjacent artery through entire venous outflow including the inferior or superior vena cava), radiological supervision and interpretation), 75962 (Transluminal balloon angioplasty, peripheral artery other than renal, or other visceral artery, iliac or lower extremity, radiological supervision and interpretation), and 75968 (Transluminal balloon angioplasty, each additional visceral artery, radiological supervision and interpretation). At the October 2015 CPT Editorial Panel meeting, the panel approved the creation of four new codes and deletion of 13 existing codes used to describe bundled percutaneous transluminal angioplasty services. The Open and Percutaneous Transluminal Angioplasty family of codes overlaps with the Dialysis Circuit family of codes (CPT codes 36901–36909), as they are both being constructed from the same set of frequently reported together codes. We reviewed these two families of codes concurrently to maintain relativity between these clinically similar procedures based upon the same collection of deleted codes. After consideration of these materials, we proposed to accept the RUC- VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 recommended work RVU for CPT codes 37246, 37247, 37248, and 37249. For the clinical labor direct PE inputs, we proposed to use the RUCrecommend inputs with several refinements. Our proposed inputs refined the recommended clinical labor time for ‘‘Prepare and position patient/ monitor patient/set up IV’’ from 5 minutes to 3 minutes for CPT codes 37246 and 37248. The RUC recommendation included a written justification for additional clinical labor time beyond the standard 2 minutes for this activity, stating that the extra time was needed to move leads out of X-ray field, check that X-ray is not obstructed and that there is no risk of collision of X-ray equipment with patient. As we wrote for the same clinical labor activity in the Dialysis Circuit family, we agreed that extra time might be needed for this activity as compared to the default standard of 2 minutes; however, we assigned 1 extra minute for the additional positioning tasks, resulting in a total of 3 minutes for this task. We did not believe that 3 extra minutes would be typically needed for preparation of the X-ray. The equipment times for the angiography room (EL011) and the PACS workstation (ED050) were also refined to reflect this change in clinical labor. We proposed to remove the ‘‘drape, sterile, femoral’’ supply (SB009) and replace it with a ‘‘drape, sterile, fenestrated 16in x 29in’’ supply (SB011) for CPT codes 37246 and 37248. The two base codes out of which these new codes are being constructed, CPT codes 35471 and 35476, both made use of the SB011 fenestrated sterile drape supply, and there was no rationale provided for the switch to the SB009 femoral sterile drape in the two new codes. We solicited comment on the use of sterile drapes for these procedures, and what rationale there was to support the use of the SB009 femoral sterile drape as typical for these new procedures. The following is a summary of the comments we received regarding our proposed valuation of the Open and Percutaneous Transluminal Angioplasty codes. Comment: One commenter disagreed with the CMS proposed value of 3 minutes for the ‘‘Prepare and position patient/monitor patient/set up IV’’ clinical labor task. The commenter stated that the recommended 5 minutes of time was needed to move leads out of X-ray field, check that X-ray is not obstructed and that there is no risk of collision of X-ray equipment with patient. The commenter also indicated that the patient’s arm needs to be PO 00000 Frm 00129 Fmt 4701 Sfmt 4700 80297 positioned on an arm board, and requested time for this activity. Recommended: We continue to believe that additional time may be needed for this activity as compared to the default standard of 2 minutes. However, we maintain that the commenter’s request for 3 additional minutes (for a total of 5 minutes) would not typically be required for preparing the X-ray and conducting arm positioning. We do not agree that the additional tasks described by the commenters would require the requested 5 minutes of clinical labor time, and we are maintaining our proposed value of 3 minutes. Comment: Several commenters objected to the proposed replacement of the ‘‘drape, sterile, femoral’’ supply (SB009) with the ‘‘drape, sterile, fenestrated 16in x 29in’’ supply (SB011) for CPT codes 37246 and 37248. Commenters stated that the vast majority of these new procedures will be performed from a femoral or jugular approach and will utilize a standard femoral drape. According to the commenters, the fenestrated drape provides a limited sterile field (16x29in) which does not allow room for sterile manipulation of wires and catheters as they extend away from the entry into the vascular system. With the creation of the new dialysis access circuit CPT code family, commenters indicated that the use of extremity access and fenestrated drapes would become much less typical for the new angioplasty code set. Response: We appreciate the presentation of additional clinical information from the commenters regarding the sterile drape most appropriate for these procedures. As a result, we are finalizing inclusion of the sterile femoral drape supply (SB009) to CPT codes 37246 and 37248. We will therefore not be adding the fenestrated drape supply (SB011) to these procedures. After consideration of comments received, we are finalizing the proposed work RVUs for the four codes in the family. We are also finalizing the proposed direct PE inputs, with the refinement to the sterile femoral drape detailed above. (18) Esophagogastric Fundoplasty Trans-Oral Approach (CPT Code 43210) For CY 2016, the CPT Editorial Panel established CPT code 43210 to describe trans-oral esophagogastric fundoplasty. The RUC recommended a work RVU of 9.00 and for CY 2016, we established an interim final work RVU of 7.75 for CPT code 43210. We noted that a work RVU of 7.75, which corresponds to the 25th E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80298 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations percentile of the survey, more accurately reflected the resources used in furnishing this service. Comment on the CY 2016 PFS final rule with comment period: Commenters urged CMS to accept the RUCrecommended work RVU of 9.00 for CPT code 43210. The commenters believed that the RUC-recommended value compared well with the key reference service, CPT code 43276 (Endoscopic retrograde cholangiopancreatography (ERCP); with removal and exchange of stent(s), biliary or pancreatic duct, including pre- and post-dilation and guide wire passage, when performed, including sphincterotomy, when performed, each stent exchanged), which has a work RVU of 8.94 and an intraservice time of 60 minutes. Commenters believed that due to similar intraservice times and intensities, that CPT code 43210 should be valued nearly identically to CPT code 43276. Some commenters also stated that to maintain relativity within the upper GI code families, CPT code 43210 should not have a lower work RVU than CPT code 43276 since the majority of survey participants indicated that CPT code 43210 is more complex than CPT code 43276. Additionally, one commenter noted that an esophagogastroduodenoscopy (EGD) is used twice during this service, before and after fundoplication. The commenter stated that because this is a multi-stage procedure, other EGD codes are not comparable. The commenter also pointed out that this technology has a small number of users and urged CMS to accept the RUC-recommended work RVU of 9.00 until there is additional utilization, and to consider reviewing this code again in subsequent years. Response in the CY 2017 PFS proposed rule: We referred this code to the CY 2016 multi-specialty refinement panel for further review, which recommended we accept the RUCrecommended value of 9.00 work RVUs. There are four ERCP codes with 60 minutes of intraservice time, three of which have work RVUs of less than 7.00 and only one of the four codes has a work RVU higher than 7.75 RVUs (8.94). Based on our estimate of overall work for this service, we continue to believe that the 25th percentile of the survey more accurately reflects the relative resource costs associated with this service. Therefore, for CY 2017, we proposed a work RVU of 7.75 for CPT code 43210. The following is a summary of the comments we received regarding our proposed valuation of CPT code 43210: Comment: Commenters indicated that the survey results were limited since VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 this is a new technology. Commenters requested that CMS finalize the RUCrecommended work RVU of 9.00, with the understanding that the service will be reviewed again in the near future with more robust survey data as the technology continues to be adopted. Commenters disagreed with CMS’ comparison to other EGD codes for purposes of establishing the work RVU, due to differences in the inherent clinical procedural steps involved with this code, including that EGD is used more than once (pre- and postfundoplication) to ensure successful completion of the procedure. Response: While it may be true that multiple EGDs may be performed during this procedure, the surveyees are familiar with the service and we assume included this information in their proposed time and work recommendations. However, the values recommended by the survey and the RUC are not consistent with other codes with similar times and intensities. We noted in the CY 2016 interim final rule that CPT code 43240 (Drainage of cyst of the esophagus, stomach, and/or upper small bowel using an endoscope) has 10 minutes more intraservice time and a work RVU of 7.25. Therefore, we are finalizing for CY 2017 a work RVU of 7.75 for CPT code 43210. (19) Esophageal Sphincter Augmentation (CPT Codes 43284 and 43285) In October 2015, the CPT Editorial Panel created two new codes to describe laparoscopic implantation and removal of a magnetic bead sphincter augmentation device used for treatment of gastroesophageal reflux disease (GERD). The RUC noted that the specialty societies conducted a targeted survey of the 145 physicians who have been trained to furnish these services and who are the only physicians who have performed these procedures. They noted that only 18 non-conflicted survey responses were received despite efforts to follow up and that nine physicians had no experience in the past 12 months with the procedure. The RUC agreed with the specialty society that the expertise of those responding was sufficient to consider the survey; however, neither the RUC nor the specialty society used the survey results as the primary basis for their recommended value. For CPT code 43284, the RUC recommended a work RVU of 10.13. We compared this code to CPT code 43180 (Esophagoscopy, rigid, transoral with diverticulectomy of hypopharynx or cervical esophagus (e.g., Zenker’s diverticulum), with cricopharyngeal PO 00000 Frm 00130 Fmt 4701 Sfmt 4700 myotomy, includes use of telescope or operating microscope and repair, when performed), which has a work RVU of 9.03 and has identical intraservice time and similar total time. We stated in the proposed rule that we believe the overall intensity of these procedures is similar; therefore, we proposed a work RVU of 9.03 for CPT code 43284. For CPT code 43285, the RUC recommended a work RVU of 10.47. We used the increment between the RUCrecommended work RVU for this code and CPT code 43284 (0.34 RVUs) to develop our proposed work RVU of 9.37 for CPT code 43285. Comment: We received many comments on our proposal from various stakeholders including practitioners, manufacturers, the RUC, and medical specialty societies representing various surgical specialties. For CPT code 43284, commenters indicated that CMS’ proposed crosswalk from CPT code 43180 was inadequate with regard to time and complexity of the services. Commenters stated that CPT code 43180 has 10 minutes less immediate postservice time and one less post-operative visit. Some commenters stated that it appears that the difference between the specialty society median survey total time for 43284 and the total time for CMS’ proposed crosswalk from CPT code 43180 was too great to discount. Commenters also disagreed that CPT code 43284 and CMS’ proposed crosswalk from CPT code 43180 had similar complexity considering that one of the procedures was performed on a natural orifice with endoscopy versus a procedure with a surgical incision. Commenters indicated that management of surgical patients with incisions necessitates a more thorough evaluation of the body than an endoscopic procedure. For CPT code 43285, commenters noted that although CPT code 47562 (the RUC-recommended crosswalk) requires more intraservice time than the aggregate survey median time for CPT code 43285, the median intraservice time may be understated because of the number of people without experience, and suggested that the total time for CPT codes 43285 and 47562 is nearly identical and both require similar work and intensity. Commenters stated that only 18 non-conflicted survey responses were received despite the efforts of the specialty societies, and that nine physicians had no experience with the procedure in the past 12 months. Commenters also noted that the RUC recommendations used the specialty society survey times, but provided a crosswalk for work RVU valuation. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 Many commenters expressed additional concerns about the specialty society survey data, indicating that the survey median and 25th percentile work RVUs were inconsistent with the total physician work for services reported with CPT codes 43284 and 43285. Commenters stated that to accept the results of the survey is to essentially state that the opinions of inexperienced surgeons is adequate to determine the value of a surgical procedure and lacked input from surgeons experienced in performing the procedure. Commenters suggested that CMS maintain carrier pricing for services reported with CPT codes 43284 and 43285 while the specialty societies conduct new surveys that include data from surgeons experienced with the procedures. Some commenters suggested that the work of CPT codes 43284 and/or 43285 is more similar to fundoplication procedures reported with CPT code 43280 (a work RVU of 18.10). Other commenters suggested valuations for these procedures ranging from 14 to 17 work RVUs, stating that the services reported with CPT codes 43284 and 43285 were slightly less complicated than fundoplication procedures, but more complex than the valuations reflected in the survey results, RUC recommendations, and CMS proposed values. Response: We appreciate the feedback received from stakeholders regarding valuation of these services. After considering the comments received, for CY 2017, we are finalizing the RUCrecommended values for CPT codes 43284 (a work RVU of 10.13) and 43285 (a work RVU of 10.47). We recognize commenters’ concerns regarding the specialty society survey data and believe these codes may be potentially misvalued. We look forward to receiving feedback from interested parties and specialty societies regarding accurate valuation of these services for consideration during future rulemaking. (20) Percutaneous Biliary Procedures Bundling (CPT Codes 47531, 47532, 47533, 47534, 47535, 47536, 47537, 47538, 47539, 47540, 47541, 47542, 47543, and 47544) This group of fourteen codes was reviewed by the RUC at the April 2015 meeting. We established interim final values for this group of codes during the CY 2016 PFS rulemaking cycle, and subsequently received updated RUC recommendations from the October 2015 meeting for the CY 2017 PFS rulemaking cycle. Our proposals for these codes incorporated both the updated RUC recommendations, as well as public comments received as part of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the interim final status of these procedures. We received several comments regarding the CMS refinements to the work values for this family of codes in the CY 2016 final rule with comment period. The relevance of many of these comments has been diminished by the new series of RUC recommendations for work values that we received as a result of the October 2015 meeting. Given that we proposed the updated RUCrecommended work RVUs for CPT codes 47531, 47532, 47533, 47534, 47535, 47536, 47537, 47538, 47539, 47540, 47542, 47543, and 47544, we solicited additional comments relative to these proposed values. We agreed that the second round of physician surveys conducted for the October 2015 RUC meeting more accurately captured the work and time required to perform these procedures. The one exception was CPT code 47541; the survey times for this procedure were identical as conducted for the April and October 2015 RUC meetings, yet the RUC recommendation increased from a work RVU of 5.61 in April to a work RVU of 7.00 in October. Given that the time values for the procedure remained unchanged between the two surveys, we do not understand why the work RVU would have increased by nearly 1.50 in the intervening months. Since this code also has an identical intraservice time (60 minutes) and total time (121 minutes) as CPT code 47533, we do not agree that it should be valued at a substantially higher rate compared to a medically similar procedure within the same code family. We therefore proposed to crosswalk the work value of CPT code 47541 to the work value of CPT code 47533, and we proposed a work RVU of 5.63 for both procedures. We also note that many of the codes in the Percutaneous Biliary Procedures family were previously included in Appendix G, and were valued under the assumption that moderate sedation was typically performed on the patient. As part of the changes for services previously valued with moderate sedation as inherent, we are removing a portion of the work RVU and preservice work time from CPT codes 47532, 47533, 47534, 47535, 47536, 47538, 47539, 47540, and 47541. For example, we proposed a work value for CPT code 47541 with a 0.25 reduction from 5.63 to 5.38, and a 10 minute reduction in its preservice work time from 33 minutes to 23 minutes, to reflect the work that will now be reported separately using the new moderate sedation codes. CPT codes 47542, 47533, and 47544 also were valued with moderate sedation; however, as add-on codes, they are not PO 00000 Frm 00131 Fmt 4701 Sfmt 4700 80299 subject to alterations in their work RVUs or work times since the moderate sedation code with work RVUs and work time (99152) will only be billed once for each base-code and not additionally with the add-on codes. These changes are reflected in Appendix B and the work time file posted to the web; see section II.D for more details. For the direct PE inputs, we did not propose to include the recommended L051A clinical labor for ‘‘Sedate/apply anesthesia’’ and the L037D for ‘‘Assist Physician in Performing Procedure’’ for CPT codes 47531 and 47537. As we wrote in the CY 2016 final rule with comment period (80 FR 71053), we believe that this clinical labor describes activities associated with moderate sedation, and moderate sedation is not typical for these procedures. We also proposed to refine the L037D clinical labor for ‘‘Clean room/equipment by physician staff’’ from 6 minutes to 3 minutes for all of the codes in this family. Three minutes is the standard for this clinical labor activity, and we continued to maintain that the need for additional clinical labor time for this cleaning activity would not be typical for these procedures. Comment on the CY 2016 PFS final rule with comment period: One commenter disagreed with our refinement to replace supply item ‘‘catheter, balloon, PTA’’ (SD152) with supply item ‘‘catheter, balloon ureteral (Dowd)’’ (SD150). The commenter stated that a Dowd catheter is designed and FDA approved for use in the prostatic urethra by retrograde placement through the penile urethra, and it is not designed for use in an antegrade ureteral dilation procedure. The commenter stated that this replacement is inappropriate. The updated RUC recommendations for this family of codes also restored the balloon PTA catheter. Response in the CY 2017 PFS proposed rule: We proposed again to replace the recommended supply item ‘‘catheter, balloon, PTA’’ (SD152) with supply item ‘‘catheter, balloon ureteral (Dowd)’’ (SD150). We believed that the use of this ureteral balloon catheter, which is specifically designed for catheter and image guidance procedures, would be more typical than the use of a PTA balloon catheter. While we recognize that the Dowd catheter is not FDA approved, it is our understanding that the PTA balloon catheter has also not been FDA approved for use in these procedures. We were uncertain if the commenter was requesting that we should no longer include catheters that lack FDA approval in the direct PE database; this E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80300 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations would preclude the use of most of the catheters in our direct PE database. We solicited additional comment on the use of FDA approved catheters; in the meantime, we continued our longstanding practice of using the catheters in the direct PE database without explicit regard to FDA approval in particular procedures. We also proposed to remove the recommended supply item ‘‘stone basket’’ (SD315) from CPT code 47543 and add it to CPT code 47544. Based on the code descriptors, we believed that the stone basket was intended to be included in CPT code 47544 and was erroneously listed under CPT code 47543. We solicited comments from the public to help clarify this issue. We noted again that many of the codes in the Percutaneous Biliary Procedures family were previously included in Appendix G, and as part of the change in moderate sedation reporting, we removed some of the recommended direct PE inputs related to moderate sedation from CPT codes 47532, 47533, 47534, 47535, 47536, 47538, 47539, 47540, and 47541. We removed the L051A clinical labor time for ‘‘Sedate/apply anesthesia’’, ‘‘Assist Physician in Performing Procedure (CS)’’, and ‘‘Monitor pt. following moderate sedation’’. We also removed the conscious sedation pack (SA044) supply, and some or all of the equipment time for the stretcher (EF018), the mobile instrument table (EF027), the 3-channel ECG (EQ011), and the IV infusion pump (EQ032). These changes are reflected in the public use files posted to the web; see section II.D for more details. The following is a summary of the comments we received regarding our proposed valuation of the Percutaneous Biliary Procedures codes. Comment: Several commenters disagreed with the proposed work RVU of 5.45 for CPT code 47541. Commenters stated that although CPT codes 47541 and 47533 share similar time values, the patient population for CPT code 47541 is more complex with post-surgical anatomy and atypical problems. Therefore, the commenters stated that the direct crosswalk creates a sharp rank order anomaly within the family, and requested that CMS adopt the RUC-recommended work RVU. Response: We agree with the commenters that the proposed work RVU for CPT code 47541 has the potential to create an anomalous relationship between the services in this family of codes. After considering the comments, we are finalizing a work RVU of 6.75 for CPT code 47541, which is the RUC-recommended work RVU of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 7.00 after removing 0.25 RVUs to account for the fact that moderate sedation will now be billed separately for this service. Comment: One commenter requested 2 minutes for the clinical labor task ‘‘Sedate/apply anesthesia’’ and 15 minutes for the clinical labor task ‘‘Assist Physician in Performing Procedure’’ for CPT codes 47531 and 47537. The commenter agreed with CMS that moderate sedation was not typical for either procedure, but stated that the 2 minutes was for the RN to administer the pre-procedure prophylactic antibiotics and the 15 minutes for assisting the physician was unrelated to moderate sedation. Response: We disagree with the commenter that the clinical labor time for these tasks would be typical for CPT codes 47531 and 47537. For the 2 minutes of apply anesthesia time, we do not agree that this clinical labor time should be assigned when the clinical staff is performing an entirely different activity. We have not assigned clinical labor time in this way in the past, and the request for 2 minutes related to administering pre-procedure prophylactic antibiotics was never discussed in the recommendations for these procedures. For the 15 minutes of assist physician time, the commenter did not provide a justification for why an additional staff member would be needed or what the staff member would be doing. CPT codes 47531 and 47537 already contain two clinical staff members, one technician to assist the physician and another technician to acquire images, plus a circulator. The other codes in the Percutaneous Biliary Procedures family previously had a third RN clinical staff member to administer the sedation to the patient, before moderate sedation was split off into its own separate procedure codes. However, CPT codes 47531 and 47537 do not typically require sedation, and we do not agree that this additional clinical staff member would be required to perform the procedures. Comment: Several commenters again objected to the proposed replacement of the recommended supply item ‘‘catheter, balloon, PTA’’ (SD152) with supply item ‘‘catheter, balloon ureteral (Dowd)’’ (SD150). Commenters stated that this would not reflect the practice patterns of the Interventional Radiology community, as it is atypical and even quite rare to use ureteral balloon dilatation catheters in the biliary tree. The commenters provided information regarding the size of uretal balloon catheters, indicating that the maximum diameter is 8mm (Bard) or 7mm (Cook PO 00000 Frm 00132 Fmt 4701 Sfmt 4700 Medical). According to commenters, these sizes are frequently inadequate to treat the wide variety of pathologies in the biliary tree where often balloon sizes up to 12 mm are required. As a result, the commenters stated that the change of the balloon catheter supply item does not accurately represents the actual supplies utilized in real practice, nor does the Dowd ureteral balloon catheter satisfy the clinical need performed during the procedure. Response: We appreciate the additional clinical information supplied by the commenters regarding the current use of balloon catheters. However, although commenters stated that Bard catheters and Cook Medical catheters are frequently too small to treat some of the wide variety of pathologies that occur in the biliary tree, commenters did not indicate what size balloon catheter would be typically used for these particular procedures in the Percutaneous Biliary Procedures, or provide a specific rationale for why the catheter we proposed (the Dowd ureteral balloon catheter) would not be appropriate for these procedures. We note again that we are required to assess resources based on the typical case, and the commenters did not provide data to indicate that the proposed Dowd catheter would be inadequate in the typical case for these procedures in question, only that it may be insufficient for certain pathologies in the biliary tree. We continue to believe that the Dowd ureteral balloon catheter, which is specifically designed for catheter and image guidance procedures, would be more typical than the use of a PTA balloon catheter. Comment: One commenter indicated that the stone basket supply (SD315) had indeed been incorrectly assigned to CPT code 47543, and thanked CMS for moving it to CPT code 47544 where it was intended. Response: We appreciate the response from the commenter. After consideration of comments received, we are finalizing our proposed work RVUs for the Percutaneous Biliary Procedures family of codes, with the one change to a work RVU of 6.75 for CPT code 47541. We are finalizing our proposed direct PE inputs without refinement. (21) Percutaneous Image Guided Sclerotherapy (CPT Code 49185) For CY 2016, we established an interim final work RVU of 2.35 for CPT code 49185 based on a crosswalk from CPT code 62305 (Myelography via lumbar injection, including radiological supervision and interpretation; 2 or more regions (e.g., lumbar/thoracic, E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations cervical/thoracic, lumbar/cervical, lumbar/thoracic/cervical)); which we believed accurately reflected the time and intensity involved in furnishing services reported with CPT code 49185. We also requested stakeholder input on the price of sclerosing solution (supply item SH062) as the volume of the solution in this procedure (300 mL) is much higher than other CPT codes utilizing sclerosing solution (between 1 and 10 mL). Comment on the CY 2016 PFS final rule with comment period: In response to the CY 2016 PFS final rule with comment period (80 FR 71054), commenters disagreed with CMS’ crosswalk from CPT code 62305. Commenters suggested that the RUC’s recommended crosswalk from CPT code 31622 (Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed; diagnostic, with cell washing, when performed (separate procedure)) was a more appropriate comparison due to the similarity of the services. Commenters requested that CPT code 49185 be referred to the refinement panel. The requests did not meet the requirements related to new clinical information for referral to the refinement panel. We continue to believe that for CPT code 49185 a crosswalk from the value of CPT code 62305 is accurate due to similarities in overall work. Commenters also stated that the procedure reported with CPT code 49185 required a separate clinical labor staff type. The commenter noted that, due to the inclusion of this additional individual, the L037D clinical labor and additional gloves were appropriate to include in the procedure. The commenter did not provide any evidence for this claim. Response in the CY 2017 PFS proposed rule: We continue to believe that this additional use of clinical staff would not be typical for CPT code 49185. This procedure does not involve moderate sedation, and therefore, we do not believe that there would be a typical need for a third staff member. Additionally, we did not receive any information regarding the sclerosing solution (supply item SH062) that supports maintaining an input of 300 mL, which far exceeds the volume associated with other CPT codes. Therefore, for CY 2017, we proposed a work RVU of 2.35 for CPT code 49185. We sought stakeholder feedback regarding why a different work RVU or crosswalk would more accurately reflect the resources involved in furnishing this service. We also proposed to maintain our direct PE refinements from the CY 2016 PFS final rule with comment VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 period, but proposed to refine the direct practice expense inputs for the sclerosing solution (supply item SH062) from 300 mL to 10 mL, which is the highest level associated with other CPT codes utilizing sclerosing solution. The following is a summary of the comments we received regarding our proposed valuation of CPT code 49185. Comment: Commenters requested that CMS use the RUC-recommended crosswalk from CPT code 31622 instead of the CMS-proposed crosswalk from CPT code 62305. Commenters stated that CMS’ crosswalk undervalues the services, the RUC-recommended crosswalk has analougous clinical activities during the procedure, as well as a similar risk, and the intensity of work involved for services reported with CMS’ comparison code is less than during sclerotherapy. Commenters suggested that the sclerotherapy procedure includes inherent risks and challenges that are not adequately accounted for in CMS’ proposed crosswalk. Response: We disagree with commenters that the RUC’s recommended crosswalk from CPT code 31622 has analogous clinical activities compared to CMS’ proposed crosswalk from CPT code 62305. CMS’ crosswalk code refers to a procedure with injection, drainage, and aspiration, which has more clinical similarity to CPT code 49185 than the RUC’s recommended crosswalk from 31622, which is used to report a broncoscopy procedure. We continue to believe that a work RVU of 2.35 is an appropriate valuation for services reported using CPT code 49185 and we maintain that CPT code 62305 is an accurate crosswalk, since CPT codes 49185 and 62305 have similar service times. Therefore, for CY 2017, we are finalizing a work RVU of 2.35 for CPT code 49185. Comment: Commenters disagreed with CMS’ proposal to include a direct PE input of 10 mL of sclerosing solution (supply item SH062) and requested that CMS accept the RUC’s recommendation to include 300 ml of sclerosing solution as part of the direct PE inputs for this procedure. One commenter indicated that other services that utilize sclerosing solution are used to describe injection of sclerosant into vascular structures which tend to be relatively small in size, and therefore, use a much smaller volume. Another commenter stated that for this procedure, the sclerosing solution is injected and drained three separate times, equating to 100 mL per injection, and that use of lesser volumes of sclerosant or less than three administrations of the sclerosant during the procedure would allow for more PO 00000 Frm 00133 Fmt 4701 Sfmt 4700 80301 frequent recurrence necessitating additional procedures. Response: We appreciate the commenters’ feedback regarding the direct PE inputs for CPT code 49185. We inadvertently included the RUCrecommended quantity of 300 mL for the sclerosing solution (supply item SH062) in developing the proposed rates for this code. For CY 2017, we are finalizing the RUC-recommended direct PE inputs, including 300 mL of sclerosing solution. We welcome stakeholder feedback regarding the appropriate PE inputs for this procedure for consideration for CY 2018, including volume and pricing of the sclerosing agent. (22) Genitourinary Procedures (CPT Codes 50606, 50705, and 50706) In the CY 2016 PFS final rule with comment period, we established as interim final the RUC-recommended work RVUs for all three codes. We did not receive any comments on the work values for these codes, and we proposed to maintain all three at their current work RVUs. The RUC recommended the inclusion of ‘‘room, angiography’’ (EL011) for this family of codes. As we discussed in the CY 2016 PFS final rule with comment period, we did not believe that an angiography room would be used in the typical case for these procedures, and we therefore replaced the recommended equipment item ‘‘room, angiography’’ with equipment item ‘‘room, radiographic-fluoroscopic’’ (EL014) for all three codes on an interim final basis. We also stated our belief that since the predecessor procedure codes generally did not include an angiography room and we did not have a reason to believe that the procedure would have shifted to an angiography room in the course of this coding change, we did not believe that the use of an angiography room would be typical for these procedures. Comment on the CY 2016 PFS final rule with comment period: Several commenters disagreed with the CMS substitution of the fluoroscopic room in place of the angiography room. The commenters stated that all three of these procedures were previously reported using CPT code 53899 (Unlisted procedure, urinary system) which does not have any PE inputs, and the RUC recommendations included as a reference CPT code 50387 (Removal and replacement of externally accessible transnephric ureteral stent), which includes an angiography room. The commenters suggested that CPT code 50387 was an example of a predecessor code that included the use of an angiography room, along with other E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80302 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations codes that are being bundled together to create the new Genitourinary codes. Response in the CY 2017 PFS proposed rule: We did not agree with the commenters’ implication that because CPT code 50387 was an appropriate reference code for use in valuation, that it necessarily would have previously been used to describe services that are now reported under CPT codes 50606, 50705, or 50706. Our perspective was consistent with the RUC-recommended utilization crosswalk for the three new codes, which did not suggest that the services were previously reported using 50706. We did not believe that use of one particular code for reference in developing values for another necessarily meant that the all of the same equipment would be used for both services. We did not believe that these codes described the same clinical work either. CPT code 50387 is for the ‘‘Removal and replacement of externally accessible transnephric ureteral stent’’ while CPT code 50606 describes an ‘‘Endoluminal biopsy of ureter and/or renal pelvis’’, CPT code 50705 refers to ‘‘Ureteral embolization or occlusion’’, and CPT code 50706 details ‘‘Balloon dilation, ureteral stricture.’’ Additionally, the codes do not have the same global periods, which makes comparisons between CPT code 50387 and CPT codes 506060, 50705, and 50706 even more difficult. We noted that while the commenter stated that CPT code 50387 was provided as a reference for these procedures, 50387 is not listed as a reference for any of these three codes, or mentioned at all in the codes’ respective summary of recommendations. However, we acknowledged that among the procedures that are provided as references, many of them included the use of an angiography room, such as CPT code 36227 (Selective catheter placement, external carotid artery) and CPT code 37233 (Revascularization, endovascular, open or percutaneous, tibial/peroneal artery, unilateral, each additional vessel). Therefore, we agreed that the use of the angiography room in these procedures, or at least some of its component parts, might be warranted. Comment on the CY 2016 PFS final rule with comment period: A commenter stated that the substitution of the fluoroscopic room for the angiography room was clinically unjustified. The commenter stated that the angiography room was needed for these procedures to carry out 3-axis rotational imaging (so as to avoid rolling the patient), ensure sterility, and avoid unacceptable radiation exposure to physicians, their staff, and their VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 patients. The commenter indicated that the only piece of equipment listed in the angiography room that would not be typically utilized for these procedures is the Provis Injector. All of the other items were used for these Genitourinary procedures. The commenter urged CMS to restore the angiography room to these procedures. Response in the CY 2017 PFS proposed rule: We agreed that it is important to provide equipment that is medically reasonable and necessary. Our concern with the use of the angiography room for these codes was that we did not believe all of the equipment would be typically necessary to furnish the procedure. For example, the commenter agreed that the Provis Injector would not be required for these Genitourinary codes. Therefore, we proposed to remove the angiography room from these three procedures and add in its place the component parts that make up the room. Table 17 detailed these components: TABLE 17—ANGIOGRAPHY ROOM (EL011) COMPONENTS Component 100 KW at 100 kV (DIN6822) generator C-arm single plane system, ceiling mounted, integrated multispace T motorized rotation, multiple operating modes Real-time digital imaging 40 cm image intensifier at 40/28/20/14cm 30 x 38 image intensifier dynamic flat panel detector Floor-mounted patient table with floating tabletop designed for angiographic exams and interventions (with peistepping for image intensifiers 13in+) 18 in TFT monitor Network interface (DICOM) Careposition: radiation free positioning of collimators Carewatch: acquisition and monitoring of configurable dose area product Carefilter: Cu-prefiltration DICOM HIS/RIS Control room interface Injector, Provis Shields, lower body and mavig Leonardo software Fujitsu-Siemens high performance computers Color monitors Singo modules for dynamic replay and full format images Prepared for internal networking and Siemens remote servicing, both hardware and software We included all of the above components except the Provis Injector, as commenters indicated that its use would not be typical for these procedures. We welcomed additional comments regarding if these or other components were typically used in PO 00000 Frm 00134 Fmt 4701 Sfmt 4700 these Genitourinary procedures. We lacked pricing information for these components; we therefore proposed to include each of these components in the direct PE input database at a price of $0.00 and we solicited invoices from the public for their costs to be able to price these items for use in developing final PE RVUs for CY 2017. We also noted that we believed that this issue illustrated a potentially broad problem with our use of equipment ‘‘rooms’’ in the direct PE input database. For most services, we only include equipment items that are used and unavailable for other uses due to their use during the services described by a particular code. However, for items included in equipment ‘‘rooms,’’ we allocate costs regardless of whether the individual items that comprise the room are actually used in the particular service. To maintain relativity among different kinds of procedures, we were interested in obtaining more information specifying the exact resources used in furnishing services described by different codes. We hoped to address this subject in greater detail in future rulemaking. The following is a summary of the comments we received regarding our proposed valuation of the Genitourinary codes: Comment: Many commenters objected to the removal of the angiography room from these codes and its replacement with the component parts of the room. Commenters stated that it was misguided to unbundle the components of the angiography room when one equipment item within the room is not utilized. They indicated that there are numerous cases where an equipment room is used despite the fact that not every item in the room is needed for a service, because in practice the rooms are configured for the most typical type of procedure performed within the room and it would not be efficient or realistic to remove items from a room when a less typical service is needed. For the specific case of the Provis Injector equipment, commenters stated it could not be used elsewhere and there was no way to create a separate angiography room for nonvascular procedures that did not require the injector. Commenters did not generally agree with the CMS proposal to price all of the components of the angiography room at $0.00 pending invoices from the public regarding their individual cost. Commenters stated that the resource cost of the angiography room components was clearly not $0.00, since the equipment in total costs over $1.3 million. Commenters stated that it was E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 not realistic to submit 21 separate invoices during the 60 day comment period, and furthermore that the components of the angiography room are typically not sold separately. Response: We appreciate the feedback from commenters regarding the difficulties involved in pricing the components for the angiography room. We have longstanding issues with the equipment rooms as they are currently constituted, due to our belief that all of the components of the room may not typically be used in performing the procedure in question. We continue to believe that these three codes do not make use of all of the components of the angiography room, and we believe that this code family serves as a clear example of the problems in relativity associated with the use of ‘‘rooms’’ as equipment items for a limited set of services under the PFS. However, we agree with the commenters that it is not likely that the components of the angiography room do not have a price. Therefore, while we continue to seek invoices for more detailed pricing information, we are restoring the angiography room (EL011) equipment to these three codes, with an equipment time of 47 minutes for CPT code 50606, 62 minutes for CPT code 50705, and 62 minutes for CPT code 50706, in each case consistent with the equipment time in CY 2016. We intend to continue to consider the use of equipment ‘‘rooms’’ more broadly for future rulemaking. After consideration of comments received, we are finalizing our work values for the three Genitourinary codes as proposed. We are finalizing the proposed direct PE inputs as well, with the changes to the angiography room as detailed above. (23) Electromyography Studies (CPT Code 51784) We identified CPT code 51784 as potentially misvalued through a screen of high expenditure services by specialty. This family also includes CPT code 51785 (Needle electromyography studies (EMG) of anal or urethral sphincter, any technique) but was not included in this survey. Both services have 0-day global periods. The RUC recommended a work RVU of 0.75 for CPT code 51784. We believe that this service is more accurately valued without a global period, since that is more consistent with other diagnostic services, and specifically, with all the other diagnostic electromyography services. We proposed to eliminate the global period and proposed the RUCrecommended work RVU of 0.75 for CY 2017. We also proposed to change the global period for CPT code 51785 from VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 0-day to no global period, to be consistent with the global period for CPT code 51784. Additionally, we proposed to add CPT code 51785 to the list of potentially misvalued codes to update the value of the service considering the change in global period, and to maintain consistency with CPT code 51784. Comment: A commenter supported CMS’ proposal to accept the RUCrecommended work value. The commenter requested that CMS indicate any global period changes and requests for codes as part of the family when CMS initially nominates a code or reviews the RUC level of interest (LOI) prior to distribution. Another commenter, while supporting our acceptance of the RUCrecommended work RVU for CPT code 51784, did not support adding CPT code 51785 to the potentially misvalued code list as that code was addressed recently when the new CPT codes were created for urodynamic testing procedures. Response: We appreciate commenters’ perspectives. We note that CPT code 51785 has not been valued since January 2003, at the same RUC meeting wherein CPT code 51784 was valued. We encourage stakeholders to submit the entire code family when submitting codes for inclusion on the list of potentially misvalued codes. Comment: One commenter stated that there is no difference in the work value of CPT code 51784 whether it has a 0day global period versus an XXX global period, and should not be considered as potentially misvalued. Response: We note that CPT code 51784 was identified as potentially misvalued through a screen of high expenditure services by specialty. In the standard process of code valuation, CMS decided to change the global period to XXX, indicating no global period, so that the code is more closely aligned with other similar services. Comment: One commenter did not agree that CMS should accept the RUCrecommended work values, stating that the RUC-recommended work RVU underestimates the work involved in furnishing this service. Response: We remind commenters and stakeholders that disagree with CMS values, including those based on RUC recommendations, that in addition to submitting comments on our proposed rules, they may also nominate codes as potentially misvalued through the public nomination process. After consideration of comments, we are finalizing the work and global period changes as proposed. PO 00000 Frm 00135 Fmt 4701 Sfmt 4700 80303 (24) Cystourethroscopy (CPT Code 52000) In the CY 2016 PFS final rule with comment period, CMS identified CPT code 52000 through the screen for high expenditure services. We stated in the CY 2017 proposed rule that the RUCrecommended work RVU of 1.75 for CPT code 52000 is higher than the work RVUs for all 0-day global codes with 10 minutes of intraservice time and we did not believe that the overall intensity of this service was greater than all of the other codes. Instead, we proposed that this code compares favorably to CPT code 58100 (Endometrial sampling (biopsy) with or without endocervical sampling (biopsy), without cervical dilation, any method (separate procedure)), which has a work RVU of 1.53, and has identical intraservice time and similar total time. Therefore, we proposed a work RVU of 1.53 for CPT code 52000, using a direct crosswalk to CPT code 58100. Comment: Commenters requested that CMS finalize the RUC-recommended work RVU of 1.75 for this procedure. Commenters stated that the RUCrecommended crosswalk codes were a more accurate comparison of physician work, time, and intensity for procedures reported with CPT code 52000. Response: The RUC-recommended work RVU of 1.75 is higher than the work RVUs associated with all other codes with 0-day global periods and 10 minutes of intraservice time, and we continue to believe that the work and intensity of this service is similar to other CPT codes with 10 minutes of intraservice time. Therefore, we are finalizing a work RVU of 1.53 for CPT code 52000. (25) Biopsy of Prostate (CPT Code 55700) In the CY 2016 PFS final rule with comment period, CMS identified CPT code 55700 as potentially misvalued based on the high expenditure by specialty screen. The RUC subsequently reviewed this code for physician work and practice expense and recommended a work RVU of 2.50 based on the 25th percentile of the survey. We believed the RUCrecommended work RVU overestimates the work involved in furnishing this service given the reduction in total service time; specifically, the reduction in preservice and postservice times. The RUC recommendation also appears overvalued when compared to similar 0day global services with 15 minutes of intraservice time and comparable total times. To develop a proposed work RVU, we crosswalked the work RVUs E:\FR\FM\15NOR2.SGM 15NOR2 80304 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 for this code from CPT code 69801 (Labyrinthotomy, with perfusion of vestibuloactive drug(s), transcanal), noting similar levels of intensity, similar total times, and identical intraservice times. Therefore, we proposed a work RVU of 2.06 for CPT code 55700. Comments: A few commenters, including the RUC, noted the RUC compared CPT code 55700 to other 0day global services with 15 minutes of intraservice time and stated that the RUC-recommended value was appropriate. The RUC noted that the overall work of the surveyed code was similar to services: CPT code 93503 (Insertion and placement of flow directed catheter (eg, Swan-Ganz) for monitoring purposes) (work RVU = 2.91, intraservice time of 15 minutes) and CPT code 36556 (Insertion of nontunneled centrally inserted central venous catheter; age 5 years or older) (work RVU = 2.50, intraservice time of 15 minutes). The RUC determined that these services required the same intraservice time, comparable physician work and intensity and recommended CMS accept the RUC-recommended work RVU of 2.50. Additionally, the RUC continued to urge specialty societies to submit invoices for new equipment. Response: We appreciate additional information offered by the commenters. After consideration of comments received, we agree with the additional information provided by commenters and are finalizing the RUCrecommended work RVU of 2.50. (26) Laparoscopic Radical Prostatectomy (CPT Code 55866) In the CY 2016 PFS final rule with comment period, we established an interim final work RVU of 21.36 for CPT code 55866 based on a direct crosswalk to CPT code 55840 (Prostatectomy, retropubic radical, with or without nerve sparing). We stated that we believed these codes were medically similar procedures with nearly identical time values, and we did not believe that the difference in intensity between CPT code 55840 and CPT code 55866 was significant enough to warrant the RUCrecommended difference of 5.50 work RVUs. We also compared CPT code 55866 to the work RVU of 25.18 for CPT code 55845, and stated our belief that, in general, a laparoscopic procedure would not require greater resources than an open procedure. Comment on the CY 2016 PFS final rule with comment period: Several commenters disagreed with the statement that a laparoscopic procedure, such as CPT code 55866, would generally require fewer resources than VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 an open procedure, such as CPT code 55840. Commenters stated that developing the skill necessary to perform a minimally invasive laparoscopic surgery requires a greater degree of experience and specialized training than that required to perform an open prostatectomy. Commenters indicated that this level of practitioner skill should be reflected in the work RVU for the procedure, as intensity is based in part upon skill, mental effort, and psychological stress. Response in the CY 2017 PFS proposed rule: We agreed with the commenters that skill and technique, as well as mental effort and psychological stress on the part of the practitioner contribute to the overall intensity of the furnishing a given service, and therefore, are one of the two components in determining code-level work RVUs. However, we did not believe that relative increases in requisite skill or technique can be considered alone. Although the development of new technology (such as robotic assistance) may create a greater burden of knowledge on the part of the practitioner, it can also make procedures faster, safer, and easier to perform. This means that there may be reductions in time for such a procedure (which is the other component of the work RVU), but also that the mental effort and psychological stress for a given procedure may be mitigated by the improvements in safety. Therefore, we did not agree that a newer procedure that includes additional technology and requires greater training would inherently be valued at a higher rate than an older and potentially more invasive procedure. Comment on the CY 2016 PFS final rule with comment period: A commenter stated that CPT code 55866 describes two very different procedures in one code. The descriptor for the code states ‘‘includes robotic assistance when performed’’, and the procedure is performed differently depending on whether or not the robotic assistance is included. The commenter indicated that the vast majority of radical prostatectomies are performed with the robot, and although the outcomes are the same in both cases, the procedures are completely different. Response in the CY 2017 PFS proposed rule: We agreed with the commenter that the descriptor includes the possibility for confusion, especially on the part of the survey respondents. Valuing this code based on the typical case is difficult when the procedure differs depending on the inclusion or exclusion of robotic assistance. We suggested that valuation might be PO 00000 Frm 00136 Fmt 4701 Sfmt 4700 improved if the CPT Editorial Panel were to consider further revisions to this code to describe the two cases of laparoscopic radical prostatectomy: With and without robotic assistance. Comment on the CY 2016 PFS final rule with comment period: One commenter stated that the application of the phase-in transition for facility-only codes like CPT code 55866 would have a particularly egregious impact in the second year of the transition. The commenter urged CMS to ensure that its implementation of the phase-in transition does not undermine the protections created by the statute. Response in the CY 2017 PFS proposed rule: Please see sections II.G and II.H for a discussion of the phasein transition and its implementation in its second year. Comment on the CY 2016 PFS final rule with comment period: Several commenters requested that CMS refer CPT code 55866 to the refinement panel for review. At the refinement panel, the presenters brought up new evidence in the form of a study published in 2016 describing discharge data for radical laparoscopic prostatectomies. The presenters stated that there were many more people included in this study as opposed to the 30 respondents in the survey data, and that on average the robotic procedure took 90 minutes longer than the open procedure. The additional time needed to perform the procedure, as indicated by this new study’s results, was presented as a new rationale as to why CMS should accept the RUC-recommended work RVU. Response in the CY 2017 PFS proposed rule: CPT code 55866 was referred to the CY 2016 Multi-Specialty Refinement Panel per the request of commenters. The outcome of the refinement panel was a median work RVU of 26.80, the same value as the RUC recommended in the previous rulemaking cycle. After consideration of the comments and the results of the refinement panel, we proposed for CY 2017 to maintain the interim final work RVU of 21.36 for CPT code 55866. We were interested in the results of the study mentioned at the refinement panel, and we stated that we would consider incorporating this data into the valuation of this code, including, if appropriate, adjustments to the work times used in PFS ratesetting. We also solicited that the study be submitted through the public comment process so that we could allow it proper consideration along with other information submitted by the public, rather than using the results of a single study to propose valuations. We were also curious about the time values E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations regarding the duration of CPT code 55866. One of the members of the refinement panel stated that on average the robotic procedure took 90 minutes longer than the open procedure. This was not what was indicated by the survey data from the RUC recommendations, which had the two procedures valued at virtually identical times (same intraservice time, 6 minutes difference total time). We therefore solicited comment on whether the times included in this study were more accurate than the time reflected in the RUC surveys. The following is a summary of the comments we received regarding our proposed valuation of CPT code 55866: Comment: One commenter agreed that the code descriptor for CPT code 55866 might have caused confusion by the RUC survey respondents. The commenter stated that they were encouraged by the CMS comments that the valuation might be improved if the CPT Editorial Panel were to consider further revisions to this code to describe a laparoscopic radical prostatectomy with and without robotic assistance. The commenter requested a strong statement from CMS urging the CPT Editorial Panel to create two unique codes: One for laparoscopic radical prostatectomy and one for robotic radical prostatectomy. Response: We believe that there are potential problems with CPT code 55866 as it is currently described and with the corresponding RUC recommendation. Commenters presented data suggesting that there are significant differences between the robotic and non-robotic versions of the procedure in the length of time required to perform the operation. However, the same data also suggests that the nonrobotic version of the laparoscopic radical prostatectomy has become comparatively rare. Given the information presented by commenters, we believe that valuation might be improved with further revisions to this code. However, we note that we do not direct the work of the CPT Editorial Panel, and we also note the comparative rarity of the non-robotic version of the procedure. Comment: Several commenters referenced a study entitled ‘‘Robotassisted versus Open Radical Prostatectomy: A Contemporary Analysis of an All-payer Discharge Database’’ by J.L. Leow, S.L. Chang, and colleagues. This study was published in February 2016, and it detailed how university investigators analyzed more than 600,000 men undergoing radical prostatectomy in the United States from 2003–2013, which showed that the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 robotic approach took on average 90 minutes longer than an open radical prostatectomy. Commenters noted how this contrasted to the RUC survey data that had only 32 respondents and recommended an intraservice time equal to an open radical prostatectomy (180 minutes). The commenters presented the study data in favor of demonstrating how the robotic approach to radical prostatectomy detailed in CPT code 55866 takes significantly more time to perform than the open approach detailed in the CMS crosswalk code 55840. Commenters recommended that CMS adopt the RUC-recommended work RVU of 26.80 based on this new clinical evidence contained in the study. Response: We appreciate the submission of this additional clinical information from the commenters. We have had longstanding interest in using robust data sources regarding the resource costs of PFS services, and we believe that the use of such additional outside data sources can improve the accuracy of the valuation of services. However, we do note that the cited study was not specifically designed to measure intraoperative times and did not use the same ‘‘skin to skin’’ definition of intraservice time typically used in the development of times included in PFS ratesetting. In this case of the particular comment, we note the potential logical dissonance of the commenter urging us to adopt the RUC-recommended work value derived from the RUC survey by citing alternative data that calls into question the accuracy of the time data from the same RUC survey. In other words, we are troubled with the idea that we should consider survey data as valid for work while rejecting its validity for time, given that time is one of the two elements of overall work. Despite these concerns, we agree that the study presents additional data indicating that there is a significant difference between the open and robotic-assisted forms of laparoscopic radical prostatectomy, and that the robotic form described by CPT code 55866 likely takes a longer time to perform. Based on this presentation of additional clinical evidence, we agree with the commenters that the recommended work RVU of 26.80 is a more appropriate value for this procedure. After consideration of comments received, we are finalizing a work RVU of 26.80 for CPT code 55866. PO 00000 Frm 00137 Fmt 4701 Sfmt 4700 80305 (27) Hysteroscopy (CPT Codes 58555, 58558, 58559, 58560, 58561, 58562, and 58563) During CY 2016 PFS rulemaking, we identified CPT code 58558 as a potentially misvalued code via the high expenditure specialty screen. CPT codes 58559–58563 were also included in the RUC’s January 2016 review of this family of codes. For CPT code 58555, the RUC recommended a work RVU of 3.07. We proposed that the 25th percentile survey result, a work RVU of 2.65, accurately reflects the resources involved in furnishing this service. We stated that this value is bracketed by two crosswalk codes, CPT code 43191 (Esophagoscopy, rigid, transoral; diagnostic, including collection of specimen(s) by brushing or washing when performed (separate procedure)), which has a work RVU of 2.49, and CPT code 31295 (Nasal/sinus endoscopy, surgical; with dilation of maxillary sinus ostium (for example, balloon dilation), transnasal or via canine fossa), which has a work RVU of 2.70. CPT codes 43191 and 31295 have identical intraservice times and similar total times when compared with CPT code 58555. For CPT code 58558, the RUC recommended a work RVU of 4.37. However, we believed that a direct crosswalk from CPT code 36221 (Nonselective catheter placement, thoracic aorta, with angiography of the extracranial carotid, vertebral, and/or intracranial vessels, unilateral or bilateral, and all associated radiological supervision and interpretation, includes angiography of the cervicocerebral arch, when performed), which has a work RVU of 4.17, and identical intraservice time, and similar total time, more accurately reflects the time and intensity of furnishing this service. Our proposed work RVU was additionally supported by using an increment between this code and the base code for this family, CPT code 58555. The increment between the RUCrecommended values for these two codes is 1.3. That increment added to the proposed work RVU of 2.65 for the base code, CPT code 58555, results in a work RVU of 3.95. Therefore, we proposed a work RVU of 4.17 RVUs for CPT code 58558. For CPT code 58559, the RUC recommended a work RVU of 5.54. However, we believed that a direct crosswalk from CPT code 52315 (Cystourethroscopy, with removal of foreign body, calculus, or ureteral stent from urethra or bladder (separate procedure); complicated), which has a work RVU of 5.20, a similar intraservice E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80306 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations time, and similar total time as compared with CPT code 58559 more accurately reflects the time and intensity of furnishing this service. This proposed value was additionally supported by using an increment between CPT code 58559 and the base code for this family, CPT code 58555. The increment between the RUC recommended values for the two codes is 2.47. That increment added to the proposed value for the base code, CPT code 58555, would result in a work RVU of 5.12. Therefore, we proposed a work RVU of 5.20 for CPT code 58559. For CPT code 58560, the RUC recommended a work RVU of 6.15. We stated in the proposed rule that we believe that a direct crosswalk from CPT code 52351 (Cystourethroscopy, with ureteroscopy and/or pyeloscopy; diagnostic), which has a work RVU of 5.75 and which has more intraservice time and very similar total time, more accurately reflects the time and intensity of furnishing this service. Our proposal further supported this value by using an increment between CPT code 58560 and the base code for this family, CPT code 58555. We stated that the increment between the RUC recommended values for the two codes is 3.08. That increment added to the proposed value for the base code, CPT code 58555, would result in a work RVU of 5.73. Therefore, we proposed a work RVU of 5.75 for CPT code 58560. For CPT code 58561, the RUC recommended a work RVU of 7.00. We stated in the proposed rule that we believe that a direct crosswalk from CPT code 35475 (Transluminal balloon angioplasty, percutaneous; brachiocephalic trunk or branches, each vessel), which has a work RVU of 6.60 and which has similar intraservice and total times, more accurately reflected the time and intensity of furnishing this service. We also noted that our proposal was further supported by using an increment between CPT code 58561 and the base code for this family, CPT code 58555. The increment between the RUC recommended values for the two codes is 3.93. That increment added to the proposed value for the base code, CPT code 58555, would result in a work RVU of 6.58. Therefore, we proposed a work RVU of 6.60 for CPT code 58561. For CPT code 58562, the RUC recommended a work RVU of 4.17. However, we believed that a direct crosswalk of the work RVUs for CPT code 15277 (Application of skin substitute graft to face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits, total wound surface area greater than or equal to 100 sq cm; first 100 sq cm wound VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 surface area, or 1% of body area of infants and children), which has a work RVU of 4.00 and which has identical intraservice time and similar total time, more accurately reflects the time and intensity of furnishing this service. The RUC also used this code as one of its supporting codes for its recommendation. This value is additionally supported by using an increment between CPT code 58562 and the base code for this family, CPT code 58555. The increment between the RUC recommended values for the two codes is 1.10. That increment added to the proposed value for the base code, CPT code 58555, results in a work RVU of 3.75. Therefore, we proposed a work RVU of 4.00 for CPT code 58562. For CPT code 58563, the RUC recommended a work RVU of 4.62. However, we believed that a direct crosswalk of the work RVUs for CPT code 33962 (Extracorporeal membrane oxygenation (ECMO)/extracorporeal life support (ECLS) provided by physician; reposition peripheral (arterial and/or venous) cannula(e), open, 6 years and older (includes fluoroscopic guidance, when performed)), which has a work RVU of 4.47 and that has identical intraservice time and similar total time, more accurately reflects the resources involved in furnishing this service. This value is additionally supported by using an increment between CPT code 58563 and the base code for this family, CPT code 58555. The increment between the RUC recommended values for the two codes is 1.55. That increment added to the proposed value for the base code, CPT code 58555), results in a work RVU of 4.20. We note that CPT code 58563 has the same instraservice time and the same total time as CPT code 58558; however, we agreed that the intensity would be slightly higher for this service. Therefore, we proposed a work RVU of 4.47 for CPT code 58562. The RUC submitted invoices for two new equipment items used in furnishing CPT code 58558, the hysteroscopic fluid management system and the hysteroscopic resection system. We proposed to use these invoice prices for the hysteroscopic fluid management system, which totaled $14,698.38. The hysteroscopic resection system included the price of the hysteroscope, as well as other items necessary for tissue removal. However, we generally price endoscopes separately and not as a part of a system. To maintain consistency, we proposed not to include the hysteroscope from the Resection System. Instead, we proposed to update the equipment item ‘‘endoscope, rigid, hysteroscopy’’ (ES009) with the invoice price, $6,207.50. We did not propose to PO 00000 Frm 00138 Fmt 4701 Sfmt 4700 include the sterilization tray from the hysteroscopic resection system because we believe this tray has generally been characterized as an indirect practice expense. For the hysteroscopic resection system, we proposed to include the hysteroscopic tissue remover ($18,375), the sheath ($1,097.25), and the calibration device ($300), and created a new equipment item code, priced at $19,857.50 in the proposed direct PE input database. We did not propose to include the calibration device since the submitted price was not documented with a paid invoice. Comment: Commenters, including the RUC, disagreed with CMS’ proposed refinements to the work RVUs for these procedures, and requested that CMS finalize the RUC-recommended work values for these codes. Commenters suggested that these procedures are more complex in cases where it is more difficult to find and feed the scopes through the cervix. Commenters suggested that it appeared as though CMS used a time to work ratio to value these services, stating further that, for example, CPT code 58555 requires a forced dilation of a natural orifice, very small in size and can be difficult to identify in a post-menopausal patient or a patient with prior cervical surgery. Commenters suggested that the CMS crosswalk codes are for a natural orifice that might not require any dilation or only a 10% dilation, and the orifice is consistently the same with little variation among patients. Response: While we appreciate the commenters’ feedback, we do not consider forced or difficult dilation as described by the commenter to be typical based on the RUC’s clinical vignette and that the difficulty of forced dilation at the time of surgery can often be offset by preoperative cervical ripening. Therefore, we are finalizing the following work RVUs for each code in this family. • CPT code 58555, 2.65 work RVUs; • CPT code 58558, 4.17 work RVUs; • CPT code 58559, 5.20 work RVUs; • CPT code 58560, 5.75 work RVUs; • CPT code 58561, 6.60 work RVUs; • CPT code 58562, 4.00 work RVUs; and • CPT code 58563, 4.47 work RVUs. Comment: Regarding the direct PE inputs for CPT code 58558, one commenter requested that CMS add a procedure kit and update the prices for these supplies to reflect the cost of providing this procedure in the physician office setting. The commenter also submitted invoices related to other direct PE inputs for this code, including invoices for the incisor blade and the procedure kit, which the commenter E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 indicated includes inflow tubing, outflow tubing, and the non-sterile components of jumper cables and a tissue trap. Response: We appreciate the feedback we received regarding the direct PE inputs for CPT code 58558. We agree with the addition of the hysteroscopic procedure kit and are creating a new supply item ‘‘hysteroscopic fluid management tubing set’’ using a single invoice price of $320. Additionally, we note that we inadvertently did not remove the existing direct PE inputs related to suction, which we proposed to replace with the hysteroscopic fluid management system. Therefore, we are removing direct PE inputs for the following items: • Supply item SD009: Canister, suction; • Supply item SD031: Catheter, suction; and • Equipment item EQ235: Suction machine (Gomco). The commenter also included an additional invoice for the incision instrument. Based on this new information, we are renaming this new supply item, ‘‘hysteroscopic tissue removal device,’’ with a final price of $629.00, which is the simple average of the two invoice prices we have received for this supply item ($599 and $659 respectively). Additionally, we note that our proposed summary price for the hysteroscopic resection system was added incorrectly. The correct price is $19,772.25. We are also modifying the equipment title to ensure clarity of items included in the hysteroscopic resection system (control unit, footpiece, handpiece, sheath and calibration device). (28) Intracranial Endovascular Intervention (CPT Codes 61645, 61650, and 61651) For CY 2016, we established an interim final work RVU of 15.00 for CPT code 61645, 10.00 for CPT code 61650 and 4.25 for CPT code 61651. The RUCrecommended values for CPT codes 61645, 61650 and 61651 were 17.00, 12.00 and 5.50, respectively. We valued CPT code 61645 by applying the ratio between the RUC-recommended reference code, CPT code 37231 (revascularization, endovascular, open or percutaneous, tibial, peroneal artery, unilateral, initial vessel; with transluminal stent placement(s) and atherectomy, includes angioplasty within the same vessel, when performed), to the work and time for CPT code 61645. We valued CPT code 61650 based on a crosswalk to CPT code 37221 (revascularization, endovascular, open or percutaneous, iliac artery, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 unilateral, initial vessel; with transluminal stent placement(s), includes angioplasty within the same vessel, when performed), due to similar intensity and intraservice time. We valued CPT code 61651 based on a crosswalk to CPT code 37223 (revascularization, endovascular, open or percutaneous, iliac artery, each additional ipsilateral iliac vessel; with transluminal stent placement(s), includes angioplasty within the same vessel, when performed (list separately in addition to the code for primary procedure)), due to similar intraservice time and intensity. Both CPT codes 61645 and 61650 included postservice work time associated with a level 3 inpatient hospital visit. In the CY 2016 PFS final rule with comment period, we stated that we believe that for the typical patient, these services would be considered hospital outpatient services, not inpatient services. As a result, the intraservice time of the hospital observation care service was valued in the immediate postservice time. We refined the work time for CPT code 61645 by removing 55 minutes of work time associated with CPT code 99233, and added 30 minutes of time to the immediate postservice time. Therefore, the total time for CPT code 61645 was reduced to 241 minutes and the immediate postservice time increased to 83 minutes. We also removed the inpatient visit from CPT code 61650, which reduced the total time to 206 minutes and increased the postservice time to 75 minutes. Comment on the CY 2016 PFS final rule with comment period: Commenters disagreed with our categorization of these codes as typically outpatient. Commenters stated that according to Medicare claims data, the predecessor codes were performed primarily on an inpatient basis. Additionally, commenters pointed out that the new codes would typically be performed on acute stroke patients. Commenters also said as the new codes are inpatientonly, the CMS reductions in work and time based on the assumption of outpatient status are flawed and suggested we accept the RUCrecommended values. Commenters also requested that these codes be referred to the refinement panel. Response in the CY 2017 PFS proposed rule: For CY 2016, we valued CPT codes 61645, 61650, and 61651 based on comparisons to CPT codes 37231, 37221, and 37223, respectively. We continue to believe that these crosswalks are appropriate comparisons based on intensity and intraservice time, and because no persuasive information PO 00000 Frm 00139 Fmt 4701 Sfmt 4700 80307 was presented at the refinement panel that indicated that these comparisons are not accurate. Therefore, for CY 2017, we proposed work RVUs of 15.00 for CPT code 61645, 10.00 for CPT code 61650, and 4.25 for CPT code 61651. We also proposed time inputs based on our refinements of the RUC recommendations, including removing the time associated with a hospital inpatient visit (CPT code 99233) from the intraservice work time, and adding 30 minutes to the immediate postservice time for both CPT codes 61645 and 61650. We do not believe that 0-day global codes should include post-operative visits; rather, if global codes require post-operative visits, they are more appropriately assigned 10- or 90-day global periods based on our current criteria. Our policy has been to remove the visit from the post-operative period and the associated minutes from the total time while adding 30 minutes to the immediate postservice period without necessarily making an adjustment to the work RVU (see the CY 2010 PFS proposed rule, 74 FR 33557; also see the CY 2011 PFS proposed rule, 75 FR 40072). We solicited comment on the inclusion of post-operative visits in valuation of codes with 0-day global periods. Both CPT codes 61645 and 61650 are assigned 0-day global periods, and the refinements we proposed reflected changes to more appropriately value these codes with 0-day global periods. The following is a summary of the comments we received regarding our proposed valuations for the intracranial endovascular intervention family: Comment: Commenters, including the RUC, requested that CMS finalize the RUC-recommended work RVUs for CPT codes 61645, 61650 and 61651. The RUC suggested that evaluating the actual physician work performed in the inpatient setting is more accurate than applying a crosswalk to a CPT code that is performed predominantly in the outpatient setting. As examples, the RUC noted that CPT code 61645 would not be performed in the outpatient setting, and CPT codes 61650 and 61651 would be performed in the intensive care unit. For CPT codes 61645 and 61650, commenters also expressed concern about CMS’ proposed refinements to remove the time associated with a postservice visit from each code and subsequently adding 30 minutes to the immediate postservice period for each of these codes. The RUC suggested that these CMS refinements artificially reduced the total work time for CPT codes 61645 and 61650. E:\FR\FM\15NOR2.SGM 15NOR2 80308 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 Response: We continue to believe that our crosswalks for each of these codes accurately reflect the physician work involved in these procedures due to similarities in intensity and intraservice time. For example, our proposed work RVU of 15.00 for CPT code 61645 would be the highest work value among comparable codes with similar intraservice times. We note that we identified three CPT codes with similar intraservice times (CPT codes 33955, 33956, and 33988) that had higher work RVUs than our proposed work RVU of 15.00, but these three CPT codes are used to report extracorporeal membrane oxygenation or extracorporeal life support services (ECMO/ECLS) procedures, which we do not believe are comparable to the CPT codes in this family. Regarding physician time for CPT codes 61645 and 61650, as we discussed in the proposed rule, we do not believe that 0-day global codes should include post-operative visits; rather, if global codes require post-operative visits, they are more appropriately assigned 10- or 90-day global periods based on our current criteria. Our policy has been to remove the visit from the post-operative period and the associated minutes from the total time while adding 30 minutes to the immediate postservice period without necessarily making an adjustment to the work RVU (see the CY 2010 PFS proposed rule, 74 FR 33557; also see the CY 2011 PFS proposed rule, 75 FR 40072). Therefore, for CY 2017, we are finalizing a work RVU of 15.00 for CPT code 61645, a work RVU of 10.00 for CPT code 61650, and a work RVU of 4.25 for CPT code 61651. (29) Epidural Injections (CPT Codes 62320, 62321, 62322, 62323, 62324, 62325, 62326, and 62327) We proposed the RUC-recommended work RVU for all eight of the codes in this family. We proposed to remove the 10–12mL syringes (SC051) and the RK epidural needle (SC038) from all eight of the codes in this family. We stated that these supplies were duplicative, as they are included in the epidural tray (SA064). As an alternative, we raised the possibility of removing the epidural tray and replacing it with the individual supply components used in each procedure; we solicited public comment on either the inclusion of the epidural tray or its individual components for this family of codes. The following is a summary of the comments we received regarding our proposed valuation of the Epidural Injection codes: VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment: A few commenters expressed their support for the proposed work values. Response: We appreciate the support from the commenters. Comment: Several commenters disagreed with the proposed removal of the 10–12mL syringes (SC051) and the RK epidural needle (SC038) due to the CMS belief that they are duplicative of the supplies in the epidural tray (SA064). Commenters stated that although there are three syringes listed in the epidural tray, none of the syringes in the tray are the 10–12mL syringe. In addition, none of the needles currently listed in the epidural tray (SA064) are an epidural needle. As a result, commenters indicated that there was no reason to replace the epidural tray with its individual components. Response: We appreciate this clarification from the commenters regarding the components that make up the epidural tray. Taking this information into account, we are restoring the 10–12mL syringes (SC051) and the RK epidural needle (SC038) to all eight of the codes in this family. After consideration of comments received, we are finalizing the proposed work RVUs for the Epidural Injection codes. We are also finalizing the proposed direct PE inputs, with the addition of the 10–12mL syringes and the RK epidural needle detailed above. (30) Endoscopic Decompression of Spinal Cord (CPT Code 62380) For CY 2016, the CPT Editorial Panel created CPT code 62380 to describe the endoscopic decompression of neural elements. The RUC recommended a work RVU of 10.47 based on a crosswalk to CPT code 47562 (Laparoscopy, surgical; cholecystectomy) with a higher intraservice time than reflected in the survey data. Since we believe CPT codes 62380 and 47562 are similar in intensity, we believe using the same work RVU as the crosswalk code overestimates the work involved in furnishing CPT code 62380. Reference CPT code 49507 (Repair initial inguinal hernia, age 5 years or older; incarcerated or strangulated) has a work RVU of 9.09 and has similar intensity and an identical intraservice time compared to CPT code 62380. Therefore, we proposed a work RVU of 9.09 for CPT code 62380. Comment: Some commenters reiterated that the RUC-recommended direct crosswalk to CPT code 47562 is appropriate since this code has a similar physician time, and the IWPUT of the RUC-recommended work RVU is 0.085, a comparable valuation when compared with other spinal decompression PO 00000 Frm 00140 Fmt 4701 Sfmt 4700 procedures. The RUC agreed that the intensity of CPT code 62380 was greater, which offsets the 10 minute difference in intraservice time between the two codes. The RUC indicated that the difference in intensity between these procedures is based on CPT code 62380 involving decompression about neural elements and the spinal cord, where the opportunity for complications and for loss of function is high. One commenter indicated that CMS’ proposed work RVU would fall below the minimum survey results. A few commenters expressed concerns about the structure of the CPT code descriptors and RUCrecommended valuations. Commenters suggested that the CPT Editorial Panel and the RUC did not take certain indications into account such as differences between the physician work required for endoscopic tubular microdiscectomy compared to lumbar spinal stenosis decompression and posterior cervical posterior laminoforaminotomy. Commenters indicated that the specialty society survey data was inadequate due to the inexperience of the survey respondents, with others suggesting that the survey times were not reflective of some practitioners’ experience or patient complexity. The commenters indicated that the current RUC recommendations for full endoscopic tubular endoscopic surgery are based on limited experience among survey respondents with lumbar microdiscectomy, and insufficient experience with lumbar spinal stenosis decompression and posterior cervical foraminotomy without fusion and are invalid for these indications. Commenters requested that the current CPT codes and valuations for full endoscopic lumbar spinal stenosis decompression and posterior cervical foraminotomy without fusion remain unchanged until further RUC survey data are examined. Some commenters suggested alternative crosswalks including CPT code 61548 (Hypophysectomy or excision of pituitary tumor, transnasal or transseptal approach, nonstereotactic) with a work RVU of 23.37, CPT code 63030 (Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and/or excision of herniated intervertebral disc; 1 interspace, lumbar) with a work RVU of 13.18, and CPT code 63056 (Transpedicular approach with decompression of spinal cord, equina and/or nerve root(s) (e.g., herniated intervertebral disc), single segment; E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 lumbar (including transfacet, or lateral extraforaminal approach) (e.g., far lateral herniated intervertebral disc)) with a work RVU of 21.86. Response: As discussed above, commenters raised multiple concerns about the accuracy of the survey results, the RUC’s recommended valuation of this service, and our subsequent proposed refinements. Therefore, at this time, we are finalizing contractor pricing for CPT code 62380. We note that the summary of recommendations (SOR) included with the RUC recommendations indicated that the expert panel reviewing the survey data for this procedure believed the survey median and 25th percentile work RVU were inconsistent with the physician work as it related to other major open spine procedures. Subsequently, the RUC recommended a work RVU of 10.47 based on a crosswalk from CPT code 47562 (Laparoscopy, surgical; cholecystectomy). The RUC noted that procedures reported with CPT code 62380 have ten minutes less intraoperative time compared to the RUC’s recommended crosswalk from CPT code 62380, but suggested that the physician work of endoscopic decompression in the small disc interspace near the spinal nerve roots of the cauda equina is more complex and will require more post-discharge office work for required imaging to confirm stabilization and for physical therapy orders and monitoring. We note that based on the RUC’s utilization crosswalk, services that will be reported in CY 2017 with CPT code 62380 are currently reported using either CPT code 22899 (Unlisted procedure, spine) or CPT code 0275T (Percutaneous laminotomy/ laminectomy (interlaminar approach) for decompression of neural elements, (with or without ligamentous resection, discectomy, facetectomy and/or foraminotomy), any method, under indirect guidance (e.g., fluoroscopic, CT), with or without the use of an endoscope, single or multiple levels, unilateral or bilateral; lumbar)), which are both contractor priced for CY 2016. We welcome feedback from interested parties and specialty societies regarding valuation of this service for consideration in future rulemaking. (31) Paravertebral Block Injection (CPT Codes 64461, 64462, and 64463) In CY 2015, the CPT Editorial Panel created three new codes to describe paravertebral block injections at single or multiple levels, as well as for continuous infusion for the administration of local anesthetic for post-operative pain control and thoracic VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 and abdominal wall analgesia. For the CY 2016 PFS final rule with comment period, we established the RUCrecommended work RVUs of 1.75 and 1.10 as interim final for CPT codes 64461 and 64462, respectively. For CPT code 64463, we utilized a direct crosswalk from three other injection codes (CPT codes 64416 (Injection, anesthetic agent; brachial plexus, continuous infusion by catheter (including catheter placement), 64446 (Injection, anesthetic agent; sciatic nerve, continuous infusion by catheter (including catheter placement), and 64449 (Injection, anesthetic agent; lumbar plexus, posterior approach, continuous infusion by catheter (including catheter placement)), which all had a work RVU of 1.81, as we believed this crosswalk more accurately reflected the work involved in furnishing this service. Comment on the CY 2016 PFS final rule with comment period: We received comments from the RUC stating CPT code 64463 was more comparable to CPT code 64483 (Injection(s), anesthetic agent and/or steroid, transforaminal epidural, with imaging guidance (fluoroscopy or CT); lumbar or sacral, single), which has a work RVU of 1.90 and requires the same physician work and time to perform. The RUC recommended we accept a work RVU of 1.90, which is the 25th percentile of the survey. Another commenter stated that our interim final work RVU for CPT code 64463 was inappropriate since imaging guidance is not part of our comparison codes. The commenter advocated for us to accept the survey respondent’s selection of CPT code 64483 as the most appropriate comparison code and assign a work RVU of 1.90. Response in the CY 2017 PFS proposed rule: After reviewing and considering the comments, we stated we continued to believe that CPT codes 64416, 64446, and 64449, all of which have 20 minutes of intraservice time, are better crosswalks to CPT code 64463, which also has 20 minutes of intraservice time and a similar total time. In contrast, the crosswalk code recommended by commenters, CPT 64483, only has 15 minutes of intraservice time. Therefore, for CY 2017 we proposed a work RVU of 1.81 for CPT code 64463. The following is a summary of the comments we received regarding our proposed valuations for the Paravertebral Block Injection family: Comment: One commenter stated that CMS based its decision on an inappropriate comparison of CPT code 64463 with codes that describe PO 00000 Frm 00141 Fmt 4701 Sfmt 4700 80309 continuous peripheral nerve blocks that do not include imaging guidance. The commenter stated that the imaging component included in CPT code 64463 was justification for at least the 0.09 difference between the RUC recommendation and the CMS proposed value. The commenter offered CPT code 47000 (Biopsy of liver, needle; percutaneous), which has identical intraservice time and a work RVU of 1.90 as a comparator code. Response: We appreciate the additional information offered by the commenters and we agree with the commenter’s statement that the image guidance component of this service was justification for the 0.09 difference between the RUC recommendation and the CMS proposed value. After review and consideration of the comments, we are finalizing the RUC-recommended work RVUs of 1.75, 1.10 and 1.90 for CPTs code 64461, 64462 and 64463, respectively for CY 2017. (32) Implantation of Neuroelectrodes (CPT Codes 64553 and 64555) The RUC identified CPT codes 64553 and 64555 as a site of service anomaly during the CY 2016 PFS rulemaking cycle. In the Medicare claims data, these services were typically reported in the nonfacility setting, yet the survey data were predicated on a facility-based procedure. We agreed with the RUC that these two codes should be referred to the CPT Editorial Panel to better define the services, in particular to investigate the possibility of establishing one code to describe temporary or testing implantation and another code to describe permanent implantation. We maintained the CY 2015 work RVUs and direct PE inputs for these two codes on an interim basis until receiving updated recommendations from the CPT Editorial Panel and the RUC. Comment on the CY 2016 PFS final rule with comment period: A commenter requested that CMS allow practitioners to bill the MACs separately for a percutaneous electrode kit (SA022) for CPT code 64555. The commenter stated that without allowing for a separate payment for the percutaneous electrode kit, the payment for the procedure would be insufficient to cover the physician’s costs. Response in the CY 2017 PFS proposed rule: We agreed that CPT codes 64553 and 64555 as currently constructed were potentially misvalued codes, which is why we maintained the CY 2015 work RVUs and direct PE inputs on an interim basis. We believe that the disposable supplies furnished incident to the procedure are paid through the nonfacility PE RVUs. The E:\FR\FM\15NOR2.SGM 15NOR2 80310 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 percutaneous electrode kit (SA022) was not previously included in the direct PE inputs for either of these two services, and since we proposed to maintain current direct PE inputs pending additional recommendations, we do not agree that disposable supplies should be separately payable. We proposed to maintain the interim final work RVUs and direct PE inputs for these two codes, and we looked forward to reviewing recommendations regarding these procedures again for future rulemaking. Additionally, we were alerted to a discrepancy regarding the times for these codes in the CY 2016 work time file. Our proposed CY 2017 work time file addressed this discrepancy by reflecting the RUC recommended times of 155 minutes for CPT code 64553 and 140 minutes for CPT code 64555. The following is a summary of the comments we received regarding our proposed valuation of the Implantation of Neuroelectrodes codes: Comment: One commenter responded to the CMS request for information about whether there was a need for separate codes for temporary/testing and permanent placement for neuroelectrodes. The commenter stated that it did not support the creation of new separate codes at this time. The commenter stressed that the current codes account for the work of both temporary/testing and permanent placement, making the creation of new codes unwarranted. Response: We appreciate the submission of this information from the commenter. We did not receive any comments addressing the proposed valuation of these codes. After consideration of comments, we are finalizing the proposed work RVUs and proposed direct PE inputs for CPT codes 64553 and 64555. (33) Ocular Reconstruction Transplant (CPT Code 65780) In CY 2015, the RUC identified CPT code 65780 as potentially misvalued through a misvalued code screen for 90day global services that included more than 6 office visits. The RUC recommended a direct work RVU crosswalk from CPT code 27829 (Open treatment of distal tibiofibular joint (syndesmosis) disruption, includes internal fixation, when performed). After examining comparable codes, we determined the RUC-recommended work RVU of 8.80 for CPT code 65780 would likely overstate the work involved in the procedure given the change in intraservice and total times compared to the previous values. We believed that the ratio of the total times VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 (230/316) applied to the work RVU (10.73) more accurately reflected the work involved in this procedure. Therefore, we established an interim final work RVU of 7.81 for CPT code 65780. Comment on the CY 2016 PFS final rule with comment period: The RUC and other commenters disagreed with our interim final values based on objections to our use of time ratios in developing work RVUs for PFS services. Response in the CY 2017 PFS proposed rule: We stated that we appreciate the commenters’ concerns and responded to these concerns about our methodology in section II.L of the CY 2017 proposed rule. After review of the comments, we continued to consider the work RVU of 7.81 to accurately represent the work involved in CPT code 65780. We believed this service was similar in overall intensity to CPT code 27766 (Open treatment of medial malleolus fracture, includes internal fixation, when performed) that has a work RVU of 7.89 and a total time that more closely approximates that of CPT code 65780. In the CY 2017 proposed rule, we proposed a work RVU of 7.81 for CPT code 65780. We did not receive any comments in response to our proposed valuation on CPT code 65780; therefore, we are finalizing a work RVU of 7.81 as proposed. (34) Trabeculoplasty by Laser Surgery (CPT Code 65855) In CY 2015, the RUC identified CPT code 65855 as potentially misvalued through the review of 10-day global services with more than 1.5 postoperative visits. The RUC noted that the code was changed from a 90-day to a 10-day global period when it was last valued in 2000. However, the descriptor was not updated to reflect that change. CPT code 65855 describes multiple laser applications to the trabecular meshwork through a contact lens to reduce intraocular pressure. The current practice is to perform only one treatment session during a 10-day period and then wait for the effect on the intraocular pressure. The descriptor for CPT code 65855 has been revised and removes the language ‘‘1 or more sessions’’ to clarify this change in practice. The RUC recommended a work RVU of 3.00 for CPT code 65855. While the RUC-recommended value represents a reduction from the CY 2015 work RVU of 3.99, we stated that significant reductions in the intraservice time, the total time, and the change in the office visits represent a more significant PO 00000 Frm 00142 Fmt 4701 Sfmt 4700 change in the work resources involved in furnishing the typical service. The intraservice and total times were decreased by approximately 33 percent while the elimination of two postoperative visits (CPT code 99212) alone would reduce the overall work RVU by at least 24 percent under the reverse building block method. However, the RUC-recommended work RVU only represents a 25 percent reduction relative to the previous value. To identify potential work RVUs for this service, we calculated an intraservice time ratio between the CY 2015 intraservice time, 15 minutes, and the RUC-recommended intraservice time, 10 minutes, and applied this ratio to the current work RVU of 3.99 to arrive at a work RVU of 2.66 for CPT code 65855, which we established as interim final for CY 2016. Comment on the CY 2016 PFS final rule with comment period: A few commenters, including the RUC, provided explanations as to how the RUC recommendation had already accounted for the reduction in physician intraservice time and postoperative visits. Some commenters disagreed with CMS’ interim final values based on objections to CMS’ use of time ratios in developing work RVUs for PFS services. Response in the CY 2017 PFS proposed rule: We stated that we appreciated the commenters’ concerns regarding the time ratio methodologies and responded to those concerns about our methodology in section II.H.2 of the CY 2017 proposed rule. After considering the explanations provided by commenters through public comments describing the RUC’s methodologies in more detail, we agreed that the proposed value did not accurately reflect the physician work involved in furnishing the service. In the CY 2017 proposed rule, we proposed the RUC-recommended work RVU value of 3.00 for CPT code 65855. We did not receive any comments in response to our proposed valuation on CPT code 65855; therefore, we are finalizing a work RVU of 3.00 as proposed. Comment: A few commenters stated their support of CMS’ decision to propose the RUC-recommended value for CY 2017 and strongly urged us to finalize the proposal. Response: Thank you for your comments. For CY 2017 we are finalizing the RUC-recommended work RVU of 3.00 for CPT code 65855. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations (35) Glaucoma Surgery (CPT Codes 66170 and 66172) The RUC identified CPT codes 66170 and 66172 as potentially misvalued through a screen for 90-day global codes that included more than six office visits. We believed the RUC-recommended work RVU of 13.94 for CPT code 66170 did not accurately account for the reductions in time. Specifically, the survey results indicated reductions of 25 percent in intraservice time and 28 percent in total time. These reductions suggested that the RUC-recommended work RVU for CPT code 66170 overstated the work involved in furnishing the service, since the recommended value only represented a reduction of approximately seven percent. We believed that applying the intraservice time ratio, the ratio between the CY 2015 intraservice time, 60 minutes, and the RUC-recommended intraservice time, 45 minutes, applied to the current work RVU, 15.02, resulted in a more appropriate work RVU of 11.27. Therefore, for CY 2016, we established an interim final work RVU of 11.27 for CPT code 66170. For CPT code 66172, the RUC recommended a work RVU of 14.81. After comparing the RUC-recommended work RVU for this code to the work RVU for similar codes (for example, CPT code 44900 (Incision and drainage of appendiceal abscess, open) and CPT code 52647 (Laser coagulation of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy are included if performed))), we believed the RUCrecommended work RVU of 14.81 overstated the work involved in this procedure. For the same reasons and following the same valuation methodology utilized above, we applied the intraservice time ratio between the CY 2015 intraservice time and the survey intraservice time, 60/90, to the CY 2015 work RVU of 18.86. This resulted in a work RVU of 12.57 for CPT code 66172. Therefore, for CY 2016, we established an interim final work RVU of 12.57 for CPT code 66172. Comment on the CY 2016 PFS final rule with comment period: Several commenters, including the RUC, objected with our interim final values based on objections to our use of time ratios in developing work RVUs for PFS services. Commenters also requested CMS refer CPT codes 66170 and 66172 to the refinement panel. Response in the CY 2017 PFS proposed rule: We acknowledged VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 commenters’ concerns regarding the time ratio methodologies and responded to those concerns in section II.H.2 of the CY 2017 proposed rule (81 FR 46162). CPT codes 66170 and 66172 were referred to the CY 2016 multi-specialty refinement panel per commenters’ request. The outcome of the refinement panel was a median of 13.94 RVUs for CPT code 66170 and 14.84 RVUs for CPT code 66172. Due to the new information presented to the refinement panel regarding the level of intensity required to perform millimeter incisions in the eye, we agreed with the assessment of the refinement panel and proposed a work RVU of 13.94 for CPT code 66170 and 14.84 for CPT code 66172 for CY 2017. The following is a summary of the comments we received regarding our proposed valuations for the Glaucoma Surgery family: Comments: Several commenters stated their support of CMS’ decision to propose the values recommended by the refinement panel for CPT codes 66170 and 66172. Some commenters, including the RUC, also brought to our attention discrepancies between our proposal for these codes in the CY 2017 proposed rule and the work RVUs posted in Addendum B on the CMS Web site. Response: For CY 2017, we are finalizing a work RVU of 13.94 for CPT code 66170 and a work RVU of 14.84 for CPT code 66172. We appreciate commenters bringing this issue regarding conflicting information in the CY 2017 PFS proposed rule preamble text and the public use files published on the CMS Web site. We have corrected this discrepancy in this final rule and the associated public use files. (36) Retinal Detachment Repair (CPT Codes 67101, 67105, 67107, 67108, 67110, and 67113) For CY 2015, the CPT Editorial Panel made several changes to CPT codes 67101 and 67105. These changes include revising the code descriptors to exclude ‘‘diathermy’’ and ‘‘with or without drainage of subretinal fluid’’ and removing the reference to ‘‘1 or more sessions.’’ The recommended global period also changed from 90 days to 10 days. For CPT code 67101, we proposed the RUC recommended work RVU of 3.50, which was based on the 25th percentile of the survey. For CPT code 67105, the RUC recommended a work RVU of 3.84 based on the 25th percentile of the survey. The RUC also stated that CPT code 67105 was a more intense procedure, and therefore, it should have a higher work RVU than CPT code 67101. Currently, CPT code PO 00000 Frm 00143 Fmt 4701 Sfmt 4700 80311 67101 has a higher work RVU than CPT code 67105 and according to the surveys, the intraservice and total times remain higher for CPT code 67101. We do not understand why the RUC believes that CPT code 67105 is more work than CPT code 67101. Therefore, we did not propose the RUCrecommended work RVU of 3.50 for CPT code 67105. We did not find evidence that CPT code 67105 is more intense than CPT code 67101 and accordingly, proposed a lower work RVU for CPT code 67105. To value CPT code 67105, we used the RVU ratio between CPT codes 67101 and 67105. We divided the current work RVU of 8.53 for CPT code 67105, by the current work RVU of 8.80 for CPT code 67101 and multiplied the quotient by the RUCrecommended work RVU of 3.50 for CPT code 67101 to arrive at a work RVU of 3.39. Therefore, for CY 2017, we proposed a work RVU of 3.39 for CPT code 67105. CPT codes 67107, 67108, 67110, and 67113 were identified through the Relative Assessment Workgroup process under the 90-day global post-operative visit screen in CY 2015. The RUC recommended a work RVU of 16.00 for CPT code 67107, which corresponded to the 25th percentile of the survey. While the RUC recommendation represented a five percent reduction from the current work RVU of 16.71, we believed the RUC recommendation still overvalued the service given the 15 percent reduction in intraservice time and 25 percent reduction in total time. We used the intraservice time ratio between the existing and new time values to identify an interim final work RVU of 14.06. We believed this value accurately reflected the work involved in this service and was comparable to other codes that have the same global period and similar intraservice time and total time. For CY 2016, we established an interim final work RVU of 14.06 for CPT code 67107. For CPT code 67108, the RUC recommended a work RVU of 17.13 based on the 25th percentile of the survey, which reflected a 25 percent reduction from the current work RVU. The survey results reflected a 53 percent reduction in intraservice time and a 42 percent reduction in total time. We believed the RUC-recommended work RVU overestimated the work, given the significant reductions in intraservice time and total time and does not maintain relativity among the codes in this family. To determine the appropriate value for this code and maintain relativity within the family, we preserved the 1.13 work RVU increment recommended by the RUC between this code and CPT code 67107 E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80312 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations and applied that increment to the interim final work RVU of 14.06 for CPT code 67107. Therefore, we established an interim final work RVU of 15.19 for CPT code 67108. For CPT code 67110, the RUC recommended maintaining the current work RVU of 10.25. To maintain appropriate relativity with the work RVUs established for the other services within this family, we used the RUCrecommended 5.75 work RVU differential between CPT code 67107 and CPT code 67110 to establish the CY 2016 interim final work RVU of 8.31 for CPT code 67110. For CPT code 67113, the RUC recommended and we established an interim final work RVU of 19.00 based on the 25th percentile of the survey. Comment on the CY 2016 PFS final rule with comment period: We received several comments disagreeing with our interim final values based on objections to our use of time ratios in developing work RVUs for PFS services. Some commenters also stated that by using some RUC-recommended increments and rejecting others, we have not only established inconsistencies within the family of codes, but potentially opened up anomalies across a wide range of services. The RUC also expressed disagreement with using the recommended work RVU increments without using the recommended work RVU. Some commenters also stated the new IWPUT values for these three services are inappropriately low and pointed to the derived per minute intensity of 0.064 for CPT code 67110 as particularly problematic. Response in the CY 2017 PFS proposed rule: We disagreed with the statement about inconsistencies as the codes in this family are valued relative to one another based on the times and level of physician work required for each code. We also stated that generally we do not agree that a low IWPUT itself indicates overall misvaluation as the validity of the IWPUT as a measure of intensity depends on the accuracy of the assumptions regarding the number, level, and work RVUs attributable to visits for services in the post-operative global period for individual services. We provided an example where a service with an unrealistic number or level of postoperative visits may have a very low derived intensity for the intraservice time. CPT codes 67107, 67108, and 67110 were referred to the CY 2016 multispecialty refinement panel per commenters’ request. The outcome of the refinement panel was a median work RVU of 16.00, 17.13, and 10.25, respectively. After consideration of the comments and the results of the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 refinement panel, we proposed a work RVU of 16.00, 17.13, and 10.25 for CPT codes 67107, 67108, and 66110, respectively, for CY 2017. The following is a summary of the comments we received regarding our proposed valuations for the Retinal Detachment Repair family: Comments: A few commenters, including the RUC, noted that CPT codes 67101 and 67105 were last valued by the Harvard study. The RUC stated that during the Harvard studies, CPT code 67101 was valued higher due to greater total time. However, now photocoagulation is reported at vastly higher levels than the cryotherapy procedure, as it is considered to be a more effective treatment. A few commenters stated that given the changing nature of the service since the last valuation, the intensity of CPT code 67105 is now greater and urged CMS to accept the RUC-recommended values. For CPT codes 67107, 67108, 67110, and 67113, several commenters supported CMS’ decision to propose the values recommended by the refinement panel and urged CMS to finalize these proposed values. A few commenters, including the RUC, brought to our attention discrepancies between our proposal for these codes and the work RVUs posted in Addendum B on the CMS Web site. Response: We note that, according to the surveys, the intraservice and total times were significantly higher for CPT code 67101 and note the specialty societies recommended a higher work RVU for CPT code 67101 prior to the RUC meeting. Although commenters state that photocoagulation (CPT code 67105) is typically billed more frequently than diathermy (CPT code 67101), we do not believe the utilization rate of a service in and of itself is reason enough to warrant an increase in RVUs. Therefore, for CY 2017, we are finalizing a work RVU of 3.50 and 3.39 for CPT codes 67101 and 67105, respectively. We appreciate commenters bringing to our attention the issue regarding conflicting information in the CY 2017 PFS proposed rule preamble text and the public use files published on the CMS Web site. We have corrected this discrepancy in this final rule and the public use files. For CY 2017, we are finalizing a work RVU of 16.00, 17.13, 10.25 and 19.00 for CPT codes 67107, 67108, 66110 and 67113, respectively, in agreement with the refinement panel recommendations. (37) Fetal MRI (74712 and 74713) For CY 2016, we established the RUCrecommended work RVU of 3.00 as interim final for CPT code 74712. We PO 00000 Frm 00144 Fmt 4701 Sfmt 4700 established an interim final work RVU of 1.78 for CPT code 74713 based on a refinement of the RUC-recommended work RVU of 1.85 using the ratio of work to time for both codes. This proposed value also corresponds to the 25th percentile survey result. Comment on the CY 2016 PFS final rule with comment period: Commenters stated that the work RVU of 1.78 for CPT code 74713 did not reflect the higher intensity inherent in the procedure’s typical patient. The commenter explained that the typical patient is pregnant with twins and has a higher likelihood of complications related to congenital anomalies, as well as of ischemic brain injury with twin gestations. The commenter further stated that twin gestations are more difficult to image. Commenters requested that CPT code 74713 be referred to the multispecialty refinement panel. Response in the CY 2017 PFS proposed rule: CPT code 74713 was referred to the CY 2016 multispecialty refinement panel. After considering the comments and the results of the refinement panel, we agreed with commenters that an RVU of 1.78 underestimated the work for CPT code 74713. In the CY 2017 proposed rule, we proposed a work RVU of 1.85 for the service for CY 2017. We did not receive any comments in response to our proposed valuation on CPT code 74713; therefore, we are finalizing the proposed work RVU. (38) Abdominal Aortic Ultrasound Screening (CPT Code 76706) For CY 2017, the CPT Editorial Panel created a new code, CPT code 76706, to describe abdominal aortic ultrasound screening, currently described by HCPCS code G0389. The specialties that surveyed CPT code 76706 for the RUC were vascular surgery and radiology, and the direct PE inputs recommended by the RUC included an ultrasound room. Based on an analysis of Medicare claims data, the dominant specialties furnishing the service are family practice and internal medicine. We believe that these specialties may more typically use a portable ultrasound device rather than an ultrasound room. Therefore, we proposed to accept the RUC-recommended work RVU of 0.55, and the RUC-recommended PE inputs for this service, but we solicited comment regarding whether or not it would be more accurate to substitute a portable ultrasound device or possibly a hand-held device for an ultrasound room for CPT code 76706. We note that while the phase-in of significant E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations reductions in RVUs ordinarily would not apply to new codes, we believe that it would be appropriate to consider this change from a G-code to a CPT code to be fundamentally similar to an editorial coding change since the service is not described differently, and therefore, we proposed to apply the phase-in to this service by comparing the previous value of the G-code to the value for the new CPT code. Comment: One commenter stated that this service should be furnished by a physician or surgeon that specializes in vascular disease. The commenter noted that CMS should assign inputs based on which specialties would more appropriately furnish a given service. Another commenter disagreed with our statement in the CY 2017 proposed rule that the dominant specialties furnishing this service are family practice and internal medicine. The commenter stated that these specialties are more likely to make use of a portable ultrasound device rather than an ultrasound room. One commenter says that this service is underutilized, and CMS should implement policies which support screening. Response: We appreciate the commenters’ perspectives. We note that, in evaluating codes in the Medicare Physician Fee Schedule (MPFS), we price codes based on the typical service. Our review of the Medicare claims data indicates that the combined utilization for the technical component of this service and the service billed globally is typically billed under the PFS by family practice and internal medicine, which is why we solicited comment on whether the PE inputs for this service should be revised. Comment: A commenter supported our decision to apply the phase-in to this code. Response: We thank the commenter for the support. Comment: A commenter agreed with CMS that family practice physicians typically use a portable ultrasound device rather than an ultrasound room. The commenter stated that CMS should continue to include an ultrasound room as a direct PE input, unless other specialties furnishing the service indicate that they do not typically make use of an ultrasound room. One commenter states that abdominal aortic aneurysm screenings are performed on nonportable machines in either ambulatory or hospital settings, and therefore, an ultrasound room is appropriate. Response: We thank the commenters, and we will take this information regarding the appropriate PE inputs for this service into consideration for future VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 rulemaking. While the specialty mix of the practitioners furnishing services can be helpful in identifying typical PE inputs, we continue to seek definitive information regarding the most appropriate PE inputs for this code. For CY 2017, we are finalizing the RUCrecommended work and PE inputs, as proposed. (39) Fluoroscopic Guidance (CPT Codes 77001, 77002, and 77003) In the CY 2015 PFS final rule with comment period, CMS indicated that while CPT codes 77002 and 77003 had been previously classified as standalone codes without global periods, we believe their vignettes and CPT Manual parentheticals are consistent with an add-on code as has been established for CPT code 77001. Therefore, the global periods for CPT codes 77002 and 77003 now reflect an add-on code global period with modifications to the vignettes and parentheticals. For CPT code 77001, we proposed the RUC-recommended work RVU of 0.38. We stated that the RUC-recommended work RVUs for CPT codes 77002 and 77003 did not appear to account for the significant decrease in total times for these codes relative to the current total times. We noted that these three codes describe remarkably similar services and have identical intraservice and total times. Based on the identical times and notable similarity for all three of these codes, we proposed a work RVU of 0.38 for all three codes. The following is a summary of the comments we received regarding our proposed valuation of the Fluoroscopic Guidance codes: Comment: A few commenters disagreed with the change in the global period for CPT codes 77002 and 77003 to reflect their status as add-on codes. The commenters stated that this would imply that the imaging-related preservice and postservice activities inherent to these image guidance codes are captured by the base codes with which they are reported, which simply is not the case. The commenters provided an example of how reporting of radiation specific information, such as fluoroscopy time, is not included in the postservice activities of the base codes. Response: CPT codes 77002 and 77003 were surveyed under the assumption that they would be classified as add-on codes, and the RUC recommendations for both work RVUs and direct PE inputs reflect this status. We do not believe that it would be appropriate to assign these codes a different global period after they were surveyed and valued with the PO 00000 Frm 00145 Fmt 4701 Sfmt 4700 80313 understanding that they would be classified as add-on codes. Comment: Many commenters disagreed with the proposed work RVU of 0.38 for CPT codes 77002 and 77003. Commenters stated that these two codes should not share the same work RVU as CPT code 77001, on the basis that the physician work, intensity and complexity of codes 77002 and 77003 are greater than the first code in the family. Commenters stated that the intensity and complexity increases in parts of the body where there are additional anatomy considerations, such as superficial and deep structures to consider with CPT code 77002, as well as additional neuro and spinal structures to consider when performing CPT code 77003. One commenter suggested that there was clinical data indicating that CPT codes 77002 and 77003 take longer to perform than CPT code 77001, in contradiction of the RUC survey data that assigned all three codes identical time values. The commenter stated that this was likely due to the greater complexity and procedural variability of the latter two codes. Another commenter recognized that these codes describe similar services but stressed that they do not describe identical services, which was especially important for CPT code 77003 as it pertains to spinal procedure and carries more risk than the other two codes. Response: We recognize the concerns raised by the commenters in assigning the same work RVU of 0.38 to the three codes in the Fluoroscopic Guidance family. We note that even in cases where we assign the same work RVU, we do not believe that the services are identical, only that they share the same overall resources in work as measured in RVUs. We also appreciate the reference to additional clinical data from one commenter suggesting that CPT codes 77002 and 77003 take longer to perform than CPT code 77001. We have longstanding concerns about using survey data alone for code valuation, and we are always interested in investigating additional sources of information to assist in this process. We encourage future commenters to submit this data as part of their public comment so that it can be used by CMS as part of the code valuation process. Based on the submission of this additional data, we believe that the CPT codes 77002 and 77003 are more accurately valued at a higher RVU than CPT code 77001. After consideration of comments received, we are finalizing the RUCrecommended work RVUs for all three codes in the family, which is an increase from the proposed work RVU of 0.38 to a work RVU 0.54 for CPT code E:\FR\FM\15NOR2.SGM 15NOR2 80314 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 77002 and to 0.60 for CPT code 77003. We are finalizing the proposed work RVU of 0.38 for CPT code 77001 without change. (40) Mammography—Computer Aided Detection Bundling (CPT Codes 77065, 77066 and 77067) Section 104 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106–554) required us to create separate codes with higher payment amounts for digital mammography compared to film mammography, which was the technology considered to be typical at the time. In addition, the statute required additional payment to be made when computer-aided detection (CAD) was used. In CY 2002, we began valuing digital mammography services using three Gcodes, G0202, G0204, and G0206 to describe screening mammography, unilateral diagnostic mammography, and bilateral diagnostic mammography, respectively. CMS implemented the requirements of BIPA section 104(d)(1), which applied to tests furnished in 2001, by using the work RVUs of the parallel CPT codes, but establishing a fixed PE RVU rather than using PE RVUs developed under the standard PE methodology. The fixed amount of PE RVUs for these codes has generally remained unchanged since implementation of the G-codes that specifically described digital imaging. Most mammography services under Medicare have since been billed with these G-codes when digital mammography was used, and with CPT codes 77055, 77056, and 77057 when film mammography was used. The use of CAD has been reported with CPT codes 77051 and 77052. For CY 2017, the CPT Editorial Panel deleted CPT codes 77051, 77052, 77055, 77056, 77057 and created three new CPT codes, 77065, 77066, and 77067, to describe mammography services bundled with CAD. For CY 2017, the RUC recommended work RVUs of 0.81 for CPT code 77065, 1.00 for CPT code 77066, and 0.76 for CPT code 77067, as well as new PE inputs for use in developing resource-based PE RVUs based on our standard methodologies. The RUC recommended these inputs and only one medical specialty society provided us with a set of single invoices to price the equipment used in furnishing these services. We reviewed these coding changes and proposed changes to valuation for these codes for CY 2017. The revised CPT coding mitigates the need for both separate G-codes and the CAD add-on codes. Based upon these coding changes and the RUC-recommended input values, overall Medicare payment for mammography services would be drastically reduced. This is particularly true for the technical component of these services, which could possibly be reduced up to 50 percent relative to the PE RVUs currently used for payment for these services. Based on our initial review of the recommended inputs for the new codes, we believed that these changes would likely result in values more closely related to the relative resources involved in furnishing these services. However, we recognized that these services, particularly the preventive screenings, are of particular importance to the Medicare program and the health of Medicare beneficiaries. We were concerned that making drastic changes in coding and payment for these services could be disruptive in ways that could adversely impact beneficiary access to necessary services. We also recognized that unlike almost any other high-volume PFS service, the RVUs used for payment for many years have not been developed through the generally applicable PFS methodologies, and instead reflect the statutory directive under section 104 of the BIPA. Similarly, we recognized that the changes in both coding and valuation are significant changes for those who provide these services. Therefore, instead of proposing to simultaneously adopt the revised CPT coding and drastic reductions in overall payment rates, we believed it was advisable to propose to adopt the new coding, including the elimination of separate billing for CAD, for CY 2017 without proposing immediate implementation of the recommended resource inputs. We anticipated that we would consider the recommended inputs, including the pricing of the required equipment, as carefully as possible prior to proposing revised PE values through subsequent rulemaking. Therefore, for CPT codes 77065, 77066, and 77067, we proposed to accept the RUC-recommended work RVUs, but to crosswalk the PE RVUs for the technical component of the current corresponding G-codes, as we sought further pricing information for these equipment items. Since the publication of the proposed rule, we have determined that for several reasons related to claims processing systems, Medicare claims systems will be unable to process claims using CPT codes 77065, 77066, and 77067 for CY 2017. However, given the parallel structure of these new CPT codes, 77065, 77066, and 77067 to existing G-codes G0206, G0204, and G0202, we anticipate that the claims systems will be fully capable of processing the appropriate payment policies and prices discussed below for CPT codes 77065, 77066, and 77067 by using the existing G-codes. Therefore, for CY 2017, we will operationalize the new coding rules, including adoption of the new code descriptors for CPT codes 77065, 77066, and 77067 through use of the three current G-codes. For the purposes of discussion below, we discuss policies and payment rates for these three codes using the CPT numbers. Therefore, in the preamble discussion below, references to the Gcodes refer to the descriptors, policies, and rates for CY 2016 and references to the new CPT codes refer to the 2017 descriptors, policies and rates that will be implemented through revisions to the current G-codes. We anticipate being able to adopt the CPT coding for CY 2018. In addition to soliciting comment on this proposal, we also solicited input on rates for these services in the commercial market to help us understand the potential impacts of any future proposed revisions to PFS payment rates. Finally, we noted that by proposing to adopt the new coding for CY 2017, any subsequent significant reduction in RVUs (greater than 20 percent) for the codes would be subject to the statutory phase-in under section 1848(c)(7). To help us examine the resource inputs for these services, we solicited public comment on the list of items recommended as equipment inputs for mammography services. We also invited commenters to provide any invoices that would help with future pricing of these items. TABLE 18—RECOMMENDED EQUIPMENT ITEMS FOR MAMMOGRAPHY SERVICES # Item description 1 ........... 2D Selenia Dimensions Mammography System. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Quantity PO 00000 Purpose 1 Frm 00146 Mammography unit and in-room console itself. Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80315 TABLE 18—RECOMMENDED EQUIPMENT ITEMS FOR MAMMOGRAPHY SERVICES—Continued # Item description Quantity 2 ........... Mammo Accreditation Phantom ........... 1 3 ........... 4 ........... Phantom Case ...................................... Paddle Storage Rack ........................... 1 3 5 ........... Needle Localization Kit ......................... 1 6 ........... 7 ........... 8 ........... 1 1 1 9 ........... 10 ......... Advanced Workflow Manager System Cenova 2D Tower System ................... Image Checker CAD (9.4) License for One FFDM. Film Digitizing System ( ........................ Mammography Chair ............................ 1 1 11 ......... Laser Imager Printer ............................. 1 12 ......... 13 ......... Barcode Scanner .................................. MRS V7 SQL Reporting System .......... 1 1 14 ......... Worksheet Printing Module .................. 1 15 ......... 16 ......... Site License .......................................... Additional Concurrent User License ..... 1 3 17 ......... Densitometer ........................................ 1 We also received specialty society recommendations for a new Equipment Item, a physician PACS mammography workstation. We note that we discuss physician PACS workstation in section II.A of this rule. The items that comprise the physician PACS mammography workstation are listed in Table 19. We requested public comment as to the appropriateness of this list and if some items are indirect expenses or belong in other codes. We also invited commenters to provide any invoices that would help with future pricing of these items. mstockstill on DSK3G9T082PROD with RULES2 TABLE 19—PHYSICIAN PACS MAMMOGRAPHY WORKSTATION PC Tower. Monitors 5 MP (mammo) (x2). 3rd & 4th monitor (for speech recognition, etc.). Admin Monitor (the extra working monitor). Keyboard & Mouse. Powerscribe Microphone. Software—SV APP SYNC 1.3.0. Software—R2 Cenova. We also note that for CY 2015, the CPT Editorial Panel created CPT codes 77061, 77062, and 77063 to describe unilateral, bilateral, and screening digital breast tomosynthesis, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Purpose Required for MQSA. The phantom is currently valued into the existing mammography room. Protects expensive required phantom from damage. It requires 3 racks to hold and prevent damage to all of the paddles that are part of the typical standard mammography system. Needed for a full functioning mammography room. Allows for the performance of needle localizations. Input is not separately in the PE for the mammography guided procedure codes, 19281–19282, as a fully functioning mammography room is needed for those procedures. Workflow system connecting mammography room and workstations. CAD server, and also used for post-processing. License required for using CAD. This is a one-time fee. Digitizes analog films to digital for comparison purposes. A special chair needed for patients who cannot stand to safely have their mammogram performed. Prints high resolution copies of the mammograms to send to surgeons and oncologists, and to use in the OR. Allows selection of individual patient file for interpretation. MQSA requires that the facility develop and maintain a database that tracks recall rates from screening, true and false positive and true and false negative rates, sensitivity, specificity, and cancer detection rate. A reporting system is required to build the required database and produce the federally required quality audit. Components below needed for the reporting system. The reporting system is currently valued into the existing mammography room. Database reports are required for federal tracking purposes. This is used to generate reports for MQSA. License for site to use the reporting system. This is a one-time fee. Licenses for radiologists to use the reporting system. A minimum of three additional licenses is typical. Required for MQSA. respectively. CPT code 77063 is an addon code to CPT code 77057, the CPT code for screening mammography. To be consistent with our use of G-codes for digital mammography, we did not implement two of these three CPT codes for Medicare purposes. We only adopted CPT code 77063 as an add-on code to HCPCS code G0202. Instead of adopting stand-alone CPT codes 77061 and 77062, we created a new code, G0279 Diagnostic digital breast tomosynthesis, as an add-on code to the diagnostic digital mammography HCPCS codes G0204 and G0206 and assigned it values based on CPT code 77063. Pending revaluation of the mammography codes using direct PE inputs, we proposed in CY 2017 to maintain the current coding structure for digital breast tomosynthesis with the technical change that HCPCS code G0279 be reported with CPT codes 77065 or 77066 as the replacement codes for HCPCS codes G0204 and G0206. Comment: Many commenters expressed support for our decision to prevent a drastic reduction in payment for the technical component of these services by maintaining the PE RVUs from CMS’ digital mammography coding. A few commenters expressed concern that shifting to our standard PO 00000 Frm 00147 Fmt 4701 Sfmt 4700 resource-based PE valuation methodology in future rulemaking would drastically reduce payments. Some commenters agreed that CMS does not have sufficient pricing data to value digital mammography. One commenter stated that the RUC-recommended direct PE inputs do not need to be reconsidered, as they include pricing data provided by the specialty that most frequently furnishes the service. Response: We will continue to carefully consider the potential negative impact that our valuation of these services will have on beneficiary access as we evaluate all relevant sources of data in future rulemaking, including data provided by the RUC. Comment: A commenter did not support our intention to seek more pricing information in the commercial market, stating that commercial payers are generally more responsive to market incentives to reduce rather than increase prices. Response: We refer readers to the CY 2010 PFS final rule with comment period (74 FR 61743 through 61748) that describes CMS’ methodology in evaluating practice expense. We would consider a variety of different data sources, pending their availability and applicability. We believe that having E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80316 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations more information regarding pricing in the commercial market may help us to contextualize recommended pricing, as well as potential impact of significant changes in payment. Comment: One commenter expressed concern that, despite our maintenance of PE RVUs and our acceptance of RUCrecommended work RVUs, these services will still see significant payment reductions. Response: We are accepting the RUCrecommended work RVUs, which equal the sum of the base code work RVUs for mammography and for CAD. The work RVUs for the new mammography coding are therefore not changing from their current values. Furthermore, as we are retaining the PE RVUs from the digital mammography G-codes in the new coding, the practice expense valuation is not changing. Therefore, payment amounts for mammography services will not see significant reductions for CY 2017. We expect to revalue these services through our standard code valuation process in future rulemaking. Comment: One commenter said that CMS should accept the RUCrecommended direct PE inputs. Response: As noted earlier, we did not propose the RUC-recommended inputs for these three codes for several reasons, including our concerns that drastic changes in coding and payment for these services could be disruptive in ways that could adversely affect beneficiary access to necessary services, and that unlike almost any other highvolume PFS service, the RVUs used for payment for many years have not been developed through the generally applicable PFS methodologies. Therefore, instead of proposing to simultaneously adopt the revised CPT coding and drastic reductions in overall payment rates, we believed it was advisable to propose to adopt the new coding, including the elimination of separate billing for CAD, for CY 2017 without proposing immediate implementation of the recommended resource inputs. Comment: One commenter requested clarification regarding if the PE RVUs were valued using the RUCrecommended direct PE inputs, as these inputs were posted in Public Use Files (PUFs) for the CY 2017 Proposed Rule. Response: We thank the commenter for pointing out that direct PE inputs were posted for these codes. These inputs were inadvertently included in the Public Use Files. We reiterate that we are not implementing PE inputs for these services, and we are instead crosswalking the PE RVUs from the digital mammography HCPCS codes G0202, G0204, and G0206, as doing so VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 prevents a drastic reduction in payments. We included potential direct PE inputs in the text of the CY 2017 proposed rule to facilitate public comment and information in anticipation of developing updated PE RVUs for these services in future rulemaking. Comment: A commenter stated that this coding violates statutory requirements set forth by BIPA that required the agency to: (1) create separate codes with higher payment amounts for digital mammography compared to film mammography and (2) pay separately when computer-aided detection (CAD) was used. Response: The BIPA requirements specifically refer to screening and diagnostic mammography furnished during the period beginning on April 1, 2001, and ending on December 31, 2001. CMS chose to retain the payment rates for the technical component following this period. Comment: A number of commenters volunteered to help CMS in pricing direct PE inputs for these services. Response: We thank the commenters and seek as much information as possible regarding appropriate establishment of direct PE inputs for these services. Comment: A commenter stated that the potential reductions to the technical component that we are avoiding would have been based on flawed methodology, particularly stating that the PE per hour values used in PE ratesetting methodology is inaccurate as it is based on the Physician Practice Expense Information Survey (PPIS) from 2007–2008, which the commenter considers to be flawed. The commenter also stated that the interest rate applied to high cost capital equipment such as imaging is inappropriately low, and that the equipment utilization rate assumption is inappropriately high. Response: We note that the 90 percent equipment utilization rate only applies to diagnostic imaging services with equipment priced at $1 million dollars or more. The most recent recommended inputs for these services do not include imaging equipment priced at $1 million dollars or more, so the 90 percent equipment utilization would not apply. However, we would address any application of a different utilization rate through notice and comment rulemaking when valuing the codes under our standard PE methodology. As always, we welcome information about the validity of the assumptions we make in calculation of direct and indirect costs in terms of PE. We previously noted our interest in improving PE calculations through incorporation of PO 00000 Frm 00148 Fmt 4701 Sfmt 4700 alternative data sources and we continue to seek information from interested stakeholders as to the kinds of data sources that might be available. For CY 2017, we are finalizing the proposed work RVUs and PE RVUs associated with CPT codes 77067, 77066 and 77065 for use with HCPCS codes G0202, G0204, and G0206, respectively. (41) Radiation Treatment Devices (CPT Codes 77332, 77333, and 77334) We identified CPT codes 77332, 77333, and 77334 through the high expenditures by specialty screen. These services represent an incremental increase of complexity from the simple to the intermediate to the complex in design of radiation treatment devices. The RUC recommended no change from the current work RVUs of 0.54 for CPT code 77332, 0.84 for CPT code 77333 and 1.24 for CPT code 77334. We believed the recommended work RVUs overstate the work involved in furnishing these services, as they do not sufficiently reflect the degree to which the RUC concurrently recommended a decrease in intraservice or total time. For CPT code 77332, we believed the RUC recommendation to maintain its current value despite a 34 percent decrease in total time appeared to ignore the change in time. Therefore, we proposed a value for this code based on a crosswalk from the value from CPT code 93287 (Peri-procedural device evaluation (in person) and programming of device system parameters before or after a surgery, procedure, or test with analysis, review and report by a physician or other qualified health care professional; single, dual, or multiple lead implantable defibrillator system), due to its identical intraservice time, similar total time, and similar level of intensity. We therefore proposed a work RVU of 0.45 for CPT code 77332. We further supported this valuation with CPT code 97760 (Orthotic(s) management and training (including assessment and fitting when not otherwise reported) upper extremity(s), lower extremity(s) and/or trunk, each 15 minutes), which has similar physician time and intensity measurements and a work RVU of 0.45. As these codes are designed to reflect an incremental increase in work value from simple, to intermediate, and complex device designs, we used an incremental difference methodology to value CPT codes 77333 and 77334. We proposed a work RVU of 0.75 for CPT code 77333, maintaining its recommended increment from CPT code 77332. For CPT code 77334, we proposed a work RVU of 1.15, which would maintain its increment from CPT code 77332. E:\FR\FM\15NOR2.SGM 15NOR2 80317 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Comment: Several commenters did not support CMS’ use of CPT code 93287 as a crosswalk code to value CPT code 77332, as it is not a radiology service. Response: We appreciate the commenters’ concern about using a nonradiology service to assist in our valuation of this code family. We note that it is fundamental to the validity of the relative value system that codes furnished by different kinds of physicians remain valid relative to each other. We commonly value codes by use of crosswalks to other codes that are similar in terms of time and intensity, and this may extend across different mixes of specialties furnishing each service on the MPFS. Comment: One commenter did not support CMS’ pointing to the RUC’s recommendation of a reduction of total time without a commensurate reduction in work RVU, as the current time is a CMS/Other source time, which is not derived from a survey and was assigned over 20 years ago. Response: We utilize a variety of methodologies and approaches in developing work RVUs, and we believe that the total time value for this service is one of several appropriate criteria that can be used to estimate the overall time and intensity. We believe that the intraservice and total times listed for this service are valid elements in allowing us to determine an appropriate work RVU. Furthermore, we note that the current times assigned to this code have been used to allocate indirect PE to services furnished by the same specialties, and use of this value is consistent with code valuation methodology. Comment: One commenter asked for clarification regarding if CMS is comparing the total time for CPT code Response: We appreciate the commenter’s concerns about standard time packages not being applied to these codes. We continue to believe, however, that use of the RUC-recommended time to value the work RVU in this case is appropriate because we believe that time values are a critical element of establishing work RVUs. Comment: A few commenters stated that CMS’ proposed reduction in the work RVUs for CPT codes 77333 and 77334 based on an incremental relationship with CPT code 77332 is arbitrary, and that a reduction to the work RVU for CPT code 77332 does not automatically justify a reduction to the other two family codes. A commenter supported the use of incremental valuation methodology in theory but did not believe it is appropriately applied to these codes, because the commenter believes that the valuation of CPT code 77332, upon which the increments are based, is incorrect. Response: We refer readers to a discussion of the methodology for establishing work RVUs in section II.L.2 of this final rule. As outlined there, we frequently use an incremental methodology to identify potential work RVUs for particular codes. We note that we are maintaining the RUCrecommended incremental relationship between these three codes. This code family is structured to represent simple, intermediate, and complex procedures, and we seek to maintain that structure for this code family. Therefore, we are finalizing the work RVUs as proposed. We provide the information in Table 20 to illustrate our valuation of CPT code 77332 and its value relative to our crosswalk codes: 93287 to the current physician time of 77332 or to the survey time on which the RUC recommendation was based. One commenter stated that CMS’ characterization of the intraservice time of crosswalk CPT code 93287 as identical to CPT code 77332 is incorrect; the intraservice time for 77332 is 15 minutes, and the intraservice time of CPT code 93287 is 13.5 minutes. Response: We thank the commenter for bringing this to our attention; our previous statement that the intraservice time of CPT code 93287 is identical to the RUC-recommended intraservice time is incorrect. The RUCrecommended intraservice time of 15 minutes is similar, but not identical to the intraservice time of CPT code 93287 which is 13.5 minutes. We continue to believe that a work RVU of 0.45 is appropriate because we continue to believe the overall work for these services is approximately the same as 97760. As further support for our proposed value, we refer to 93016 (Cardiovascular stress test using maximal or submaximal treadmill or bicycle exercise, continuous electrocardiographic monitoring, and/or pharmacological stress; supervision only, without interpretation and report) which has an intraservice time that is identical to the RUC-recommended intraservice time for 77332, as well as a similar total time. Comment: One commenter stated that these codes have XXX global periods, and therefore, do not have standard pre or post service packages. These standard pre and post services packages did not exist at the time that this service was valued, thus the convention of eliminating pre-service time and applying minimal post-service time to services with XXX global periods was not applied at that time. TABLE 20—VALUATION OF CPT CODE 77332 RELATIVE TO CROSSWALK CODES HCPCS Description Intra time 77332—Current ............. Treatment devices, design and construction; simple (simple block, simple bolus). Treatment devices, design and construction; simple (simple block, simple bolus). Peri-procedural device evaluation & programming .......... Orthotic management and training .................................. Cardiovascular stress test ................................................ ........................ 28 .54 ........... 15 18 .45 0.0126 13.5 14 15 26 18 19 .45 .45 .45 0.0126 0.0257 0.0240 77332—CMS ................. mstockstill on DSK3G9T082PROD with RULES2 93287 ............................. 97760 ............................. 93016 ............................. (42) Special Radiation Treatment (CPT Code 77470) We identified CPT code 77470 through the high expenditures by specialty screen. We proposed the RUCrecommended work RVU of 2.03. However, we believe the description of service and vignette describe different VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 and unrelated treatments being performed by the physician and clinical staff for a typical patient, and this presents a disparity between the work RVUs and PE RVUs. We solicited comment on information that would clarify this apparent disparity to help determine appropriate PE inputs. In PO 00000 Frm 00149 Fmt 4701 Sfmt 4700 Total time Work RVU IWPUT addition, we solicited comment to determine if creating two G-codes, one that describes the work portion of this service, and one that describes the PE portion, may be a potentially more accurate method of valuing and paying for the service or services described by this code. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80318 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Comment: Some commenters maintained that the clinical labor and physician work component are related and are necessarily reported together. Commenters did not approve of CMS suggestion of breaking the work and PE components of this service into two separate G-codes in future rulemaking, stating that the CPT descriptor is accurate and represents the typical patient. Some commenters sought greater explanation for why CMS believes that the work and PE portions of this service are unrelated; commenters question if it is because the vignettes offered for the work and PE describe treatments for two separate diagnoses. Commenters also questioned if CMS is assuming that the ‘‘devices’’ mentioned in the description of clinical labor activities overlap with Radiation Treatment Devices codes which are also being evaluated in this rule. A commenter stated that if CMS is suggesting that there should be multiple CPT codes for every possible diagnosis for the use of this code, then that suggestion is problematic. Response: According to the description of work provided for this service, the physician performs cognitive work such as planning, consideration of test results, and therapeutic treatment contingency planning that is in addition to what he or she would typically be performing for most radiation treatments. Meanwhile, the radiation therapist handles the treatment devices, performs tasks such as positioning the patient, and helps facilitate the scan of the patient. We believe that this may describe activities that are fundamentally disconnected. To illustrate our concern, we offer the example that this is akin to a physician removing a mole from a patient’s hand while the clinical staff places a cast on the patient’s foot; we see no compelling clinical evidence to indicate that the two tasks are related. In addition, the disparate diagnoses described by the vignettes further calls into question the degree to which the work and PE components are interrelated. While we agree that there should not separate coding for each possible diagnosis for a particular service, in trying to accurately assess relative value, we believe that the work and PE components should be valued under unified assumptions about the typical service. We are finalizing the RUC-recommended work RVU and PE inputs as proposed; however, we continue to have serious concerns about the validity of this coding. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 (43) Interstitial Radiation Source Codes (CPT Codes 77778 and 77790) In the CY 2016 PFS final rule with comment period, we established an interim final value for CPT code 77790 without a work RVU, consistent with the RUC’s recommendation. We did not use the RUC-recommended work RVU to establish the interim final values for CPT code 77778. We stated that the specialty society survey included a work time that was significantly higher than the RUC-recommended work time without a commensurate change in the work RVU. For CY 2016, we established the 25th percentile work RVU survey result of 8.00 as interim final for CPT code 77778 and 0 work RVUs for CPT code 77790. Comment on the CY 2016 PFS final rule with comment period: Commenters agreed that the preservice survey times and the RUC-recommended survey times were inconsistent and explained that this inconsistency resulted from the RUC’s use of preservice packages in developing recommendations. In addition, commenters stated that because the work associated with CPT code 77790 (including pre-time supervision, handling, and loading of radiation seeds into needles) was bundled into CPT code 77778, that the additional work should be reflected in the RVU for CPT code 77778. Commenters encouraged us to accept the RUC-recommended work RVU of 8.78 and requested that CPT code 77778 be referred to the refinement panel. Response in the CY 2017 PFS proposed rule: We did not refer CPT code 77778 to the CY 2016 multispecialty refinement panel because commenters did not provide new clinical information. We continued to believe that, based on the reduction in total work time, an RVU of 8.00 accurately reflected the work involved in furnishing CPT code 77778. In the CY 2017 proposed rule, we proposed a work RVU of 8.00 for CPT code 77778 and 0 work RVUs for CPT code 77790. We also sought comment on whether we should use time values based on preservice packages if the recommended work value was based on time values that were significantly different than those ultimately recommended. The following is a summary of the comments we received regarding our proposed valuations for CPT codes 77778 and 77790: Comment: Some commenters stated that CMS underestimates the additional work inherent in furnishing CPT code 77778, considering that it is being bundled with CPT code 77790. PO 00000 Frm 00150 Fmt 4701 Sfmt 4700 Commenters did not agree with our decision not to accept the RUCrecommended work RVU of 8.78 and to propose for CY 2017 a work RVU of 8.00, considering the disparity between the survey total time and the RUCrecommended total time. According to the RUC, the survey respondents had accurately estimated the work RVU based on magnitude estimation while overestimating the relatively low intensity pre-service time involved in performing this service, and this explains the disparity between the survey time and the RUC-recommended total time. One commenter noted that the RUC significantly reduced the pretime because it did not include work in supervising the ordering of the isotope. Several commenters stated that CMS routinely accepts and uses pre-service time packages as recommended by the RUC. Response: We continue to question how the same survey respondents that significantly overestimated the total time based on the RUC’s analysis could nonetheless accurately estimate the overall work. We are also concerned about the specialty society’s perspective that the RUC does not consider the work of supervising the ordering of the isotope as part of the service, given the survey respondents clearly considered such work to be described by the code. We believe that it is important that a particular code clearly describes the work involved in furnishing a service. While we appreciate the usefulness of pre-time packages generally, for this particular code, we believe that in this case the drastic time difference from the survey time value to the RUCrecommended time value that the pretime package produces is problematic, especially since there does not appear to be consensus regarding which services are included in the code, or which might be perceived to be separately reportable. In general we are concerned with using recommended time values that are disconnected from recommended work RVUs, including in cases where the recommended work RVU may include elements of work that are not reflected in the assumptions in time, as appears to be the case for this code. We reiterate that we believe the statute directs us to establish work RVUs that reflect the relative resource costs in time and intensity, so we believe that there should be an identifiable relationship between time and work RVUs. To align the time and work associated with this code, we proposed a reduction of the work RVU from 8.78 to 8.00 as we proposed. However, upon consideration of comments, we were persuaded that E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 the RUC-recommended work RVUs for this service are appropriate, particularly because the work includes the supervision, handling, and loading of radiation seeds, and it reflects the bundling with CPT code 77790. While we are not finalizing a change in the time associated with this code since we proposed to use the RUC recommended value based on the preservice package, we seek additional information regarding the best approach to valuing work when there is a clear disconnect between assumptions regarding time described by a code and the time recommended by the RUC. We understand that pre-service time packages can be a helpful tool in assigning estimates of time to particular codes relative to others on the PFS and that these times may be significantly different than those derived from survey results. However, since the RUC has repeatedly stated that its recommendations reflect the typical resources involved in furnishing PFS services, we believe it would be important for us to be able to identify cases where the recommended time values reflect the application of particular policies rather than the best estimate of the actual time involved in furnishing procedures. (44) Colon Transit Imaging (78264, 78265, 78266) In establishing CY 2016 interim final values, we accepted the RUC recommended work RVUs for CPT codes 78265 and 78266. We believed that the RUC-recommended RVU of 0.80 overestimated the work involved in furnishing CPT code 78264 and as a result, we established an interim final work RVU of 0.74 based on a crosswalk to CPT code 78226 (hepatobiliary system imaging, including gallbladder when present), due to similar intraservice times and intensities. Comment on the CY 2016 PFS final rule with comment period: Commenters did not support our interim final work RVU for CPT code 78264. Commenters disagreed with our assessment of CPT code 78264 as having a higher work RVU and shorter intraservice time relative to the other codes in the family. One commenter stated that a difference of two minutes in intraservice time was insignificant and should not be used as a rationale for revaluing. Another commenter stated that we should have maintained the RUC-recommended crosswalk of CPT code 78264 to CPT code 78227 (Hepatobiliary system imaging, including gallbladder when present; with pharmacologic intervention, including quantitative measurement(s) when performed) due to VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 similarities in service, work and intensity. Based on these concerns, commenters requested that CPT code 78264 be referred to the refinement panel. Response in the CY 2017 PFS proposed rule: CPT code 78264 was referred to the CY 2016 multi-specialty refinement panel for further review. We calculated the refinement panel results as the median of each vote. That result for CPT code 78264 was 0.79 RVUs. In the CY 2017 proposed rule, we proposed a value of 0.79 for CPT code 78264. The following is a summary of the comments we received regarding our proposed valuation of the Colon Transit Imaging codes: Comment: A commenter recommended that we reexamine the data associated with these codes to ensure the accuracy of the final values. Response: We thank the commenter for this input. We continue to believe that the proposed valuation on CPT code 78264 most accurately describes the work, time and intensity associated with this service; therefore, we are finalizing the work RVU as proposed. (45) Cytopathology Fluids, Washings or Brushings and Cytopathology Smears, Screening, and Interpretation (CPT Codes 88104, 88106, 88108, 88112, 88160, 88161, and 88162) In the CY 2016 PFS final rule with comment period, we made a series of refinements to the recommended direct PE inputs for this family of codes. We removed the equipment time for the solvent recycling system (EP038) and the associated clinical labor described by the tasks ‘‘Recycle xylene from stainer’’ and ‘‘Order, restock, and distribute specimen containers and or slides with requisition forms’’ due to our belief that these were forms of indirect PE. This refinement applied to all seven codes in the family. We also noticed what appeared to be an error in the quantity of non-sterile gloves (SB022), impermeable staff gowns (SB027), and eye shields (SM016) assigned to CPT codes 88108 and 88112. The recommended value of these supplies was a quantity of 0.2, which we believed was intended to be a quantity of 2. We therefore refined the value of these supplies to 2 for CPT codes 88108 and 88112. Comment on the CY 2016 PFS final rule with comment period: Several commenters disagreed with our characterization of the solvent recycling system and its associated clinical labor tasks as indirect PE. Commenters stated that the solvent recycling system costs are direct expenses since they are based PO 00000 Frm 00151 Fmt 4701 Sfmt 4700 80319 on the amount of recycled solvent allocated to each specimen, with solvents allocated to specific specimens based on batch size. They indicated that the related clinical labor tasks are direct PE as they are also based on the amount of recycled solvent allocated to each specimen. The time for these tasks varies based on the batch size, which varies by procedure. Response in the CY 2017 PFS proposed rule: We maintained our previously stated belief that these are forms of indirect PE, as they are not allocated to any individual service. Under the established PE methodology, direct PE inputs are defined as clinical labor, medical supplies, or medical equipment that are individually allocable to a particular patient for a particular service. We continue to believe that a solvent recycling system would be in general use for a lab practice, and that the associated clinical labor tasks for ordering and restocking specimen containers can be more accurately described as administrative activities. We proposed to maintain these refinements from the previous rulemaking cycle for CPT codes 88104– 88162. Comment on the CY 2016 PFS final rule with comment period: A commenter indicated that we did not account for the batch size when considering the supply quantities for CPT codes 88108 and 88112. The commenter indicated that the practice expense inputs should be assumed to have a batch size of five for these two codes, and therefore, no edits should be made. The commenter requested that we restore the quantity of 0.2 for the gloves, gowns, and eye shields associated with these procedures. This did not apply to the other codes on the submitted spreadsheet, which had a batch size of one. Response in the CY 2017 PFS proposed rule: We appreciated the assistance of the commenter in clarifying the batch size for these procedures. As a result, we proposed to refine the supply quantity of the nonsterile gloves (SB022), impermeable staff gowns (SB027), and eye shields (SM016) back to the RUC-recommended value of 0.2 for CPT codes 88108 and 88112. The following is a summary of the comments we received regarding our proposed valuation of the Cytopathology Fluids and Cytopathology Smears codes: Comment: A few commenters continued to disagree that the proposed refinements to the direct PE inputs were forms of indirect PE. Commenters stated that these tasks are direct expenses, as they are variable based on the volume E:\FR\FM\15NOR2.SGM 15NOR2 80320 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 of these services, with the clinical labor and equipment time directly attributable to the quantity of specimens typically provided from a typical laboratory. Commenters also stated that these activities were not captured in the questions asked on the indirect practice expense cost survey. Response: We continue to believe that these are administrative tasks that are more accurately classified as forms of indirect PE because they are not allocable to an individual service. Whether these tasks are variable based on the volume of the services is unrelated to this classification. For example, some services may require additional time for administrative staff to record electronic health records or restock inventory than other services, but in all cases these are defined as indirect PE under the established methodology, as they are administrative tasks that are not allocated to any individual service. We disagree that the validity of the practice expense data rests on whether or not particular questions were asked on the survey. We note that we understand medical practice and technology often change over time and the PE survey data is used to capture the relative difference in practice expenses incurred by various specialties as opposed to representing a summation of all individual items that incur an expense. Therefore, we do not believe that inclusion or exclusion of particular items means that the underlying data are invalid for purposes of measuring relativity. Comment: A commenter agreed with the changes to the RUC-recommended supply quantity of 0.2 for the non-sterile gloves (SB022), impermeable staff gowns (SB027), and eye shields (SM016) in CPT codes 88108 and 88112. Response: We appreciate the support from the commenter. After consideration of comments, we are finalizing the proposed direct PE inputs for CPT codes 88104, 88106, 88108, 88112, 88160, 88161, and 88162. (46) Flow Cytometry Interpretation (CPT Codes 88184, 88185, 88187, 88188, and 88189) The Flow Cytometry Interpretation family of codes is split into a pair of codes used to describe the technical component of flow cytometry (CPT codes 88184 and 88185) that do not have a work component, and a trio of codes (CPT codes 88187, 88188, and 88189) that do not have direct practice expense inputs, as they are professional component only services. CPT codes 88184 and 88185 were reviewed by the RUC in April 2014, and their CMS refined values were included in the CY VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 2016 PFS final rule with comment period. The full family of codes was reviewed again at the January 2016 RUC meeting, and new recommendations were submitted to CMS as part of the CY 2017 PFS rulemaking cycle. We proposed the RUC-recommended work RVU of 0.74 for CPT code 88187, and the RUC-recommended work RVU of 1.70 for CPT code 88189. For CPT code 88188, we proposed a work RVU of 1.20 instead of the RUCrecommended work RVU of 1.40. We arrived at this value by noticing that there were no comparable codes with no global period in the RUC database with intraservice time and total time of 30 minutes that had a work RVU higher than 1.20. The RUC-recommended work RVU of 1.40 would go beyond the current maximum value and establish a new high, which is not consistent with our estimation of the overall intensity of this service relative to the others. As a result, we believe it is more accurate to crosswalk CPT code 88188 to the work value of the code with the current highest value, which is CPT code 88120 (Cytopathology, in situ hybridization (for example, FISH), urinary tract specimen with morphometric analysis, 3–5 molecular probes) at a work RVU of 1.20. We believe that CPT code 88120 is crosswalk comparable code since it shares the identical intraservice time and total time of 30 minutes with CPT code 88188. We also noted that the survey increment between CPT codes 88187 and 88188 at the RUC-recommended 25th percentile was 0.40 (between work RVUs of 1.00 and 1.40), and this increment of 0.40 when added to CPT code 88187’s work RVU of 0.74 would arrive at a value of 1.14. In addition, the total time for CPT code 88188 decreases from 43 minutes to 30 minutes, which is a ratio of 0.70, and when this time ratio is multiplied by CPT code 88188’s previous work value of 1.69, the result would be a new work RVU of 1.18. With this information in mind, we proposed a work RVU of 1.20 for CPT code 88188 as a result of a direct crosswalk to CPT code 88120. For CPT codes 88184 and 88185, which describe the technical component of flow cytometry, we proposed to use the RUC-recommended inputs with a series of refinements. However, we believe that the coding for these two procedures may inhibit accurate valuation. CPT code 88184 describes the first marker for flow cytometry, while CPT code 88185 is an add-on code that describes each additional marker. We believe that it may be more accurate to have a single CPT code that describes the technical component of flow PO 00000 Frm 00152 Fmt 4701 Sfmt 4700 cytometry on a per patient case basis, as these two procedures are always performed together and it is difficult to determine the clinical labor, supplies, and equipment used in the typical case under the current coding structure. We solicited comments regarding the public interest in consolidating these two procedures into a single code used to describe the technical component of flow cytometry. Absent such a change in coding, we proposed to refine the clinical labor time for ‘‘Instrument start-up, quality control functions, calibration, centrifugation, maintaining specimen tracking, logs and labeling’’ from 15 minutes to 13 minutes for CPT code 88184. We maintained that 13 minutes for this activity, which is the current time value, would be typical for the procedure, as CPT code 88182 also uses 13 minutes for the identical clinical labor task. We also proposed to refine the L054A clinical labor for ‘‘Load specimen into flow cytometer, run specimen, monitor data acquisition, and data modeling, and unload flow cytometer’’ from 10 minutes to 7 minutes using the same rationale, a comparison to CPT code 88182. We proposed to maintain the clinical labor for ‘‘Print out histograms, assemble materials with paperwork to pathologists Review histograms and gating with pathologist’’ for CPT code 88184 at 2 minutes, as opposed to the RUC-recommended 5 minutes. A clinical labor time of 2 minutes is standard for this activity; we disagree with the RUC rationale that reviewing histograms and gating with the pathologist in this procedure is not similar to other codes. We also note that the review of histograms with a pathologist is not even described by CPT code 88184, which again refers to the technical component of flow cytometry, not the professional component. We also proposed to refine the L033A clinical labor time for ‘‘Clean room/equipment following procedure’’ from 2 minutes to 1 minute for CPT code 88184. We have established 1 minute in previous rulemaking (80 FR 70902) as the standard time for this clinical labor activity in the laboratory setting. We proposed to maintain our removal of the clinical labor time for ‘‘Enter data into laboratory information system, multiparameter analyses and field data entry, complete quality assurance documentation’’ for both CPT code 88182 and CPT code 88184. As we stated in the CY 2016 PFS final rule with comment period (80 FR 70979), we have not recognized the laboratory information system as an equipment E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations item that can be allocated to an individual service. We continue to believe that this is a form of indirect PE, and therefore, we do not recognize the laboratory information system as a direct PE input, and we do not consider this task as typically performed by clinical labor on a per-service basis. We proposed to maintain the quantity of the ‘‘lysing reagent’’ supply (SL089) at 2 ml for CPT code 88185, as opposed to the RUC-recommended quantity of 3 ml. In our discussions with pathology specialists who perform flow cytometry, we were informed that the use of 50–55 ml of the lysing reagent would be typical for an entire patient case. The RUC recommendation similarly suggested a quantity of 46 ml or 48 ml per patient case. We were also told that the most typical number of markers used for flow cytometry is 24, consisting of 1 service of CPT code 88184 and 23 services of CPT code 88185. An investigation of our claims data confirmed this information, indicating that 24 markers is the most frequent per patient case for flow cytometry, and the use of more than 20 markers is typical. We believe that this data supports our refinement of the lysing reagent from a quantity of 3 ml to a quantity of 2 ml for CPT code 88185, which is also the current value for the procedure and the RUC-recommended value from the previous set of recommendations. For the typical case of 24 markers, our value would produce a total lysing reagent quantity of 51 ml (5 ml from the single service of CPT code 88184 and 46 ml from the 23 services of CPT code 88185), which matches with the amount required for a total per patient case. If we were to adopt the RUC recommendation, the total lysing reagent quantity would be 74 ml, which is well in excess of what we believe to be typical for these procedures. We also proposed to refine the quantity of the ‘‘antibody, flow cytometry’’ supply (SL186) from quantity 1.6 to quantity 1, which is also the current value for the supply and the RUC-recommended value from the previous set of recommendations. We do not agree that more than one antibody would be typically used for each marker. We are reaffirming the previous RUC recommendation, and maintaining the current quantity of 1 antibody for each marker. We did not agree with the recommended additional time for the ‘‘printer, dye sublimation (photo, color)’’ equipment (ED031). We proposed to maintain the equipment time at 2 minutes for CPT code 88184, and at 1 minute for CPT code 88185. As we stated in the CY 2016 PFS final rule VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 with comment period (80 FR 70979), we proposed to assign equipment time for the dye sublimation printer to match the clinical labor time for ‘‘Print out histograms, assemble materials with paperwork to pathologists.’’ We do not believe that it would be typical for the printer to be in use longer than it takes to accomplish this clinical labor task. The following is a summary of the comments we received regarding our proposed valuation of the Flow Cytometry Interpretation codes. Due to the large number of comments we received for this code family, we will first summarize the comments related to the coding structure of CPT codes 88184 and 88185, followed by the comments related to specific work RVUs, and finally the comments related to the direct PE inputs. Comment: Many commenters disagreed with the potential concept of consolidating CPT codes 88184 and 88185 into a single code used to describe the technical component of flow cytometry. Commenters stated that the resources required for the first marker and for each subsequent marker differ, and with flow cytometry, there is no ‘‘typical case.’’ Because the number of markers differ for different disease states, such as HIV, Lyme disease, and acute leukemias, the current coding structure is designed to reflect different valuations of the professional component codes, based on the number of markers that must be interpreted. Many commenters stressed that this makes one code for the technical component of flow cytometry infeasible, and strongly advised against it. One commenter was also concerned that a coding structure change may exacerbate the undervaluation of these services, which have been recently reviewed twice by the RUC and resulted in substantial decreases in the practice expense relative values. A few commenters supported the possibility of combining CPT codes 88184 and 88185 into a single code. One commenter stated that the current coding structure does not incentivize the use of less reagents, and actually penalizes labs that appropriately test fewer markers. According to this commenter, moving to a single code structure would be consistent with the vast majority of lab tests, would simplify billing processes, and may make development of more costeffective panels financially desirable. The commenter supported further examination of a single CPT code and urged that current payment rates should be frozen while such examination occurs. Another commenter suggested a slightly different coding structure, one PO 00000 Frm 00153 Fmt 4701 Sfmt 4700 80321 which would collapse the codes into a series of case rate codes that reflect the procedures: screening, classification, and monitoring. There was support from one additional commenter for a three code proposal designed to track this workflow. Response: We appreciate the detailed responses from the commenters about the proper coding structure used to describe the technical component of flow cytometry. We do not intend to finalize any recommendations regarding the coding structure at this time, but we will consider this information for future proposals regarding these services. Comment: Many commenters made general comments about decreases to the proposed rates for either the professional or the technical component of the flow cytometry codes. Commenters stated that there was no justification for the reduction in payment rates, and that the decreases would hamper laboratories’ ability to offer the flow cytometry services. One commenter stated that the payment cuts were not realistic and would result in flow cytometry not being financially feasible in the less expensive physicianoffice setting. Another commenter indicated that further reductions to these codes would result in an inability to maintain the level of professional services required to reduce medical errors. Response: We share the concern of the commenters in ensuring that payment for Medicare services is based on an accurate assessment of the relative resource costs involved in furnishing the service. With regards to the technical component of flow cytometry, most of the decrease in code valuation is taking place due to a decrease in the quantity of the lysing reagent supply (SL089). The RUC has agreed that there was previously an excess of this supply in CPT codes 88184–88185, and has recommended a decrease of approximately 78 percent in this supply quantity, from 336 ml to 74 ml, in the typical case of 24 markers. Due to the resource-based nature of the RVU system, this substantial reduction in supply costs will be reflected in the RVUs for these procedures. We note that since CY 2016 the phase-in of significant reductions in RVUs has been in effect; if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, those decreases are limited to a 19 percent reduction in total RVUs. We note that the phase-in mechanism allows reductions to be transitioned in over time rather than instituting large decreases in a single E:\FR\FM\15NOR2.SGM 15NOR2 80322 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 rule cycle. Please see section II.H for more information regarding the phase-in of significant RVU reductions. Comment: Many commenters disagreed with the proposed work RVU of 1.20 for CPT code 88188. Several commenters took issue with the CMS statement that there were no comparable codes with no global period in the RUC database with intra-service time and total time of 30 minutes that had a work RVU higher than 1.20. These commenters indicated that there were at least 10 such codes valued over 1.20 RVUs in the 2016 RUC database (1 XXX and 9 ZZZ add-on global codes), ranging in work value from 1.38 to 2.40 RVUs, with a median of 1.67. The commenters suggested that these codes supported the higher RUC-recommended work RVU of 1.40 for CPT code 88188. Response: We continue to believe that there are no comparable codes with the same global period with intraservice time and total time of 30 minutes that have a work RVU higher than 30 minutes. When we used the phrase ‘‘no global period’’ to refer to CPT code 88188, we were not referring to add-on codes with a global period of ZZZ. We have stated on numerous occasions that we believe the resources required to furnish add-on codes constitute a separate category, and we typically only compare add-on codes to other add-on codes. We do not believe that it is appropriate to compare the work RVU of add-on codes with 30 minutes of intraservice time to the work RVU of CPT code 88188, which is not an addon code. With regards to non-add on codes, Table 21 lists all 13 codes in the RUC database with 30 minutes of intraservice time, fewer than 40 minutes of total time, and a global period of XXX: RUC-recommended work RVU of 1.40 TABLE 21: WORK RVU OF CODES WITH COMPARABLE TIME VALUES TO for CPT code 88188. Response: We disagree that the survey CPT CODE 88188—Continued data justifies a smaller increment between the final two codes. While this Work HCPCS Descriptor is true for the 25th percentile survey RVU results, the exact opposite is true for the 88374 ........ M/phmtrc alys 0.93 survey median results, in which the ishquant/semiq. increment between CPT codes 88187 93750 ........ Interrogation vad in 0.92 and 88188 is 0.35 and the increment person. between CPT codes 88188 and 88189 is 95251 ........ Gluc monitor cont 0.85 0.70. In addition, in the current prephys i&r. 97004 ........ Ot re-evaluation ......... 0.60 reviewed version of these codes, the 97606 ........ Neg press wound tx 0.60 increment between CPT codes 88187 and 88188 is 0.33, while the increment >50 cm. between CPT codes 88188 and 88189 is As we stated previously, there are no 0.54. We believe that this suggests the codes with a work RVU higher than survey data on the work increments is 1.20, which is where we proposed to conflicting, not conclusive, and that the value CPT code 88188. We acknowledge RUC-recommended increments are a that there are global XXX codes with 30 departure from the previous incremental minutes of intraservice time that have a structure of this code family, in which work RVU greater than 1.20. However, the second two codes had a larger all of these codes have at least 40 increment than the first two codes. We minutes of total time, which is 33 do not agree that the work increments percent higher at a minimum than the at the survey 25th percentile are a total time for CPT code 88188. We sufficient justification for adopting the believe that a crosswalk to CPT code recommended work RVU for CPT code 88120, which shares the identical time 88188 due to the additional data values as CPT 88188, is a more regarding work increments between appropriate choice than codes that have these codes detailed above. Comment: Several commenters stated substantially higher total time. In the that over the last decade, flow particular case of CPT code 88188, we cytometric analyses have changed continue to believe that establishing a through new technological advances new maximum work value above 1.20 that have led to an increased would not be consistent with our estimation of the overall intensity of this interpretative sophistication. It is now service relative to the others on the PFS. typical for the physician to analyze Comment: Some commenters substantially more data than in the past. disagreed with the proposed work RVU According to commenters, with the of CPT code 88188 based on the work advent of 5, 6, 8, and 10 color flow increments between the codes in the cytometry the intensity and complexity family. These commenters stated that of these services has significantly the original recommended work values increased. Commenters stated that this had almost identical increments increased intensity and complexity is between the three services (0.60 reflected in the RUC recommendation between CPT codes 88187 and 88188, for this service, based on new physician and 0.63 between CPT codes 88188 and work associated with technological TABLE 21: WORK RVU OF CODES 88189); however the median survey changes, time, and intensity. WITH COMPARABLE TIME VALUES TO results indicated a much greater Response: We appreciate this CPT CODE 88188 physician work increment between CPT additional information about the professional interpretation of flow codes 88188 and 88189. According to Work cytometry from the commenters. commenters, the final RUC HCPCS Descriptor RVU However, we note that the RUCrecommendations were based on the recommended intensity of CPT codes expertise of the RUC to establish the 77331 ........ Special radiation do0.87 88187 and 88189 has actually decreased work increment between CPT codes simetry. compared to the current pre-reviewed 78195 ........ Lymph system imag1.20 88187 and 88188 (0.74) higher than the version of these codes. We believe that increment between CPT codes 88188 ing. this indicates that the same new 78456 ........ Acute venous throm1.00 and 88189 (0.30). In other words, the bus image. recommended work increment between technological advances also allow 86079 ........ Phys blood bank serv 0.94 CPT code 88187 (work RVU = 0.74) and practitioners to analyze data faster and authrj. CPT code 88188 (work RVU = 1.40) was with fewer errors, which is reflected in 88120 ........ Cytp urne 3–5 probes 1.20 significantly larger than the work the decreased work RVUs and time ea spec. increment between CPT code 88188 values in the RUC recommendations. 88187 ........ Flowcytometry/read 0.74 (work RVU = 1.40) and CPT code 88189 The only one of the three codes with a 2–8. RUC-recommended increase in intensity 88365 ........ Insitu hybridization 0.88 (work RVU = 1.70). The commenters stated that the survey results and expert is CPT code 88188. This increased (fish). intensity in the second code creates an 88368 ........ Insitu hybridization 0.88 opinion justified this smaller increment between the final two codes, and the manual. anomalous relationship within the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00154 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations family, as the RUC-recommended intensity for CPT code 88188 is equal to the intensity for CPT code 88189, in contrast to the current pre-reviewed version of these codes where the three codes have a linear increase in intensity (IWPUT = 0.39, 0.43, 0.50). We do not understand why the professional interpretation of 9 to 15 markers would have an equal intensity to interpreting 16 or more markers. Logic would suggest that CPT code 88188 should have a lower intensity than CPT code 88189, which is indeed the case at our proposed work RVU of 1.20. The proposed value also re-establishes a linear increase in intensity between the three codes as additional markers are interpreted (IWPUT = 0.37, 0.40, 0.47). We believe that this intensity data offers additional support for our proposed work RVU. Comment: One commenter disagreed with the CMS crosswalk to the work RVU of CPT code 88120, which the commenter suggested was completely different in step by step work effort, intensity, and complexity. The commenter stated that CPT code 88120 typically only involves identifying and quantifying a limited subset molecular probes (for example, FISH probes for chromosomes 3, 7, 17 and 9p21 loss), using two to four color signal enumeration to detect aneuploidy staining of nuclei on slides from isolated cell preparations, usually from morphologically well-characterized specimens. In contrast, the commenter stated that for CPT code 88188 the pathologist is required to integrate multi-parameter diagnostic information on different cell populations (both abnormal and normal), by assessing cell scatter (size and shape) along with signal intensity and pattern of staining of cell surface markers with antibody reagents using four to six (or more) color fluorescent antibody probes. The pathologist must perform successive, iterative analyses of 2- and 3dimensional plots and histograms and re-gating of identified cell populations (based on size, shape, relative staining patterns, signal intensity, etc.) to characterize cell lineage and render a final diagnosis and interpretation. Due to this clinical rationale, the commenter indicated that the work and complexity of CPT code 88188 was substantially greater than CPT code 88120. Response: We disagree with the commenter that CPT code 88120 is an inappropriate crosswalk code for CPT code 88188. These codes are both recently-reviewed pathology codes with identical intraservice time and total time values within the Cytopathology listing of the CPT manual. We also note VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 that many of the activities listed by the commenter are not detailed in the intraservice work description for CPT code 88188, and may not be needed in the typical case. The following comments address the proposed direct PE inputs for the Flow Cytometry family of codes. Comment: Many commenters disagreed with the proposed time of 13 minutes for the clinical labor activity ‘‘Instrument start-up, quality control functions, calibration, centrifugation, maintaining specimen tracking, logs and labeling.’’ Commenters stated that the CMS comparison to CPT code 88182 was not appropriate, as that code uses older/simpler technology, with CPT code 88184 using 4–6 or more color channels while CPT code 88182 uses 1–2 channels. Commenters stressed that these clinical labor tasks are unique to this flow cytometry service, and they should not be assumed to take the identical time as other services. Other commenters stated that three instruments must be run consecutively, and the task includes quality control calibration, taking a minimum of 13 to 16 minutes in dedicated technical staff time. Another commenter indicated that the time required to complete these activities is continually increasing as more regulatory requirements are added, and that the recently added flow cytometry requirement for individual antibody lot/shipment testing increased this time exponentially. Response: We disagree with the commenters that the identical clinical labor activity would take longer to perform for CPT code 88184 than it would for CPT code 88182. Both of these procedures use the same equipment to perform this task, a flow cytometer (EP014) and a centrifuge (EP007). We do not agree that there is additional clinical labor time required for using additional color channels in CPT code 88184, as the same equipment is being used to perform the same clinical labor task as in CPT code 88182. We did not receive data from the commenters suggesting that regulatory requirements are increasing the time required to perform this clinical labor task, nor was this reflected in the RUC recommendations, which continued to recommend the same unchanged time for this task. Comment: Many commenters objected to the proposed clinical labor time of 7 minutes for the ‘‘Load specimen into flow cytometer, run specimen, monitor data acquisition, and data modeling, and unload flow cytometer’’ activity for CPT code 88184. Commenters stated that the CMS comparison to the clinical labor time used for this same activity in PO 00000 Frm 00155 Fmt 4701 Sfmt 4700 80323 CPT code 88182 was not appropriate as CPT code 88184 uses 4–6 color channel instruments and up, while 88182 uses only 1–2 channels. According to the commenters, the time it takes for data capture, data modeling, data acquisition, and computational analysis is exponentially longer for CPT code 88184 than for CPT code 88182, since additional colors result in more complicated profiles which are more difficult and time consuming to evaluate. Another commenter stated that 7 minutes was wholly inadequate to perform all of these tasks, and that analysis of a specimen can take 12 to 15 minutes, depending on the complexity of the case. Response: We continue to disagree with the commenters that the identical clinical labor activity would take longer to perform for CPT code 88184 than it would for CPT code 88182. As we stated in response to the previous comment, we do not agree that there is additional clinical labor time required for using additional color channels in CPT code 88184, as the same equipment is being used to perform the same clinical labor task as in CPT code 88182. For the same reason, we do not agree that this clinical labor activity takes 12 to 15 minutes to perform, since the identical task only requires 7 minutes for CPT code 88182. Comment: Many commenters opposed the proposed value of 2 minutes for the clinical labor activity ‘‘Print out histograms, assemble materials with paperwork to pathologists Review histograms and gating with pathologist’’ for CPT code 88184. Commenters stated that it was not reasonable to expect that a flow cytometry technologist could print out histograms, assemble the documents and deliver them to a pathologist, and review the histograms with a pathologist, all in the span of a mere 120 seconds. Commenters were concerned that flow cytometry technologists cannot produce a highquality product and ensure its accuracy and completeness for presentation to a pathologist in the proposed time. One commenter noted that although their specific procedure for these steps was largely electronic, their workflow analysis corroborated the RUC’s conclusion because it showed that it took 5 minutes for staff to complete the equivalent activities. Several other commenters stated that if the time the cyotechnologist takes to determine exactly which histograms to print is subtracted, then they could agree with the proposed 2 minutes. Commenters also stated that printing is not performed all at one time, with 25–30 pages of information and data printed over a 5 minute time span, and one E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80324 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations commenter indicated that the process was ‘‘largely electronic’’ with clinical staff not using the equipment for the full duration that it is in use. Response: We appreciate the support from several of the commenters. In responding to the comments for this clinical labor activity and the equipment time for the dye sublimation printer (ED031), it became clear that the clinical labor time for printing was not the same as the equipment time that the printer was in use. Based on the information from the commenters that printing is not performed all at one time, we are assigning the full 5 minutes of equipment time for the dye sublimation printer; however, we are maintaining our proposed 2 minutes of clinical labor time for ‘‘Print out histograms, assemble materials with paperwork to pathologists Review histograms and gating with pathologist’’, as commenters have informed us that the clinical staff do not use the equipment for the full duration that it is in use. Comment: Several commenters disagreed with the proposed clinical labor time of 1 minute for ‘‘Clean room/ equipment following procedure’’ for CPT code 88184. The commenters stated that this time is allocated over entire patient case, and that it is typical and critical to clean the equipment between patient cases. The commenters also supplied details about the cleaning process, regarding how the laboratory technician cleans the equipment and workspace by decontaminating the equipment and work bench surfaces, as well as carrying out waste management after the procedure. Response: We appreciate the additional information from the commenters regarding the cleaning of the room. However, the commenters did not provide a rationale as to why CPT code 88184 requires additional clinical labor above the standard value of 1 minute for room cleaning in lab procedures. We continue to believe that the standard clinical labor time is the most accurate valuation for this clinical labor task. Comment: Many commenters requested that CMS restore the clinical labor time for the ‘‘Enter data into laboratory information system, multiparameter analyses and field data entry, complete quality assurance documentation’’ activity. Commenters stated that this data entry is manually entered and must be performed for each individual patient case. Several commenters indicated that entering testspecific data takes between five and ten minutes, and entry of client information and demographics and specimen VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 information takes additional time that cannot be short-changed. Commenters emphasized that these are extremely important tasks that require technical skills, and assigning zero minutes to this critical task was illogical for a service like flow cytometry. One commenter stated that the current RUCrecommended value of four minutes was already a gross underestimation of the time required to complete these activities for the majority of testing, and suggested that these activities commonly take more than ten minutes to perform. Response: We agree with the commenters that entering patient data into information systems is an important task, and we agree that it would take more than zero minutes to perform. However, the commenters did not address our rationale for removing this clinical labor time from CPT codes 88184 and 88185, which is that this task is indirect PE. As we stated in the CY 2016 final rule with comment period (80 FR 70979), we have not recognized the laboratory information system as an equipment item that can be allocated to an individual service. We continue to believe that this is indirect PE, and therefore, we do not recognize the laboratory information system as a direct PE input, and we do not consider this task as typically performed by clinical labor on a per-service basis. Comment: One commenter requested the inclusion of additional cytotechnologist time of 10 minutes for CPT code 88184 and 2 minutes for CPT code 88185, as well as an additional desktop computer with monitor (ED021) equipment times of 10 minutes for 88184 and 2 minutes for 88185. This additional time was intended to reflect the time spent using the flow cytometry analytics software (EQ380). Response: We agree with the RUC recommendations that the clinical labor and equipment time associated with the flow cytometry analytics software is already accounted for in the recommended clinical labor inputs. As the recommendations indicate, this time is included as part of the clinical labor activities ‘‘Accession specimen’’, ‘‘Instrument start-up, quality control functions’’, ‘‘Load specimen into flow cytometer, run specimen’’ and ‘‘Print out histograms, assemble materials with paperwork to pathologists.’’ Comment: Many commenters disagreed with the proposed supply quantity of 2 for the lysing reagent (SL089) in CPT code 88185. Commenters stated that although they acknowledged that the current Medicare data showed that a patient case of 24 markers is typical, this result ignored PO 00000 Frm 00156 Fmt 4701 Sfmt 4700 other relevant pieces of information. The commenters indicated that an analysis of the 2014 Medicare 5% Sample Carrier Database showed that over 50 percent of individual providers typically bill fewer than 20 markers per patient case, and that since these providers are generally smaller and see fewer annual cases, the proposed supply quantity of 2 would potentially drive these providers to consider ceasing their flow cytometry services. The commenter also stated that these codes are often billed as part of either the Hospital IPPS or OPPS, which should be factored into the typical number of markers billed per case. The commenter also stated that the most common professional component of flow cytometry, CPT code 88189, would be associated with patient cases that bill for fewer than 24 markers, from 16 to 24. Response: We reiterate that we establish payment rates based on the typical case, which the commenters agreed was 24 total markers. We have historically established payment rates based on the typical service and do not believe that it would be appropriate or serve the purpose of relativity to deviate from that practice in this case. We also do not believe that the payment for these codes under the IPPS or OPPS is a directly relevant factor in defining the typical case under the Physician Fee Schedule. We believe that the patient population and typical case under the IPPS would not necessarily be the same as the typical case under the PFS. Finally, we agree that CPT code 88189 would be associated with patient cases that bill for fewer than 24 markers, as the code descriptor states that it refers to the performance of 16 or more markers. However, we do not believe that this affects the number of markers in the typical case, which the commenters agreed was 24 for the typical patient. Comment: A commenter stated that that it opposed putting a number or cap on markers because there is a wide range of possible markers required to achieve patient diagnosis. Response: We agree with the commenter, and we are not establishing a cap or determining a fixed number of markers to use for these procedures. As stated previously, however, we are required to establish payment rates based on the typical case, which our internal data and commenter feedback has agreed is 24 markers. Comment: Other commenters disagreed with the CMS proposal for the lysing reagent based on the supply quantity needed to perform the procedure. A commenter stated that the 46–48 mL quantity detailed by CMS in E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the proposed rule was based on a RUC recommendation; however, the RUC’s amount was based on an average of 16 markers, not 24 markers. Although the commenter agreed that 24 markers reflected a common case, the commenter stated that it was necessary to consider the amount of lysing agent for a 24 marker case, not to assume that the 46–48 mL amount based upon 16 markers also applies to 24 markers. Another commenter stated that a laboratory using ammonia chloride needs at least 2.5 ml of lysing reagent for each time that CPT code 88185 is performed. Response: We did not base our proposal for this supply quantity upon the RUC recommendation. As we stated in the proposed rule, we were informed that the use of 50–55 ml of the lysing reagent would be typical for an entire patient case based on our discussions with pathology specialists who perform flow cytometry. For the typical case of 24 markers, our value would produce a total lysing reagent quantity of 51 ml (5 ml from the single service of CPT code 88184 and 46 ml from the 23 services of CPT code 88185), which matches with the amount required for a total per patient case. Since commenters agreed that 24 markers was the typical patient case, we continue to believe that our proposed quantity of 2 ml is the most accurate value for CPT code 88185. Comment: Many commenters objected to the proposed supply quantity of 1 for the flow cytometry antibody (SL186) in CPT codes 88184 and 88185. Commenters stated that although it is standard practice to use a single antibody multiple times during the analysis, each antibody or marker can only be billed once per analysis. According to commenters, multiple use of such antibodies are not reportable or billable, but are critical to the overall analysis and interpretation of results and are part of the total cost for each procedure performed. Some commenters explained that the recommended quantity of 1.6 antibodies per billed marker was based on averaging together two separate analyses: a survey of 59 professionals performing flow cytometry that found 1.52 antibodies required per marker, and a customer survey that found 1.87 antibodies per marker. A different commenter stated that its member laboratories found that under the current four-color process, 1.36 antibodies per marker is necessary. Another commenter stated that while one antibody is generally used per marker, the required use of controls for many of these markers for analysis or quality control means that this value is VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 greater than 1 antibody per marker reported. Response: We appreciate the additional data presented regarding the clinical use of the flow cytometry antibody supply. However, we continue to have reservations regarding the information that we have received regarding the 1.6 quantity for this supply. Different commenters recommended different quantities of this supply required to furnish the procedure, ranging from 1 to 1.36 to 1.52 to 1.6 to 1.87. We are hesitant to increase the quantity of this supply given the wide-ranging information that we received from commenters. We are also concerned that although commenters referenced studies that found different supply quantities for SL186, commenters did not submit the data associated with these studies for our review. We would be more open to the idea of increasing the supply quantity to 1.6 if this data were supported by clinical data or study. We also note that one commenter stated that one antibody is ‘‘generally used’’ per marker, which supports our contention that the proposed value of 1 antibody for CPT codes 88184 and 88185 would be typical. As a result, we are maintaining a supply quantity of 1 for the flow cytometry antibody supply, which is also the current value for the supply and the RUC-recommended value from the previous set of recommendations. Comment: Several commenters disagreed with the proposed equipment time for the dye sublimation printer (ED031). Commenters stated that printing is not performed all at one time, with 25–30 pages of information and data printed over a 5 minute time span. Commenters indicated that this time cannot be linked directly to one particular clinical labor task line, and the printer cannot be used for any other task during these 5 minutes even while it is not actively printing. Response: We appreciated the additional information from the commenters regarding the use of the dye sublimation printer. Due to the presentation of this new information detailing how the equipment time for the printer is disassociated from any clinical labor tasks, we will increase the equipment time to the RUCrecommended 5 minutes for CPT code 88184 and 2 minutes for CPT code 88185. After consideration of comments received, we are finalizing the proposed work RVUs for CPT code 88187, 88188, and 88189. We are also finalizing the proposed direct PE inputs, with the PO 00000 Frm 00157 Fmt 4701 Sfmt 4700 80325 refinement to the dye sublimation printer detailed above. (47) Microslide Consultation (CPT Codes 88321, 88323, and 88325) CPT codes 88321, 88323, and 88325 were reviewed by the RUC in April 2014 for their direct PE inputs only, and the CMS refined values were included in the CY 2016 PFS final rule with comment period. The family of codes was reviewed again at the January 2016 RUC meeting for both work values and direct PE inputs, and new recommendations were submitted to CMS as part of the CY 2017 PFS rulemaking cycle. In the CY 2016 PFS final rule with comment period, we finalized our proposal to remove many of the inputs for clinical labor, supplies, and equipment for CPT code 88325. The descriptor for this code did not state that slide preparation was taking place, and therefore, we refined the labor, supplies, and equipment inputs to align with the inputs recommended for CPT code 88321, which also does not include the preparation of slides. After further discussion with pathologists and consideration of comments received, we have been persuaded that slide preparation does take place in conjunction with the service described by CPT code 88325. In the RUCrecommended direct PE inputs from the January 2016 meeting, the labor, supplies, and equipment inputs related to slide preparation were added once again to CPT code 88325. We proposed to accept these restorations related to slide preparation without refinement. Regarding the clinical labor direct PE inputs, we proposed to assign 1 minute of L037B clinical labor for ‘‘Complete workload recording logs. Collate slides and paperwork. Deliver to pathologist’’ for CPT codes 88323 and 88325. We are maintaining this at the current value for CPT code 88323, and adding this 1 minute to CPT code 88325 based on our new understanding that slide preparation is undertaken as part of the service described by this code. We proposed to remove the clinical labor for ‘‘Assemble and deliver slides with paperwork to pathologists’’ from all three codes, as we believe this clinical labor is redundant with the labor assigned for ‘‘Complete workload recording logs.’’ We similarly proposed to remove the clinical labor for ‘‘Clean equipment while performing service’’ from CPT codes 88323 and 88325, as we believe it to be redundant with the clinical labor assigned for ‘‘Clean room/ equipment following procedure.’’ We proposed to maintain the quantity of the ‘‘stain, hematoxylin’’ supply E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80326 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations (SL135) at 16 ml for CPT codes 88323 and 88325, as opposed to the RUCrecommended quantity of 32 ml. The RUC recommendation stated that the hematoxylin supply does not include eosin and should not be redundant; the stains are not mixed together, but are instead sequential. The recommendation also made a comparison to the use of the hematoxylin supply quantity in CPT code 88305. However, we note that CPT code 88305 does not include 8 ml of eosin stain (SL201), but instead 8 gm of eosin solution (SL063), and these are not the same supply. Therefore we do not agree that a direct comparison of the supply quantities is the most accurate way to value these procedures. For CPT codes 88323 and 88325, we continue to note that the prior supply inputs for these procedures had quantity 2.4 of the eosin solution (SL063) and quantity 4.8 of the hematoxylin stain (SL135); in other words, a 1:2 ratio between the eosin and hematoxylin. We proposed to maintain that 1:2 ratio with 8 ml of the eosin stain (SL201) and 16 ml of the hematoxylin stain (SL135). We also proposed to update the use of the eosin solution (sometimes listed as ‘‘eosin y’’) in our supply database. We believe that the eosin solution supply (SL063), which is measured in grams, reflects an older process of creating eosin stains by hand. This is in contrast to the eosin stain supply (SL201), which is measured in milliliters, and can be ordered in a state that is ready for staining immediately. We do not believe that the use of eosin solution would reflect typical lab practice today, with the readily availability for purchase of inexpensive eosin staining materials. We also note that in the CY 2016 PFS final rule with comment period, we removed 8 gm of the eosin solution and replaced it with 8 ml of the eosin stain, and this substitution was accepted without further change in the most recent set of RUC recommendations. As a result, we proposed to update the price of the eosin stain supply from $0.044 per ml to $0.068 per ml to reflect the current cost of the supply. We also proposed to use CPT codes 88323 and 88325 as a model, and replace the use of eosin solution with an equal quantity of eosin stain for the rest of the codes that make use of this supply. This applies to 15 other CPT codes: 88302 (Level II—Surgical pathology, gross and microscopic examination), 88304 (Level III—Surgical pathology, gross and microscopic examination), 88305 (Level IV—Surgical pathology, gross and microscopic examination), 88307 (Level V—Surgical pathology, gross and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 microscopic examination), 88309 (Level VI—Surgical pathology, gross and microscopic examination), 88364 (In situ hybridization (e.g., FISH), per specimen; each additional single probe stain procedure), 88365 (In situ hybridization (e.g., FISH), per specimen; initial single probe stain procedure), 88366 (In situ hybridization (e.g., FISH), per specimen; each multiplex probe stain procedure), 88367 (Morphometric analysis, in situ hybridization (quantitative or semi-quantitative), using computer-assisted technology, per specimen; initial single probe stain procedure), 88368 (Morphometric analysis, in situ hybridization (quantitative or semi-quantitative), manual, per specimen; initial single probe stain procedure), 88369 (Morphometric analysis, in situ hybridization (quantitative or semiquantitative), manual, per specimen; each additional single probe stain procedure), 88373 (Morphometric analysis, in situ hybridization (quantitative or semi-quantitative), using computer-assisted technology, per specimen; each additional single probe stain procedure), 88374 (Morphometric analysis, in situ hybridization (quantitative or semi-quantitative), using computer-assisted technology, per specimen; each multiplex probe stain procedure), 88377 (Morphometric analysis, in situ hybridization (quantitative or semi-quantitative), manual, per specimen; each multiplex probe stain procedure), and G0416 (Surgical pathology, gross and microscopic examinations, for prostate needle biopsy, any method). The following is a summary of the comments we received regarding our proposed valuation of the Microslide Consultation codes. Comment: One commenter supported the restoration of the direct PE inputs related to slide preparation in CPT code 88325 and requested that CMS update the PE data files for CY 2016 to reflect these changes. Response: We appreciate the support from the commenter. The proposed rates for CY 2017 reflected these changes to the direct PE inputs. However, the RVUs for CY 2016 were unaffected by this proposal, as has been our longstanding practice for interim final codes. Comment: Several commenters requested that CMS add an additional 1 minute for the clinical labor activity ‘‘Complete workload recording logs. Collate slides and paperwork. Deliver to pathologist’’ in CPT code 88321. Commenters stated that this clinical labor task was accidently left off of the April 2014 RUC recommendation for CPT code 88321, and that it was a PO 00000 Frm 00158 Fmt 4701 Sfmt 4700 necessary task that was not redundant with other clinical labor activities. Response: We agree with the commenters that 1 minute of clinical labor time for this task is an appropriate addition for CPT 88321 to be consistent with the identical clinical labor task taking place in other codes in the family. After consideration of comments received, we are finalizing our proposed work RVUs for CPT code 88321, 88323, and 88325. We are also finalizing the proposed direct PE inputs, with the addition of 1 minute of clinical labor time as detailed above for CPT code 88321. We note as well that we are finalizing the replacement of eosin solution with eosin stain, as detailed in the PE section of this final rule (see section II.A. of this final rule). (48) Immunohistochemistry (CPT Codes 88341, 88342, 88344, and 88350) In the CY 2014 PFS final rule with comment period (78 FR 74341), we assigned a status indicator of I (Not valid for Medicare purposes) to CPT codes 88342 and 88343 and instead created two G-codes, G0461 and G0462, to report immunohistochemistry services. We did this, in part, to avoid creating incentives for overutilization. For CY 2015, the CPT coding was revised with the creation of two new CPT codes, 88341 and 88344, the revision of CPT code 88342 and the deletion of CPT code 88343. In the past for similar procedures in this family, the RUC recommended a work RVU for the add-on code (CPT code 88364) that was 60 percent of the work RVU for the base code (CPT code 88365). In the CY 2015 PFS final rule with comment period, we stated that the relative resources involved in furnishing an add-on service in this family would be reflected appropriately using the same 60 percent metric and subsequently established an interim final work RVU of 0.42 for CPT code 88341, which was 60 percent of the work RVU of 0.70 for the base CPT code 88342. In the CY 2016 PFS proposed rule, we revised the add-on codes from 60 percent to 76 percent of the base code and subsequently proposed a work RVU of 0.53 for CPT code 88341. However, we inadvertently published work RVUs for CPT code 88341 in Addendum B on the CMS Web site without explicitly discussing it in the preamble text. In the CY 2016 PFS final rule with comment period, we maintained the CY 2015 work RVU of 0.53 for CPT code 88341 as interim final for CY 2016 and requested public comment. Also, in the CY 2016 PFS final rule with comment period, we E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations established an interim final work RVU of 0.70 for CPT codes 88342 and 88344. Comment on the CY 2016 PFS final rule with comment period: Several commenters objected to a standard discount for the physician work involved in pathology add-on services and urged us to accept the RUCrecommend work RVU of 0.65 for CPT code 88341. Response in the CY 2017 PFS proposed rule: We responded to the comments by stating our appreciation of the commenters’ concerns regarding a standard discount; however, we believed that it was reasonable to estimate work RVUs for a base and an add-on code, and to recognize efficiencies between them, by looking at how similar efficiencies are reflected in work RVUs for other PFS services. Also we noted that the intravascular codes for which we initially established our base/add-on code relationship for CPT codes 88346 and 88350 were deleted in CY 2016 and replaced with two new codes; CPT codes 37252 and 37253. The relationship between CPT codes 37252 and 37253 represents a 20 percent discount for the add-on code as the base CPT code 37252 has a work RVU of 1.80 and CPT code 37253 has a work RVU of 1.44. As CPT codes 37252 and 37253 replaced the codes on which our discounts for base and add-on codes were based (please see the CY 2016 PFS final rule with comment period (80 FR 70972) for a detailed discussion), we believed it would be appropriate to maintain the same 20 percent relationship for CPT codes 88346 and 88350. Therefore, for CY 2017, we proposed a work RVU of 0.56 for CPT code 88341, which represents 80 percent of the work RVU of 0.70 for the base code. For CY 2016, we finalized a work RVU of 0.56 for CPT code 88350 which, represented 76 percent of the work RVU of 0.74 for the base code. To maintain consistency within this code family, for CY 2017 we proposed to revalue CPT code 88350 using the 20 percent discount discussed above. To value CPT code 88350, we multiplied the work RVU of 0.74 for CPT code 88346 by 80 percent, and then subtracted the product from 0.74, resulting in a work RVU of 0.59 for CPT code 88350. For CY 2017, we proposed a work RVU of 0.59 for CPT code 88350. The following is a summary of the comments we received regarding our proposed valuations for the Immunohistochemistry family: Comments: Several commenters stated concerns regarding the level of reimbursement these pathology codes would receive if CMS reduced the work RVUs as proposed. The commenters VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 stated the reduced reimbursement would force pathologists to decrease the number of technical staff, which would interfere with pathologists’ ability to perform these services accurately and timely. The RUC stated the CY 2017 proposed work RVUs for CPT codes 88341 and 88350 do not represent the work involved in furnishing the procedure and present a rank order anomaly for other services. The RUC also stated that the services furnished by CPT codes 37252 and 37253, which we used to establish the relationship between the base code and the add-on code, are not medically comparable services to CPT codes 88341 and 88350. Additionally, the RUC stated each pathology service has individual intensities and complexities. Specifically, for additional immunohistochemistry services represented by add-on CPT codes 88341 and 88350, each antibody is evaluated separately on different slides and each additional service is separate and distinct. Lastly, the RUC stated its approach of evaluating the actual work associated with each unique base and each unique add-on service is far more accurate, rational, and responsive to the specific circumstances than holding codes equal to a fixed discount from the base code. Applying ratio comparisons and fixed discounts to arrive at a work relative value will continue to create interspecialty rank order anomalies of physician work RVUs. Another commenter noted there were RUC surveys that evaluated physician work differentials between the base codes and the add-on codes for pathology services. The commenter offered CPT codes 88333 (Pathology consultation during surgery; cytologic examination (e.g., touch prep, squash prep), initial site) and 88334 (Pathology consultation during surgery; cytologic examination (e.g., touch prep, squash prep), each additional site (List separately in addition to code for primary procedure)) and CPT codes 88331 (Pathology consultation during surgery; first tissue block, with frozen section(s), single specimen) and 88332 (Pathology consultation during surgery; each additional tissue block with frozen section(s) (List separately in addition to code for primary procedure) as examples for consideration. Response: We appreciate commenters’ concern regarding the level of reimbursement and will continue to consider input from the medical community on this issue through evaluation of CPT coding changes and associated RUC recommendations, as well as feedback received through PO 00000 Frm 00159 Fmt 4701 Sfmt 4700 80327 public comments, as we value these services through future notice and comment rulemaking. We also note that the PFS is a relative value system and, as such, values services across all specialties. We believe it is important that there are accurate comparisons between codes in different families. As discussed in detail in previous proposed and final rules, we continue to believe the metric we use to value addon codes relative to their base codes is appropriate and representative of the work involved and note that there is no rank order anomaly within this particular code family. In response to the commenter’s statement that there should be no comparison of intravascular ultrasound services to any pathology service, we continue to believe any difference in work RVUs for codes describing different kinds of services should reflect the relative differences in time and intensity involved in furnishing the services. Therefore, we believe that it is imperative that we can compare the assumptions regarding overall work between any two codes, regardless of their characteristics. We appreciate commenters’ concerns regarding a standard discount, and we do not consider the use of a particular increment to establish a new standard. Instead, we reiterate that we believe that it is reasonable to estimate work RVUs for a base and an add-on code, and to recognize efficiencies between them, by looking at how similar efficiencies are reflected in work RVUs for other PFS services. We appreciate the commenters’ concerns regarding the time ratio methodologies and have responded to these concerns about our methodology in section II.L of this final rule. Therefore, for CY 2017 we are finalizing a work RVU of 0.56, 0.70, 0.70, and 0.59 for CPT codes 88341, 88342, 88344 and 88350, respectively. (49) Morphometric Analysis (CPT Codes 88364, 88365, 88367, 88368, 88369 and 88373) For CY 2015, the CPT Editorial Panel revised the code descriptors for the in situ hybridization procedures, CPT codes 88365, 88367 and 88368, to specify ‘‘each separately identifiable probe per block.’’ Additionally, three new add-on codes (CPT codes 88364, 88369 and 88373) were created to specify ‘‘each additional separately identifiable probe per slide.’’ Some of the add-on codes in this family had RUC-recommended work RVUs that were 60 percent of the work RVU of the base procedure. We believed this accurately reflected the resources used in furnishing these add-on codes and E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80328 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations subsequently established interim final work RVUs of 0.53 for CPT code 88364 (60 percent of the work RVU of CPT code 88365); 0.53 for CPT code 88369 (60 percent of the work RVU of CPT code 88368); and 0.43 for CPT code 88373 (60 percent of the work RVU of CPT code 88367). For CY 2016, the RUC re-reviewed these services due to the specialty society’s initially low survey response rate. In our review of these codes, we noticed that the latest RUC recommendation was identical to the RUC recommendation provided for CY 2015. Therefore, we proposed to retain the CY 2015 work RVUs and work time for CPT codes 88367 and 88368 for CY 2016. For CPT code 88365 we finalized a work RVU of 0.88 for CY 2016. For CPT codes 88364 and 88369, we increased the work RVUs for both of these add-on codes from 0.53 to 0.67, which reflected 76 percent of the work RVUs of the base procedures for these services. However, we inadvertently omitted the rationale for this revision to the work RVUs in the preamble to CY 2016 proposed rule. Consequently, we maintained the CY 2015 interim final values of the work RVU of 0.67 for CPT codes 88464 and 88369 and sought comment on these values for CY 2016. For CPT code 88373 we finalized a work RVU of 0.43. Comment on the CY 2016 PFS final rule with comment period: A few commenters stated their objection to our use of a standard discount for pathology add-on services and for suggesting that each service is separate and unique. Commenters also stated there should be no comparison of intravascular ultrasound services to morphometric analysis, immunohistochemistry, immunofluorescence, or any pathology service. Response in the CY 2017 PFS proposed rule: In reviewing the RUC recommended base/add-on relationships between several pathology codes, we continue to believe the base/ add-on code time relationships for pathology services are appropriate and have not been presented with any compelling evidence that conflicts with the RUC-recommended relationships. However, as we stated above, the intravascular codes we initially examined in revaluing CPT codes 88364 and 88369 were deleted in CY 2016 and replaced with CPT codes 37252 and 37253. For the reasons stated above we continue to believe this 20 percent discount relationship between the base and add-on code accurately reflects the work involved in furnishing these services. Therefore, for CY 2017, we are proposing a work RVU of 0.70 for CPT VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 codes 88364 and 88369 which represents a 20 percent discount from the base code. As the relationship between the base code and add-on code now represents a 20 percent difference we are proposing to revalue CPT code 88373 at 0.58 work RVUs. In the CY 2017 proposed rule, we proposed a work RVU of 0.58 for CPT code 88373. The following is a summary of the comments we received regarding our proposed valuation of the Morphometric Analysis codes: Comments: The RUC stated appreciation for the proposed increase in work RVUs for CPT codes 88364 and 88369 although it stated the increase still does not represent the proper work RVU for the work involved and presents a rank order anomaly relative to other services. The RUC, along with other commenters, stated the services described by CPT codes 37252 and 37253 are not comparable medical services to those furnished by CPT codes 88364 and 88369, and there should be no comparison of intravascular ultrasound services to any pathology services. The RUC also stated that although some medical procedures and services may present efficiencies between base and add-on services, this is not the case for CPT codes 88364 and 88369, as each pathology service is individual so that any rational comparison of the physician work of intravascular ultrasound services with pathology services is impossible. The RUC also stated that no pathology add-on service can be presumed to have a discount in physician work from the base service. Another commenter stated for CPT code 88373, it is irrational to assume that second and subsequent services designated by convention as ‘‘add-on’’ services require a reduction in resources relative to the corresponding initial service. Another commenter noted that in the CY 2017 proposed rule, CMS incorrectly stated it was utilizing a RUC recommendation specific to these codes. According to the CY 2015 Final Rule (79 FR 67548), the codes on which CMS based its discount were CPT codes 88334, 88335, 88177, and 88172. The commenter states the distinction between the codes cited in the CY 2015 final rule, CPT codes 88334, 88335, 88177, 88172, and the new add-on codes, CPT codes 88364, 88369 and 88373, is that the discount factor is specific to services for which a diagnosis has already been furnished. For the new codes to which CMS applied this discount, no such PO 00000 Frm 00160 Fmt 4701 Sfmt 4700 corresponding interpretative diagnosis has been made. The same commenter stated for morphometric codes, the pathologist is reviewing a second, unique and distinct probe with an entirely different signal than that of its base code, and the work involved with these add-on services requires the same level of intensity and time as their base codes. The commenter also stated that pathology consultation and cytopathology evaluation codes were clinically different and are not valid proxies to identify efficiencies for the new add-on codes. Response: We do not agree that there are rank order anomalies within this code family, and we note that this code family was valued within itself and not in relation to other services within the PFS. In response to the commenter’s statement that there should be no comparison of intravascular ultrasound services to any pathology service as discussed above, we continue to believe it is valid to compare services across the PFS when determining appropriate values. We also continue to believe that it is reasonable to recognize efficiencies between them a base and an add-on code. In reviewing the RUCrecommended base/add-on relationships between several pathology codes, we continue to believe the base/ add-on code time relationships for pathology services are appropriate and have not been presented with any persuasive evidence or rationale that conflicts with the RUC-recommended relationships. We agree with the commenter that the designation ‘‘add-on’’ does not automatically imply a reduction; however, in the case of these similar pathology services, we continue to believe using the same valuation metrics is valid. Therefore, for CY 2017, we are finalizing a work RVU of 0.70, 0.73, 0.88, 0.70 and 0.58 for CPT codes 88364, 88367, 88368, 88369 and 88373, respectively. (50) Liver Elastography (CPT Code 91200) For CY 2016, we received a RUC recommendation of 0.27 work RVUs for CPT code 91200. After careful review of the recommendation, we established the RUC-recommended work RVU and direct PE inputs as interim final for CY 2016. Comment on the CY 2016 PFS final rule with comment period: A few commenters requested that we reconsider the level of payment assigned to this service when furnished in a nonfacility setting, stating that the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations code met the definition for the potentially misvalued code list as there is a significant difference in payment between sites of service. The commenters also asked us to reconsider the assigned 50 percent utilization rate for the FibroScan equipment in this procedure as the current utilization rate would translate to over 50 procedures per week. Instead, the commenters suggested the typical number of procedures done per week ranges between 15 and 25 and requested we adopt a 25 percent utilization rate which corresponds to that number of procedures. Response in the CY 2017 PFS proposed rule: We refer commenters to the CY 2016 final rule with comment period (80 FR 71057–71058) where we discussed and addressed the comparison of the PFS payment amount to the OPPS payment amount for CPT 91200. For the commenter’s statement about the utilization rate, we have previously addressed the accuracy of these default assumptions as they apply to particular equipment resources and particular services. In the CY 2008 PFS proposed rule (72 FR 38132), we discussed the 50 percent utilization assumption and acknowledged that the default 50 percent usage assumption is unlikely to capture the actual usage rates for all equipment. However, we stated that we did not believe that we had strong empirical evidence to support any alternative approaches. We indicated that we would continue to monitor the appropriateness of the equipment utilization assumption, and evaluate whether changes should be proposed in light of the data available. The commenters did not provide any verifiable data suggesting a lower utilization rate. Therefore, for CY 2017 we proposed a work RVU of 0.27 for CPT code 91200, consistent with the CY 2016 interim final value, and we continued to explore and solicit comments regarding publically available data sources to identify the most accurate equipment utilization rate assumptions possible. We also noted that following the publication of the CY 2016 PFS final rule with comment period (80 FR 70886) there was an inconsistency in the Work Time file published on the CMS Web site. For CPT code 91200 the RUC recommended 16 minutes total service time whereas our file reflected 18 minutes total time for the service. For CY 2017, we proposed to update the Work Time file to reflect the RUC’s recommendation, which is 16 minutes for CPT code 91200. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 The following is a summary of the comments we received regarding our proposed valuation of CPT code 91200. Comment: Many commenters disagreed with the proposed valuation of CPT code 91200, suggesting that the $34 payment rate in the nonfacility setting for CY 2016 underestimated the resource cost of the procedure. Commenters stated that this code is a first-line method used to assess fibrosis scores in patients with chronic liver disease, especially those with chronic Hepatitis C, and that the current reimbursement was not sufficient to cover the cost of providing the service. Some commenters compared the use of the Fibroscan device in CPT code 91200 to more expensive and more invasive liver biopsies, or compared the cost of the procedure to the treatment provided in hospital-based payment systems. Commenters urged CMS to increase the valuation of CPT code 91200 to encourage providers to adopt the use of the Fibroscan device. Response: We remind commenters that we are obligated by statute to set payment rates based on the resources used to furnish the procedure, and that as a result pricing for codes on the PFS does not necessarily mirror pricing for codes under different payment systems. We also note that we proposed the RUCrecommended work RVU and direct PE inputs for CPT code 91200 without alteration. Comment: Many of the commenters also addressed the pricing of the Fibroscan equipment (ER101). Commenters provided CMS a range of different prices for this equipment item, individually suggesting that the equipment costs $120k, $130k, $140k, and $150k. One commenter supplied an individual invoice for the Fibroscan, including the device itself along with a CAP option, an S probe, a printer, and shipping/maintenance costs. Response: We appreciate the submission of additional information regarding the proper pricing of the Fibroscan. We encourage more commenters to include invoices with their comment submissions if they believe that existing supplies or equipment items are undervalued, as we have had longstanding reservations about establishing pricing based on single invoices. In the specific case of the Fibroscan equipment, we agree that the price should be increased based on the submitted invoice. We are pricing ER101 at $183,390 based on a combination of the cost of the Fibroscan itself ($131,950), the CAP option ($22,955), the S probe ($27,950), and the printer ($495). We note that we do not typically pay for shipping costs or PO 00000 Frm 00161 Fmt 4701 Sfmt 4700 80329 maintenance costs, as equipment maintenance costs are built into the equipment cost per minute formula. We are also changing the name of ER101 from ‘‘Fibroscan’’ to ‘‘Fibroscan with printer’’ to reflect the fact that this pricing incorporates a printer. After consideration of comments received, we are finalizing our proposed work RVUs and direct PE inputs, with the price increase to the Fibroscan with printer equipment. (51) Closure of Paravalvular Leak (CPT Codes 93590, 93591, and 93592) The CPT Editorial Panel developed three new codes (two base codes and one add-on code) to describe paravalvular leak closure procedures that were previously reported using an unlisted code. The RUC recommended a work RVU of 17.97 for CPT code 93591. We proposed a work RVU of 14.50 for CPT code 93591, a direct crosswalk from CPT code 37227. We stated in the CY 2017 proposed rule that we believe that a direct crosswalk to CPT code 37227 accurately reflected the time and intensity described in CPT code 93591 since CPT code 37227 also described a transcatheter procedure with similar service times. To maintain relativity among the codes in this family, we proposed refinements to the recommended work RVUs for CPT code 93590. The RUC noted that the additional work associated with CPT code 93590 compared to CPT code 93591 was due to the addition of a transseptal puncture to access the mitral valve. The RUC identified a work RVU of 3.73 for a transseptal puncture. Therefore, for CPT code 93590, we proposed a work RVU of 18.23 by using our proposed work RVU of 14.50 for CPT code 93591 and adding the value of a transseptal puncture (3.73). CPT code 93592 is an add-on code used to report placement of additional occlusion devices for percutaneous transcatheter paravalvular leak closure, performed in conjunction with either an initial mitral or aortic paravalvular leak closure. The RUC recommended a work RVU of 8.00 for this code. In the proposed rule, we stated that we considered applying the relative increment between CPT codes 93590 and 93591; however, we believed that a direct crosswalk to CPT code 35572, with a work RVU of 6.81, more accurately reflected the time and intensity of furnishing the service. Therefore, for CPT code 93592, we proposed a work RVU of 6.81. Comment: For CPT code 93591, commenters opposed CMS’ assertion that a cardiovascular intervention E:\FR\FM\15NOR2.SGM 15NOR2 80330 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 performed in an immobile leg is comparable in intensity and patient risk to an intervention performed in a beating, moving heart. Commenters suggested that CMS’ proposed crosswalk to CPT code 37227 was not appropriate since CPT code 37227 is generally performed in an outpatient setting, while CPT code 93591 is generally performed in a facility setting due to the intensity and risk associated with the procedure. Subsequently, commenters suggested that CMS finalize the RUCrecommended work RVU of 17.97 for CPT code 93591. For CPT code 93590, commenters, including the RUC, supported CMS’ proposed use of the same building block methodology used in the RUC recommendations, by proposing to apply a work RVU of 3.73 to the base code value of 93591. However, commenters suggested that CMS apply the value of a transeptal puncture to the RUC-recommended value for CPT code 93591, and therefore, finalize the RUCrecommended work RVU of 21.70 for CPT code 93590. For CPT code 93592, commenters, including the RUC, disagreed with CMS’ proposed comparison of CPT code 93592 to CPT code 35572 (Harvest of femoropopliteal vein, 1 segment, for vascular reconstruction procedure (e.g., aortic valve services)). Commenters stated that CMS’s proposed crosswalk is inappropriate and does not recognize the intensity and skill level needed to place a device to close a paravalvular leak in a moving, beating heart, frequently in patients with heart failure. Commenters stated that CPT code 35572 was only similar to CPT code 93592 in that both procedures are cardiovascular in nature. Commenters also stated that surgical harvest of the lower extremity vein is not clinically similar to the transcatheter percutaneous structural heart therapies. Response: We thank the commenters for their feedback on our proposal. After consideration of the comments received, we are finalizing the RUC-recommended work RVUs for each of the codes in this family. Therefore, we are finalizing a work RVU of 21.70 for CPT code 93590, a work RVU of 17.97 for CPT code 93591, and a work RVU of 8.00 for CPT code 93592. (52) Electroencephalogram (EEG) (CPT Codes 95812, 95813, and 95957) In February 2016, the RUC submitted recommendations for work and direct PE inputs for CPT codes 95812, 95813, and 95957. We proposed to use the RUC-recommended physician work and direct PE inputs for CPT code 95957 and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 to use the RUC-recommended work RVUs for CPT codes 95812 and 95813. In the CY 2016 PFS final rule with comment period (80 FR 70886), we finalized direct PE input refinements for several clinical labor times for CPT codes 95812 and 95813. The RUC’s February 2016 direct PE summary of recommendations indicated that the specialty society expert panel disagreed with CMS’ refinements to clinical labor time for these two codes. The RUC recommended 62 minutes for clinical labor task ‘‘perform procedure’’ for CPT code 95812 and 96 minutes for the same clinical labor task for CPT code 95813, similar to the values recommended by the RUC in April 2014. We proposed to maintain the CMSrefined CY 2016 PE inputs for clinical labor task ‘‘perform procedure’’ for CPT codes 95812 (50 minutes) and 95813 (80 minutes), since the RUC’s PE summary of recommendations stated that CPT code 95812 required 50 minutes of clinical labor time for EEG recording, and CPT code 95813 required 80 minutes of clinical labor time for the same clinical labor task. We did not receive any comments on our proposals for this family of codes. Therefore, for CY 2017, we are finalizing our proposed direct PE inputs for these codes without modifications. We are also finalizing for CY 2017 work RVUs of 1.08 for CPT code 95812, 1.63 for CPT code 95813, 1.98 for CPT code 95957. (53) Analysis of Neurostimulator Pulse Generator System (CPT Codes 95971, 95972) CPT codes 95971 and 95972 were established as interim final following the CY 2016 final rule with comment period. For CY 2017, we proposed to maintain their work RVUs and direct PE inputs. Comment: A commenter expressed support for the proposal to maintain the current work and PE RVUs, stating that these codes were revalued in 2015 and there was no reason to make any changes. Response: We appreciate the support from the commenter. After consideration of comments received, we are finalizing our proposed work RVUs and proposed direct PE inputs for CPT codes 95971 and 95972. (54) Patient, Caregiver-focused Health Risk Assessment (CPT Codes 96160 and 96161) In October 2015, the CPT Editorial Panel created two new PE-only CPT codes, 96160 (Administration of patientfocused health risk assessment instrument (e.g., health hazard appraisal) with scoring and PO 00000 Frm 00162 Fmt 4701 Sfmt 4700 documentation, per standardized instrument) and 96161 (Administration of caregiver-focused health risk assessment instrument (e.g., depression inventory) for the benefit of the patient, with scoring and documentation, per standardized instrument). For CPT code 96160, we proposed the RUCrecommended direct PE inputs. For CPT code 96161, the service is furnished to a patient who may not be a Medicare beneficiary, and therefore, we did not believe the code would be eligible for Medicare payment. We proposed to assign a procedure status of I (Not valid for Medicare purposes) for CPT code 96161. We noted that we believed that CPT code 96160 describes a service that is frequently reasonable and necessary in the treatment of illness or injury, such as when there has been a change in health status. However, when the service described by CPT code 96160 is explicitly included in another service being furnished, such as the Annual Wellness Visit (AWV), this code should not be billed separately, much like other codes that describe services included in codes with broader descriptions. We also noted that this service should not be billed separately if furnished as a preventive service as it would describe a non-covered service. However, we also solicited comment on whether this service may be better categorized as an add-on code and welcomed stakeholder input regarding whether or not there are circumstances when this service might be furnished as a stand-alone service. Comment: Many commenters recommended that CMS should recognize and make separate payment for CPT code 96160, as proposed, as well as 96161 using the RUCrecommended values. Several of these commenters argued that the medical community has recognized that health risk assessment of caregivers is an integral part of ongoing medical care for patients with particular needs. These commenters offered several examples where such an assessment is integral to treating patients, such as: • Assessment of maternal depression in the active care of infants, • Assessment of parental mental health as part of evaluating a child’s functioning, • Assessment of caretaker conditions as indicated where atypical parent/child interactions are observed during care, • Assessment of caregivers as part of care management for adults whose physical or cognitive status renders them incapable of independent living and dependent on another adult caregiver. Some examples might be intellectually disabled adults, seriously E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 disabled military veterans and adults with significant musculoskeletal or central nervous system impairments. Because commenters noted that these assessments were generally administered during E/M services, they were receptive to making both CPT codes 96160 and 96161 add-on codes to E/M services. Response: After considering comments, we believe that CPT codes 96160 and 96161 describe services that, in particular cases, can be necessary components of services furnished to Medicare beneficiaries. While we recognize that in many cases we have previously assigned non-payment indicators to codes that describe interactions with caregivers, we also note that we have also recognized that in current medical practice, practitioner interaction with caregivers is an integral part of treatment for some patients. Accordingly, the descriptions for several payable codes under the PFS include direct interactions between practitioners and caregivers. In developing our proposal regarding the payment disposition of this code, we noted that it singularly described a service administered to a caregiver. However, based on public comments, including the receptivity to our assignment of add-on code status, we understand that in actual practice, this service is integrated with E/M visits under particular circumstances. Consequently, we believe the appropriate payment status for the code should be determined by looking at the overall service as described by the two codes together. We agree with commenters, then, that there are circumstances where this service is an essential part of a service to a Medicare beneficiary. Therefore, we are assigning an active payment status to both codes for CY 2017. We are also establishing use of the RUC recommended values for these codes. We are also assigning an add-on code status to both of these services. As add-on codes, CPT codes 96160 and 96161 describe additional resource components of a broader service furnished to the patient that are not accounted for in the valuation of the base code. (55) Reflectance Confocal Microscopy (CPT Codes 96931, 96932, 96933, 96934, 96935, and 96936) For CY 2015, the CPT Editorial Panel established six new Category I codes to describe reflectance confocal microscopy (RCM) for imaging of skin. For CPT codes 96931 and 96933, the specialty society and the RUC agreed that the physician work required for both codes were identical, and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 therefore, should be valued the same. The RUC recommended a work RVU of 0.80 for CPT codes 96931 and 96933 based on the 25th percentile of the survey. Based on the similarity of the services being performed in CPT codes 96931 and 96933 and the identical intraservice times of 96931, 96933 and 88305, the key reference code from the survey, we believe a direct crosswalk from CPT code 88305 to CPT codes 96931 and 96933 would more accurately reflect the work involved in furnishing the procedure. Therefore, for CY 2017, we proposed a work RVU of 0.75 for CPT codes 96931 and 96933. In addition, we proposed removing 3 minutes of preservice time from CPT codes 96931 and 96933 since it is not included in CPT code 88305 and as a result, we did not believe it was appropriate in CPT codes 96931 and 96933. For CPT codes 96934 and 96936, the specialty society and the RUC agreed that the physician work required for both codes were identical, and therefore, should be valued the same. In its recommendation, the RUC stated that it believed the survey respondents somewhat overestimated the work for CPT code 96934 with the 25th percentile yielding a work RVU of 0.79. Consequently, the RUC reviewed the survey results from CPT code 96936 and agreed that the 25th percentile work RVU of 0.76 accurately accounted for the work involved for the service. Therefore, the RUC recommended a work RVU of 0.76 for CPT codes 96934 and 96936. We believe that the incremental difference between the RUCrecommended values for the base and add-on codes accurately captures the difference in work between the code pairs. However, because we valued the base codes differently than the RUC, we proposed values for the add-on codes that maintain the RUC’s 0.04 increment instead of the RUC-recommended values. Therefore we proposed a work RVU of 0.71 for CPT codes 96934 and 96936. We also proposed to reduce the preservice clinical labor for ‘‘Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by physician’’ for CPT codes 96934 and 93936 as this work is performed in the two base CPT codes 93931 and 93933. We proposed to reduce the service period clinical labor for ‘‘Prepare and position patient/ monitor patient/set up IV’’ from 2 to 1 minute for CPT codes 93934 and 93936 since we believed that less positioning time is needed with subsequent lesions. PO 00000 Frm 00163 Fmt 4701 Sfmt 4700 80331 We proposed to refine the service period clinical labor for ‘‘Other Clinical Activity—Review imaging with interpreting physician’’ to zero minutes for CPT codes 96933 and 96936 as these are interpretation and report only codes and not image acquisition. Comment: Several commenters, including the RUC, objected to the proposed valuations for CPT codes 96931, 96933, 96934, and 96936. The RUC disagreed with pre-service time being removed from a survey code simply due to a key reference code not also having pre-service time. The RUC stated CPT codes 96931 and 96933 are distinct procedures from CPT codes 88305 and the CMS proposal to remove 3 minutes of pre-time from the base RCM codes was grounded on faulty logic. The RUC stated its agreement with the specialty society that 3 minutes of preservice time was necessary for the physician to review clinical history and referral information. The RUC further stated with the 3 minutes of pre-service time in its recommendation for the RCM base codes were appropriately in line with top key reference CPT code 88305 and urged CMS to accept the survey 25th percentile work RVUs for CPT codes 96931, 96933, 96934, and 96936. Other commenters stated there were very significant differences in the technologies used and the work involved between the procedures of CPT code 88305, the key reference code, and CPT codes 96931 and 96933, with CPT codes 96931 and 96933 being more complex procedures. One commenter stated CMS incorrectly removed technician time for ‘‘Other Clinical Activity—Review imaging with interpreting physician’’ for CPT codes 96933 and 96936 noting the technician still must review the imaging with the interpreting physician and urged CMS to accept the RUC recommendations. Response: After consideration of comments received, we agree with the commenters and will finalize the RUCrecommended work RVUs of 0.80, 0.80, 0.76, and 0.76 for CPT codes 96931, 96933, 96934 and 96936; respectively. We will also restore the 3 minutes of preservice time to CPT codes 96931 and 96933. (56) Evaluative Procedures for Physical Therapy and Occupational Therapy (CPT Codes 97161, 97162, 97163, 97164, 97165, 97166, 97167, 97168) For CY 2017, the CPT Editorial Panel deleted four CPT codes (97001, 97002, 97003, and 97004) and created eight new CPT codes (97161–97168) to describe the evaluative procedures furnished by physical therapists and E:\FR\FM\15NOR2.SGM 15NOR2 80332 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 occupational therapists. There are three new codes, stratified by complexity, to replace a single CPT code 97001, for physical therapy (PT) evaluation, and three new codes, also stratified by complexity, to replace a single code CPT code 97003, for occupational therapy (OT) evaluation, and one new code each to replace the re-evaluation codes for physical and occupational therapy, CPT codes 97002 and 97004. Table 23 includes the long descriptors and the required components of each of the eight new CPT codes for the PT and OT services. The CPT Editorial Panel’s creation of the new codes for PT and OT evaluative procedures grew out of a CPT workgroup that was originally convened in January 2012 when contemplating major revision of the Physical Medicine and Rehabilitation CPT section of codes in response to our nomination of therapy codes as potentially misvalued codes, including CPT code 97001 (and, as a result, all four codes in the family) in the CY 2012 PFS proposed rule. In reviewing the eight new CPT codes for evaluative procedures, the HCPAC forwarded recommendations for work RVUs and direct PE inputs for each code. Currently, CPT codes 97001 and 97003 both have a work RVU of 1.20, and CPT codes 97002 and 97004 both have a work RVU of 0.60. These CPT codes have reflected the same work RVUs since CY 1998 when we accepted the HCPAC values during CY 1998 rulemaking. i. Valuation of Evaluation Codes In the CY 2017 PFS proposed rule, we noted that the HCPAC submitted work RVU recommendations for each of the six new PT and OT evaluation codes. These recommendations are intended to be work neutral relative to the valuation for the previous single evaluation code for PT and OT, respectively. However, that assessment for each family of codes is dependent on the accuracy of the utilization forecast for the different complexity levels within the PT or OT family. As used in this section, work neutrality is distinct from the budget neutrality that is applied broadly in the PFS. Specifically, work neutrality is intended to reflect that despite changes in coding, the overall amount of work RVUs for a set of services is held constant from one year to the next. For example, if a service is reported using a single code with a work RVU of 2.0 for one year but that same service would be reported using two codes, one for ‘‘simple’’ and another for ‘‘complex’’ in the subsequent year valued at 1.0 and 3.0 respectively, work neutrality could only be attained if exactly half the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 services were reported using each of the two new codes. If more than half of the services were reported using the ‘‘simple’’ code, then there would be fewer overall work RVUs. If more than half of the services were reported using the ‘‘complex’’ code, then there would be more overall work RVUs. Therefore, work neutrality can only be assessed with an understanding of the relative frequency of how often particular codes will be reported. The HCPAC recommended a work RVU of 0.75 for CPT code 97161, a work RVU of 1.18 for CPT code 97162, and a work RVU of 1.5 for CPT code 97163. The PT specialty society projected that the moderate complexity evaluation code would be reported 50 percent of the time because it is the typical evaluation, and the CPT codes for the low and high complexity evaluations are each expected to be billed 25 percent of the time. The HCPACrecommended work RVU of 1.18 for CPT code 97162 represents the survey median with 30 minutes of intraservice time, 10 minutes of preservice time, and 15 minutes postservice time. The HCPAC notes this work value is appropriately ranked between levels 2 and 3 of the E/M office visit codes for new patients. The HCPAC recommended a work RVU of 0.88 for CPT code 97165, a work RVU of 1.20 for CPT code 97166, and a work RVU of 1.70 for CPT code 97167. For the OT codes, work neutrality would be achieved only with a projected utilization in which the low complexity evaluation is billed 50 percent of the time; the moderate complexity evaluation is billed 40 percent of the time, and the high complexity evaluation only billed 10 percent of the time. For purposes of calculating work neutrality, the HCPAC recommended assuming that the low complexity code will be most frequently reported even though the HCPACrecommended work RVU of 1.20 and 45 minutes of intraservice time for moderate complexity code is identical to that of the current OT evaluation code. The HCPAC believes that the work RVU of 1.20 is appropriately ranked between 99202 and 99203, levels 2 and 3 for E/M office visits for new outpatients. ii. Valuation of Evaluation Codes and Discussion of PAMA In our review of the HCPAC recommendations, we noted the work neutrality and the inherent reliance on the utilization assumptions. We considered the three complexity levels for the PT evaluations and the three complexity levels for the OT PO 00000 Frm 00164 Fmt 4701 Sfmt 4700 evaluations; and we also considered the evaluation services described by the codes as a whole. The varying work RVUs and the dependence on utilization for each complexity level to ensure work neutrality in the PT and OT code families make it difficult for us evaluate the HCPAC’s recommended values or to predict with a high degree of certainty whether physical and occupational therapists will actually bill for these services at the same rate forecast by their respective specialty societies. We were concerned that the coding stratification in the PT and OT evaluation codes may result in upcoding incentives, especially while physical and occupational therapists gain familiarity and expertise in the differential coding of the new PT and OT evaluation codes that now include the typical face-to-face times and new required components that are not enumerated in the current codes. We were also concerned that stratified payment rates may provide, in some cases, a payment incentive to therapists to upcode to a higher complexity level than was actually furnished to receive a higher payment. We understood that there may be multiple reasons for the CPT Editorial Panel to stratify coding for OT and PT evaluation codes based on complexity. We also noted that the codes will be used by payers in addition to Medicare, and other payers may have direct interest in making such differential payment based on complexity of OT and PT evaluation. Given our concerns regarding appropriate valuation, work neutrality, and potential upcoding, however, we did not believe that making different payment based on the reported complexity for these services is, at current, advantageous for Medicare or Medicare beneficiaries. Given the advantages inherent and public interest in using CPT codes once they become part of the code set, we proposed to adopt the new CPT codes for use in Medicare for CY 2017. However, given our concerns about appropriate pricing and payment for the stratified services, we proposed to price the services described by these stratified codes as a group instead of individually. To do that, we proposed to utilize the authority in section 220(f) of the Protecting Access to Medicare Act (PAMA), which revised section 1848(c)(2)(C) of the Act to authorize the Secretary to determine RVUs for groups of services, rather than determining RVUs at the individual service level. We believed that using this authority instead of proposing to make payment based on Medicare G-codes will preserve consistency in the code set E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations across payers, thus lessening burden on providers, while retaining flexibilities that are beneficial to Medicare. We proposed a work RVU of 1.20 for both the PT and the OT evaluation groups of services. We proposed this work RVU because we believed it best represents the typical PT and OT evaluation. This is the value recommended by the HCPAC for the OT moderate complexity evaluation and nearly the same work RVU for corresponding PT evaluation (1.18). Additionally, a work RVU of 1.20 is the long-standing value for the current evaluation codes, CPT codes 97001 and 97003, and thus, assures work neutrality without reliance on particular assumptions about utilization, which we believed was the intent of the HCPAC recommendation. Because we proposed to use the same work RVU for the six evaluation codes, we are not addressing any additional concerns about the utilization assumptions recommended to us. Because we proposed the same work values for each code in the family, there will be no ratesetting impact to work neutrality. As such, we are not revising the utilization crosswalks as projected by the respective therapy specialties to achieve work neutrality. However, were we to value each code in the PT or OT evaluation families individually, we would seek objective data from stakeholders to support the utilization crosswalks, particularly those for the OT family in which the low-level complexity evaluation is depicted as typical and the high complexity is projected to be billed infrequently at 10 percent of the overall number of OT evaluations. We proposed to use the direct PE inputs forwarded by the HCPAC (with the refinements described below) for the moderate complexity PT and OT evaluations in the development of PE RVUs for the PT and OT codes as a group of services. For the PT codes, we proposed to use the recommended inputs for the moderate complexity code for the direct PE inputs of all three codes based on its assumption as the typical service. Our proposed direct PE inputs reflect the recommended values minus 2 minutes of physical therapist assistant (PTA) time in the service period because we believe that PTA tasks to administer certain assessment tools are appropriately included as part of the physical therapist’s work and the time of the PTA to explain and score self-reported outcome measures is not separately included in the clinical labor of other codes. We proposed to include the recommended four sheets of laser paper without an association to a VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 specific equipment item, but we solicited comment regarding the paper’s use. For the OT evaluation codes, we considered proposing to use the direct PE inputs for the low complexity evaluation because the OT specialty organization believes it represents the typical OT evaluation service with a projected 50 percent utilization rate. However, we proposed to use the moderate-level direct inputs instead, because the direct PE for this level is based on a vignette that is valued with the same intraservice time, 45 minutes, as the current code, CPT code 97003. Consequently, we proposed to use the recommended direct PE inputs for the moderate complexity code for use in developing PE RVUs for this group of services. Our proposed direct PE inputs reflect the recommended values minus 2 minutes of occupational therapist assistant (OTA) time in the service period because we believe that OTA tasks to administer certain assessment tools are appropriately included as part of the occupational therapist’s work and the time of the OTA to explain and score self-reported outcome measures is not separately included in the clinical labor of other codes. We also rounded up the recommended 6.8 minutes to 7 minutes to represent the time the OTA assists the occupational therapist during the intraservice time period. For the Vision Kit equipment item, our proposed price reflects the submitted invoice that clearly defined a kit. iii. Valuation of Re-evaluation Codes The recommendations the HCPAC sent to us for the PT and OT reevaluation codes are not work neutral. For the new PT re-evaluation code, CPT code 97164, the HCPAC recommended a work RVU of 0.75 compared to the work RVU of 0.60 for CPT code 97002. This recommended work RVU falls between the 25th percentile of the survey and the survey’s median value and was based on a direct crosswalk to CPT code 95992 for canalith repositioning with 20 minutes intraservice time and 10 minutes immediate postservice time. The HCPAC supported this 0.15 work RVU increase based on an anomalous relationship between PT services and E/ M office visit codes for established patients, noting that physician E/M codes have historically been used as a relative comparison. The HCPAC stated its recommendation of a work RVU of 0.75 for CPT code 97164 appropriately ranks it between the key reference codes for this service, CPT codes 99212 and PO 00000 Frm 00165 Fmt 4701 Sfmt 4700 80333 99213, levels 2 and 3 E/M office-visit codes for established patients. The HCPAC provided a work RVU of 0.80 for the OT re-evaluation code, CPT code 97168, based on the 25th percentile of the survey, which represents an increase over the current work RVU of 0.60 for CPT code 97004. This work value includes 30 minutes of intraservice time, 5 minutes preservice time, and 10 minutes immediate postservice time. The HCPAC noted that the increase in work compared to the PT re-evaluation code (0.75) is because the occupational therapist spends more time observing and assessing the patient and, in general, the OT patient typically has more functional and cognitive disabilities. The HCPAC recommendation notes that the 0.80 work RVU recommendation appropriately ranks it between the level 1 and 2 E/M office-visit codes for new patients. The HCPAC’s recommended increases to work RVUs for the PT and OT reevaluation codes are not work neutral. We are unclear why the HCPAC did not maintain work neutrality for the OT and PT re-evaluation codes since maintaining work neutrality was important to the establishment of the six new evaluation codes. We proposed to maintain the overall work RVUs for these services by proposing a work RVU of 0.60 for CPT codes 97164 and 97168, consistent with the work RVUs for the deleted re-evaluation codes. We solicited comments from stakeholders on whether there are reasons that the reevaluation codes should be revalued without regard to work neutrality. We proposed the HCPACrecommended direct PE inputs for CPT code 97164 with a reduction in time for the PTA by 1 minute (from 5 to 4) in the service period—the line for ‘‘Other Clinical Activity’’—because the time to explain and score the self-reported outcome measure (for example, Oswestry) is not separately included in the clinical labor of other codes. We proposed the HCPACrecommended direct PE inputs for CPT code 97168 with a reduction in time for the OTA by 1 minute (from 3 to 2) in the service period—the line for ‘‘Other Clinical Activity’’—for the same reason we proposed to reduce the corresponding line for PTAs—because the time to explain and score any patient-self-administered functional and other standardized outcome measure is not separately included in the clinical labor of other codes. Because the new CPT code descriptors contain new coding requirements for each complexity level, we solicited comment from the PT and E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80334 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations OT specialty organizations, as well as other stakeholders to clarify how therapists will be educated to distinguish the required complexity level components and the selection of the number of elements that impact the plan of care. For example, for the OT codes, we invited comment on how to define performance deficits, what process the occupational therapist uses to identify the number of these performance deficits that result in activity limitations, and performance factors needed for each complexity level. For the PT codes, we sought more information about how the physical therapist differentiates the number of personal factors that actually affect the plan of care. We were also interested in understanding more about how the physical therapist selects the number of elements from any of the body structures and functions, activity limitations, and participation restrictions to make sure there is no duplication during the physical therapist’s examination of body systems. The following is summary of the comments we received: Comment: Several commenters disagreed with our proposal to accept the new CPT codes for PT and OT evaluations and re-evaluations and urged us to keep the current four-code set. A few of these commenters noted our proposal to accept the stratified code sets for PT and OT evaluations would increase the administrative burden associated with documentation and education training of therapists, billers and coders. Other commenters believed that CMS should first implement the new complexity-defined CPT code set on a demonstration or pilot project basis before we apply it nationally. One commenter proposed that, rather than accepting the new CPT eight-code set with varying descriptors for each PT and OT complexity level, we adopt just two codes that both the PT and OT disciplines could use: a code for PT/OT evaluation and another for PT/OT re-evaluation. Another commenter told us that ‘‘implementation of the complex scheme for determining the evaluation level will excessively complicate patient evaluations where clinicians will require more mental effort to meet the demands of the documentation with less time and attention directed at treating the patient.’’ One commenter suggested that instead of implementing the stratified code sets, CMS should develop an alternative coding and payment model for therapy services and recommended that we create a valuebased payment program, consistent with the Triple Aim of health care, which VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 includes reliable and valid outcome and quality measures to demonstrate the outcome and value of therapy. Response: We thank the commenters for voicing their concerns about our adoption of the new CPT codes for PT and OT evaluative procedures and their alternative coding suggestions. However, we note that we do not have the authority to change CPT code descriptors or use deleted codes without creating G-codes to do so. We also note that adopting a demonstration or pilot program is not a typical CMS payment policy response to the creation of new CPT codes or code sets. After considering these comments, we continue to believe that our proposal to adopt the eight new CPT codes for use in Medicare for CY 2017, rather than retain the current coding structure by creating G-codes, is the best option given the advantages inherent and public interest in using the CPT codes once they become part of the code set. As such, we are finalizing our proposal to adopt new CPT codes 97161–97168 for PT and OT evaluations and reevaluations. Comment: Many commenters objected to our proposal to use the PAMA authority to price the services described by the stratified sets of PT and OT evaluation codes as a group instead of individually and asked us to accept or consider the HCPAC work RVU values for each of these six evaluation services. Some commenters expressed concern that we ignored the HCPAC recommendations and proposed to maintain the work RVU of 1.20, since the codes have not been reviewed for this purposes in nearly 20 years. Other commenters stated that CMS, by valuing the PT and OT evaluation complexity levels with the same work RVUs, was failing to appropriately align cost and quality as mandated in the ACA and MACRA. Because we proposed the same values, a few commenters were concerned that we failed to discuss the difference in the PT and OT evaluation services. These commenters told us that the HCPAC recommendations included higher work RVUs for the OT services because they reflected greater intraservice times from the surveys, and these times led, in part, to the HCPAC’s belief that the typical patient receiving OT services is more complex and intense to treat than the patient receiving PT services. The HCPAC and the OT specialty society urged us to consider the increase in work RVUs for the OT evaluative services, indicating in their comments that while the HCPAC recommendations for the PT evaluations were work-neutral, those for the OT PO 00000 Frm 00166 Fmt 4701 Sfmt 4700 evaluations were not. The HCPAC requested that we consider the difference in PT services versus OT services. Some commenters presumed that our proposal to value the work the same for each evaluation complexity level was temporary. Another commenter expressed hope that we did not intend to equally value the PT high complexity evaluation the same as the low complexity one in perpetuity. Several commenters requested that CMS describe our future plans to revisit these code sets and asked that the future proposal for these payment amounts be subject to public comment. One of these commenters that favored keeping the current code structure urged us not to adopt the new CPT codes until we are ready to differentiate payments based on the complexity of the provided service. Some commenters told us that our lack of payment stratification for the three PT and three OT evaluation codes would likely prompt coding and billing behavioral change by some therapists and other providers of therapy services. One of these commenters claimed that assigning the same work RVU to each evaluation complexity level would cause some providers not to adhere to the new coding stratification which could result in inaccurate data on the levels being reported. Another commenter stated that the lack of payment stratification to reflect the therapist’s time and expertise at each complexity level could signal to therapists that the accurate coding of evaluations is of diminished interest to CMS. Other commenters stated that the failure to recognize payment stratification between the complexity levels would be detrimental to patient care and the practice of therapy, for example, by reducing incentives for therapists to thoroughly evaluate patients with multiple and complex conditions who fall into the high complexity evaluation. Response: After a review of the comments, we continue to believe that using the PAMA RVU authority to value the PT and OT evaluation codes as a group of services is appropriate. Given our concerns about appropriate pricing and payment for the PT and OT stratified evaluation services as described in the CY 2017 proposed rule, we are finalizing our proposal to use the PAMA authority to value services as groups rather than individually— valuing each complexity level at 1.2 work RVUs for the PT and OT family of evaluation codes for CY 2017. We believe this policy has advantages for the Medicare program. It limits the incentives for and consequences of E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations upcoding by therapists and providers, especially as therapists become more familiar with the new set of codes. Additionally, the policy assures work neutrality for these PT and OT code families while allowing us to collect and analyze utilization data of the complexity levels for possible future rulemaking. We understand commenters’ concerns about the possibility that the absence of payment stratification in the complexity levels of the PT and OT evaluations could have an effect on some therapists’ coding behavior in for these services in CY 2017. However, we are also concerned with the implication that financial incentives are the primary drivers for accurate coding for a significant number of therapists, and if that is the case, we believe that implementing stratified coding would likely encourage upcoding since that is consistent with the financial incentives. We believe that the implementation of these new PT and OT code sets carries with it an inherent change for the therapists furnishing the services since there will be three complexity levels to replace just one and each new code contains newly defined necessary components. We also believe that it is premature to predict how therapists will code and bill the new complexity levels before therapists gain familiarity with the new codes. Comment: We received several comments on utilization assumptions inherent to the HCPAC recommendations. Several commenters questioned why we did not treat the HCPAC-recommended utilization assumptions for the PT and OT complexity-stratified evaluation code sets as we have historically treated other codes sets that come to us from the HCPAC or RUC; that is, using the utilization assumptions provided in the recommendations. The HCPAC explained that if the assumptions are overestimated, the HCPAC or RUC will examine and determine whether to recommend reductions. We received several comments from stakeholders in response to our statement in the proposed rule that we would request additional objective data to support the utilization crosswalks, especially for the OT codes, if we were to value the codes individually for the PT and OT evaluation complexity levels. In its comments, the OT specialty society explained that their frequency estimations of the three complexity levels were based on the most recent utilization frequency data from the 2014 Medicare utilization from the five percent sample file. The OT specialty society also stated that it defined the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 complexity levels using certain groups of diagnoses and patient types. The PT specialty society stated that because its survey process included a broad crosssection of therapists working in the various Medicare settings, it believed its utilization projections for the low, moderate and high complexity evaluation were representative. Many commenters told us because some therapists may not initially code the complexity levels correctly, that we would need to consider an entire year of utilization data to ensure its accuracy. Response: We appreciate the views expressed and the information that the commenters forwarded to us. However, we continue to have concerns that therapists, particularly occupational therapists, will not bill with the same utilization frequencies forecast by their specialty societies for the low, moderate, and high complexity evaluations as described in the CY 2017 proposed rule. In other words, we are concerned with the possibility that we would establish rates (including for purposes of PFS budget neutrality) that rely on the national organizations’ assessment of what ought to be billed, but Medicare spending and subsequent PFS budget neutrality assumptions will reflect actual billing given the financial incentives inherent in stratified payment. Should we propose to value the evaluation codes individually in future rulemaking, we would seek additional objective data at that time. We agree that an entire year of data is likely needed to appropriately analyze the utilization of these evaluation services. We appreciate that our historical practice regarding significant revision of CPT coding scheme has required us to make significant assumptions regarding utilization for new codes. We note that in many cases, we have not accepted the assumptions recommended by specialty societies and the RUC and that we were not pricing groups of services together in the past. Comment: Several commenters expressed concern about the new PT and OT CPT code descriptors, specifically, that each descriptor includes minimal coding requirements. Several commenters expressed skepticism that therapists will be able to report the new codes accurately—one of these commenters believes the new codes rely on subjective clinical reasoning and decision making that will lead to further significant coding and audit concerns for CMS. Several commenters told us that they believe the true complexity of evaluating patients cannot be solely based on personal factors, comorbidities, performance deficits, or time requirements. One of PO 00000 Frm 00167 Fmt 4701 Sfmt 4700 80335 these commenters noted that some patients with multiple comorbidities and body structures involved are not complicated, while others with few comorbidities and body structures involved are deceptively very complex, difficult to diagnose and treat. Another commenter specifically recommended that each PT and OT evaluation complexity level should have the same timeframes, as well as the same component requirements. A few commenters voiced concern about how CMS and our contractors will note these multiple required components of each CPT code. One commenter noted that an evaluation may have characteristics that fall between two complexity levels and told us that it should be up to the clinician to determine which level is most appropriate. A few commenters noted that the new detailed requirements that dictate the level of each code’s definition may cause confusion for physical and occupational therapists, especially as they begin to navigate the new codes. Response: We appreciate the commenters’ concerns about new code descriptors that detail the minimal required components for each of the eight new PT and OT evaluative procedures. We realize that it may take time to train therapists about the various required components of each new PT and OT evaluative procedure code and we have addressed this training in the comment and response below. We also appreciate the commenters’ concern that the evaluative process is likely more complex than the component parts comprising each code’s new coding requirements; however, as noted in the CY 2017 proposed rule, we proposed to adopt the new CPT codes for PT and OT evaluative procedures rather than propose a different coding structure using G-codes. We would like to clarify for the commenters that were concerned about ‘‘time requirements’’ in the new PT and OT CPT code descriptors for evaluative procedures that these ‘‘typical times’’ are included as a frame of reference and do not represent a minimum coding requirement. Just as the typical times included for each E/M code represent the physician face-toface time with the patient, the typical times in the new PT and OT CPT codes represent the typical face-to-face time of the physical or occupational therapist with the patient. Regarding the commenter’s concern about evaluations that fall between two complexity levels, we would note general coding principles applicable to all codes—that the therapist should select the evaluation complexity level that best E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80336 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations represents the furnished service and for which the medical necessity is clearly documented. Comment: Many commenters requested that we delay documentation requirements for the new PT and OT evaluative procedure codes; several commenters requested a one year reprieve from application of medical review and audit requirements; and a few commenters requested that we delay the implementation of the new CPT codes until CY 2018. Most of these delay requests, commenters told us, were related to the time needed to educate therapists about the new codes. Most of these commenters who asked us not to implement new documentation requirements also supported payment stratification of the complexity levels for the PT and OT evaluation complexity levels. Concerned about the proposed lack of payment stratification, the PT specialty society noted in its comments that it asked CPT to postpone the codes for CPT 2017, but CPT denied the request. In its comments, the PT society, along with a few other stakeholders, also asked CMS to delay implementing the new CPT codes for CY 2017 ‘‘if there is any way possible that does not disrupt patient care.’’ A few commenters say they will need a delay of six months, at a minimum, to train therapists, since all new descriptors include various required elements and the typical time for each PT and OT complexity level and the reevaluation codes. The majority of commenters, though, indicated they would need a year for their educational efforts to be successful. In addition to therapists, a few commenters told us they would have to educate coders and billers in the use of the new CPT codes. A few commenters noted the time to implement these new codes into their billing systems was too short. The PT and OT specialty societies each told us about their plans to educate their therapist members and nonmembers to ensure coding accuracy. Each therapy association has already begun this training, some of which will include webinars, self-paced online courses, frequently asked questions, documentation resources, published articles, etc. Some commenters asked CMS to work with various stakeholders and to either establish guidelines or assist in educating therapists about the new codes through Open Door Forums, MLN articles, etc. Additionally, they also wanted to work with CMS on LCDs established by contractors. One commenter stated that CMS must provide clear guidance regarding the selection of the appropriate level of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 evaluation services provided by physical and occupational therapists and the associated documentation requirements to ensure consistency and appropriate reporting of these services. Several commenters asked us to consider a one-year reprieve from the payment consequences of medical review and audit requirements that address lack of documentation to support the complexity level of the code billed. Response: We understand that implementing the new code sets for PT and OT evaluative procedures will require time for therapists to be educated in their proper use. We would like to remind those requesting we assist in writing guidelines that the CPT manual PM&R subsections for PT and OT Evaluations contain official CPT guidelines. We understand the many requests for delay of new documentation requirements during the initial year of their use. As such, for CY 2017, we will delay changes to our current manual instructions for documentation for evaluations and reevaluations in the Medicare Benefits Policy Manual (MBPM), chapter 15, section 220.3. We understand and appreciate that the PT and OT specialty societies are already underway in their educational efforts of therapists, as it has been our past experience with the implementation of other CPT codes and code sets that the leading educational role is assumed by the specialty societies responsible for the code changes. Comment: We received many comments objecting to our proposal to maintain a work RVU of 0.60 for the reevaluation codes. Many commenters— including therapy specialty societies and organization representing therapy providers and private practice physical and occupational therapists, among other stakeholders—disagreed with our proposal to maintain the work RVUs for the PT and OT re-evaluation codes and expressed their disappointment that we did not consider or accept the HCPAC recommendations for increased work RVUs of 0.75 for PT (CPT code 97164) and 0.8 for OT (CPT code 97168). One commenter supported increasing the work RVUs, but suggested that the PT and OT re-evaluation codes should be equally valued for the relative work, PE and MP RVUs. This same commenter contended that because the patients treated by the PT and OT disciplines for hand rehabilitation are the same; that is, have the same functional and cognitive deficits, the same time and expertise of both physical and occupational therapists is required to perform a PO 00000 Frm 00168 Fmt 4701 Sfmt 4700 thorough re-evaluation. The commenter recommended that both re-evaluations reflect the 30-minute typical time that is inherent to the OT re-evaluation code. Several commenters reminded us that the work RVU recommendations forwarded to us were not considered work neutral because the HCPAC accepted the PT and OT specialty societies’ beliefs as compelling evidence that the practice of PT and OT have each significantly changed over the past two decades. Some commenters reasoned that we should accept the HCPACrecommended work RVUs for these codes, in part, because the PT and OT specialty societies completed the RUC– HCPAC defined survey process, including time and intensity of the services. Comments from the HCPAC, the PT and OT specialty societies, and a few other stakeholders provided the rationale that the practice of PT and OT has significantly changed since 1997, including the work of physical therapists and occupational therapists. Some of their rationale included: (a) advances in technology has created opportunities for additional types of treatment approaches; and, (b) the work RVUs for the PT and OT re-evaluation codes have not kept pace with the relativity of increases in work RVUs of comparable E/M codes that have historically been used as comparison: In 1997 the 0.60 work RVUs for CPT codes 97002 and 97004 was 90 percent of that for CPT code 99213; today, it is just 62 percent. Other rationales included ones often cited by commenters requesting increases in RVUs, including increased patient acuity and administrative and reporting burdens. Response: We appreciate the commenters’ remarks and the rationale forwarded in response to our request for comments. After a careful consideration of the comments, we agree that modification of our proposal, to recognize the change in practice since 1997 for the work of physical and occupational therapists, is appropriate. Because we believe that PT and OT have similar work, though, we are finalizing the value of both codes at the same work RVUs by assigning a work RVU of 0.75—the HCPAC-recommended work RVU for the PT re-evaluation and the PT low complexity evaluation. We would like to take this opportunity to remind physical and occupational therapists about our manual instructions regarding the reporting of a both the evaluation and re-evaluation codes (MBPM, Chapter 15, section 220). Of note, to be separately payable, the re-evaluation requires a E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations significant change in the patient’s condition or functional status that was not anticipated in the plan of care. The 80337 MBPM full definitions follow in Table 22. TABLE 22—FULL DEFINITIONS FOR MBPM Therapy service Definition EVALUATION ............... EVALUATION is a separately payable comprehensive service provided by a clinician, as defined above, that requires professional skills to make clinical judgments about conditions for which services are indicated based on objective measurements and subjective evaluations of patient performance and functional abilities. Evaluation is warranted for example, for a new diagnosis or when a condition is treated in a new setting. These evaluative judgments are essential to development of the plan of care, including goals and the selection of interventions. RE–EVALUATION provides additional objective information not included in other documentation. Re-evaluation is separately payable and is periodically indicated during an episode of care when the professional assessment of a clinician indicates a significant improvement, or decline, or change in the patient’s condition or functional status that was not anticipated in the plan of care. Although some state regulations and state practice acts require re-evaluation at specific times, for Medicare payment, re-evaluations must also meet Medicare coverage guidelines. RE-EVALUATION ........ Comment: We received a few comments regarding our PE proposals in the CY 2017 proposed rule for the PT and OT evaluation and re-evaluation codes. In its comments, the PT specialty society, in response to our PE proposal, explained, per our request, the use of the 4 sheets of paper as supply items in the PT evaluation and re-evaluation codes. The OT specialty society noted that they accepted the PE refinements we proposed in the proposed rule. Response: We appreciate the comments from both the PT and OT specialty societies. We will finalize the PE input changes as proposed and include them in the calculation of the final PE RVUs of the PT and OT evaluation and re-evaluation codes. After considering the comments, in summary, we are finalizing our proposals to (a) accept the new CPT codes 97161–97168 for PT and OT evaluative procedures and (b) use the PAMA smoothing authority to value the PT and OT complexity level evaluations as groups of services rather than individually by assigning a work RVU of 1.2 to each complexity level. We are modifying our proposal for the valuation of the PT and OT reevaluation codes and are finalizing a work RVU of 0.75 for each code. Lastly, we are finalizing the PE inputs as proposed. iv. Always Therapy Codes It is important to note that CMS defines the codes for these evaluative services as ‘‘always therapy.’’ This means that they always represent therapy services regardless of who performs them and always require a therapy modifier, GP or GO, to signify that the services are furnished under a PT or OT plan of care, respectively. These codes will also be subject to the therapy MPPR and to statutory therapy caps. TABLE 23—CPT LONG DESCRIPTORS FOR PHYSICAL MEDICINE AND REHABILITATION New CPT code CPT long descriptors for physical medicine and rehabilitation 97161 ........................................................................... Physical therapy evaluation: low complexity, requiring these components: • A history with no personal factors and/or comorbidities that impact the plan of care; • An examination of body system(s) using standardized tests and measures addressing 1–2 elements from any of the following: body structures and functions, activity limitations, and/or participation restrictions; • A clinical presentation with stable and/or uncomplicated characteristics; and • Clinical decision making of low complexity using standardized patient assessment instrument and/or measurable assessment of functional outcome. Typically, 20 minutes are spent face-to-face with the patient and/or family. Physical therapy evaluation: moderate complexity, requiring these components: • A history of present problem with 1–2 personal factors and/or comorbidities that impact the plan of care; • An examination of body systems using standardized tests and measures in addressing a total of 3 or more elements from any of the following body structures and functions, activity limitations, and/or participation restrictions; • An evolving clinical presentation with changing characteristics; and • Clinical decision making of moderate complexity using standardized patient assessment instrument and/or measurable assessment of functional outcome. Typically, 30 minutes are spent face-to-face with the patient and/or family. Physical therapy evaluation: high complexity, requiring these components: • A history of present problem with 3 or more personal factors and/or comorbidities that impact the plan of care; • An examination of body systems using standardized tests and measures addressing a total of 4 or more elements from any of the following: body structures and functions, activity limitations, and/or participation restrictions; • A clinical presentation with unstable and unpredictable characteristics; and • Clinical decision making of high complexity using standardized patient assessment instrument and/or measurable assessment of functional outcome. Typically, 45 minutes are spent face-to-face with the patient and/or family. 97162 ........................................................................... mstockstill on DSK3G9T082PROD with RULES2 97163 ........................................................................... VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00169 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80338 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 23—CPT LONG DESCRIPTORS FOR PHYSICAL MEDICINE AND REHABILITATION—Continued New CPT code CPT long descriptors for physical medicine and rehabilitation 97164 ........................................................................... Re-evaluation of physical therapy established plan of care, requiring these components: • An examination including a review of history and use of standardized tests and measures is required; and • Revised plan of care using a standardized patient assessment instrument and/or measurable assessment of functional outcome. Typically, 20 minutes are spent face-to-face with the patient and/or family. Occupational therapy evaluation, low complexity, requiring these components: • An occupational profile and medical and therapy history, which includes a brief history including review of medical and/or therapy records relating to the presenting problem; • An assessment(s) that identifies 1–3 performance deficits (i.e., relating to physical, cognitive, or psychosocial skills) that result in activity limitations and/or participation restrictions; and • Clinical decision making of low complexity, which includes an analysis of the occupational profile, analysis of data from problem-focused assessment(s), and consideration of a limited number of treatment options. Patient presents with no comorbidities that affect occupational performance. Modification of tasks or assistance (eg, physical or verbal) with assessment(s) is not necessary to enable completion of evaluation component. Typically, 30 minutes are spent face-to-face with the patient and/or family. Occupational therapy evaluation, moderate complexity, requiring these components: • An occupational profile and medical and therapy history, which includes an expanded review of medical and/or therapy records and additional review of physical, cognitive, or psychosocial history related to current functional performance; • An assessment(s) that identifies 3–5 performance deficits (i.e., relating to physical, cognitive, or psychosocial skills) that result in activity limitations and/or participation restrictions; and • Clinical decision making of moderate analytic complexity, which includes an analysis of the occupational profile, analysis of data from detailed assessment(s), and consideration of several treatment options. Patient may present with comorbidities that affect occupational performance. Minimal to moderate modification of tasks or assistance (eg, physical or verbal) with assessment(s) is necessary to enable patient to complete evaluation component. Typically, 45 minutes are spent face-to-face with the patient and/or family. Occupational therapy evaluation, high complexity, requiring these components: • An occupational profile and medical and therapy history, which includes review of medical and/or therapy records and extensive additional review of physical, cognitive, or psychosocial history related to current functional performance; • An assessment(s) that identify 5 or more performance deficits (i.e., relating to physical, cognitive, or psychosocial skills) that result in activity limitations and/or participation restrictions; and • A clinical decision-making is of high analytic complexity, which includes an analysis of the patient profile, analysis of data from comprehensive assessment(s), and consideration of multiple treatment options. Patient presents with comorbidities that affect occupational performance. Significant modification of tasks or assistance (eg, physical or verbal) with assessment(s) is necessary to enable patient to complete evaluation component. Typically, 60 minutes are spent face-to-face with the patient and/or family. Re-evaluation of occupational therapy established plan of care, requiring these components: • An assessment of changes in patient functional or medical status with revised plan of care; • An update to the initial occupational profile to reflect changes in condition or environment that affect future interventions and/or goals; and • A revised plan of care. A formal reevaluation is performed when there is a documented change in functional status or a significant change to the plan of care is required. Typically, 30 minutes are spent face-to-face with the patient and/or family. 97165 ........................................................................... 97166 ........................................................................... 97167 ........................................................................... 97168 ........................................................................... mstockstill on DSK3G9T082PROD with RULES2 v. Potentially Misvalued Therapy Codes Since 2010, in addition to the codes for evaluative services, CMS has periodically added codes that represent therapy services to the list of potentially misvalued codes. The current list of ten therapy codes was based on the statutory category ‘‘codes that account for the majority of spending under the physician fee schedule,’’ as specified in VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 section 1848(c)(2)(K)(ii)(VII) of the Act. We understand that the therapy specialty organizations have pursued the development of coding changes through the CPT process for these modality and procedure services. While we understand that, in some cases, it may take several years to develop appropriate coding revisions, we are, in the meantime, seeking information PO 00000 Frm 00170 Fmt 4701 Sfmt 4700 regarding appropriate valuation for the existing codes. See Table 24. Comment: We received multiple comments on our nomination of the ten therapy codes to the potentially misvalued code list. The PT and OT specialty societies each expressed concern that we issued the potentially misvalued code list knowing that they are currently working with the AMA E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Relativity Assessment Workgroup (RAW) to survey and submit CPT changes to certain intervention codes in the PM&R family, including some codes on the misvalued code list. Nonetheless, the PT specialty society told us that it will work with the RUC (as the appropriate venue) this fall to survey and value the codes; but asked to meet with us in early 2017 to discuss their progress. The OT specialty society stated that it has already begun work with AMA to expedite valuation surveys for relevant codes, but also noted its intent to resume work with the RAW to replace some of the codes on the misvalued code list, including CPT code 97535, as soon as the misvalued code survey process is complete. In addition, the OT specialty society noted its belief that CMS staff attendance at the RAW condoned their timeline for proceeding with various PM&R code revisions. A few commenters believe the codes on the potentially misvalued code list are already valued correctly as the PE inputs for many therapy codes, including those defined by 15-minute intervals, have already been adjusted by the PEAC/RUC/HCPAC to account for efficiencies when billed with other therapy codes. Several commenters cautioned that any review must also consider that all of these codes are already subject to a 50 percent MPPR reduction. One commenter believes the work of CPT code 97140 is undervalued compared to other codes since it requires the more skilled therapist using manual techniques to touch the patient. Response: We will include a valuation discussion during CY 2018 rulemaking of those codes for which we receive RUC recommendations by/at its February 2017 meeting. TABLE 24—POTENTIALLY MISVALUED CODES IDENTIFIED THROUGH HIGH EXPENDITURE BY SPECIALTY SCREEN HCPCS code 97032 ....... 97035 ....... 97110 ....... 97112 ....... 97113 ....... 97116 ....... 97140 ....... 97530 ....... 97535 ....... G0283 ...... Short descriptor Electrical stimulation. Ultrasound therapy. Therapeutic exercises. Neuromuscular reeducation. Aquatic therapy/exercises. Gait training therapy. Manual therapy 1/regions. Therapeutic activities. Self care mngment training. Elec stim other than wound. 80339 (57) Valuation of Services Where Moderate Sedation is an Inherent Part of the Procedure and Valuation of Moderate Sedation Services (CPT Codes 99151, 99152, 99153, 99155, 99156, and 99157; and HCPCS Code G0500) In the CY 2015 PFS proposed rule (79 FR 40349), we noted that it appeared that practice patterns for endoscopic procedures were changing. Anesthesia services are increasingly being separately reported for endoscopic procedures, meaning that resource costs associated with sedation were no longer incurred by the practitioner reporting the procedure. Subsequently, in the CY 2016 PFS proposed rule (80 FR 41707), we solicited public comment and recommendations on approaches to address the appropriate valuation of moderate sedation related to the approximately 400 diagnostic and therapeutic procedures for which the CPT Editorial Panel has determined that moderate sedation is an inherent part of furnishing the service. The CPT Editorial Panel created separate codes for reporting moderate sedation services (see Table 25). TABLE 25—MODERATE SEDATION CODES AND DESCRIPTORS CPT/HCPCS code Descriptor 99151 ................ Moderate sedation services provided by the same physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient’s level of consciousness and physiological status; initial 15 minutes of intra-service time, patient younger than 5 years of age. Moderate sedation services provided by the same physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient’s level of consciousness and physiological status; initial 15 minutes of intra-service time, patient age 5 years or older. Moderate sedation services provided by the same physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient’s level of consciousness and physiological status; each additional 15 minutes of intra-service time (List separately in addition to code for primary service). Moderate sedation services provided by a physician or other qualified health care professional other than the physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; initial 15 minutes of intra-service time, patient younger than 5 years of age. Moderate sedation services provided by a physician or other qualified health care professional other than the physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; initial 15 minutes of intra-service time, patient age 5 years or older. Moderate sedation services provided by a physician or other qualified health care professional other than the physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; each additional 15 minutes intra-service time (List separately in addition to code for primary service). 99152 ................ 99153 ................ 99155 ................ 99156 ................ mstockstill on DSK3G9T082PROD with RULES2 99157 ................ For the newly created moderate sedation CPT codes, we proposed to use the RUC-recommended work RVUs for CPT codes 99151, 99152, 99155, and 99157. We stated in the CY 2017 proposed rule that CPT codes 99151 and 99152 make a distinction between moderate sedation services furnished to patients younger than 5 years of age and patients 5 years or older, with CPT VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 codes 99155 and 99156 making a similar distinction. The RUC recommendations included a work RVU increment of 0.25 between CPT codes 99151 and 99152. For CPT code 99156, we proposed a work RVU of 1.65 to maintain the 0.25 increment relative to CPT code 99155 (a RUC-recommended work RVU of 1.90) and maintain relativity among the CPT codes in this family. We proposed to use PO 00000 Frm 00171 Fmt 4701 Sfmt 4700 the RUC-recommended direct PE inputs for all six codes. We stated in the CY 2017 proposed rule that when moderate sedation is reported for Medicare beneficiaries, we expect that it would most frequently be reported using the code that describes moderate sedation furnished by the same person who also performs the primary procedure for patients 5 years E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80340 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations of age or older. Under the new coding structure, these moderate sedation services would be reported using CPT code 99152, for which we proposed a work RVU of 0.25, consistent with the RUC recommendations for this code. Stakeholders presented information that illustrated that the specialty group survey data regarding the work involved in furnishing moderate sedation described by CPT code 99152 showed a significant bimodal distribution between procedural services furnished by gastroenterologists (GI) and those services furnished by other specialties. The GI societies’ survey data reported a median valuation of 0.10 work RVUs for moderate sedation furnished by the same person furnishing the base procedure. Given the significant volume of moderate sedation furnished by GI practitioners and the significant difference in RVUs reported in the survey data, we proposed to make payment using a GI endoscopy-specific moderate sedation code (HCPCS code G0500) that would be used in lieu of the new CPT moderate sedation coding for use with other services. • G0500: moderate sedation services provided by the same physician or other qualified health care professional performing a gastrointestinal endoscopic service (excluding biliary procedures) that sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient’s level of consciousness and physiological status; initial 15 minutes of intra-service time; patient age 5 years or older. We proposed to value HCPCS code G0500 at 0.10 work RVUs based on the median survey result for GI respondents in the survey data. We proposed that when moderate sedation services are furnished by the same practitioner reporting the GI endoscopy procedure, practitioners would report the sedation services using HCPCS code G0500 instead of CPT code 99152. In all other cases, we proposed that practitioners would report moderate sedation using one of the new moderate sedation CPT codes consistent with CPT guidance. This would include the full range of codes for those furnishing moderate sedation with the remaining (non-GI endoscopy) base procedures, as well as for the other circumstances during which moderate sedation is furnished along with a GI endoscopy (for example, to a patient under 5 years of age or for a biliary procedure, the endoscopist furnishing moderate sedation should not use HCPCS code G0500, but instead use the appropriate CPT code. In addition to proposing work RVUs for the new codes used to separately VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 report moderate sedation, we stated in the proposed rule that the RUC provided recommendations that valued the procedural services without moderate sedation. However, the RUC recommended removing fewer RVUs from the procedures than it recommended for valuing the moderate sedation services that were removed from the procedure codes. In other words, the RUC recommended that overall payments for these procedures should be increased now that practitioners would be required to report the sedation services that were previously included as inherent parts of the procedures. We stated in the proposed rule that we believe that if we were to use the RUC recommendations for revaluation of the procedural services without refinement, the RVUs currently attributable to the redundant payment for sedation services when anesthesia is separately reported would be used exclusively to increase overall payment for these services. We refer readers to section II.D.5. of this final rule, which includes a more extensive discussion of our general principle that overall resource costs for procedures that include moderate sedation do not inherently change based solely on changes in coding. To account for the separate billing of moderate sedation services, we proposed to maintain current values for the procedure codes less the work RVUs associated with the most frequently reported corresponding moderate sedation code so that practitioners furnishing the moderate sedation services previously considered to be inherent in the procedure would have no change in overall work RVUs. Since we proposed 0.10 work RVUs for moderate sedation for the GI endoscopy procedures, we proposed a corresponding 0.10 reduction in work RVUs for these same procedures. For all other Appendix G procedures that currently include moderate sedation as an inherent part of the procedure, we proposed to remove 0.25 work RVUs from the current values. We received 22 comments from medical professionals, ambulatory surgical centers (ASCs), manufacturers, and professional medical specialty societies representing radiation oncology, brachytherapy, colon and rectal surgeons, certified registered nurse anesthetists (CRNAs), pediatrics, cardiology, thorasic surgery, general surgery, gastroenterology, emergency medicine, interventional radiology, and vascular surgery. Commenters were generally supportive of CMS’ proposals related to valuation of the new moderate sedation codes. A few commenters PO 00000 Frm 00172 Fmt 4701 Sfmt 4700 disagreed with our proposed refinements for one of the new moderate sedation CPT codes. While most commenters were supportive of CMS’ proposal to use a methodology to revalue the procedural services without moderate sedation, some commenters suggested that we should revalue certain procedures differently (for example, apply a lower work RVU reduction or make no reduction). A few commenters were opposed to separate reporting of moderate sedation and suggested alternatives for CMS to consider. Our responses to commenters’ specific issues are included below. Comment: Many commenters expressed support for CMS’ proposal to accept the RUC’s recommendations for new moderate sedation CPT codes 99151, 99152, 99153, 99155, and 99157. Several commenters, including the RUC and medical specialty societies, disagreed with CMS’ proposal to value CPT code 99156 at 1.65 work RVUs. Commenters requested that CMS finalize the RUC-recommended work RVU of 1.84 (the 25th percentile survey result). Commenters stated that there were clinical differences in the typical patients that receive services that would be reported using CPT code 99156, disagreeing with CMS’ proposal to reduce the work RVU for CPT code 99156 to maintain relativity among the code pairs in this family. Commenters suggested that CPT code 99156 would be used to report moderate sedation services that are currently reported using CPT code 99149. Commenters stated that CPT code 99149 was typically performed in the emergency department (approximately 58 percent of the time), indicating that the typical patient is either acutely ill or injured, and that moderate sedation services are typically performed without support staff, which commenters suggested further justified a work RVU of 1.84 for CPT code 99156. Response: The code descriptors for each of the new moderate sedation CPT codes make distinctions between the ages of the patients and the clinical staff involved in furnishing the moderate sedation services. The typical patient vignettes used in the specialty societies’ surveys did not indicate clinical differences between patients receiving moderate sedation services reported using CPT code 99156 compared to services reported with CPT code 99155. Additionally, the typical patient vignettes for CPT codes 99151 and 99152 did not indicate clinical differences in the patients. We continue to believe that the work RVU increment of 0.25 should be maintained between CPT codes 99155 and 99156 since these E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations codes have the same younger than age 5/older than age 5 dynamic as described by CPT codes 99151 and 99152. Therefore, for CY 2017, we are finalizing work RVUs for the moderate sedation codes as follows: • Work RVU of 0.50 for CPT code 99151; • Work RVU of 0.25 for CPT code 99152; • Work RVU of 1.90 for CPT code 99155; • Work RVU of 1.65 for CPT code 99156; and • Work RVU of 1.25 for CPT code 99157. We note that CPT code 99153 is a PEonly code and we are finalizing the proposed PE inputs for CPT code 99153, as well as finalizing the proposed PE inputs for all other codes in this family without modification. Comment: While many commenters supported use of a methodological approach to revaluing Appendix G procedural services, some commenters disagreed with CMS’ proposed refinements to the RUC’s recommended methodology. Commenters suggested that the RUC’s approach was consistent with how the services were originally valued and was budget neutral within these services. The RUC, along with several commenters representing specialty medical societies, requested that CMS use the same RUC-approved two-tier methodology for removing work RVUs associated with the work of moderate sedation from Appendix G services based on whether the code was assigned to one of two preservice time packages used by the RUC in developing recommendations. Using the same twotier methodology, the RUC suggested removal of 0.10 work RVUs for some GI services and 0.19 work RVUs from other GI services, depending on the RUC’s assignment of pre-service time. Response: We understand that some stakeholders would prefer that we use the RUC’s recommendations so that the RVUs currently attributable to the redundant payment for sedation services when anesthesia is separately reported would be used exclusively to increase overall payment for these services. We also understand that the RUC assumes that the amount of preservice time for particular services may reflect a different level of preparation required for sedation services. However, we continue to believe that the overall resource costs for the procedures including moderate sedation do not inherently change based solely on changes in coding, so we do not believe that our assignment of overall work RVUs should increase in cases where the moderate sedation is performed by VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the proceduralists, as previously assumed. Therefore, we believe that a different amount of work RVUs should be removed from the Appendix G services only in cases where the typical moderate sedation code also has a different amount of assigned work RVUs, such as the case with codes that would be reported with G0500. In other words, we believe that there should be a direct relationship, for each code, between the work RVUs attributable to moderate sedation, regardless of whether it is automatically included in payment for a given procedure (at current) or separately reported (as proposed). Comment: A few commenters expressed concerns that the proposed revaluation methodology would disturb the relativity of many of the Appendix G codes, along with the increasing administrative burden by requiring separate reporting of the procedural and moderate sedation services. Other commenters suggested that CMS consider alternatives including only addressing revaluation of Appendix G services where moderate sedation is no longer inherent or only those procedural services reported with separate anesthesia services the majority of the time. Response: We appreciate the concerns of commenters regarding both the issues of relativity within families of codes, as well as concerns regarding administrative burden. However, we believe that it serves relativity to maintain the overall work RVUs for each of the services when reported with moderate sedation, which would be typical for many of these codes. While we understand the value in reducing the number of codes required to be reported for payment under the PFS, we also believe that it is important that the coding be granular enough to allow us to identify which services are furnished to Medicare beneficiaries by which practitioners. It is also clear to us that the accuracy of the assumption of moderate sedation as inherent for particular procedures may change over time, as we have seen reflected in the claims data. We do not believe that a shifting set of services where moderate sedation values are alternatively included or not included in the valuation of particular codes based on annual analysis of claims data would be likely to be administratively easier for practitioners. Comment: A few commenters requested that CMS not finalize its proposal to reduce the work RVUs for certain procedures. Some commenters indicated that certain codes identified in Appendix G were valued before PO 00000 Frm 00173 Fmt 4701 Sfmt 4700 80341 Appendix G was established, or the work of moderate sedation was not included in the valuation of certain procedures. Response: We appreciate the commenters’ feedback regarding our proposals. We remind stakeholders that the potentially misvalued code process is intended to improve the accuracy of the RVUs assigned to particular codes. We welcome feedback from interested individuals, stakeholders, and specialty societies regarding the valuation of specific codes for consideration in future rulemaking. Comment: A few commenters stated that CMS did not provide a rationale to support that moderate sedation furnished with GI endoscopy services required less work than moderate sedation furnished with other Appendix G procedures. Response: Our proposal was based on the GI societies’ survey data included in the RUC recommendations that reported a median valuation of 0.10 work RVUs for moderate sedation furnished by the same person furnishing the base procedure. Comment: A few commenters suggested that creation of HCPCS code G0500 would cause confusion among practitioners since the new CPT codes developed to report moderate sedation do not differentiate between GI and nonGI procedures. One commenter stated that HCPCS code G0500 is time based, and therefore, to report the code, at least 50 percent of the time (7.5 minutes) is required, but the GI subset of data that CMS accepted to create the HCPCS code G0500 indicates an intraservice time of 5 minutes. The commenter went on to state that it would appear that a majority of the GI endoscopists would never be able to report HCPCS code G0500. Response: We expect that practitioners will report the appropriate CPT or HCPCS code that most accurately describes the services performed during a patient encounter, including those services performed concurrently and in support of a procedural service consistent with CPT guidance. We note that the commenter refers to the time for moderate sedation in the survey data, while the time thresholds for the moderate sedation codes are intended to match the intraservice time of the procedure itself. We reviewed the intraservice time assumptions for the procedure codes, and only one includes an intraservice time as low as 7.5 minutes and none lower. Table 26 identifies the GI endoscopic services for which HCPCS code G0500 will be used to report moderate sedation services (available in the ‘‘downloads’’ section of the PFS E:\FR\FM\15NOR2.SGM 15NOR2 80342 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Web site at https://www.cms.gov/ Medicare/Medicare-Feefor-ServicePayment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html). Comment: Several commenters disagreed with CMS’ proposal to revalue Appendix G esophageal dilation, biliary endoscopy, and ERCP procedures minus 0.25 work RVUs instead of minus 0.10 work RVUs, similar to other endoscopy services identified in Appendix G. Commenters requested that CMS only reduce these procedural services with a 0.10 work RVU reduction, and allow reporting of moderate sedation using HCPCS code G0500, similar to other endoscopy procedures identified in Appendix G. Response: While we continue to believe that the moderate sedation work for Appendix G esophageal dilation, biliary endoscopy, and ERCP procedures is more extensive than for other endoscopy procedures identified in Appendix G, for CY 2017, after considering the comments, we are finalizing a revaluation of certain esophageal dilation, biliary endoscopy, and ERCP procedures minus 0.10 work RVUs instead of the 0.25 work RVU reduction as proposed (see Table 26 for additional information). We will continue to monitor claims data related to separately billed anesthesia services performed in conjunction with these procedures to inform future rulemaking related to the valuation of these codes. We are also modifying the code descriptor for HCPCS code G0500 to reflect these changes. Therefore, we are finalizing the descriptor for HCPCS code G0500 as: • G0500: Moderate sedation services provided by the same physician or other qualified health care professional performing a gastrointestinal endoscopic service that sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient’s level of consciousness and physiological status; initial 15 minutes of intra-service time; patient age 5 years or older. (additional time may be reported with 99153, as appropriate). Comment: Some commenters requested that CMS provide practitioners and providers with instructions on use of the newly created moderate sedation codes, allow for additional time to implement the coding changes, and provide MACs appropriate claims processing instructions specific to these codes. Response: We plan to issue appropriate claims processing instructions to the local MACs. We do not believe that an implementation delay is necessary since the new CPT and HCPCS codes will be effective January 1, 2017 and available for use by practitioners and providers at that time. In summary, after consideration of the comments, we are finalizing our proposed modifications to maintain the current values for the procedure codes less the work RVUs associated with the most frequently reported corresponding moderate sedation code. Practitioners furnishing the moderate sedation services previously considered to be inherent in the procedure will have no change in overall work RVUs. Since we are finalizing a work RVU of 0.10 (HCPCS code G0500) for moderate sedation for the GI endoscopy procedures, we are finalizing a corresponding 0.10 reduction in work RVUs for the corresponding procedural services. For all other Appendix G procedures that currently include moderate sedation as an inherent part of the procedure, we are finalizing a 0.25 work RVU reduction from the current values. Table 26 lists the CY 2016 work RVUs for each applicable service and our proposed and final CY 2017 refined work RVUs using the finalized revaluation methodology described above. Additionally, the table identifies the GI endoscopic services for which HCPCS code G0500 will be used to report moderate sedation services (available in the ‘‘downloads’’ section of the PFS Web site at https:// www.cms.gov/Medicare/MedicareFeefor-Service-Payment/ PhysicianFeeSched/PFS-FederalRegulation-Notices.html). TABLE 26—VALUATIONS FOR SERVICES MINUS MODERATE SEDATION CY 2016 work RVU mstockstill on DSK3G9T082PROD with RULES2 CPT code 10030 19298 20982 20983 22510 22511 22512 22513 22514 22515 22526 22527 31615 31622 31623 31624 31625 31626 31627 31628 31629 31632 31633 31634 31635 31645 ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00174 Fmt 4701 Sfmt 4700 CY 2017 proposed work RVU 3.00 6.00 7.27 7.13 8.15 7.58 4.00 8.90 8.24 4.00 6.10 3.03 2.09 2.78 2.88 2.88 3.36 4.16 2.00 3.80 4.00 1.03 1.32 4.00 3.67 3.16 E:\FR\FM\15NOR2.SGM 2.75 5.75 7.02 6.88 7.90 7.33 4.00 8.65 7.99 4.00 5.85 3.03 1.84 2.53 2.63 2.63 3.11 3.91 2.00 3.55 3.75 1.03 1.32 3.75 3.42 2.91 15NOR2 CY 2017 final work RVU 2.75 5.75 7.02 6.88 7.90 7.33 4.00 8.65 7.99 4.00 5.85 3.03 1.84 2.53 2.63 2.63 3.11 3.91 2.00 3.55 3.75 1.03 1.32 3.75 3.42 2.91 Use HCPCS code G0500 to report moderate sedation (Y/N) N N N N N N N N N N N N N N N N N N N N N N N N N N Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80343 TABLE 26—VALUATIONS FOR SERVICES MINUS MODERATE SEDATION—Continued CY 2016 work RVU mstockstill on DSK3G9T082PROD with RULES2 CPT code 31646 31647 31648 31649 31651 31652 31653 31654 31660 31661 31725 32405 32550 32551 32553 33010 33011 33206 33207 33208 33210 33211 33212 33213 33214 33216 33217 33218 33220 33221 33222 33223 33227 33228 33229 33230 33231 33233 33234 33235 33240 33241 33244 33249 33262 33263 33264 33282 33284 33990 33991 33992 33993 35471 35472 35475 35476 36010 36140 36147 36148 36200 36221 36222 36223 36224 36225 36226 ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... 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VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00175 Fmt 4701 Sfmt 4700 CY 2017 proposed work RVU 2.72 4.40 4.20 1.44 1.58 4.71 5.21 1.40 4.25 4.50 1.96 1.93 4.17 3.29 3.80 2.24 2.24 7.39 8.05 8.77 3.30 3.39 5.26 5.53 7.84 5.87 5.84 6.07 6.15 5.80 5.10 6.55 5.50 5.77 6.04 6.32 6.59 3.39 7.91 10.15 6.05 3.29 13.99 15.17 6.06 6.33 6.60 3.50 3.00 8.15 11.88 4.00 3.51 10.05 6.90 6.60 5.10 2.43 2.01 3.72 1.00 3.02 4.17 5.53 6.00 6.50 6.00 6.50 E:\FR\FM\15NOR2.SGM 2.47 4.15 3.95 1.44 1.58 4.46 4.96 1.40 4.00 4.25 1.71 1.68 3.92 3.04 3.55 1.99 1.99 7.14 7.80 8.52 3.05 3.14 5.01 5.28 7.59 5.62 5.59 5.82 5.90 5.55 4.85 6.30 5.25 5.52 5.79 6.07 6.34 3.14 7.66 9.90 5.80 3.04 13.74 14.92 5.81 6.08 6.35 3.25 2.75 7.90 11.63 3.75 3.26 9.80 6.65 6.35 4.85 2.18 1.76 3.47 1.00 2.77 3.92 5.28 5.75 6.25 5.75 6.25 15NOR2 CY 2017 final work RVU 2.47 4.15 3.95 1.44 1.58 4.46 4.96 1.40 4.00 4.25 1.71 1.68 3.92 3.04 3.55 1.99 1.99 7.14 7.80 8.52 3.05 3.14 5.01 5.28 7.59 5.62 5.59 5.82 5.90 5.55 4.85 6.30 5.25 5.52 5.79 6.07 6.34 3.14 7.66 9.90 5.80 3.04 13.74 14.92 5.81 6.08 6.35 3.25 2.75 7.90 11.63 3.75 3.26 9.80 6.65 6.35 4.85 2.18 1.76 3.47 1.00 2.77 3.92 5.28 5.75 6.25 5.75 6.25 Use HCPCS code G0500 to report moderate sedation (Y/N) N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 80344 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 26—VALUATIONS FOR SERVICES MINUS MODERATE SEDATION—Continued CY 2016 work RVU mstockstill on DSK3G9T082PROD with RULES2 CPT code 36227 36228 36245 36246 36247 36248 36251 36252 36253 36254 36481 36555 36557 36558 36560 36561 36563 36565 36566 36568 36570 36571 36576 36578 36581 36582 36583 36585 36590 36870 37183 37184 37185 37186 37187 37188 37191 37192 37193 37197 37211 37212 37213 37214 37215 37216 37218 37220 37221 37222 37223 37224 37225 37226 37227 37228 37229 37230 37231 37232 37233 37234 37235 37236 37237 37238 37239 37241 ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... 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VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00176 Fmt 4701 Sfmt 4700 CY 2017 proposed work RVU 2.09 4.25 4.90 5.27 6.29 1.01 5.35 6.99 7.55 8.15 6.98 2.68 5.14 4.84 6.29 6.04 6.24 6.04 6.54 1.92 5.36 5.34 3.24 3.54 3.48 5.24 5.29 4.84 3.35 5.20 7.99 8.66 3.28 4.92 8.03 5.71 4.71 7.35 7.35 6.29 8.00 7.06 5.00 2.74 18.00 0.00 15.00 8.15 10.00 3.73 4.25 9.00 12.00 10.49 14.50 11.00 14.05 13.80 15.00 4.00 6.50 5.50 7.80 9.00 4.25 6.29 2.97 9.00 E:\FR\FM\15NOR2.SGM 2.09 4.25 4.65 5.02 6.04 1.01 5.10 6.74 7.30 7.90 6.73 2.43 4.89 4.59 6.04 5.79 5.99 5.79 6.29 1.67 5.11 5.09 2.99 3.29 3.23 4.99 5.04 4.59 3.10 4.95 7.74 8.41 3.28 4.92 7.78 5.46 4.46 7.10 7.10 6.04 7.75 6.81 4.75 2.49 17.75 0.00 14.75 7.90 9.75 3.73 4.25 8.75 11.75 10.24 14.25 10.75 13.80 13.55 14.75 4.00 6.50 5.50 7.80 8.75 4.25 6.04 2.97 8.75 15NOR2 CY 2017 final work RVU 2.09 4.25 4.65 5.02 6.04 1.01 5.10 6.74 7.30 7.90 6.73 2.43 4.89 4.59 6.04 5.79 5.99 5.79 6.29 1.67 5.11 5.09 2.99 3.29 3.23 4.99 5.04 4.59 3.10 4.95 7.74 8.41 3.28 4.92 7.78 5.46 4.46 7.10 7.10 6.04 7.75 6.81 4.75 2.49 17.75 0.00 14.75 7.90 9.75 3.73 4.25 8.75 11.75 10.24 14.25 10.75 13.80 13.55 14.75 4.00 6.50 5.50 7.80 8.75 4.25 6.04 2.97 8.75 Use HCPCS code G0500 to report moderate sedation (Y/N) N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80345 TABLE 26—VALUATIONS FOR SERVICES MINUS MODERATE SEDATION—Continued CY 2016 work RVU mstockstill on DSK3G9T082PROD with RULES2 CPT code 37242 37243 37244 37252 37253 43200 43201 43202 43204 43205 43206 43211 43212 43213 43214 43215 43216 43217 43220 43226 43227 43229 43231 43232 43233 43235 43236 43237 43238 43239 43240 43241 43242 43243 43244 43245 43246 43247 43248 43249 43250 43251 43252 43253 43254 43255 43257 43259 43260 43261 43262 43263 43264 43265 43266 43270 43273 43274 43275 43276 43277 43278 43450 43453 44360 44361 44363 44364 ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... 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VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00177 Fmt 4701 Sfmt 4700 CY 2017 proposed work RVU 10.05 11.99 14.00 1.80 1.44 1.52 1.82 1.82 2.43 2.54 2.39 4.30 3.50 4.73 3.50 2.54 2.40 2.90 2.10 2.34 2.99 3.59 2.90 3.69 4.17 2.19 2.49 3.57 4.26 2.49 7.25 2.59 4.83 4.37 4.50 3.18 3.66 3.21 3.01 2.77 3.07 3.57 3.06 4.83 4.97 3.66 4.25 4.14 5.95 6.25 6.60 6.60 6.73 8.03 4.17 4.26 2.24 8.58 6.96 8.94 7.00 8.02 1.38 1.51 2.59 2.87 3.49 3.73 E:\FR\FM\15NOR2.SGM 9.80 11.74 13.75 1.80 1.44 1.42 1.72 1.72 2.33 2.44 2.29 4.20 3.40 4.63 3.40 2.44 2.30 2.80 2.00 2.24 2.89 3.49 2.80 3.59 4.07 2.09 2.39 3.47 4.16 2.39 7.15 2.49 4.73 4.27 4.40 3.08 3.56 3.11 2.91 2.67 2.97 3.47 2.96 4.73 4.87 3.56 4.15 4.04 5.70 6.00 6.35 6.35 6.48 7.78 3.92 4.01 2.24 8.33 6.71 8.69 6.75 7.77 1.13 1.26 2.49 2.77 3.39 3.63 15NOR2 CY 2017 final work RVU 9.80 11.74 13.75 1.80 1.44 1.42 1.72 1.72 2.33 2.44 2.29 4.20 3.40 4.63 3.40 2.44 2.30 2.80 2.00 2.24 2.89 3.49 2.80 3.59 4.07 2.09 2.39 3.47 4.16 2.39 7.15 2.49 4.73 4.27 4.40 3.08 3.56 3.11 2.91 2.67 2.97 3.47 2.96 4.73 4.87 3.56 4.15 4.04 5.85 6.15 6.50 6.50 6.63 7.93 3.92 4.01 2.24 8.48 6.86 8.84 6.90 7.92 1.28 1.41 2.49 2.77 3.39 3.63 Use HCPCS code G0500 to report moderate sedation (Y/N) N N N N N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N N Y Y Y Y Y Y Y Y Y Y Y 80346 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 26—VALUATIONS FOR SERVICES MINUS MODERATE SEDATION—Continued CY 2016 work RVU mstockstill on DSK3G9T082PROD with RULES2 CPT code 44365 ............................................................................................................... 44366 ............................................................................................................... 44369 ............................................................................................................... 44370 ............................................................................................................... 44372 ............................................................................................................... 44373 ............................................................................................................... 44376 ............................................................................................................... 44377 ............................................................................................................... 44378 ............................................................................................................... 44379 ............................................................................................................... 44380 ............................................................................................................... 44381 ............................................................................................................... 44382 ............................................................................................................... 44384 ............................................................................................................... 44385 ............................................................................................................... 44386 ............................................................................................................... 44388 ............................................................................................................... 44388–53 ......................................................................................................... 44389 ............................................................................................................... 44390 ............................................................................................................... 44391 ............................................................................................................... 44392 ............................................................................................................... 44394 ............................................................................................................... 44401 ............................................................................................................... 44402 ............................................................................................................... 44403 ............................................................................................................... 44404 ............................................................................................................... 44405 ............................................................................................................... 44406 ............................................................................................................... 44407 ............................................................................................................... 44408 ............................................................................................................... 44500 ............................................................................................................... 45303 ............................................................................................................... 45305 ............................................................................................................... 45307 ............................................................................................................... 45308 ............................................................................................................... 45309 ............................................................................................................... 45315 ............................................................................................................... 45317 ............................................................................................................... 45320 ............................................................................................................... 45321 ............................................................................................................... 45327 ............................................................................................................... 45332 ............................................................................................................... 45333 ............................................................................................................... 45334 ............................................................................................................... 45335 ............................................................................................................... 45337 ............................................................................................................... 45338 ............................................................................................................... 45340 ............................................................................................................... 45341 ............................................................................................................... 45342 ............................................................................................................... 45346 ............................................................................................................... 45347 ............................................................................................................... 45349 ............................................................................................................... 45350 ............................................................................................................... 45378 ............................................................................................................... 45378–53 ......................................................................................................... 45379 ............................................................................................................... 45380 ............................................................................................................... 45381 ............................................................................................................... 45382 ............................................................................................................... 45384 ............................................................................................................... 45385 ............................................................................................................... 45386 ............................................................................................................... 45388 ............................................................................................................... 45389 ............................................................................................................... 45390 ............................................................................................................... 45391 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VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00178 Fmt 4701 Sfmt 4700 CY 2017 proposed work RVU 3.31 4.40 4.51 4.79 4.40 3.49 5.25 5.52 7.12 7.46 0.97 1.48 1.27 2.95 1.30 1.60 2.82 1.41 3.12 3.84 4.22 3.63 4.13 4.44 4.80 5.60 3.12 3.33 4.20 5.06 4.24 0.49 1.50 1.25 1.70 1.40 1.50 1.80 2.00 1.78 1.75 2.00 1.86 1.65 2.10 1.14 2.20 2.15 1.35 2.22 3.08 2.91 2.82 3.62 1.78 3.36 1.68 4.38 3.66 3.66 4.76 4.17 4.67 3.87 4.98 5.34 6.14 4.74 E:\FR\FM\15NOR2.SGM 3.21 4.30 4.41 4.69 4.30 3.39 5.15 5.42 7.02 7.36 0.87 1.38 1.17 2.85 1.20 1.50 2.72 1.36 3.02 3.74 4.12 3.53 4.03 4.34 4.70 5.50 3.02 3.23 4.10 4.96 4.14 0.39 1.40 1.15 1.60 1.30 1.40 1.70 1.90 1.68 1.65 1.90 1.76 1.55 2.00 1.04 2.10 2.05 1.25 2.12 2.98 2.81 2.72 3.52 1.68 3.26 1.63 4.28 3.56 3.56 4.66 4.07 4.57 3.77 4.88 5.24 6.04 4.64 15NOR2 CY 2017 final work RVU 3.21 4.30 4.41 4.69 4.30 3.39 5.15 5.42 7.02 7.36 0.87 1.38 1.17 2.85 1.20 1.50 2.72 1.36 3.02 3.74 4.12 3.53 4.03 4.34 4.70 5.50 3.02 3.23 4.10 4.96 4.14 0.39 1.40 1.15 1.60 1.30 1.40 1.70 1.90 1.68 1.65 1.90 1.76 1.55 2.00 1.04 2.10 2.05 1.25 2.12 2.98 2.81 2.72 3.52 1.68 3.26 1.63 4.28 3.56 3.56 4.66 4.07 4.57 3.77 4.88 5.24 6.04 4.64 Use HCPCS code G0500 to report moderate sedation (Y/N) Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80347 TABLE 26—VALUATIONS FOR SERVICES MINUS MODERATE SEDATION—Continued CY 2016 work RVU mstockstill on DSK3G9T082PROD with RULES2 CPT code 45392 45393 45398 47000 47382 47383 47532 47533 47534 47535 47536 47538 47539 47540 47541 47542 47543 47544 49405 49406 49407 49411 49418 49440 49441 49442 49446 50200 50382 50384 50385 50386 50387 50430 50432 50433 50434 50592 50593 50606 50693 50694 50695 50705 50706 57155 66720 69300 77371 77600 77605 77610 77615 92920 92921 92924 92925 92928 92929 92933 92934 92937 92938 92941 92943 92944 92953 92960 ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... ............................................................................................................... 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VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00179 Fmt 4701 Sfmt 4700 CY 2017 proposed work RVU 5.60 4.78 4.30 1.90 15.22 9.13 4.25 6.00 8.03 4.50 2.88 6.60 9.00 10.75 5.61 2.50 3.07 4.29 4.25 4.25 4.50 3.82 4.21 4.18 4.77 4.00 3.31 2.63 5.50 5.00 4.44 3.30 2.00 3.15 4.25 5.30 4.00 6.80 9.13 3.16 4.21 5.50 7.05 4.03 3.80 5.40 5.00 6.69 0.00 1.56 2.09 1.56 2.09 10.10 0.00 11.99 0.00 11.21 0.00 12.54 0.00 11.20 0.00 12.56 12.56 0.00 0.23 2.25 E:\FR\FM\15NOR2.SGM 5.50 4.68 4.20 1.65 14.97 8.88 4.25 5.38 7.60 3.95 2.61 4.75 8.75 9.03 5.38 2.85 3.00 3.28 4.00 4.00 4.25 3.57 3.96 3.93 4.52 3.75 3.06 2.38 5.25 4.75 4.19 3.05 1.75 2.90 4.00 5.05 3.75 6.55 8.88 3.16 3.96 5.25 6.80 4.03 3.80 5.15 4.75 6.44 0.00 1.31 1.84 1.31 1.84 9.85 0.00 11.74 0.00 10.96 0.00 12.29 0.00 10.95 0.00 12.31 12.31 0.00 0.01 2.00 15NOR2 CY 2017 final work RVU 5.50 4.68 4.20 1.65 14.97 8.88 4.25 5.38 7.60 3.95 2.61 4.75 8.75 9.03 6.75 2.85 3.00 3.28 4.00 4.00 4.25 3.57 3.96 3.93 4.52 3.75 3.06 2.38 5.25 4.75 4.19 3.05 1.75 2.90 4.00 5.05 3.75 6.55 8.88 3.16 3.96 5.25 6.80 4.03 3.80 5.15 4.75 6.44 0.00 1.31 1.84 1.31 1.84 9.85 0.00 11.74 0.00 10.96 0.00 12.29 0.00 10.95 0.00 12.31 12.31 0.00 0.01 2.00 Use HCPCS code G0500 to report moderate sedation (Y/N) Y Y Y N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 80348 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 26—VALUATIONS FOR SERVICES MINUS MODERATE SEDATION—Continued CY 2016 work RVU mstockstill on DSK3G9T082PROD with RULES2 CPT code 92961 ............................................................................................................... 92973 ............................................................................................................... 92974 ............................................................................................................... 92975 ............................................................................................................... 92978 ............................................................................................................... 92979 ............................................................................................................... 92986 ............................................................................................................... 92987 ............................................................................................................... 93312 ............................................................................................................... 93313 ............................................................................................................... 93314 ............................................................................................................... 93315 ............................................................................................................... 93316 ............................................................................................................... 93317 ............................................................................................................... 93318 ............................................................................................................... 93451 ............................................................................................................... 93452 ............................................................................................................... 93453 ............................................................................................................... 93454 ............................................................................................................... 93455 ............................................................................................................... 93456 ............................................................................................................... 93457 ............................................................................................................... 93458 ............................................................................................................... 93459 ............................................................................................................... 93460 ............................................................................................................... 93461 ............................................................................................................... 93462 ............................................................................................................... 93463 ............................................................................................................... 93464 ............................................................................................................... 93505 ............................................................................................................... 93530 ............................................................................................................... 93561 ............................................................................................................... 93562 ............................................................................................................... 93563 ............................................................................................................... 93564 ............................................................................................................... 93565 ............................................................................................................... 93566 ............................................................................................................... 93567 ............................................................................................................... 93568 ............................................................................................................... 93571 ............................................................................................................... 93572 ............................................................................................................... 93582 ............................................................................................................... 93583 ............................................................................................................... 93609 ............................................................................................................... 93613 ............................................................................................................... 93615 ............................................................................................................... 93616 ............................................................................................................... 93618 ............................................................................................................... 93619 ............................................................................................................... 93620 ............................................................................................................... 93621 ............................................................................................................... 93622 ............................................................................................................... 93624 ............................................................................................................... 93640 ............................................................................................................... 93641 ............................................................................................................... 93642 ............................................................................................................... 93644 ............................................................................................................... 93650 ............................................................................................................... 93653 ............................................................................................................... 93654 ............................................................................................................... 93655 ............................................................................................................... 93656 ............................................................................................................... 93657 ............................................................................................................... 94011 ............................................................................................................... 94012 ............................................................................................................... 94013 ............................................................................................................... 96440 ............................................................................................................... G0105 .............................................................................................................. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00180 Fmt 4701 Sfmt 4700 CY 2017 proposed work RVU 4.59 3.28 3.00 7.24 0.00 0.00 22.85 23.63 2.55 0.51 2.10 2.94 0.85 2.09 2.40 2.72 4.75 6.24 4.79 5.54 6.15 6.89 5.85 6.60 7.35 8.10 3.73 2.00 1.80 4.37 4.22 0.50 0.16 1.11 1.13 0.86 0.86 0.97 0.88 0.00 0.00 12.56 14.00 0.00 6.99 0.99 1.49 4.25 7.31 11.57 0.00 0.00 4.80 3.51 5.92 4.88 3.29 10.49 15.00 20.00 7.50 20.02 7.50 2.00 3.10 0.66 2.37 3.36 E:\FR\FM\15NOR2.SGM 4.34 3.28 3.00 6.99 0.00 0.00 22.60 23.38 2.30 0.26 1.85 2.69 0.60 1.84 2.15 2.47 4.50 5.99 4.54 5.29 5.90 6.64 5.60 6.35 7.10 7.85 3.73 2.00 1.80 4.12 3.97 0.25 0.01 1.11 1.13 0.86 0.86 0.97 0.88 0.00 0.00 12.31 13.75 0.00 6.99 0.74 1.24 4.00 7.06 11.32 0.00 0.00 4.55 3.26 5.67 4.63 3.04 10.24 14.75 19.75 7.50 19.77 7.50 1.75 2.85 0.41 2.12 3.26 15NOR2 CY 2017 final work RVU 4.34 3.28 3.00 6.99 0.00 0.00 22.60 23.38 2.30 0.26 1.85 2.69 0.60 1.84 2.15 2.47 4.50 5.99 4.54 5.29 5.90 6.64 5.60 6.35 7.10 7.85 3.73 2.00 1.80 4.12 3.97 0.25 0.01 1.11 1.13 0.86 0.86 0.97 0.88 0.00 0.00 12.31 13.75 0.00 6.99 0.74 1.24 4.00 7.06 11.32 0.00 0.00 4.55 3.26 5.67 4.63 3.04 10.24 14.75 19.75 7.50 19.77 7.50 1.75 2.85 0.41 2.12 3.26 Use HCPCS code G0500 to report moderate sedation (Y/N) N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N Y Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80349 TABLE 26—VALUATIONS FOR SERVICES MINUS MODERATE SEDATION—Continued CY 2016 work RVU CPT code G0105–53 ........................................................................................................ G0121 .............................................................................................................. G0121–53 ........................................................................................................ G0341 .............................................................................................................. mstockstill on DSK3G9T082PROD with RULES2 (58) Prolonged Evaluation and Management Services (CPT Codes 99354, 99358, and 99359) We previously received RUC recommendations for face-to-face and non-face-to-face prolonged E/M services. In response to the request for public comments in the CY 2016 PFS proposed rule about improving payment accuracy for cognitive services, commenters suggested that we consider making separate payment for CPT codes 99358 and 99359. As reflected in section II.E, we proposed to make separate payment for these services. We also proposed values for services in this family of codes based on the RUC-recommended values, including for CPT code 99354, which would increase the current work RVU to 2.33. Likewise, we proposed to adopt the RUC-recommended work RVU of 2.10 for CPT code 99358 and 1.00 for CPT code 99359. Comment: One commenter recommended that CMS develop separate payment for a modifier and new G-codes that would account for additional non-face-to-face time spent on circumstances that fell outside that of a typical level-4 patient. Response: We appreciate the recommendation and will consider coding alternatives in future rulemaking. Comment: Many commenters were very supportive of CMS’ proposal to pay separately for CPT codes 99258 and 99359, and to increase the current work RVU for CPT code 99354. Response: We thank commenters for their support, and are finalizing the values as proposed. (59) Complex Chronic Care Management Services (CPT Codes 99487 and 99489) We received RUC recommendations for CPT codes 99487 and 99489 following the October 2012 RUC meeting, however we considered these services bundled and did not make separate payment. For CY 2017, we proposed to change the procedure status for CPT codes 99487 and 99489 from B (bundled) to A (active), see II.E, and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 1.68 3.36 1.68 6.98 proposed to adopt the RUCrecommended work RVUs of 1.00 for CPT code 99487 and 0.50 for CPT code 99489, as well as direct PE inputs consistent with the RUC recommendations. We received no comments on the valuation of CPT codes 99487 and 99489; therefore, we are finalizing as proposed. (60) Prostate Biopsy, Any Method (HCPCS Code G0416) The College of American Pathologists and the American Society of Cytopathology formed an expert panel to make recommendations at the October 2015 RUC meeting to determine an appropriate work RVU for HCPCS code G0416, as they believed that the survey results were invalid. The panel made several arguments to the RUC in recommending a higher work RVU under the RUC’s ‘‘compelling evidence’’ standard. These arguments were: (1) That incorrect assumptions were made in previous valuations; (2) the value of HCPCS code G0416 remained constant while the code descriptors changed over the years; and (3) the ‘‘anomalous relationship’’ between HCPCS code G0416 and CPT code 88305 (Level IV— Surgical pathology, gross and microscopic examination). The expert panel recommended a work RVU of 4.00 based on a crosswalk from CPT code 38240 (Hematopoietic progenitor cell (HPC); allogeneic transplantation per donor). The RUC agreed with the recommendation of the expert panel. We believed HCPCS code G0416 should not be valued as a direct crosswalk from CPT code 38240. Instead, since code G0416 describes services that would otherwise be reported using CPT code 88305 we believed that G0416 should be valued relative to CPT code 88305. To value HCPCS code G0416, we used the intraservice time ratio between HCPCS code G0416 and CPT code 88305 to arrive at a work RVU of 3.60. To further support this method, we noted that the IWPUT for HCPCS code G0416 with a work RVU of 3.60 is the same as CPT code PO 00000 Frm 00181 Fmt 4701 Sfmt 4700 CY 2017 proposed work RVU 1.63 3.26 1.63 6.98 CY 2017 final work RVU 1.63 3.26 1.63 6.98 Use HCPCS code G0500 to report moderate sedation (Y/N) Y Y Y N 88305. Using the RUC-recommended RVU of 4.00 results in a higher IWPUT, and we did not believe there is a difference in work intensity between these codes. Therefore for CY 2017, we proposed a work RVU of 3.60 for HCPCS code G0416. Comment: A few commenters, including the RUC, stated their objection to the methodology used in proposing a value for this HCPCS code along with the proposed work RVU. The RUC stated its disagreement with what it called a formulaic approach of multiplying time by intensity to arrive at a value for this code. The RUC, along with other commenters, also urged CMS to accept the compelling evidence that G0416 and 88305 have an anomalous relationship as a pathologist may examine 30–60 slides when furnishing HCPCS code G0416 whereas only one slide is examined with CPT code 88305. The commenters also noted that CMS had previously stated its belief that the typical number of specimens evaluated for prostate biopsies was between 10 and 12, and therefore, would value the typical G0416 at 9.00 RVUs (0.75 x 12), if the number of specimens were used rather than a time ratio. Response: We continue to believe HCPCS code G0416 should not be valued as a direct crosswalk from CPT code 38240. CPT code 38240 involves the intense monitoring of a patient’s reactions to a critical infusion of cellular material. This process does not allow the physician to leave the patient. We do not believe the time, effort, and intensity required of this procedure is similar to a physician reviewing slides. While examining slides, it is possible for the physician to stop, refer to references, complete other tasks, and return to the slides. Thus the service does not have analogous or comparable intensity. We believe the vignette for CPT code 88305 typically involves, by definition, two blocks and resulting slides. Based upon that rationale, CMS values each block (and resulting slides) as worth a work RVU of 0.375. Valuing the RVUs on a per block basis, then a sextant E:\FR\FM\15NOR2.SGM 15NOR2 80350 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations (typical 10–12 blocks or slides) would result in 5 times 0.375 to 6 times 0.375. Therefore, for CY 2017 we are finalizing a work RVU of 3.60 for HCPCS G0416. mstockstill on DSK3G9T082PROD with RULES2 (61) Resource-Intensive Services (HCPCS Code G0501) As discussed in section II.E. of this final rule, we proposed to establish payment for services furnished to patients with mobility-related disabilities, through a new add-on G-code, to be billable with office/ outpatient E/M and TCM codes. Based on our analysis of the resources typically involved in furnishing office visits to patients with these needs (especially including the typical additional practitioner and staff time), we believed that the physician work and time for HCPCS code G0501 was most accurately valued through a direct crosswalk from CPT code 99212 (Level 2 office or other outpatient visit for the evaluation and management of an established patient). Therefore, we proposed a work RVU of 0.48 and a physician time of 16 minutes for HCPCS code G0501. We sought comment on whether these work and time values accurately capture the additional physician work typically involved in furnishing services to patients with mobility impairments. We believed that a direct crosswalk to the clinical staff time associated with CPT code 99212, which is 27 minutes of LN/LPN/MTA (L037D) accurately represented the additional clinical staff time required to furnish an outpatient office visit or TCM to a patient with a mobility-related disability. We also proposed to include as direct PE inputs 27 minutes for a stretcher (EF018) and a high/low table (EF028), and 27 minutes for new equipment inputs associated with the following: A patient lift system, wheelchair accessible scale, and padded leg support positioning system. These items were included in the CY 2017 proposed direct PE input database. We sought comments on whether these inputs are appropriate, and whether any additional inputs are typically used in treating patients with mobility impairments. Comment: Many commenters supported the proposed valuation of G0501 and recommend we finalize as proposed, while others had questions or concerns about the crosswalk and the inputs. Response: As noted in section II.E.6. of this final rule, we are not finalizing payment for HCPCS code G0501 for CY 2017. We will continue to welcome recommendations from stakeholders on methods for improving the payment VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 accuracy of services for individuals with disabilities. Comment: Several commenters noted that the Americans with Disabilities Act (ADA) provides federal tax credits for certain physicians to help cover the cost of specialized equipment for patients with mobility-related disabilities. Response: We remind practitioners that there are existing IRS tax credits and deductions to assist business with complying with the ADA. More information on these tax credits is available at https://www.ada.gov/ taxcred.htm. (62) Behavioral Health Integration: Psychiatric Collaborative Care Model (HCPCS Codes G0502, G0503, and G0504) and General Behavioral Health Integration (HCPCS Code G0507) For CY 2017, we proposed to establish and make separate Medicare payment using four new HCPCS G-codes, G0502 (Initial psychiatric collaborative care management, first 70 minutes in the first calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional), G0503 (Subsequent psychiatric collaborative care management, first 60 minutes in a subsequent month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional), G0504 (Initial or subsequent psychiatric collaborative care management, each additional 30 minutes in a calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional), and G0507 (Care management services for behavioral health conditions, at least 20 minutes of clinical staff time, directed by a physician or other qualified health care professional time, per calendar month) for collaborative care and care management for beneficiaries with behavioral health conditions, as detailed in section II.E of this final rule. To value HCPCS codes G0502, G0503, and G0504, we proposed to base the portion of the work RVU that accounts for the work of the treating physician or other qualified health care professional on a direct crosswalk to the proposed work values for the complex CCM codes, CPT codes 99487 and 99489. To value the portion of the work RVU that accounts for the psychiatric consultant, we estimated 10 minutes of psychiatric consultant time per patient per month and a work RVU of 0.42, based on the PO 00000 Frm 00182 Fmt 4701 Sfmt 4700 per minute work RVUs for the highest volume codes typically billed by psychiatrists, since the resource costs of the consultant’s work is being paid to the primary practitioner. Since the behavioral health care manager in the services described by HCPCS codes G0502, G0503, and G0504 should have specialized training in behavioral health, we proposed a new clinical labor type for the behavioral health care manager, L057B, at $0.57 per minute, based on the rates for genetic counselors in the direct PE input database. We solicited comment on all aspects of these proposed valuations. Comment: Some commenters stated that the work of the psychiatric consultant should be valued at least the same as the primary care practitioner. Commenters noted that the crosswalk to CPT code 90836 was inaccurate, as the work of the psychiatric consultant would not be similar to psychotherapy but instead be similar to E/M services. Commenters recommended that CMS value the work of the psychiatric consultant through a crosswalk to a level-4 outpatient E/M, such as CPT codes 99204 or 99214. Response: We thank commenters for their response and for providing CMS with additional perspectives on appropriate valuation of the work furnished by the psychiatric consultant. We note that for HCPCS codes G0502, G0503, and G0504, Medicare is making payment to the billing practitioner on the basis that he or she is incurring the costs associated with retaining the psychiatric consultant. In general, we consider such costs to be appropriately categorized under the PE RVUs, regardless of the degree of expertise for that particular contributor. Historically these costs have been included in the calculation of PE RVUs and incorporated as costs based on a national per minute payment rate for that kind of labor instead of varying based on which service is furnished. However, we recognize the unique nature of the services described by this code, especially with regard to the potential inclusion of the work of a physician as PE. We also recognize that the work of the psychiatrist under this model of care more closely resembles E/M work than that of psychotherapy, although not necessarily the work associated with a level-4 office visit. Therefore, for CY 2017, we are finalizing work RVUs for these services that reflect the per minute intensity of E/M services instead of psychotherapy for the portion of the overall work RVU attributable to the psychiatric consultant. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations We welcome any information on the best way to account for the work, time, and practice expense resource costs associated with two physicians when one physician is typically incurring the resource costs of another. We are particularly interested in information regarding how CoCM might apply for beneficiaries receiving care in an institutional or inpatient setting. We believe that the work associated with the billing practitioner would overall be greater than the work associated with the psychiatric consultant. The work of the billing practitioner includes services such as broader care management, direction of the care manager, and by ‘‘incident to’’ rules, the general supervision of other staff, while the psychiatric consultant primarily conducts review work. Therefore, in allocating differential portion of the work RVU to each practitioner, we believe the work RVU associated with the billing practitioner should be greater than the work RVU associated with the psychiatric consultant. After considering these comments, we are finalizing total work RVUs of 1.70 for G0502, 1.53 for G0503, and 0.82 for G0504. These RVUs include 0.52 for the psychiatric consultant based on a crosswalk to the work per minute of a level three established patient office visit. Comment: One commenter urged CMS to consider the forthcoming RUC recommendations. Response: We thank the commenter for their suggestion and will evaluate the RUC’s recommendation according to our established review process in future rulemaking. Comment: A few commenters requested that CMS increase the facility setting PE RVUs, as patients in this setting are more complex, and therefore, the care manager would need to be more experienced. The extra costs in terms of clinical staff, commenters stated, would offset the decrease in other kinds of PE associated with the facility setting. Response: The clinical labor costs for PFS are generally included in the nonfacility rate but not included in the facility rate under the PFS, because applicable payment for the clinical labor costs would be made under the appropriate institutional payment system, like the OPPS. Historically we have not developed separate work RVUs for the facility and the non-facility setting for the same codes. The only cases where we have differentiated work between an institutional and a noninstitutional setting are when the HCPCS codes delineate between them, for example site specific codes VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 describing E/M services furnished in an inpatient hospital setting versus those services furnished in an office setting. For this reason, we are not developing separate facility and non-facility work RVUs here. Comment: With regard to G0503, a few commenters stated that the allocation of 60 minutes is inappropriate because a comprehensive follow up would take longer than 60 minutes. Response: As these are temporary codes designed to facilitate one year of separate payment prior to receiving a RUC recommendations through CMS’ standard process and we continue to believe that 60 minutes would be typical of the time involved, we will not be making adjustments to the time values at this time. We remind commenters that PFS direct PE inputs are used for calculation of rates that we believe reflect the typical case for a service, and are not intended to be instructive to providers as to what is permitted under the code or what should be furnished in any particular case. We also wish to remind commenters that we have longstanding interest in robust extant data sources regarding times, and as these services continue to be furnished to Medicare beneficiaries, we would encourage stakeholders to develop sets of such data that we could potentially use in valuation, among other things. Comment: One commenter recommended that CMS pay separately for tools, such as multidimensional mental health monitoring tools, to assist practitioners in data analysis. Response: The CoCM model does not make reference to any specific health monitoring tools; therefore, we will not be including those as direct PE inputs in our valuation of these services. To value HCPCS code G0507, we proposed a work RVU of 0.61 based on a direct crosswalk from CPT code 99490 (Chronic care management services). We recognize that the services described by CPT code 99490 are distinct from those furnished under the CoCM and we believe that these also vary based on different kinds of BHI care. We note that there are relatively few existing codes that describe these kinds of services over a calendar month. We also believe that the resources associated with CPT code 99490 may vary based on the ways different practitioners furnish the service. Until we have more information about how the services described by G0507 are typically furnished, we believe valuation based on an estimate of the typical resources would be most appropriate. To account for the care manager minutes in the direct PE inputs PO 00000 Frm 00183 Fmt 4701 Sfmt 4700 80351 for HCPCS code G0507, we proposed to use clinical labor type L045C, which is the labor type for social workers/ psychologists and has a rate of $0.45 per minute. Comment: Many commenters stated that 20 minutes of care manager time over the course of a month was an inaccurate representation of the resource costs incurred when furnishing BHI services, and that a longer duration was needed to fully reflect the time and resources associated with providing this care. A few commenters stated that CMS should create an add-on code for HCPCS code G0507 to account for any additional time. Response: We proposed HCPCS code G0507 to make separate payment for other kinds of BHI and we are concerned that an increased time threshold may not be typical across the range of services captured by G0507 and may present an additional barrier to appropriate utilization for some models of care. We continue to be interested in information from stakeholders regarding other models of BHI, including those that have longer associated times than are accurately captured by HCPCS code G0507. Comment: A few commenters recommended that CMS include the same clinical staff in HCPCS code G0507 as is included in HCPCS codes G0502, G0503, and G0504 because the complexity in care management would likely to be consistent across all four codes. Response: We agree with commenters, and will finalize 20 minutes of behavioral health care manager, L057B, time for HCPCS code G0507. After considering these comments, we are finalizing a total work RVU of 0.61 for G0507. (63) Comprehensive Assessment and Care Planning for Patients With Cognitive Impairment (HCPCS Code G0505) For CY 2017, we proposed to create and pay separately for new HCPCS code G0505 (Cognition and functional assessment using standardized instruments with development of recorded care plan for the patient with cognitive impairment, history face-toface obtained from patient and/or caregiver, in office or other outpatient setting or home or domiciliary or rest home), see II.E for further discussion. Based on similarities between work intensity and time, we believe that the physician work and time for this code would be accurately valued by combining the work RVUs from CPT code 99204 (Level 4 office or other outpatient visit for the evaluation and E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80352 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations management of a new patient) and half the work RVUs for HCPCS code G0181 (Physician supervision of a patient receiving Medicare-covered services furnished by a participating home health agency (patient not present) requiring complex and multidisciplinary care modalities involving regular physician development and/or revision of care plans, review of subsequent reports of patient status, review of laboratory and other studies, communication (including telephone calls) with other health care professionals involved in the patient’s care, integration of new information into the medical treatment plan and/or adjustment of medical therapy, within a calendar month, 30 minutes or more). Therefore, we proposed a work RVU of 3.30. For direct PE inputs we proposed 70 total minutes of time for RN/LPN/MTA (L037D). We believed this was typical based on information from several specialty societies representing practitioners who typically furnish this service and report, it, when appropriate, using E/M codes. We solicited comment on these valuation assumptions and welcomed additional information on the work and direct PE associated with furnishing this service. Comment: One commenter stated that to more accurately reflect the reality of the case complexity involved in assessment and care planning for patients with cognitive impairment, that the work RVU should be based on at least a Level 5 office visit with recognition that the work required is likely 1.5 times to two times greater than a Level 5 visit. Furthermore, the commenter stated that 120 minutes was a more appropriate time value. Many other commenters encouraged CMS to accept the RUC-recommended values for this code, presented at the April 2016 RUC meeting. The AMA RUC submitted the recommendation of a work RVU of 3.44 as part of its public comment. Response: After reviewing values recommended by the RUC in its comment, we are persuaded that many elements of its valuation accurately capture the resource costs associated with the provision of this service. Therefore, we are finalizing the physician work and time values in consideration of these comments as recommended. We are finalizing a work RVU of 3.44 as recommended by the RUC. We are removing 2 minutes of the 6 recommended clinical staff time for the task ‘‘Gather and review X-ray, lab, pathology reports and prepare for physician review; conduct initial phone call for preliminary assessment of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 cognitive function; identify caregiver and explain assessment’’ as we believe 4 minutes is a more typical time associated with this task. (64) Comprehensive Assessment and Care Planning for Patients Requiring Chronic Care Management (HCPCS Code G0506) For CY 2017, we proposed to make payment for the resource costs of comprehensive assessment and care planning for patients requiring CCM services through HCPCS code G0506 as an add-on code to be billed with the initiating visit for CCM for patients that require extensive assessment and care planning (see section II.E). In valuing this code, we believed that a crosswalk to half the work and time values of HCPCS code G0181 (Physician supervision of a patient receiving Medicare-covered services provided by a participating home health agency (patient not present) requiring complex and multidisciplinary care modalities involving regular physician development and/or revision of care plans, review of subsequent reports of patient status, review of laboratory and other studies, communication (including telephone calls) with other health care professionals involved in the patient’s care, integration of new information into the medical treatment plan and/or adjustment of medical therapy, within a calendar month, 30 minutes or more) accurately accounts for the time and intensity of the work associated with furnishing this service over and above the work accounted for as part of the separately billed initiating visit. Therefore, we proposed a work RVU of 0.87 and 29 minutes of physician time. We also proposed 36 minutes for a RN/LPN/MTA (L037D) as the only direct PE input for this service. Comment: Many commenters supported the proposed work and PE values. Response: We thank commenters for supporting physician work and PE inputs for G0506 and we are finalizing as proposed. (65) Telehealth Consultation for a Patient Requiring Critical Care Services (HCPCS Codes G0508and G0509) As discussed in section II.C, we proposed use of new HCPCS G-codes, G0508 (Telehealth consultation, critical care, physicians typically spend 60 minutes communicating with the patient via telehealth (initial) and G0509 (Telehealth consultation, critical care, physicians typically spend 50 minutes communicating with the patient via telehealth (subsequent)), to report telehealth consultations for a patient PO 00000 Frm 00184 Fmt 4701 Sfmt 4700 requiring critical care services, such as a stroke patient. We noted that due to limited coding granularity for highintensity cognitive services, in the PFS, we did not believe there is an intuitive crosswalk code for ideal estimation of the work and time values for G0508. In general, we believed that the overall work for G0508 is not as great as 99291 (Critical care, evaluation and management of the critically ill or critically injured patient; first 30–74 minutes) but that the service involves more work than HCPCS code G0427 (Telehealth consultation, emergency department or initial inpatient, typically 70 minutes or more communicating with the patient via telehealth). We believe that G0508 is most accurately valued by a crosswalk to the work RVU and physician intra-service time of CPT code 38240 (Hematopoietic progenitor cell (HPC); allogeneic transplantation per donor). Therefore, we proposed a work RVU of 4.0 and solicited comment on the accuracy of these assumptions. We did not believe that direct PE inputs would typically be involved with furnishing this service from the distant site. For G0509 we proposed a work RVU of 3.86 based on a crosswalk from G0427. We believed that G0427 has similar overall work intensity to G0509 and has a similar intraservice time. We also believed that no direct PE inputs would typically be associated with furnishing this service from the distant site. Comment: Many commenters supported the proposal, saying the codes will improve patient outcomes and quality of care. Response: We thank commenters for their support. We are finalizing the work RVUs for new HCPCS codes G0508 and G0509 as proposed. Comment: A few commenters encouraged CMS to recognize critical care as a telehealth service rather than create G-codes to facilitate payment. Commenters also stated that the complex nature of patients requiring critical care services necessitates the codes be billed more than once per day. Response: We continue to believe that the telehealth consultation model, including the limit on billing more than once per day, is more appropriate than the model used to describe the inperson critical care E/Ms. In general we believe that the complex nature of patients requiring critical care is described by in-person critical care E/Ms, which includes services that cannot be furnished via remote communication technology. Furthermore, we believe that the telehealth consultation model, including the limit on billing more than E:\FR\FM\15NOR2.SGM 15NOR2 80353 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations once per day, appropriately captures the kind of work described as remote, critical consultations for critical care patients. Comment: A few commenters suggested that CMS clarify that the consulting doctor could communicate with staff or family members if the patient was unable to communicate. Response: We appreciate the comments and, in order to make it clear that the consultation could include conversations with other providers and caregivers if the patient is unable to communicate, we will finalize the following code descriptors: • G0508: Telehealth consultation, critical care, physicians typically spend 60 minutes communicating with the patient and providers via telehealth (initial). • G0509: Telehealth consultation, critical care, physicians typically spend 50 minutes communicating with the patient and providers via telehealth (subsequent). TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES CY 2016 Work RVU HCPCS Code Long Descriptor 00740 .............. Anesthesia for upper gastrointestinal endoscopic procedures, endoscope introduced proximal to duodenum. Anesthesia for lower intestinal endoscopic procedures, endoscope introduced distal to duodenum. Placement of soft tissue localization device(s) (eg, clip, metallic pellet, wire/needle, radioactive seeds), percutaneous, including imaging guidance; first lesion. Placement of soft tissue localization device(s) (eg, clip, metallic pellet, wire/needle, radioactive seeds), percutaneous, including imaging guidance; each additional lesion. Avulsion of nail plate, partial or complete, simple; single ... Avulsion of nail plate, partial or complete, simple; each additional nail plate. Biopsy, bone, open; deep (eg, humerus, ischium, femur) .. Injection(s); single tendon sheath, or ligament, aponeurosis (eg, plantar ‘‘fascia’’). Injection(s); single or multiple trigger point(s), 1 or 2 muscle(s). Injection(s); single or multiple trigger point(s), 3 or more muscles. Insertion of interbody biomechanical device(s) (eg, synthetic cage, mesh) with integral anterior instrumentation for device anchoring (eg, screws, flanges) when performed to intervertebral disc space in conjunction with interbody arthrodesis, each interspace. Insertion of intervertebral biomechanical device(s) (eg, synthetic cage, mesh) with integral anterior instrumentation for device anchoring (eg, screws, flanges) when performed to vertebral corpectomy(ies) (vertebral body resection, partial or complete) defect, in conjunction with interbody arthrodesis, each contiguous defect. Insertion of intervertebral biomechanical device(s) (eg, synthetic cage, mesh, methylmethacrylate) to intervertebral disc space or vertebral body defect without interbody arthrodesis, each contiguous defect. Insertion of interlaminar/interspinous process stabilization/ distraction device, without fusion, including image guidance when performed, with open decompression, lumbar; single level. Insertion of interlaminar/interspinous process stabilization/ distraction device, without fusion, including image guidance when performed, with open decompression, lumbar; second level. Insertion of interlaminar/interspinous process stabilization/ distraction device, without open decompression or fusion, including image guidance when performed, lumbar; single level. Insertion of interlaminar/interspinous process stabilization/ distraction device, without open decompression or fusion, including image guidance when performed, lumbar; second level. Repair or advancement, flexor tendon, in zone 2 digital flexor tendon sheath (eg, no man’s land); primary, without free graft, each tendon. Repair or advancement, flexor tendon, in zone 2 digital flexor tendon sheath (eg, no man’s land); secondary, without free graft, each tendon. 00810 .............. 10035 .............. 10036 .............. 11730 .............. 11732 .............. 20245 .............. 20550 .............. 20552 .............. 20553 .............. 22853 .............. 22854 .............. 22859 .............. 22867 .............. 22868 .............. 22869 .............. mstockstill on DSK3G9T082PROD with RULES2 22870 .............. 26356 .............. 26357 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00185 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement 0.00 0.00 0.00 No. 0.00 0.00 0.00 No. 1.70 1.70 1.70 No. 0.85 0.85 0.85 No. 1.10 0.44 1.05 0.38 1.05 0.38 No. Yes. 8.95 0.75 6.00 0.75 6.00 0.75 No. No. 0.66 0.66 0.66 No. 0.75 0.75 0.75 No. NEW 4.25 4.25 No. NEW 5.50 5.50 No. NEW 5.50 5.50 No. NEW 13.50 13.50 No. NEW 4.00 4.00 No. NEW 7.03 7.03 No. NEW 2.34 2.34 No. 9.56 9.56 9.56 No. 10.53 11.00 11.00 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80354 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 26358 .............. Repair or advancement, flexor tendon, in zone 2 digital flexor tendon sheath (eg, no man’s land); secondary, with free graft (includes obtaining graft), each tendon. Closed treatment of posterior pelvic ring fracture(s), dislocation(s), diastasis or subluxation of the ilium, sacroiliac joint, and/or sacrum, with or without anterior pelvic ring fracture(s) and/or dislocation(s) of the pubic symphysis and/or superior/inferior rami, unilateral or bilateral; without manipulation. Closed treatment of posterior pelvic ring fracture(s), dislocation(s), diastasis or subluxation of the ilium, sacroiliac joint, and/or sacrum, with or without anterior pelvic ring fracture(s) and/or dislocation(s) of the pubic symphysis and/or superior/inferior rami, unilateral or bilateral; with manipulation, requiring more than local anesthesia (i.e., general anesthesia, moderate sedation, spinal/epidural). Hallux rigidus correction with cheilectomy, debridement and capsular release of the first metatarsophalangeal joint. Hallux rigidus correction with cheilectomy, debridement and capsular release of the first metatarsophalangeal joint; with implant. Correction, hallux valgus (bunion), with or without sesamoidectomy; Keller, McBride, or Mayo type procedure. Correction, hallux valgus (bunionectomy), with sesamoidectomy, when performed; with proximal metatarsal osteotomy, any method. Correction, hallux valgus (bunion), with or without sesamoidectomy; with metatarsal osteotomy (eg, Mitchell, Chevron, or concentric type procedures). Correction, hallux valgus (bunion), with or without sesamoidectomy; Lapidus-type procedure. Correction, hallux valgus (bunion), with or without sesamoidectomy; by phalanx osteotomy. Correction, hallux valgus (bunion), with or without sesamoidectomy; by double osteotomy. Intubation, endotracheal, emergency procedure ................. Laryngoplasty; for laryngeal stenosis, with graft, without indwelling stent placement, younger than 12 years of age. Laryngoplasty; for laryngeal stenosis, with graft, without indwelling stent placement, age 12 years or older. Laryngoplasty; for laryngeal stenosis, with graft, with indwelling stent placement, younger than 12 years of age. Laryngoplasty; for laryngeal stenosis, with graft, with indwelling stent placement, age 12 years or older. Laryngoscopy, flexible; with ablation or destruction of lesion(s) with laser, unilateral. Laryngoscopy, flexible; with therapeutic injection(s) (eg, chemodenervation agent or corticosteroid, injected percutaneous, transoral, or via endoscope channel), unilateral. Laryngoscopy, flexible; with injection(s) for augmentation (eg, percutaneous, transoral), unilateral. Laryngoscopy, flexible fiberoptic; diagnostic ....................... Laryngoscopy, flexible fiberoptic; with biopsy ..................... Laryngoscopy, flexible fiberoptic; with removal of foreign body. Laryngoscopy, flexible fiberoptic; with removal of lesion .... Laryngoscopy, flexible or rigid fiberoptic, with stroboscopy Laryngoplasty; for laryngeal web, 2-stage, with keel insertion and removal. Laryngoplasty; with open reduction of fracture ................... Laryngoplasty, cricoid split .................................................. Laryngoplasty, medialization; unilateral ............................... Cricotracheal resection ........................................................ 27197 .............. 27198 .............. 28289 .............. 28291 .............. 28292 .............. 28295 .............. 28296 .............. 28297 .............. 28298 .............. 28299 .............. 31500 .............. 31551 .............. 31552 .............. 31553 .............. 31554 .............. 31572 .............. 31573 .............. 31574 .............. mstockstill on DSK3G9T082PROD with RULES2 31575 .............. 31576 .............. 31577 .............. 31578 .............. 31579 .............. 31580 .............. 31584 31587 31591 31592 .............. .............. .............. .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00186 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement 12.13 12.60 12.60 No. NEW 1.53 1.53 Yes. NEW 4.75 4.75 Yes. 8.31 6.90 6.90 No. NEW 7.81 8.01 No. 9.05 7.44 7.44 No. NEW 8.25 8.57 No. 8.35 8.25 8.25 No. 9.43 9.29 9.29 No. 8.13 7.75 7.75 No. 11.57 9.29 9.29 No. 2.33 NEW 2.66 21.50 3.00 21.50 No. No. NEW 20.50 20.50 No. NEW 22.00 22.00 No. NEW 22.00 22.00 No. NEW 3.01 3.01 No. NEW 2.43 2.43 No. NEW 2.43 2.43 No. 1.10 1.97 2.47 0.94 1.89 2.19 0.94 1.89 2.19 No. No. No. 2.84 2.26 14.66 2.43 1.88 14.60 2.43 1.88 14.60 No. No. No. 20.47 15.27 NEW NEW 17.58 15.27 13.56 25.00 17.58 15.27 13.56 25.00 No. No. No. No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80355 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 33340 .............. Percutaneous transcatheter closure of the left atrial appendage with endocardial implant, including fluoroscopy, transseptal puncture, catheter placement(s), left atrial angiography, left atrial appendage angiography, when performed, and radiological supervision and interpretation. Valvuloplasty, aortic valve, open, with cardiopulmonary bypass; simple (i.e., valvotomy, debridement, debulking and/or simple commissural resuspension). Valvuloplasty, aortic valve, open, with cardiopulmonary bypass; complex (eg, leaflet extension, leaflet resection, leaflet reconstruction or annuloplasty). Push transfusion, blood, 2 years or younger ...................... Exchange transfusion, blood; newborn ............................... Exchange transfusion, blood; other than newborn .............. Partial exchange transfusion, blood, plasma or crystalloid necessitating the skill of a physician or other qualified health care professional, newborn. Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, mechanochemical; first vein treated. Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, mechanochemical; subsequent vein(s) treated in a single extremity, each through separate access sites. Introduction of needle(s) and/or catheter(s), dialysis circuit, with diagnostic angiography of the dialysis circuit, including all direct puncture(s) and catheter placement(s), injection(s) of contrast, all necessary imaging from the arterial anastomosis and adjacent artery through entire venous outflow including the inferior or superior vena cava, fluoroscopic guidance, radiologic supervision and interpretation and image documentation and report. Introduction of needle(s) and/or catheter(s), dialysis circuit, with diagnostic angiography of the dialysis circuit, including all direct puncture(s) and catheter placement(s), injection(s) of contrast, all necessary imaging from the arterial anastomosis and adjacent artery through entire venous outflow including the inferior or superior vena cava, fluoroscopic guidance, radiologic supervision and interpretation and image documentation and report; with transluminal balloon angioplasty, peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the angioplasty. Introduction of needle(s) and/or catheter(s), dialysis circuit, with diagnostic angiography of the dialysis circuit, including all direct puncture(s) and catheter placement(s), injection(s) of contrast, all necessary imaging from the arterial anastomosis and adjacent artery through entire venous outflow including the inferior or superior vena cava, fluoroscopic guidance, radiologic supervision and interpretation and image documentation and report; with transcatheter placement of intravascular stent(s) peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the stenting, and all angioplasty within the peripheral dialysis segment. Percutaneous transluminal mechanical thrombectomy and/ or infusion for thrombolysis, dialysis circuit, any method, including all imaging and radiological supervision and interpretation, diagnostic angiography, fluoroscopic guidance, catheter placement(s), and intraprocedural pharmacological thrombolytic injection(s). 33390 .............. 33391 .............. 36440 36450 36455 36456 .............. .............. .............. .............. 36473 .............. 36474 .............. 36901 .............. 36902 .............. 36903 .............. mstockstill on DSK3G9T082PROD with RULES2 36904 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00187 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement NEW 13.00 14.00 No. NEW 35.00 35.00 No. NEW 41.50 41.50 No. 1.03 2.23 2.43 NEW 1.03 3.50 2.43 2.00 1.03 3.50 2.43 2.00 No. No. No. No. NEW 3.50 3.50 No. NEW 1.75 1.75 No. NEW 2.82 2.82 No. NEW 4.24 4.24 No. NEW 5.85 5.85 No. NEW 6.73 6.73 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80356 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 36905 .............. Percutaneous transluminal mechanical thrombectomy and/ or infusion for thrombolysis, dialysis circuit, any method, including all imaging and radiological supervision and interpretation, diagnostic angiography, fluoroscopic guidance, catheter placement(s), and intraprocedural pharmacological thrombolytic injection(s); with transluminal balloon angioplasty, peripheral dialysis segment, including all imaging and radiological supervision and interpretation necessary to perform the angioplasty. Percutaneous transluminal mechanical thrombectomy and/ or infusion for thrombolysis, dialysis circuit, any method, including all imaging and radiological supervision and interpretation, diagnostic angiography, fluoroscopic guidance, catheter placement(s), and intraprocedural pharmacological thrombolytic injection(s); with transcatheter placement of an intravascular stent(s), peripheral dialysis segment, including all imaging and radiological supervision and interpretation to perform the stenting and all angioplasty within the peripheral dialysis circuit. Transluminal balloon angioplasty, central dialysis segment, performed through dialysis circuit, including all imaging and radiological supervision and interpretation required to perform the angioplasty. Transcatheter placement of an intravascular stent(s), central dialysis segment, performed through dialysis circuit, including all imaging and radiological supervision and interpretation required to perform the stenting, and all angioplasty in the central dialysis segment. Dialysis circuit permanent vascular embolization or occlusion (including main circuit or any accessory veins), endovascular, including all imaging and radiological supervision and interpretation necessary to complete the intervention. Transluminal balloon angioplasty (except lower extremity artery(s) for occlusive disease, intracranial, coronary, pulmonary, or dialysis circuit), open or percutaneous, including all imaging and radiological supervision and interpretation necessary to perform the angioplasty within the same artery; initial artery. Transluminal balloon angioplasty (except lower extremity artery(s) for occlusive disease, intracranial, coronary, pulmonary, or dialysis circuit), open or percutaneous, including all imaging and radiological supervision and interpretation necessary to perform the angioplasty within the same artery; each additional artery. Transluminal balloon angioplasty (except dialysis circuit), open or percutaneous, including all imaging and radiological supervision and interpretation necessary to perform the angioplasty within the same vein; initial vein. Transluminal balloon angioplasty (except dialysis circuit), open or percutaneous, including all imaging and radiological supervision and interpretation necessary to perform the angioplasty within the same vein; each additional vein. Submucosal ablation of the tongue base, radiofrequency, 1 or more sites, per session. Esophagogastroduodenoscopy, flexible, transoral; with esophagogastric fundoplasty, partial or complete, includes duodenoscopy when performed. Laparoscopy, surgical, esophageal sphincter augmentation procedure, placement of sphincter augmentation device (i.e., magnetic band), including cruroplasty when performed. Removal of esophageal sphincter augmentation device .... Injection procedure for cholangiography, percutaneous, complete diagnostic procedure including imaging guidance (eg, ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation; existing access. 36906 .............. 36907 .............. 36908 .............. 36909 .............. 37246 .............. 37247 .............. 37248 .............. 37249 .............. 41530 .............. 43210 .............. mstockstill on DSK3G9T082PROD with RULES2 43284 .............. 43285 .............. 47531 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00188 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement NEW 8.46 8.46 No. NEW 9.88 9.88 No. NEW 2.48 2.48 No. NEW 3.73 3.73 No. NEW 3.48 3.48 No. NEW 7.00 7.00 No. NEW 3.50 3.50 No. NEW 6.00 6.00 No. NEW 2.97 2.97 No. 3.50 3.50 3.50 No. 7.75 7.75 7.75 No. NEW 9.03 10.13 No. NEW 1.80 9.37 1.30 10.47 1.30 No. No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80357 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 47532 .............. Injection procedure for cholangiography, percutaneous, complete diagnostic procedure including imaging guidance (eg, ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation; new access (eg, percutaneous transhepatic cholangiogram). Placement of biliary drainage catheter, percutaneous, including diagnostic cholangiography when performed, imaging guidance (eg, ultrasound and/or fluoroscopy), and all associated radiological supervision and interpretation; external. Placement of biliary drainage catheter, percutaneous, including diagnostic cholangiography when performed, imaging guidance (eg, ultrasound and/or fluoroscopy), and all associated radiological supervision and interpretation; internal-external. Conversion of external biliary drainage catheter to internal-external biliary drainage catheter, percutaneous, including diagnostic cholangiography when performed, imaging guidance (eg, fluoroscopy), and all associated radiological supervision and interpretation. Exchange of biliary drainage catheter (eg, external, internal-external, or conversion of internal-external to external only), percutaneous, including diagnostic cholangiography when performed, imaging guidance (eg, fluoroscopy), and all associated radiological supervision and interpretation. Removal of biliary drainage catheter, percutaneous, requiring fluoroscopic guidance (eg, with concurrent indwelling biliary stents), including diagnostic cholangiography when performed, imaging guidance (eg, fluoroscopy), and all associated radiological supervision and interpretation. Placement of stent(s) into a bile duct, percutaneous, including diagnostic cholangiography, imaging guidance (eg, fluoroscopy and/or ultrasound), balloon dilation, catheter exchange(s) and catheter removal(s) when performed, and all associated radiological supervision and interpretation, each stent; existing access. Placement of stent(s) into a bile duct, percutaneous, including diagnostic cholangiography, imaging guidance (eg, fluoroscopy and/or ultrasound), balloon dilation, catheter exchange(s) and catheter removal(s) when performed, and all associated radiological supervision and interpretation, each stent; new access, without placement of separate biliary drainage catheter. Placement of stent(s) into a bile duct, percutaneous, including diagnostic cholangiography, imaging guidance (eg, fluoroscopy and/or ultrasound), balloon dilation, catheter exchange(s) and catheter removal(s) when performed, and all associated radiological supervision and interpretation, each stent; new access, with placement of separate biliary drainage catheter (eg, external or internal-external). Placement of access through the biliary tree and into small bowel to assist with an endoscopic biliary procedure (eg, rendezvous procedure), percutaneous, including diagnostic cholangiography when performed, imaging guidance (eg, ultrasound and/or fluoroscopy), and all associated radiological supervision and interpretation, new access. Balloon dilation of biliary duct(s) or of ampulla (sphincteroplasty), percutaneous, including imaging guidance (eg, fluoroscopy), and all associated radiological supervision and interpretation, each duct. Endoluminal biopsy(ies) of biliary tree, percutaneous, any method(s) (eg, brush, forceps, and/or needle), including imaging guidance (eg, fluoroscopy), and all associated radiological supervision and interpretation, single or multiple. 47533 .............. 47534 .............. 47535 .............. 47536 .............. 47537 .............. 47538 .............. 47539 .............. 47540 .............. mstockstill on DSK3G9T082PROD with RULES2 47541 .............. 47542 .............. 47543 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00189 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement 4.25 4.25 4.25 No. 6.00 5.38 5.38 No. 8.03 7.60 7.60 No. 4.50 3.95 3.95 No. 2.88 2.61 2.61 No. 1.83 1.84 1.84 No. 6.60 4.75 4.75 No. 9.00 8.75 8.75 No. 10.75 9.03 9.03 No. 5.61 5.38 6.75 No. 2.50 2.85 2.85 No. 3.07 3.00 3.00 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80358 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 47544 .............. Removal of calculi/debris from biliary duct(s) and/or gallbladder, percutaneous, including destruction of calculi by any method (eg, mechanical, electrohydraulic, lithotripsy) when performed, imaging guidance (eg, fluoroscopy), and all associated radiological supervision and interpretation. Sclerotherapy of a fluid collection (eg, lymphocele, cyst, or seroma), percutaneous, including contrast injection(s), sclerosant injection(s), diagnostic study, imaging guidance (eg, ultrasound, fluoroscopy) and radiological supervision and interpretation when performed. Endoluminal biopsy of ureter and/or renal pelvis, nonendoscopic, including imaging guidance (eg, ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation. Ureteral embolization or occlusion, including imaging guidance (eg, ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation. Balloon dilation, ureteral stricture, including imaging guidance (eg, ultrasound and/or fluoroscopy) and all associated radiological supervision and interpretation. Bladder irrigation, simple, lavage and/or instillation ............ Insertion of non-indwelling bladder catheter (eg, straight catheterization for residual urine). Insertion of temporary indwelling bladder catheter; simple (eg, Foley). Insertion of temporary indwelling bladder catheter; complicated (eg, altered anatomy, fractured catheter/balloon). Bladder instillation of anticarcinogenic agent (including retention time). Electromyography studies (EMG) of anal or urethral sphincter, other than needle, any technique. Cystourethroscopy (separate procedure) ............................ Biopsy, prostate; needle or punch, single or multiple, any approach. Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed. Hysteroscopy, diagnostic (separate procedure) .................. Hysteroscopy, surgical; with sampling (biopsy) of endometrium and/or polypectomy, with or without D & C. Hysteroscopy, surgical; with lysis of intrauterine adhesions (any method). Hysteroscopy, surgical; with division or resection of intrauterine septum (any method). Hysteroscopy, surgical; with removal of leiomyomata ........ Hysteroscopy, surgical; with removal of impacted foreign body. Hysteroscopy, surgical; with endometrial ablation (eg, endometrial resection, electrosurgical ablation, thermoablation). Laparoscopy, surgical, ablation of uterine fibroid(s) including intraoperative ultrasound guidance and monitoring, radiofrequency. Balloon dilatation of intracranial vasospasm, percutaneous; initial vessel. Balloon dilatation of intracranial vasospasm, percutaneous; each additional vessel in same vascular family. Balloon dilatation of intracranial vasospasm, percutaneous; each additional vessel in different vascular family. Percutaneous arterial transluminal mechanical thrombectomy and/or infusion for thrombolysis, intracranial, any method, including diagnostic angiography, fluoroscopic guidance, catheter placement, and intraprocedural pharmacological thrombolytic injection(s). 49185 .............. 50606 .............. 50705 .............. 50706 .............. 51700 .............. 51701 .............. 51702 .............. 51703 .............. 51720 .............. 51784 .............. 52000 .............. 55700 .............. 55866 .............. 58555 .............. 58558 .............. 58559 .............. 58560 .............. 58561 .............. 58562 .............. 58563 .............. 58674 .............. 61640 .............. mstockstill on DSK3G9T082PROD with RULES2 61641 .............. 61642 .............. 61645 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00190 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement 4.29 3.28 3.28 No. 2.35 2.35 2.35 No. 3.16 3.16 3.16 No. 4.03 4.03 4.03 No. 3.80 3.80 3.80 No. 0.88 0.50 0.60 0.50 0.60 0.50 No. No. 0.50 0.50 0.50 No. 1.47 1.47 1.47 No. 1.50 0.87 0.87 No. 1.53 0.75 0.75 No. 2.23 2.58 1.53 2.06 1.53 2.50 No. No. 21.36 21.36 26.80 No. 3.33 4.74 2.65 4.17 2.65 4.17 No. No. 6.16 5.20 5.20 No. 6.99 5.75 5.75 No. 9.99 5.20 6.60 4.00 6.60 4.00 No. No. 6.16 4.47 4.47 No. NEW 14.08 14.08 No. N N N No. N N N No. N N N No. 15.00 15.00 No. 15.00 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80359 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 61650 .............. Endovascular intracranial prolonged administration of pharmacologic agent(s) other than for thrombolysis, arterial, including catheter placement, diagnostic angiography, and imaging guidance; initial vascular territory. Endovascular intracranial prolonged administration of pharmacologic agent(s) other than for thrombolysis, arterial, including catheter placement, diagnostic angiography, and imaging guidance; each additional vascular territory. Injection(s), of diagnostic or therapeutic substance(s) (eg, anesthetic, antispasmodic, opioid, steroid, other solution), not including neurolytic substances, including needle or catheter placement, interlaminar epidural or subarachnoid, cervical or thoracic; without imaging guidance. Injection(s), of diagnostic or therapeutic substance(s) (eg, anesthetic, antispasmodic, opioid, steroid, other solution), not including neurolytic substances, including needle or catheter placement, interlaminar epidural or subarachnoid, cervical or thoracic; with imaging guidance (i.e., fluoroscopy or CT). Injection(s), of diagnostic or therapeutic substance(s) (eg, anesthetic, antispasmodic, opioid, steroid, other solution), not including neurolytic substances, including needle or catheter placement, interlaminar epidural or subarachnoid, lumbar or sacral (caudal); without imaging guidance. Injection(s), of diagnostic or therapeutic substance(s) (eg, anesthetic, antispasmodic, opioid, steroid, other solution), not including neurolytic substances, including needle or catheter placement, interlaminar epidural or subarachnoid, lumbar or sacral (caudal); with imaging guidance (i.e., fluoroscopy or CT). Injection(s), including indwelling catheter placement, continuous infusion or intermittent bolus, of diagnostic or therapeutic substance(s) (eg, anesthetic, antispasmodic, opioid, steroid, other solution), not including neurolytic substances, interlaminar epidural or subarachnoid, cervical or thoracic; without imaging guidance. Injection(s), including indwelling catheter placement, continuous infusion or intermittent bolus, of diagnostic or therapeutic substance(s) (eg, anesthetic, antispasmodic, opioid, steroid, other solution), not including neurolytic substances, interlaminar epidural or subarachnoid, cervical or thoracic; with imaging guidance (i.e., fluoroscopy or CT). Injection(s), including indwelling catheter placement, continuous infusion or intermittent bolus, of diagnostic or therapeutic substance(s) (eg, anesthetic, antispasmodic, opioid, steroid, other solution), not including neurolytic substances, interlaminar epidural or subarachnoid, lumbar or sacral (caudal); without imaging guidance. Injection(s), including indwelling catheter placement, continuous infusion or intermittent bolus, of diagnostic or therapeutic substance(s) (eg, anesthetic, antispasmodic, opioid, steroid, other solution), not including neurolytic substances, interlaminar epidural or subarachnoid, lumbar or sacral (caudal); with imaging guidance (i.e., fluoroscopy or CT). Endoscopic decompression of spinal cord, nerve root(s), including laminotomy, partial facetectomy, foraminotomy, discectomy and/or excision of herniated intervertebral disc; 1 interspace, lumbar. Paravertebral block (PVB) (paraspinous block), thoracic; single injection site (includes imaging guidance, when performed). Paravertebral block (PVB) (paraspinous block), thoracic; second and any additional injection site(s) (includes imaging guidance, when performed). 61651 .............. 62320 .............. 62321 .............. 62322 .............. 62323 .............. 62324 .............. 62325 .............. 62326 .............. 62327 .............. mstockstill on DSK3G9T082PROD with RULES2 62380 .............. 64461 .............. 64462 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00191 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement 10.00 10.00 10.00 No. 4.25 4.25 4.25 No. NEW 1.80 1.80 No. NEW 1.95 1.95 No. NEW 1.55 1.55 No. NEW 1.80 1.80 No. NEW 1.89 1.89 No. NEW 2.20 2.20 No. NEW 1.78 1.78 No. NEW 1.90 1.90 No. NEW 9.09 C No. 1.75 1.75 1.75 No. 1.10 1.10 1.10 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80360 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 64463 .............. Paravertebral block (PVB) (paraspinous block), thoracic; continuous infusion by catheter (includes imaging guidance, when performed). Percutaneous implantation of neurostimulator electrode array; cranial nerve. Percutaneous implantation of neurostimulator electrode array; peripheral nerve (excludes sacral nerve). Posterior tibial neurostimulation, percutaneous needle electrode, single treatment, includes programming. Placement of amniotic membrane on the ocular surface; without sutures. Placement of amniotic membrane on the ocular surface; single layer, sutured. Ocular surface reconstruction; amniotic membrane transplantation, multiple layers. Trabeculoplasty by laser surgery ........................................ Fistulization of sclera for glaucoma; trabeculectomy ab externo in absence of previous surgery. Fistulization of sclera for glaucoma; trabeculectomy ab externo with scarring from previous ocular surgery or trauma (includes injection of antifibrotic agents). Repair of retinal detachment, 1 or more sessions; cryotherapy or diathermy, including drainage of subretinal fluid, when performed. Repair of retinal detachment, 1 or more sessions; photocoagulation, including drainage of subretinal fluid, when performed. Repair of retinal detachment; scleral buckling (such as lamellar scleral dissection, imbrication or encircling procedure), including, when performed, implant, cryotherapy, photocoagulation, and drainage of subretinal fluid. Repair of retinal detachment; with vitrectomy, any method, including, when performed, air or gas tamponade, focal endolaser photocoagulation, cryotherapy, drainage of subretinal fluid, scleral buckling, and/or removal of lens by same technique. Repair of retinal detachment; by injection of air or other gas (eg, pneumatic retinopexy). Repair of complex retinal detachment (eg, proliferative vitreoretinopathy, stage C–1 or greater, diabetic traction retinal detachment, retinopathy of prematurity, retinal tear of greater than 90 degrees), with vitrectomy and membrane peeling, including, when performed, air, gas, or silicone oil tamponade, cryotherapy, endolaser photocoagulation, drainage of subretinal fluid, scleral buckling, and/or removal of lens. Destruction of extensive or progressive retinopathy (eg, diabetic retinopathy), cryotherapy, diathermy. Treatment of extensive or progressive retinopathy (eg, diabetic retinopathy), photocoagulation. Magnetic resonance (eg, proton) imaging, orbit, face, and/ or neck; without contrast material(s). Magnetic resonance (eg, proton) imaging, orbit, face, and/ or neck; with contrast material(s). Magnetic resonance (eg, proton) imaging, orbit, face, and/ or neck; without contrast material(s), followed by contrast material(s) and further sequences. Radiologic examination, pelvis; 1 or 2 views ...................... Radiologic examination, hip, unilateral, with pelvis when performed; 1 view. Radiologic examination, hip, unilateral, with pelvis when performed; 2–3 views. Radiologic examination, hip, unilateral, with pelvis when performed; minimum of 4 views. Radiologic examination, hips, bilateral, with pelvis when performed; 2 views. Radiologic examination, hips, bilateral, with pelvis when performed; 3–4 views. Radiologic examination, hips, bilateral, with pelvis when performed; minimum of 5 views. 64553 .............. 64555 .............. 64566 .............. 65778 .............. 65779 .............. 65780 .............. 65855 .............. 66170 .............. 66172 .............. 67101 .............. 67105 .............. 67107 .............. 67108 .............. 67110 .............. 67113 .............. 67227 .............. 67228 .............. 70540 .............. 70542 .............. 70543 .............. 72170 .............. 73501 .............. mstockstill on DSK3G9T082PROD with RULES2 73502 .............. 73503 .............. 73521 .............. 73522 .............. 73523 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00192 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement 1.81 1.81 1.90 No. 2.36 2.36 2.36 No. 2.32 2.32 2.32 No. 0.60 0.60 0.60 No. 1.00 1.00 1.00 No. 2.50 2.50 2.50 No. 7.81 7.81 7.81 No. 2.66 11.27 3.00 13.94 3.00 13.94 No. No. 12.57 14.84 14.84 No. 8.80 3.50 3.50 No. 8.53 3.39 3.39 No. 14.06 16.00 16.00 No. 15.19 17.13 17.13 No. 8.31 10.25 10.25 No. 19.00 19.00 19.00 No. 3.50 3.50 3.50 No. 4.39 4.39 4.39 No. 1.35 1.35 1.35 No. 1.62 1.62 1.62 No. 2.15 2.15 2.15 No. 0.17 0.18 0.17 0.18 0.17 0.18 No. No. 0.22 0.22 0.22 No. 0.27 0.27 0.27 No. 0.22 0.22 0.22 No. 0.29 0.29 0.29 No. 0.31 0.31 0.31 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80361 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 73551 .............. 73552 .............. 74712 .............. Radiologic examination, femur; 1 view ................................ Radiologic examination, femur; minimum 2 views .............. Magnetic resonance (eg, proton) imaging, fetal, including placental and maternal pelvic imaging when performed; single or first gestation. Magnetic resonance (eg, proton) imaging, fetal, including placental and maternal pelvic imaging when performed; each additional gestation. Ultrasound, abdominal aorta, real time with image documentation, screening study for abdominal aortic aneurysm. Fluoroscopic guidance for central venous access device placement, replacement (catheter only or complete), or removal (includes fluoroscopic guidance for vascular access and catheter manipulation, any necessary contrast injections through access site or catheter with related venography radiologic supervision and interpretation, and radiographic documentation of final catheter position). Fluoroscopic guidance for needle placement (eg, biopsy, aspiration, injection, localization device). Fluoroscopic guidance and localization of needle or catheter tip for spine or paraspinous diagnostic or therapeutic injection procedures (epidural or subarachnoid). Diagnostic mammography, including computer-aided detection (CAD) when performed; unilateral. Diagnostic mammography, including computer-aided detection (CAD) when performed; bilateral. Screening mammography, bilateral (2-view study of each breast), including computer-aided detection (CAD) when performed. Treatment devices, design and construction; simple (simple block, simple bolus). Treatment devices, design and construction; intermediate (multiple blocks, stents, bite blocks, special bolus). Treatment devices, design and construction; complex (irregular blocks, special shields, compensators, wedges, molds or casts). Special treatment procedure (eg, total body irradiation, hemibody radiation, per oral or endocavitary irradiation). Interstitial radiation source application, complex, includes supervision, handling, loading of radiation source, when performed. Supervision, handling, loading of radiation source ............. Gastric emptying imaging study (eg, solid, liquid, or both) Gastric emptying imaging study (eg, solid, liquid, or both); with small bowel transit. Gastric emptying imaging study (eg, solid, liquid, or both); with small bowel and colon transit, multiple days. Cytopathology, fluids, washings or brushings, except cervical or vaginal; smears with interpretation. Cytopathology, fluids, washings or brushings, except cervical or vaginal; simple filter method with interpretation. Cytopathology, concentration technique, smears and interpretation (eg, Saccomanno technique). Cytopathology, selective cellular enhancement technique with interpretation (eg, liquid based slide preparation method), except cervical or vaginal. Cytopathology, smears, any other source; screening and interpretation. Cytopathology, smears, any other source; preparation, screening and interpretation. Cytopathology, smears, any other source; extended study involving over 5 slides and/or multiple stains. Flow cytometry, cell surface, cytoplasmic, or nuclear marker, technical component only; first marker. Flow cytometry, cell surface, cytoplasmic, or nuclear marker, technical component only; each additional marker. Flow cytometry, interpretation; 2 to 8 markers .................... 74713 .............. 76706 .............. 77001 .............. 77002 .............. 77003 .............. 77065/G0206 .. 77066/G0204 .. 77067/G0202 .. 77332 .............. 77333 .............. 77334 .............. 77470 .............. 77778 .............. 77790 .............. 78264 .............. 78265 .............. 78266 .............. 88104 .............. 88106 .............. 88108 .............. 88112 .............. 88160 .............. mstockstill on DSK3G9T082PROD with RULES2 88161 .............. 88162 .............. 88184 .............. 88185 .............. 88187 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00193 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement 0.16 0.18 3.00 0.16 0.18 3.00 0.16 0.18 3.00 No. No. No. 1.78 1.85 1.85 No. NEW 0.55 0.55 No. 0.38 0.38 0.38 No. 0.54 0.38 0.54 No. 0.60 0.38 0.60 No. NEW 0.81 0.81 No. NEW 1.00 1.00 No. NEW 0.76 0.76 No. 0.54 0.45 0.45 No. 0.84 0.75 0.75 No. 1.24 1.15 1.15 No. 2.09 2.03 2.03 No. 8.00 8.00 8.78 No. 0.00 0.74 0.98 0.00 0.79 0.98 0.00 0.79 0.98 No. No. No. 1.08 1.08 1.08 No. 0.56 0.56 0.56 No. 0.37 0.37 0.37 No. 0.44 0.44 0.44 No. 0.56 0.56 0.56 No. 0.50 0.50 0.50 No. 0.50 0.50 0.50 No. 0.76 0.76 0.76 No. 0.00 0.00 0.00 No. 0.00 0.00 0.00 No. 1.36 0.74 0.74 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80362 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 88188 .............. 88189 .............. 88321 .............. Flow cytometry, interpretation; 9 to 15 markers .................. Flow cytometry, interpretation; 16 or more markers ........... Consultation and report on referred slides prepared elsewhere. Consultation and report on referred material requiring preparation of slides. Consultation, comprehensive, with review of records and specimens, with report on referred material. Immunohistochemistry or immunocytochemistry, per specimen; each additional single antibody stain procedure (List separately in addition to code for primary procedure). Immunohistochemistry or immunocytochemistry, per specimen; initial single antibody stain procedure. Immunohistochemistry or immunocytochemistry, per specimen; each multiplex antibody stain procedure. Immunofluorescence, per specimen; each additional single antibody stain procedure. In situ hybridization (eg, FISH), per specimen; each additional single probe stain procedure. Morphometric analysis, in situ hybridization (quantitative or semi-quantitative), manual, per specimen; each additional single probe stain procedure. Gastrointestinal tract imaging, intraluminal (eg, capsule endoscopy), esophagus through ileum, with interpretation and report. Gastrointestinal tract imaging, intraluminal (eg, capsule endoscopy), esophagus with interpretation and report. Liver elastography, mechanically induced shear wave (eg, vibration), without imaging, with interpretation and report. Scanning computerized ophthalmic diagnostic imaging, anterior segment, with interpretation and report, unilateral or bilateral. Scanning computerized ophthalmic diagnostic imaging, posterior segment, with interpretation and report, unilateral or bilateral; optic nerve. Scanning computerized ophthalmic diagnostic imaging, posterior segment, with interpretation and report, unilateral or bilateral; retina. Fluorescein angiography (includes multiframe imaging) with interpretation and report. Indocyanine-green angiography (includes multiframe imaging) with interpretation and report. Fundus photography with interpretation and report ............ Fluorescein angiography and indocyanine-green angiography (includes multiframe imaging) performed at the same patient encounter with interpretation and report, unilateral or bilateral. Arterial pressure waveform analysis for assessment of central arterial pressures, includes obtaining waveform(s), digitization and application of nonlinear mathematical transformations to determine central arterial pressures and augmentation index, with interpretation and report, upper extremity artery, non-invasive. Percutaneous transcatheter closure of paravalvular leak; initial occlusion device, mitral valve. Percutaneous transcatheter closure of paravalvular leak; initial occlusion device, aortic valve. Percutaneous transcatheter closure of paravalvular leak; each additional occlusion device (list separately in addition to code for primary service). Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy, single dose vial(s) (specify number of vials). Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy; single or multiple antigens (specify number of doses). Electroencephalogram (EEG) extended monitoring; 41–60 minutes. 88323 .............. 88325 .............. 88341 .............. 88342 .............. 88344 .............. 88350 .............. 88364 .............. 88369 .............. 91110 .............. 91111 .............. 91200 .............. 92132 .............. 92133 .............. 92134 .............. 92235 .............. 92240 .............. 92250 .............. 92242 .............. 93050 .............. 93590 .............. 93591 .............. mstockstill on DSK3G9T082PROD with RULES2 93592 .............. 95144 .............. 95165 .............. 95812 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00194 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement 1.69 2.23 1.63 1.20 1.70 1.63 1.20 1.70 1.63 No. No. No. 1.83 1.83 1.83 No. 2.50 2.85 2.85 No. 0.53 0.56 0.56 No. 0.70 0.70 0.70 No. 0.77 0.77 0.77 No. 0.56 0.59 0.59 No. 0.67 0.70 0.70 No. 0.67 0.70 0.70 No. 3.64 2.49 2.49 No. 1.00 1.00 1.00 No. 0.27 0.27 0.27 No. 0.35 0.30 0.30 No. 0.50 0.40 0.40 No. 0.50 0.45 0.45 No. 0.81 0.75 0.75 No. 1.10 0.80 0.80 No. 0.44 NEW 0.40 0.95 0.40 0.95 No. No. 0.17 0.17 0.17 No. NEW 18.23 21.70 No. NEW 14.50 17.97 No. NEW 6.81 8.00 No. 0.06 0.06 0.06 No. 0.06 0.06 0.06 No. 1.08 1.08 1.08 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80363 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 95813 .............. Electroencephalogram (EEG) extended monitoring; greater than 1 hour. Digital analysis of electroencephalogram (EEG) (eg, for epileptic spike analysis). Electronic analysis of implanted neurostimulator pulse generator system (eg, rate, pulse amplitude, pulse duration, configuration of wave form, battery status, electrode selectability, output modulation, cycling, impedance and patient compliance measurements); simple spinal cord, or peripheral (i.e., peripheral nerve, sacral nerve, neuromuscular) neurostimulator pulse generator/ transmitter, with intraoperative or subsequent programming. Electronic analysis of implanted neurostimulator pulse generator system (eg, rate, pulse amplitude, pulse duration, configuration of wave form, battery status, electrode selectability, output modulation, cycling, impedance and patient compliance measurements); complex spinal cord, or peripheral (i.e., peripheral nerve, sacral nerve, neuromuscular) (except cranial nerve) neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming. Administration of patient-focused health risk assessment instrument (eg, health hazard appraisal) with scoring and documentation, per standardized instrument. Administration of caregiver-focused health risk assessment instrument (eg, depression inventory) for the benefit of the patient, with scoring and documentation, per standardized instrument. Reflectance confocal microscopy (RCM) for cellular and sub-cellular imaging of skin; image acquisition and interpretation and report, first lesion. Reflectance confocal microscopy (RCM) for cellular and sub-cellular imaging of skin; image acquisition only, first lesion. Reflectance confocal microscopy (RCM) for cellular and sub-cellular imaging of skin; interpretation and report only, first lesion. Reflectance confocal microscopy (RCM) for cellular and sub-cellular imaging of skin; image acquisition and interpretation and report, each additional lesion. Reflectance confocal microscopy (RCM) for cellular and sub-cellular imaging of skin; image acquisition only, each additional lesion. Reflectance confocal microscopy (RCM) for cellular and sub-cellular imaging of skin; interpretation and report only, each additional lesion. Physical therapy evaluation; low complexity ....................... Physical therapy evaluation; moderate complexity ............. Physical therapy evaluation; high complexity ...................... Reevaluation of physical therapy established plan of care Occupational therapy evaluation; low complexity ............... Occupational therapy evaluation; moderate complexity ...... Occupational therapy evaluation; high complexity .............. Reevaluation of occupational therapy care/established plan of care. Moderate sedation services provided by the same physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient’s level of consciousness and physiological status; initial 15 minutes of intra-service time, patient younger than 5 years of age. 95957 .............. 95971 .............. 95972 .............. 96160 .............. 96161 .............. 96931 .............. 96932 .............. 96933 .............. 96934 .............. 96935 .............. 96936 .............. 97161 97162 97163 97164 97165 97166 97167 97168 .............. .............. .............. .............. .............. .............. .............. .............. mstockstill on DSK3G9T082PROD with RULES2 99151 .............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00195 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement 1.73 1.63 1.63 No. 1.98 1.98 1.98 No. 0.78 0.78 0.78 No. 0.80 0.80 0.80 No. NEW 0.00 0.00 No. NEW I 0.00 No. 0.00 0.75 0.80 No. 0.00 0.00 0.00 No. 0.00 0.75 0.80 No. 0.00 0.71 0.76 No. 0.00 0.00 0.00 No. 0.00 0.71 0.76 No. NEW NEW NEW NEW NEW NEW NEW NEW 1.20 1.20 1.20 0.60 1.20 1.20 1.20 0.60 1.20 1.20 1.20 0.75 1.20 1.20 1.20 0.75 Yes. No. Yes. No. Yes. No. Yes. No. NEW 0.50 0.50 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80364 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor 99152 .............. Moderate sedation services provided by the same physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient’s level of consciousness and physiological status; initial 15 minutes of intra-service time, patient age 5 years or older. Moderate sedation services provided by the same physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient’s level of consciousness and physiological status; each additional 15 minutes of intra-service time. Moderate sedation services provided by a physician or other qualified health care professional other than the physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; initial 15 minutes of intra-service time, patient younger than 5 years of age. Moderate sedation services provided by a physician or other qualified health care professional other than the physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; initial 15 minutes of intra-service time, patient age 5 years or older. Moderate sedation services provided by a physician or other qualified health care professional other than the physician or other qualified health care professional performing the diagnostic or therapeutic service that the sedation supports; each additional 15 minutes intraservice time. Prolonged evaluation and management or psychotherapy service(s) (beyond the typical service time of the primary procedure) in the office or other outpatient setting requiring direct patient contact beyond the usual service; first hour. Prolonged evaluation and management service before and/or after direct patient care; first hour. Prolonged evaluation and management service before and/or after direct patient care; each additional 30 minutes. Complex chronic care management services, with the following required elements: multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, chronic conditions place the patient at significant risk of death, acute exacerbation/ decompensation, or functional decline, establishment or substantial revision of a comprehensive care plan, moderate or high complexity medical decision making; 60 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month; Complex chronic care management services, with the following required elements: multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, chronic conditions place the patient at significant risk of death, acute exacerbation/ decompensation, or functional decline, establishment or substantial revision of a comprehensive care plan, moderate or high complexity medical decision making; 60 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month.; each additional 30 minutes of clinical staff time directed by a physician or other qualified health care professional, per calendar month. Surgical pathology, gross and microscopic examinations, for prostate needle biopsy, any method. 99153 .............. 99155 .............. 99156 .............. 99157 .............. 99354 .............. 99358 .............. 99359 .............. 99487 .............. mstockstill on DSK3G9T082PROD with RULES2 99489 .............. G0416 ............. VerDate Sep<11>2014 16:32 Nov 12, 2016 Jkt 241001 PO 00000 Frm 00196 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement NEW 0.25 0.25 No. NEW 0.00 0.00 No. NEW 1.90 1.90 No. NEW 1.65 1.65 No. NEW 1.25 1.25 No. 1.77 2.33 2.33 No. 2.10 2.10 2.10 No. 1.00 1.00 1.00 No. 0.00 1.00 1.00 No. 0.00 0.50 0.50 No. 3.09 3.60 3.60 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80365 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor G0500 ............. Moderate sedation services provided by the same physician or other qualified health care professional performing a gastrointestinal endoscopic service that sedation supports, requiring the presence of an independent trained observer to assist in the monitoring of the patient’s level of consciousness and physiological status; initial 15 minutes of intra-service time; patient age 5 years or older. (additional time may be reported with 99153, as appropriate). Resource-intensive services for patients for whom the use of specialized mobility-assistive technology (such as adjustable height chairs or tables, patient lift, and adjustable padded leg supports) is medically necessary and used during the provision of an office/outpatient, evaluation and management visit. (List separately in addition to primary service). Initial psychiatric collaborative care management, first 70 minutes in the first calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements:. • outreach to and engagement in treatment of a patient directed by the treating physician or other qualified health care professional; • initial assessment of the patient, including administration of validated rating scales, with the development of an individualized treatment plan;. • review by the psychiatric consultant with modifications of the plan if recommended; • entering patient in a registry and tracking patient followup and progress using the registry, with appropriate documentation, and participation in weekly caseload consultation with the psychiatric consultant; and. • provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies. Subsequent psychiatric collaborative care management, first 60 minutes in a subsequent month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional, with the following required elements: • tracking patient follow-up and progress using the registry, with appropriate documentation; • participation in weekly caseload consultation with the psychiatric consultant; • ongoing collaboration with and coordination of the patient’s mental health care with the treating physician or other qualified health care professional and any other treating mental health providers; • additional review of progress and recommendations for changes in treatment, as indicated, including medications, based on recommendations provided by the psychiatric consultant; • provision of brief interventions using evidence-based techniques such as behavioral activation, motivational interviewing, and other focused treatment strategies;. • monitoring of patient outcomes using validated rating scales; and relapse prevention planning with patients as they achieve remission of symptoms and/or other treatment goals and are prepared for discharge from active treatment. G0501 ............. G0502 ............. mstockstill on DSK3G9T082PROD with RULES2 G0503 ............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00197 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement NEW 0.10 0.10 No. NEW 0.48 B No. NEW 1.59 1.70 No. NEW 1.42 1.53 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80366 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 27—FINALIZED CY 2017 WORK RVUS FOR NEW, REVISED AND POTENTIALLY MISVALUED CODES—Continued CY 2016 Work RVU HCPCS Code Long Descriptor G0504 ............. Initial or subsequent psychiatric collaborative care management, each additional 30 minutes in a calendar month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional (List separately in addition to code for primary procedure). (Use GPPP3 in conjunction with GPPP1, GPPP2). Cognition and functional assessment using standardized instruments with development of recorded care plan for the patient with cognitive impairment, history obtained from patient and/or caregiver, in office or other outpatient setting or home or domiciliary or rest home. Comprehensive assessment of and care planning for patients requiring chronic care management services. (List separately in addition to primary monthly care management service). Care management services for behavioral health conditions, at least 20 minutes of clinical staff time, directed by a physician or other qualified health care professional, per calendar month, with the following required elements: • Initial assessment or follow-up monitoring, including the use of applicable validated rating scales; • Behavioral health care planning in relation to behavioral/ psychiatric health problems, including revision for patients who are not progressing or whose status changes; • Facilitating and coordinating treatment such as psychotherapy, pharmacotherapy, counseling and/or psychiatric consultation; and •Continuity of care with a designated member of the care team. Telehealth consultation, critical care, initial, physicians typically spend 60 minutes communicating with the patient and providers via telehealth. Telehealth consultation, critical care, subsequent, physicians typically spend 50 minutes communicating with the patient and providers via telehealth. G0505 ............. G0506 ............. G0507 ............. G0508 ............. mstockstill on DSK3G9T082PROD with RULES2 G0509 ............. VerDate Sep<11>2014 16:32 Nov 12, 2016 Jkt 241001 PO 00000 Frm 00198 Fmt 4701 Proposed CY 2017 Work RVU Final CY 2017 Work RVU CMS Work time refinement NEW 0.71 0.82 No. NEW 3.30 3.44 Yes. NEW 0.87 0.87 No. NEW 0.61 0.61 No. NEW 4.00 4.00 No. NEW 3.86 3.86 No. Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 VerDate Sep<11>2014 Remove nail plate add-on Remove nail plate add-on HCPCS code description 22:03 Nov 11, 2016 11732 .... Remove nail plate add-on Remove nail plate add-on 11732 .... Jkt 241001 Remove nail plate add-on 11732 .... PO 00000 Remove nail plate add-on 11732 .... Frm 00199 Remove nail plate add-on Clsd tx pelvic ring fx ......... Clsd tx pelvic ring fx ......... Clsd tx pelvic ring fx ......... Clsd tx pelvic ring fx ......... Laryngoplasty laryngeal sten. 11732 .... 11732 .... 27197 27197 27198 27198 31551 Fmt 4701 Sfmt 4700 Laryngoplasty laryngeal sten. Laryngoplasty laryngeal sten. Laryngoplasty laryngeal sten. 31551 .... 31551 .... E:\FR\FM\15NOR2.SGM Laryngoplasty laryngeal sten. 15NOR2 Laryngoplasty laryngeal sten. Laryngoplasty laryngeal sten. Laryngoplasty laryngeal sten. Laryngoplasty laryngeal sten. 31552 .... 31552 .... 31552 .... 31553 .... 31552 .... Laryngoplasty laryngeal sten. 31552 .... 31551 .... Laryngoplasty laryngeal sten. 31551 .... .... .... .... .... .... Remove nail plate add-on 11732 .... Remove nail plate add-on 11732 .... Remove nail plate add-on 11732 .... Remove nail plate add-on 11732 .... 11732 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 EQ137 ..... ES063 ...... ES060 ...... ES031 ...... EQ167 ..... EQ137 ..... ES063 ...... ES060 ...... ES031 ...... EQ167 ..... L037D ...... L037D ...... L037D ...... L037D ...... EQ137 ..... SJ053 ...... SH064 ...... SH047 ...... SG067 ..... SC051 ...... SC031 ...... L037D ...... EQ168 ..... EQ137 ..... EF015 ...... EF031 ...... Input code instrument pack, basic ($500– $1499). video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. light source, xenon ...................... instrument pack, basic ($500– $1499). video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. light source, xenon ...................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... instrument pack, basic ($500– $1499). silver sulfadiazene cream (Silvadene). swab-pad, alcohol ....................... lidocaine 1%–2% inj (Xylocaine) penrose drain (0.25in x 4in) ........ syringe 10–12ml .......................... needle, 30g .................................. RN/LPN/MTA ............................... instrument pack, basic ($500– $1499). light, exam ................................... mayo stand .................................. table, power ................................. Input code description F F F F F F F F F F F F F F F NF NF NF NF NF NF NF NF NF NF NF NF/F ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... 99212 27 minutes ............. 99213 36 minutes ............. 99212 27 minutes ............. 99213 36 minutes ............. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Assist physician in performing procedure. ........................................... ........................................... ........................................... ........................................... ........................................... Labor activity (where applicable) 138 0 198 0 0 138 0 198 0 0 2 1 1 2 138 2 0.5 10 1 1 1 7 7 0 0 7 RUC recommendation or current value (min or qty) 1 0 0 0 0 0 8 8 8 8 8 129 189 0 108 108 129 189 0 108 108 0 0 0 0 129 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE E4: Refined equipment time to conform to established policies for scopes. E5: Refined equipment time to conform to established policies for surgical instrument packs. E4: Refined equipment time to conform to established policies for scopes. E5: Refined equipment time to conform to established policies for surgical instrument packs. E13: Equipment item replaces another item; see preamble text EQ170. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... S9: Add-on code. Additional supplies not typical; see preamble text. S9: Add-on code. Additional supplies not typical; see preamble text. S9: Add-on code. Additional supplies not typical; see preamble text. S9: Add-on code. Additional supplies not typical; see preamble text. S9: Add-on code. Additional supplies not typical; see preamble text. S9: Add-on code. Additional supplies not typical; see preamble text. G1: See preamble text ....................... G1: See preamble text ....................... G1: See preamble text ....................... G1: See preamble text ....................... E5: Refined equipment time to conform to established policies for surgical instrument packs. E13: Equipment item replaces another item; see preamble text EQ170. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E15: Refined equipment time to conform to changes in clinical labor time. G1: See preamble text ....................... G1: See preamble text ....................... E15: Refined equipment time to conform to changes in clinical labor time. G1: See preamble text ....................... Comment ¥0.02 8.76 ¥62.98 13.97 3.00 ¥0.02 8.76 ¥62.98 13.97 3.00 ¥19.98 ¥13.32 ¥9.99 ¥26.64 ¥0.02 ¥0.01 ¥0.08 ¥0.35 ¥0.50 ¥0.18 ¥0.34 0.37 0.00 0.02 0.01 0.02 Direct costs change Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80367 VerDate Sep<11>2014 Laryngoplasty laryngeal sten. HCPCS code description 22:03 Nov 11, 2016 Laryngoplasty laryngeal sten. Laryngoplasty laryngeal sten. Laryngoplasty laryngeal sten. Laryngoplasty laryngeal sten. 31553 .... 31553 .... 31554 .... 31554 .... Jkt 241001 PO 00000 Laryngoplasty laryngeal sten. Frm 00200 Largsc w/laser dstrj les ..... Largsc w/laser dstrj les ..... 31554 .... 31572 .... 31572 .... Fmt 4701 Sfmt 4700 Largsc w/laser dstrj les ..... E:\FR\FM\15NOR2.SGM Largsc w/laser dstrj les ..... 31572 .... 31572 .... Largsc w/ther injection ...... Largsc w/laser dstrj les ..... 31572 .... Largsc w/ther injection ...... Largsc w/ther injection ...... Largsc w/ther injection ...... Largsc w/njx augmentation Largsc w/njx augmentation 31573 .... Largsc w/laser dstrj les ..... 31572 .... 31554 .... Laryngoplasty laryngeal sten. Laryngoplasty laryngeal sten. 31554 .... 31553 .... Laryngoplasty laryngeal sten. 31553 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 31573 .... 15NOR2 31573 .... 31573 .... 31574 .... 31574 .... ES031 ...... EQ167 ..... ES064 ...... ES061 ...... ES031 ...... EQ167 ..... SF030 ...... SF029 ...... ES064 ...... ES061 ...... ES031 ...... EQ167 ..... ES063 ...... ES060 ...... ES031 ...... EQ167 ..... EQ137 ..... ES063 ...... ES060 ...... ES031 ...... EQ167 ..... Input code video system, endoscopy (processor, digital capture, monitor, printer, cart). light source, xenon ...................... video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible channeled laryngoscope system. rhinolaryngoscope, flexible, video, channeled. light source, xenon ...................... laser tip, diffuser fiber .................. laser tip, bare (single use) .......... video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible channeled laryngoscope system. rhinolaryngoscope, flexible, video, channeled. light source, xenon ...................... video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. light source, xenon ...................... instrument pack, basic ($500– $1499). video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. light source, xenon ...................... Input code description NF NF NF NF NF NF NF NF NF NF NF NF F F F F F F F F F NF/F ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Labor activity (where applicable) 0 0 0 54 0 0 1 0 0 59 0 0 0 198 0 0 138 0 198 0 0 RUC recommendation or current value (min or qty) 33 33 60 0 33 33 0 1 65 0 38 38 189 0 108 108 129 189 0 108 108 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued E4: Refined equipment time to conform to established policies for scopes. E19: Refined equipment time to conform to established policies for scope accessories. E19: Refined equipment time to conform to established policies for scope accessories. E4: Refined equipment time to conform to established policies for scopes. S8: Supply item replaces another item; see preamble SF030. S7: Supply item replaced by another item; see preamble SF029. E19: Refined equipment time to conform to established policies for scope accessories. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E4: Refined equipment time to conform to established policies for scopes. E19: Refined equipment time to conform to established policies for scope accessories. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E4: Refined equipment time to conform to established policies for scopes. E5: Refined equipment time to conform to established policies for surgical instrument packs. E13: Equipment item replaces another item; see preamble text EQ170. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E13: Equipment item replaces another item; see preamble text EQ170. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... Comment 4.27 0.92 3.13 ¥13.63 4.27 0.92 ¥850.00 150.00 3.39 ¥14.89 4.92 1.05 8.76 ¥62.98 13.97 3.00 ¥0.02 8.76 ¥62.98 13.97 3.00 Direct costs change 80368 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Largsc w/njx augmentation VerDate Sep<11>2014 31575 .... Diagnostic laryngoscopy ... Diagnostic laryngoscopy ... 31574 .... 22:03 Nov 11, 2016 Jkt 241001 Diagnostic laryngoscopy ... 31575 .... 31575 .... Diagnostic laryngoscopy ... Diagnostic laryngoscopy ... 31575 .... PO 00000 Diagnostic laryngoscopy ... 31575 .... Frm 00201 Fmt 4701 Laryngoscopy with biopsy Sfmt 4700 Remove foreign body larynx. 31576 .... E:\FR\FM\15NOR2.SGM 31577 .... Remove foreign body larynx. Remove foreign body larynx. 31577 .... 15NOR2 Remove foreign body larynx. Remove foreign body larynx. Remove foreign body larynx. Remove foreign body larynx. 31577 .... 31577 .... 31577 .... 31577 .... 31577 .... Remove foreign body larynx. 31577 .... Remove foreign body larynx. 31577 .... Laryngoscopy with biopsy 31576 .... Laryngoscopy with biopsy 31576 .... 31576 .... Laryngoscopy with biopsy 31575 .... Diagnostic laryngoscopy ... 31575 .... Diagnostic laryngoscopy ... 31575 .... Largsc w/njx augmentation 31574 .... mstockstill on DSK3G9T082PROD with RULES2 ES064 ...... ES061 ...... ES031 ...... EQ234 ..... EQ170 ..... EQ167 ..... EQ137 ..... EF015 ...... EF008 ...... ES064 ...... ES061 ...... ES031 ...... EQ167 ..... L037D ...... ES063 ...... ES060 ...... ES031 ...... EQ234 ..... EQ170 ..... EQ167 ..... EF008 ...... ES063 ...... ES060 ...... headlight w- headlight w- video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible channeled laryngoscope system. rhinolaryngoscope, flexible, video, channeled. suction and pressure cabinet, ENT (SMR). light, fiberoptic source. light source, xenon ...................... instrument pack, basic ($500– $1499). mayo stand .................................. chair with headrest, exam, reclining. video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible channeled laryngoscope system. rhinolaryngoscope, flexible, video, channeled. light source, xenon ...................... RN/LPN/MTA ............................... video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. suction and pressure cabinet, ENT (SMR). light, fiberoptic source. light source, xenon ...................... chair with headrest, exam, reclining. Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Clean room/equipment by physician staff. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... 0 54 0 99 99 0 40 99 99 0 55 0 0 3 0 44 0 23 23 0 23 0 60 59 0 30 96 96 30 39 96 96 55 0 28 28 1 47 0 18 21 21 18 21 60 0 E4: Refined equipment time to conform to established policies for scopes. E4: Refined equipment time to conform to established policies for scopes. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. E19: Refined equipment time to conform to established policies for scope accessories. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E19: Refined equipment time to conform to established policies for scope accessories. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E4: Refined equipment time to conform to established policies for scopes. G1: See preamble text ....................... E4: Refined equipment time to conform to established policies for scopes. E15: Refined equipment time to conform to changes in clinical labor time. E19: Refined equipment time to conform to established policies for scope accessories. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... G1: See preamble text ....................... 3.08 ¥13.63 3.88 ¥0.03 ¥0.02 0.83 0.00 0.00 ¥0.03 2.87 ¥13.88 3.62 0.78 ¥0.74 2.18 ¥14.00 2.33 ¥0.02 ¥0.02 0.50 ¥0.02 2.78 ¥19.09 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80369 VerDate Sep<11>2014 Remove foreign body larynx. Remove foreign body larynx. HCPCS code description 31578 .... 22:03 Nov 11, 2016 Removal of larynx lesion .. Jkt 241001 PO 00000 31578 .... Diagnostic laryngoscopy ... Removal of larynx lesion .. 31578 .... Frm 00202 Fmt 4701 Diagnostic laryngoscopy ... Sfmt 4700 Diagnostic laryngoscopy ... 31579 .... E:\FR\FM\15NOR2.SGM 31579 .... Diagnostic laryngoscopy ... Diagnostic laryngoscopy ... 31579 .... Diagnostic laryngoscopy ... Revision of larynx ............. Revision of larynx ............. Revision of larynx ............. Revision of larynx ............. 31579 .... Diagnostic laryngoscopy ... 31579 .... Diagnostic laryngoscopy ... 31579 .... Diagnostic laryngoscopy ... 31579 .... 31579 .... Diagnostic laryngoscopy ... 31579 .... Removal of larynx lesion .. 31578 .... 31577 .... Removal of larynx lesion .. 31577 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 31579 .... 31580 .... 15NOR2 31580 .... 31580 .... 31580 .... ES060 ...... ES031 ...... EQ167 ..... EQ137 ..... L037D ...... L037D ...... ES065 ...... ES063 ...... ES031 ...... EQ234 ..... EQ170 ..... EQ167 ..... EF015 ...... EF008 ...... ES064 ...... ES061 ...... ES031 ...... EQ167 ..... L037D ...... L037D ...... Input code headlight w- video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. light source, xenon ...................... instrument pack, basic ($500– $1499). RN/LPN/MTA ............................... RN/LPN/MTA ............................... stroboscopy system ..................... video system, endoscopy (processor, digital capture, monitor, printer, cart). rhinolaryngoscope, flexible, video, non-channeled. suction and pressure cabinet, ENT (SMR). light, fiberoptic source. light source, xenon ...................... mayo stand .................................. chair with headrest, exam, reclining. video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible channeled laryngoscope system. rhinolaryngoscope, flexible, video, channeled. light source, xenon ...................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... Input code description F F F F NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF/F ........................................... ........................................... ........................................... ........................................... Clean room/equipment by physician staff. Obtain vital signs .............. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Clean room/equipment by physician staff. Obtain vital signs .............. Labor activity (where applicable) 198 0 0 138 3 3 49 0 0 31 31 0 31 31 0 54 0 0 3 3 RUC recommendation or current value (min or qty) 2 1 0 108 108 129 2 1 44 54 25 28 28 25 28 28 60 0 33 33 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued L17: Clinical labor task redundant with clinical labor task ‘‘Assist physician in performing the procedure’’ (L041B). E5: Refined equipment time to conform to established policies for surgical instrument packs. E13: Equipment item replaces another item; see preamble text EQ170. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E4: Refined equipment time to conform to established policies for scopes. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. E19: Refined equipment time to conform to established policies for scope accessories. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. E19: Refined equipment time to conform to established policies for scope accessories. E4: Refined equipment time to conform to established policies for scopes. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... L17: Clinical labor task redundant with clinical labor task ‘‘Assist physician in performing the procedure’’ (L041B). E19: Refined equipment time to conform to established policies for scope accessories. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... G1: See preamble text ....................... Comment ¥62.98 13.97 3.00 ¥0.02 ¥0.37 ¥0.74 ¥0.33 2.50 3.23 ¥0.03 ¥0.02 0.69 0.00 ¥0.03 3.13 ¥13.63 4.27 0.92 ¥0.37 ¥0.74 Direct costs change 80370 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Revision of larynx ............. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Treat larynx fracture ......... Treat larynx fracture ......... Treat larynx fracture ......... Revision of larynx ............. 31584 .... 31584 .... 31584 .... 31584 .... 31587 .... Revision of larynx ............. Treat larynx fracture ......... 31584 .... PO 00000 Revision of larynx ............. 31587 .... Frm 00203 Fmt 4701 31591 .... Laryngoplasty medialization. Laryngoplasty medialization. 31587 .... Sfmt 4700 Laryngoplasty medialization. Laryngoplasty medialization. Cricotracheal resection ..... 31591 .... 31591 .... 31592 .... E:\FR\FM\15NOR2.SGM Cricotracheal resection ..... Cricotracheal resection ..... Cricotracheal resection ..... Cricotracheal resection ..... Endovenous mchnchem 1st vein. Endovenous mchnchem 1st vein. 31592 .... 31591 .... Laryngoplasty medialization. 31591 .... Revision of larynx ............. 31587 .... Revision of larynx ............. 31587 .... Treat larynx fracture ......... 31580 .... mstockstill on DSK3G9T082PROD with RULES2 31592 .... 15NOR2 31592 .... 31592 .... 36473 .... 36473 .... EF031 ...... EF014 ...... ES063 ...... ES060 ...... ES031 ...... EQ167 ..... EQ137 ..... ES063 ...... ES060 ...... ES031 ...... EQ167 ..... EQ137 ..... ES063 ...... ES060 ...... ES031 ...... EQ167 ..... EQ137 ..... ES063 ...... ES060 ...... ES031 ...... EQ167 ..... EQ137 ..... ES063 ...... table, power ................................. light, surgical ............................... video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. light source, xenon ...................... instrument pack, basic ($500– $1499). video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. light source, xenon ...................... instrument pack, basic ($500– $1499). video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. light source, xenon ...................... instrument pack, basic ($500– $1499). video system, endoscopy (processor, digital capture, monitor, printer, cart). Video-flexible laryngoscope system. rhinolaryngoscope, flexible, video, non-channeled. light source, xenon ...................... instrument pack, basic ($500– $1499). rhinolaryngoscope, flexible, video, non-channeled. NF NF F F F F F F F F F F F F F F F F F F F F F ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... 0 0 0 198 0 0 138 0 198 0 0 138 0 198 0 0 138 0 198 0 0 138 0 48 48 189 0 108 108 129 189 0 108 108 129 189 0 108 108 129 189 0 108 108 129 189 E4: Refined equipment time to conform to established policies for scopes. E13: Equipment item replaces another item; see preamble text EL015. E13: Equipment item replaces another item; see preamble text EL015. E4: Refined equipment time to conform to established policies for scopes. E5: Refined equipment time to conform to established policies for surgical instrument packs. E13: Equipment item replaces another item; see preamble text EQ170. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E4: Refined equipment time to conform to established policies for scopes. E5: Refined equipment time to conform to established policies for surgical instrument packs. E13: Equipment item replaces another item; see preamble text EQ170. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E4: Refined equipment time to conform to established policies for scopes. E5: Refined equipment time to conform to established policies for surgical instrument packs. E13: Equipment item replaces another item; see preamble text EQ170. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... E4: Refined equipment time to conform to established policies for scopes. E5: Refined equipment time to conform to established policies for surgical instrument packs. E13: Equipment item replaces another item; see preamble text EQ170. E19: Refined equipment time to conform to established policies for scope accessories. G1: See preamble text ....................... 0.78 0.48 8.76 ¥62.98 13.97 3.00 ¥0.02 8.76 ¥62.98 13.97 3.00 ¥0.02 8.76 ¥62.98 13.97 3.00 ¥0.02 8.76 ¥62.98 13.97 3.00 ¥0.02 8.76 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80371 VerDate Sep<11>2014 Endovenous mchnchem 1st vein. HCPCS code description 22:03 Nov 11, 2016 Jkt 241001 36473 .... PO 00000 Frm 00204 Endovenous mchnchem 1st vein. Endovenous mchnchem 1st vein. Fmt 4701 Endovenous mchnchem add-on. Endovenous mchnchem add-on. Endovenous mchnchem add-on. Endovenous mchnchem add-on. Intro cath dialysis circuit ... Intro cath dialysis circuit ... Intro cath dialysis circuit ... Intro cath dialysis circuit ... 36473 .... Sfmt 4700 36474 .... 36474 .... 36474 .... 36474 .... E:\FR\FM\15NOR2.SGM 15NOR2 36901 .... 36901 .... 36901 .... 36901 .... 36474 .... 36473 .... 36473 .... Endovenous mchnchem 1st vein. Endovenous mchnchem 1st vein. Endovenous mchnchem add-on. 36473 .... 36473 .... 36473 .... Endovenous mchnchem 1st vein. Endovenous mchnchem 1st vein. Endovenous mchnchem 1st vein. Endovenous mchnchem 1st vein. 36473 .... 36473 .... Endovenous mchnchem 1st vein. 36473 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 SJ041 ...... L037D ...... EL011 ...... ED050 ...... SH108 ...... EQ250 ..... EL015 ...... EF031 ...... EF014 ...... SH108 ...... SA016 ...... L054A ...... L054A ...... L054A ...... L054A ...... L054A ...... L037D ...... EQ250 ..... EL015 ...... Input code povidone soln (Betadine) ............ RN/LPN/MTA ............................... room, angiography ...................... PACS Workstation Proxy ............ Sotradecol Sclerosing Agent ....... ultrasound unit, portable .............. room, ultrasound, general ........... table, power ................................. light, surgical ............................... kit, guidewire introducer (MicroStick). Sotradecol Sclerosing Agent ....... Vascular Technologist ................. Vascular Technologist ................. Vascular Technologist ................. Vascular Technologist ................. Vascular Technologist ................. RN/LPN/MTA ............................... ultrasound unit, portable .............. room, ultrasound, general ........... Input code description NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF/F Prepare and position pt/ monitor pt/set up IV. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Prepare room, equipment, supplies. Availability of prior images confirmed. Exam documents scanned into U/S machine. Exam completed in RIS system to generate billing process and to populate images into Radiologist work queue. Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist. Review examination with interpreting MD. Technologist QCs images in PACS, checking all images, reformats, and dose page. ........................................... ........................................... ........................................... Labor activity (where applicable) 60 5 37 54 2 0 30 0 0 2 1 2 2 2 1 2 2 0 39 RUC recommendation or current value (min or qty) 0 0 3 35 52 1 30 0 30 30 1 0 0 0 0 0 0 0 48 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued S7: Supply item replaced by another item; see preamble SJ088. S3: Supply not typically used in this service. S6: Refined supply quantity to what is typical for the procedure. E13: Equipment item replaces another item; see preamble text EL015. E13: Equipment item replaces another item; see preamble text EL015. E12: Equipment item replaced by another item; see preamble text EQ250. E13: Equipment item replaces another item; see preamble text EL015. S6: Refined supply quantity to what is typical for the procedure. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. G1: See preamble text ....................... G1: See preamble text ....................... G1: See preamble text ....................... G1: See preamble text ....................... G1: See preamble text ....................... G1: See preamble text ....................... E12: Equipment item replaced by another item; see preamble text EQ250. E13: Equipment item replaces another item; see preamble text EL015. G1: See preamble text ....................... Comment ¥0.48 ¥0.74 ¥10.51 ¥0.04 ¥110.20 3.49 ¥42.05 0.49 0.30 ¥110.20 ¥23.00 ¥1.08 ¥1.08 ¥1.08 ¥0.54 ¥1.08 ¥0.74 5.58 ¥54.67 Direct costs change 80372 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Intro cath dialysis circuit ... VerDate Sep<11>2014 36902 .... Intro cath dialysis circuit ... Intro cath dialysis circuit ... 36902 .... 22:03 Nov 11, 2016 Jkt 241001 Intro cath dialysis circuit ... Intro cath dialysis circuit ... 36902 .... 36903 .... 36903 .... Intro cath dialysis circuit ... Intro cath dialysis circuit ... 36902 .... PO 00000 Intro cath dialysis circuit ... 36903 .... Frm 00205 Thrmbc/nfs dialysis circuit 36904 .... Fmt 4701 Sfmt 4700 Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit 36904 .... Thrmbc/nfs dialysis circuit 36904 .... 36904 .... Thrmbc/nfs dialysis circuit 36904 .... Thrmbc/nfs dialysis circuit 36903 .... Intro cath dialysis circuit ... 36903 .... Intro cath dialysis circuit ... 36902 .... Intro cath dialysis circuit ... 36901 .... mstockstill on DSK3G9T082PROD with RULES2 36904 .... 36904 .... 36904 .... E:\FR\FM\15NOR2.SGM 36904 .... 36904 .... 15NOR2 36904 .... 36904 .... 36904 .... 36905 .... ED050 ...... SJ088 ...... SJ041 ...... SD136 ...... SD032 ...... L037D ...... L037D ...... L037D ...... L037D ...... L037D ...... L037D ...... L037D ...... EL011 ...... ED050 ...... SJ088 ...... SJ041 ...... L037D ...... EL011 ...... ED050 ...... SJ088 ...... SJ041 ...... L037D ...... EL011 ...... ED050 ...... SJ088 ...... swab, patient prep, 3.0 ml (chloraprep). PACS Workstation Proxy ............ povidone soln (Betadine) ............ vascular sheath ........................... catheter, thrombectomy-Fogarty RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... room, angiography ...................... swab, patient prep, 3.0 ml (chloraprep). PACS Workstation Proxy ............ povidone soln (Betadine) ............ RN/LPN/MTA ............................... room, angiography ...................... swab, patient prep, 3.0 ml (chloraprep). PACS Workstation Proxy ............ povidone soln (Betadine) ............ RN/LPN/MTA ............................... room, angiography ...................... swab, patient prep, 3.0 ml (chloraprep). PACS Workstation Proxy ............ NF NF NF NF NF NF NF NF F F F F NF NF NF NF NF NF NF NF NF NF NF NF NF ........................................... ........................................... ........................................... ........................................... Prepare and position pt/ monitor pt/set up IV. ........................................... Follow-up phone calls and prescriptions. Coordinate pre-surgery services. Schedule space and equipment in facility. Follow-up phone calls and prescriptions. Complete pre-service diagnostic and referral forms. Coordinate pre-surgery services. ........................................... ........................................... ........................................... Prepare and position pt/ monitor pt/set up IV. ........................................... ........................................... ........................................... ........................................... Prepare and position pt/ monitor pt/set up IV. ........................................... ........................................... ........................................... ........................................... 104 0 60 2 1 5 6 6 6 6 6 3 72 89 0 60 5 62 79 0 60 5 52 69 0 102 2 0 1 0 3 3 3 3 0 3 0 70 87 2 0 3 60 77 2 0 3 50 67 2 S2: Supply removed due to redundancy when used together with supply SA015. S2: Supply removed due to redundancy when used together with supply SA015. S7: Supply item replaced by another item; see preamble. S8: Supply item replaces another item; see preamble. E15: Refined equipment time to conform to changes in clinical labor time. S7: Supply item replaced by another item; see preamble. S8: Supply item replaces another item; see preamble. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. G1: See preamble text ....................... S7: Supply item replaced by another item; see preamble. S8: Supply item replaces another item; see preamble. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. G1: See preamble text ....................... S8: Supply item replaces another item; see preamble SJ041. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. G1: See preamble text ....................... ¥0.04 3.62 ¥0.48 ¥20.50 ¥101.75 ¥0.74 ¥1.11 ¥1.11 ¥1.11 ¥2.22 ¥1.11 ¥1.11 ¥10.51 ¥0.04 3.62 ¥0.48 ¥0.74 ¥10.51 ¥0.04 3.62 ¥0.48 ¥0.74 ¥10.51 ¥0.04 3.62 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80373 VerDate Sep<11>2014 Thrmbc/nfs dialysis circuit HCPCS code description 22:03 Nov 11, 2016 36905 .... Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit 36905 .... Jkt 241001 PO 00000 36905 .... Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit 36905 .... Frm 00206 Fmt 4701 36905 .... Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit 36905 .... Sfmt 4700 Thrmbc/nfs dialysis circuit 36905 .... Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit 36905 .... Thrmbc/nfs dialysis circuit 36905 .... Thrmbc/nfs dialysis circuit 36905 .... Thrmbc/nfs dialysis circuit 36905 .... Thrmbc/nfs dialysis circuit 36905 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 36906 .... 36906 .... 36906 .... E:\FR\FM\15NOR2.SGM 36906 .... 36906 .... 15NOR2 36906 .... 36906 .... 36906 .... L037D ...... L037D ...... L037D ...... L037D ...... L037D ...... L037D ...... EL011 ...... ED050 ...... SJ088 ...... SJ041 ...... SD136 ...... SD032 ...... L037D ...... L037D ...... L037D ...... L037D ...... L037D ...... L037D ...... L037D ...... EL011 ...... Input code RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... room, angiography ...................... swab, patient prep, 3.0 ml (chloraprep). PACS Workstation Proxy ............ povidone soln (Betadine) ............ vascular sheath ........................... catheter, thrombectomy-Fogarty RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... RN/LPN/MTA ............................... room, angiography ...................... Input code description NF NF F F F F NF NF NF NF NF NF NF NF NF F F F F NF NF/F Follow-up phone calls and prescriptions. Coordinate pre-surgery services. Schedule space and equipment in facility. Follow-up phone calls and prescriptions. Complete pre-service diagnostic and referral forms. Coordinate pre-surgery services. ........................................... ........................................... ........................................... ........................................... ........................................... Prepare and position pt/ monitor pt/set up IV. ........................................... Follow-up phone calls and prescriptions. Coordinate pre-surgery services. Schedule space and equipment in facility. Follow-up phone calls and prescriptions. Complete pre-service diagnostic and referral forms. Coordinate pre-surgery services. ........................................... Labor activity (where applicable) 6 6 6 6 6 3 102 119 0 60 2 1 5 6 6 6 6 6 3 87 RUC recommendation or current value (min or qty) 3 3 3 0 3 0 100 117 2 0 1 0 3 3 3 3 0 3 0 85 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued S2: Supply removed due to redundancy when used together with supply SA015. S2: Supply removed due to redundancy when used together with supply SA015. S7: Supply item replaced by another item; see preamble. S8: Supply item replaces another item; see preamble. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. E15: Refined equipment time to conform to changes in clinical labor time. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. G1: See preamble text ....................... Comment ¥1.11 ¥1.11 ¥1.11 ¥2.22 ¥1.11 ¥1.11 ¥10.51 ¥0.04 3.62 ¥0.48 ¥20.50 ¥101.75 ¥0.74 ¥1.11 ¥1.11 ¥1.11 ¥2.22 ¥1.11 ¥1.11 ¥10.51 Direct costs change 80374 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Thrmbc/nfs dialysis circuit VerDate Sep<11>2014 36906 .... Thrmbc/nfs dialysis circuit Thrmbc/nfs dialysis circuit 36906 .... 22:03 Nov 11, 2016 37246 .... Trluml balo angiop 1st art Trluml balo angiop 1st art 36906 .... Jkt 241001 PO 00000 Trluml balo angiop 1st vein. Frm 00207 Fmt 4701 47531 .... Injection for cholangiogram. Injection for cholangiogram. 37248 .... Sfmt 4700 E:\FR\FM\15NOR2.SGM Injection for cholangiogram. Injection for cholangiogram. 47531 .... 47531 .... 47531 .... Injection for cholangiogram. Injection for cholangiogram. 47531 .... 15NOR2 Injection for cholangiogram. Injection for cholangiogram. Injection for cholangiogram. 47531 .... 47531 .... 47532 .... 47531 .... Injection for cholangiogram. 47531 .... Injection for cholangiogram. 47531 .... Trluml balo angiop 1st vein. 37248 .... Trluml balo angiop 1st vein. 37246 .... 37248 .... Trluml balo angiop 1st art 37246 .... Thrmbc/nfs dialysis circuit 36906 .... Thrmbc/nfs dialysis circuit 36906 .... mstockstill on DSK3G9T082PROD with RULES2 ED050 ...... L051A ...... L041B ...... L037D ...... EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... ED050 ...... L037D ...... EL011 ...... ED050 ...... L037D ...... EL011 ...... ED050 ...... SJ088 ...... SJ041 ...... SD136 ...... SD032 ...... L037D ...... SpO2, PACS Workstation Proxy ............ RN ............................................... Radiologic Technologist .............. RN/LPN/MTA ............................... light, exam ................................... IV infusion pump ......................... ECG, 3-channel (with NIBP, temp, resp). room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... PACS Workstation Proxy ............ RN/LPN/MTA ............................... room, angiography ...................... PACS Workstation Proxy ............ RN/LPN/MTA ............................... room, angiography ...................... swab, patient prep, 3.0 ml (chloraprep). PACS Workstation Proxy ............ povidone soln (Betadine) ............ vascular sheath ........................... catheter, thrombectomy-Fogarty RN/LPN/MTA ............................... NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF ........................................... Clean room/equipment by physician staff. Sedate/Apply anesthesia .. Assist physician in performing procedure. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Prepare and position patient/monitor patient/set up IV. ........................................... ........................................... Prepare and position patient/monitor patient/set up IV. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Prepare and position pt/ monitor pt/set up IV. ........................................... 34 2 6 15 51 87 87 27 87 87 51 5 72 91 5 72 91 0 60 2 1 5 76 0 3 0 40 82 82 24 82 82 46 3 70 89 3 70 89 2 0 1 0 3 E18: Refined equipment time to conform to established policies for PACS Workstation Proxy. E6: Refined equipment time to conform to established policies for equipment with 4x monitoring time. E6: Refined equipment time to conform to established policies for equipment with 4x monitoring time. E15: Refined equipment time to conform to changes in clinical labor time. E6: Refined equipment time to conform to established policies for equipment with 4x monitoring time. E6: Refined equipment time to conform to established policies for equipment with 4x monitoring time. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. L11: Removed clinical labor associated with moderate sedation; moderate sedation not typical for this procedure. L1: Refined time to standard for this clinical labor task. L11: Removed clinical labor associated with moderate sedation; moderate sedation not typical for this procedure. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. G1: See preamble text ....................... S2: Supply removed due to redundancy when used together with supply SA015. S2: Supply removed due to redundancy when used together with supply SA015. S7: Supply item replaced by another item; see preamble. S8: Supply item replaces another item; see preamble. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. G1: See preamble text ....................... G1: See preamble text ....................... 0.92 ¥1.02 ¥1.23 ¥5.55 ¥0.05 ¥0.03 ¥0.07 ¥15.76 ¥0.01 ¥0.03 ¥0.11 ¥0.74 ¥10.51 ¥0.04 ¥0.74 ¥10.51 ¥0.04 3.62 ¥0.48 ¥20.50 ¥101.75 ¥0.74 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80375 VerDate Sep<11>2014 Injection for cholangiogram. Injection for cholangiogram. Injection for cholangiogram. HCPCS code description 22:03 Nov 11, 2016 Jkt 241001 PO 00000 47532 .... Frm 00208 Fmt 4701 Sfmt 4700 Plmt biliary drainage cath Plmt biliary drainage cath Plmt biliary drainage cath Plmt biliary drainage cath Plmt biliary drainage cath Plmt biliary drainage cath Plmt biliary drainage cath Plmt biliary drainage cath Plmt biliary drainage cath Plmt biliary drainage cath 47533 .... 47533 .... 47532 .... 47532 .... 47532 .... 47532 .... 47532 .... 47532 .... 47532 .... Injection for cholangiogram. Injection for cholangiogram. Injection for cholangiogram. Injection for cholangiogram. Injection for cholangiogram. Plmt biliary drainage cath Injection for cholangiogram. 47532 .... 47532 .... 47532 .... Injection for cholangiogram. Injection for cholangiogram. Injection for cholangiogram. 47532 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 47533 .... 47533 .... 47533 .... E:\FR\FM\15NOR2.SGM 47533 .... 47533 .... 15NOR2 47533 .... 47533 .... 47533 .... 47533 .... L051A ...... L051A ...... L041B ...... EQ250 ..... EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... ED050 ...... SA044 ...... L051A ...... L051A ...... L051A ...... L041B ...... EQ250 ..... EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... Input code RN ............................................... RN ............................................... Radiologic Technologist .............. ultrasound unit, portable .............. light, exam ................................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... PACS Workstation Proxy ............ pack, conscious sedation ............ RN ............................................... RN ............................................... RN ............................................... Radiologic Technologist .............. ultrasound unit, portable .............. light, exam ................................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... Input code description NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF/F Clean room/equipment by physician staff. Assist Physician in Performing Procedure (CS). Monitor pt. following moderate sedation. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Clean room/equipment by physician staff. Assist Physician in Performing Procedure (CS). Monitor pt. following moderate sedation. Sedate/Apply anesthesia .. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Labor activity (where applicable) 15 60 6 34 34 190 190 72 190 190 34 1 2 15 45 6 34 34 190 190 57 190 190 RUC recommendation or current value (min or qty) 0 0 3 85 85 187 187 69 187 187 91 0 0 0 0 3 70 70 187 187 54 187 187 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. L1: Refined time to standard for this clinical labor task. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS supply backed out input. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. L1: Refined time to standard for this clinical labor task. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. Comment ¥7.65 ¥30.60 ¥1.23 5.93 0.22 ¥0.02 ¥0.04 ¥15.76 0.00 ¥0.02 1.26 ¥17.31 ¥1.02 ¥7.65 ¥22.95 ¥1.23 4.18 0.16 ¥0.02 ¥0.04 ¥15.76 0.00 ¥0.02 Direct costs change 80376 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Plmt biliary drainage cath VerDate Sep<11>2014 47534 .... Plmt biliary drainage cath Plmt biliary drainage cath 47533 .... 22:03 Nov 11, 2016 47534 .... Plmt biliary drainage cath Plmt biliary drainage cath 47534 .... Jkt 241001 PO 00000 Plmt biliary drainage cath 47534 .... 47534 .... Plmt biliary drainage cath Plmt biliary drainage cath 47534 .... Frm 00209 Fmt 4701 Sfmt 4700 Plmt biliary drainage cath Plmt biliary drainage cath Conversion ext bil drg cath 47534 .... 47534 .... 47534 .... 47535 .... Conversion ext bil drg cath Plmt biliary drainage cath 47534 .... E:\FR\FM\15NOR2.SGM 47535 .... Conversion ext bil drg cath Conversion ext bil drg cath 47535 .... Conversion ext bil drg cath Conversion ext bil drg cath Conversion ext bil drg cath Conversion ext bil drg cath Conversion ext bil drg cath Conversion ext bil drg cath Conversion ext bil drg cath 47535 .... Conversion ext bil drg cath 47535 .... Plmt biliary drainage cath 47534 .... Plmt biliary drainage cath 47534 .... Plmt biliary drainage cath 47534 .... Plmt biliary drainage cath 47533 .... mstockstill on DSK3G9T082PROD with RULES2 47535 .... 47535 .... 15NOR2 47535 .... 47535 .... 47535 .... 47535 .... 47535 .... SA044 ...... L051A ...... L051A ...... L051A ...... L041B ...... EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... ED050 ...... SA044 ...... L051A ...... L051A ...... L051A ...... L041B ...... EQ250 ..... EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... ED050 ...... SA044 ...... L051A ...... pack, conscious sedation ............ RN ............................................... RN ............................................... RN ............................................... Radiologic Technologist .............. light, exam ................................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... PACS Workstation Proxy ............ pack, conscious sedation ............ RN ............................................... RN ............................................... RN ............................................... Radiologic Technologist .............. ultrasound unit, portable .............. light, exam ................................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... PACS Workstation Proxy ............ pack, conscious sedation ............ RN ............................................... NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF ........................................... Clean room/equipment by physician staff. Assist Physician in Performing Procedure (CS). Monitor pt. following moderate sedation. Sedate/Apply anesthesia .. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Clean room/equipment by physician staff. Assist Physician in Performing Procedure (CS). Monitor pt. following moderate sedation. Sedate/Apply anesthesia .. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Sedate/Apply anesthesia .. 1 2 15 45 6 34 190 190 57 190 190 34 1 2 15 68 6 34 34 190 190 80 190 190 34 1 2 0 0 0 0 3 70 187 187 54 187 187 76 0 0 0 0 3 93 93 187 187 77 187 187 99 0 0 G1: See preamble text MS minutes backed out input. G1: See preamble text MS supply backed out input. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. L1: Refined time to standard for this clinical labor task. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS supply backed out input. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. L1: Refined time to standard for this clinical labor task. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS supply backed out input. ¥1.02 ¥17.31 ¥1.02 ¥7.65 ¥22.95 ¥1.23 0.16 ¥0.02 ¥0.04 ¥15.76 0.00 ¥0.02 0.92 ¥17.31 ¥1.02 ¥7.65 ¥34.68 ¥1.23 6.86 0.26 ¥0.02 ¥0.04 ¥15.76 0.00 ¥0.02 1.43 ¥17.31 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80377 VerDate Sep<11>2014 Exchange biliary drg cath HCPCS code description 22:03 Nov 11, 2016 47536 .... Exchange biliary drg cath Exchange biliary drg cath 47536 .... Jkt 241001 Exchange biliary drg cath 47536 .... PO 00000 Exchange biliary drg cath 47536 .... Frm 00210 Fmt 4701 Sfmt 4700 Exchange biliary drg cath Exchange biliary drg cath Removal biliary drg cath ... 47536 .... 47536 .... 47536 .... 47537 .... Removal biliary drg cath ... Removal biliary drg cath ... Removal biliary drg cath ... Exchange biliary drg cath 47536 .... Removal biliary drg cath ... Removal biliary drg cath ... Removal biliary drg cath ... Removal biliary drg cath ... Removal biliary drg cath ... Removal biliary drg cath ... Perq plmt bile duct stent .. 47537 .... 47537 .... 47537 .... Exchange biliary drg cath 47536 .... Exchange biliary drg cath 47536 .... Exchange biliary drg cath 47536 .... Exchange biliary drg cath 47536 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 47537 .... 47537 .... 47537 .... E:\FR\FM\15NOR2.SGM 47537 .... 15NOR2 47537 .... 47537 .... 47538 .... ED050 ...... L051A ...... L041B ...... L037D ...... EQ032 ..... EQ168 ..... EQ011 ..... EF018 ...... EF027 ...... EL011 ...... ED050 ...... SA044 ...... L051A ...... L051A ...... L051A ...... L041B ...... EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... ED050 ...... Input code PACS Workstation Proxy ............ RN ............................................... Radiologic Technologist .............. RN/LPN/MTA ............................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... light, exam ................................... stretcher ....................................... table, instrument, mobile ............. room, angiography ...................... PACS Workstation Proxy ............ pack, conscious sedation ............ RN ............................................... RN ............................................... RN ............................................... Radiologic Technologist .............. light, exam ................................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... PACS Workstation Proxy ............ Input code description NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF/F ........................................... Clean room/equipment by physician staff. Sedate/Apply anesthesia .. Assist physician in performing procedure. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Clean room/equipment by physician staff. Assist Physician in Performing Procedure (CS). Monitor pt. following moderate sedation. Sedate/Apply anesthesia .. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Labor activity (where applicable) 34 2 6 15 87 51 87 87 87 27 51 1 2 15 20 6 34 70 70 32 70 70 34 RUC recommendation or current value (min or qty) 84 0 3 0 82 40 82 82 82 24 46 0 0 0 0 3 45 67 67 29 67 67 51 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued G1: See preamble text ....................... E1: Refined equipment time to conform to established policies for nonhighly technical equipment. L11: Removed clinical labor associated with moderate sedation; moderate sedation not typical for this procedure. L1: Refined time to standard for this clinical labor task. L11: Removed clinical labor associated with moderate sedation; moderate sedation not typical for this procedure. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy MS minutes backed out input. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. L1: Refined time to standard for this clinical labor task. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS supply backed out input. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy. G1: See preamble text ....................... G1: See preamble text ....................... E15: Refined equipment time to conform to changes in clinical labor time. G1: See preamble text ....................... Comment 1.10 ¥1.02 ¥1.23 ¥5.55 ¥0.03 ¥0.05 ¥0.07 ¥0.03 ¥0.01 ¥15.76 ¥0.11 ¥17.31 ¥1.02 ¥7.65 ¥10.20 ¥1.23 0.05 ¥0.02 ¥0.04 ¥15.76 0.00 ¥0.02 0.37 Direct costs change 80378 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Perq plmt bile duct stent .. VerDate Sep<11>2014 47538 .... Perq plmt bile duct stent .. Perq plmt bile duct stent .. 47538 .... 22:03 Nov 11, 2016 47538 .... Perq plmt bile duct stent .. Perq plmt bile duct stent .. 47538 .... Jkt 241001 PO 00000 Perq plmt bile duct stent .. Perq plmt bile duct stent .. 47538 .... 47538 .... 47538 .... Perq plmt bile duct stent .. Perq plmt bile duct stent .. 47538 .... Frm 00211 Fmt 4701 Perq plmt bile duct stent .. Sfmt 4700 E:\FR\FM\15NOR2.SGM Perq plmt bile duct stent .. Perq plmt bile duct stent .. Perq plmt bile duct stent .. 47539 .... 47539 .... 47539 .... 47539 .... Perq plmt bile duct stent .. Perq plmt bile duct stent .. 47539 .... Perq plmt bile duct stent .. Perq plmt bile duct stent .. Perq plmt bile duct stent .. Perq plmt bile duct stent .. Perq plmt bile duct stent .. Perq plmt bile duct stent .. Perq plmt bile duct stent .. 47539 .... Perq plmt bile duct stent .. 47539 .... Perq plmt bile duct stent .. 47538 .... 47539 .... Perq plmt bile duct stent .. 47538 .... Perq plmt bile duct stent .. 47538 .... Perq plmt bile duct stent .. 47538 .... Perq plmt bile duct stent .. 47538 .... mstockstill on DSK3G9T082PROD with RULES2 47539 .... 15NOR2 47539 .... 47539 .... 47539 .... 47539 .... 47539 .... 47539 .... SD152 ...... SD150 ...... SA044 ...... L051A ...... L051A ...... L051A ...... L041B ...... EQ250 ..... EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... ED050 ...... SD152 ...... SD150 ...... SA044 ...... L051A ...... L051A ...... L051A ...... L041B ...... EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... catheter, balloon, PTA ................. catheter, balloon ureteral (Dowd) pack, conscious sedation ............ RN ............................................... RN ............................................... RN ............................................... Radiologic Technologist .............. ultrasound unit, portable .............. light, exam ................................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... PACS Workstation Proxy ............ catheter, balloon, PTA ................. catheter, balloon ureteral (Dowd) pack, conscious sedation ............ RN ............................................... RN ............................................... RN ............................................... Radiologic Technologist .............. light, exam ................................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF ........................................... ........................................... ........................................... Clean room/equipment by physician staff. Assist Physician in Performing Procedure (CS). Monitor pt. following moderate sedation. Sedate/Apply anesthesia .. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Clean room/equipment by physician staff. Assist Physician in Performing Procedure (CS). Monitor pt. following moderate sedation. Sedate/Apply anesthesia .. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... 2 0 1 2 15 75 6 34 34 190 190 87 190 190 34 2 0 1 2 15 53 6 34 190 190 65 190 190 0 2 0 0 0 0 3 100 100 187 187 84 187 187 106 0 2 0 0 0 0 3 78 187 187 62 187 187 G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. L1: Refined time to standard for this clinical labor task. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS supply backed out input. S8: Supply item replaces another item; see preamble. S7: Supply item replaced by another item; see preamble. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. L1: Refined time to standard for this clinical labor task. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS supply backed out input. S8: Supply item replaces another item; see preamble. S7: Supply item replaced by another item; see preamble. ¥487.00 130.00 ¥17.31 ¥1.02 ¥7.65 ¥38.25 ¥1.23 7.67 0.29 ¥0.02 ¥0.04 ¥15.76 0.00 ¥0.02 1.59 ¥487.00 130.00 ¥17.31 ¥1.02 ¥7.65 ¥27.03 ¥1.23 0.19 ¥0.02 ¥0.04 ¥15.76 0.00 ¥0.02 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80379 VerDate Sep<11>2014 Perq plmt bile duct stent .. HCPCS code description 22:03 Nov 11, 2016 47540 .... Perq plmt bile duct stent .. Perq plmt bile duct stent .. 47540 .... Jkt 241001 Perq plmt bile duct stent .. 47540 .... PO 00000 Frm 00212 Perq plmt bile duct stent .. Fmt 4701 Perq plmt bile duct stent .. 47540 .... Sfmt 4700 Perq plmt bile duct stent .. 47540 .... E:\FR\FM\15NOR2.SGM Plmt access bil tree sm bwl. 47540 .... 47541 .... Plmt access bil tree sm bwl. Plmt access bil tree sm bwl. Plmt access bil tree sm bwl. Perq plmt bile duct stent .. 47540 .... 15NOR2 47541 .... 47541 .... 47541 .... 47541 .... 47541 .... Plmt access bil tree sm bwl. Plmt access bil tree sm bwl. Plmt access bil tree sm bwl. 47541 .... Perq plmt bile duct stent .. 47540 .... Perq plmt bile duct stent .. 47540 .... Perq plmt bile duct stent .. 47540 .... Perq plmt bile duct stent .. 47540 .... 47540 .... Perq plmt bile duct stent .. 47540 .... Perq plmt bile duct stent .. 47540 .... Perq plmt bile duct stent .. 47540 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... ED050 ...... SD152 ...... SD150 ...... SA044 ...... L051A ...... L051A ...... L051A ...... L041B ...... EQ250 ..... EQ168 ..... EQ032 ..... EQ011 ..... EL011 ...... EF027 ...... EF018 ...... ED050 ...... Input code light, exam ................................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... PACS Workstation Proxy ............ catheter, balloon, PTA ................. catheter, balloon ureteral (Dowd) pack, conscious sedation ............ RN ............................................... RN ............................................... RN ............................................... Radiologic Technologist .............. ultrasound unit, portable .............. light, exam ................................... ECG, 3-channel (with SpO2, NIBP, temp, resp). IV infusion pump ......................... room, angiography ...................... table, instrument, mobile ............. stretcher ....................................... PACS Workstation Proxy ............ Input code description NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF/F ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Clean room/equipment by physician staff. Assist Physician in Performing Procedure (CS). Monitor pt. following moderate sedation. Sedate/Apply anesthesia .. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Labor activity (where applicable) 34 190 190 72 190 190 34 2 0 1 2 15 85 6 34 34 190 190 97 190 190 34 RUC recommendation or current value (min or qty) 85 187 187 69 187 187 91 0 2 0 0 0 0 3 110 110 187 187 94 187 187 116 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued E18: Refined equipment time to conform to established policies for PACS Workstation Proxy MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. L1: Refined time to standard for this clinical labor task. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS supply backed out input. S8: Supply item replaces another item; see preamble SD152. S7: Supply item replaced by another item; see preamble SD150. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E15: Refined equipment time to conform to changes in clinical labor time MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. Comment 0.22 ¥0.02 ¥0.04 ¥15.76 0.00 ¥0.02 1.26 ¥487.00 130.00 ¥17.31 ¥1.02 ¥7.65 ¥43.35 ¥1.23 8.83 0.33 ¥0.02 ¥0.04 ¥15.76 0.00 ¥0.02 1.81 Direct costs change 80380 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Plmt access bil tree sm bwl. VerDate Sep<11>2014 Dilate biliary duct/ampulla Dilate biliary duct/ampulla 47541 .... 22:03 Nov 11, 2016 47542 .... 47542 .... Jkt 241001 Dilate biliary duct/ampulla PO 00000 Frm 00213 Dilate biliary duct/ampulla Endoluminal bx biliary tree 47542 .... 47542 .... 47543 .... Endoluminal bx biliary tree Dilate biliary duct/ampulla 47542 .... Fmt 4701 Endoluminal bx biliary tree 47543 .... Sfmt 4700 E:\FR\FM\15NOR2.SGM Removal duct glbldr calculi Removal duct glbldr calculi Removal duct glbldr calculi Removal duct glbldr calculi 47543 .... 47544 .... 47544 .... 47544 .... 47544 .... 47544 .... Removal duct glbldr calculi Endoluminal bx biliary tree Removal duct glbldr calculi 47543 .... 15NOR2 Removal duct glbldr calculi Endoluminal bx urtr rnl plvs. Ureteral embolization/occl Balloon dilate urtrl strix ..... Irrigation of bladder .......... Irrigation of bladder .......... Irrigation of bladder .......... Insert bladder catheter ..... 47544 .... 47544 .... 50606 .... 51700 .... 51700 .... 51701 .... 50705 .... 50706 .... 51700 .... Removal duct glbldr calculi 47544 .... Endoluminal bx biliary tree 47543 .... Endoluminal bx biliary tree 47543 .... Dilate biliary duct/ampulla 47542 .... 47542 .... 47541 .... 47541 .... 47541 .... 47541 .... Plmt access bil tree sm bwl. Plmt access bil tree sm bwl. Plmt access bil tree sm bwl. Plmt access bil tree sm bwl. Plmt access bil tree sm bwl. Dilate biliary duct/ampulla 47541 .... mstockstill on DSK3G9T082PROD with RULES2 SD024 ...... SJ031 ...... SD030 ...... EL011 ...... EL011 ...... SD024 ...... SD315 ...... EL011 ...... SD152 ...... SD150 ...... L051A ...... EQ032 ..... EQ011 ..... EF027 ...... SD315 ...... EF018 ...... L051A ...... EQ032 ..... EQ011 ..... EF027 ...... EF018 ...... SD152 ...... SD150 ...... L051A ...... EQ032 ..... EQ011 ..... EF027 ...... EF018 ...... SA044 ...... L051A ...... L051A ...... L051A ...... L041B ...... EQ250 ..... catheter, Foley ............................. leg or urinary drainage bag ......... catheter, straight .......................... room, angiography ...................... room, angiography ...................... catheter, Foley ............................. Stone basket ............................... room, angiography ...................... catheter, balloon, PTA ................. catheter, balloon ureteral (Dowd) RN ............................................... ECG, 3-channel (with Sp02, NIBP, temp, resp). IV infusion pump ......................... table, instrument, mobile ............. Stone basket ............................... stretcher ....................................... RN ............................................... ECG, 3-channel (with Sp02, NIBP, temp, resp). IV infusion pump ......................... table, instrument, mobile ............. stretcher ....................................... catheter, balloon, PTA ................. catheter, balloon ureteral (Dowd) RN ............................................... ECG, 3-channel (with Sp02, NIBP, temp, resp). IV infusion pump ......................... table, instrument, mobile ............. stretcher ....................................... pack, conscious sedation ............ RN ............................................... RN ............................................... RN ............................................... Radiologic Technologist .............. ultrasound unit, portable .............. NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Assist Physician in Performing Procedure (CS). ........................................... ........................................... ........................................... ........................................... Assist Physician in Performing Procedure (CS). ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Assist Physician in Performing Procedure (CS). ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Clean room/equipment by physician staff. Assist Physician in Performing Procedure (CS). Monitor pt. following moderate sedation. Sedate/Apply anesthesia .. ........................................... 1 0 1 61 61 0 0 46 1 0 45 45 45 45 1 45 30 30 30 30 30 1 0 30 30 30 30 30 1 2 15 60 6 34 0 1 0 62 62 1 1 47 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 3 85 G1: See preamble text ....................... G1: See preamble text ....................... S8: Supply item replaces another item; see preamble SD030. S7: Supply item replaced by another item; see preamble SD024. S8: Supply item replaces another item; see preamble SD030. S7: Supply item replaced by another item; see preamble SD030. E1: Refined equipment time to conform to established policies for nonhighly technical equipment MS minutes backed out input. L1: Refined time to standard for this clinical labor task. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS supply backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. S8: Supply item replaces another item; see preamble. S7: Supply item replaced by another item; see preamble. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text ....................... G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. G1: See preamble text MS minutes backed out input. S8: Supply item replaces another item; see preamble. S7: Supply item replaced by another item; see preamble. G1: See preamble text ....................... G1: See preamble text ....................... ¥7.82 3.08 ¥1.70 5.25 5.25 7.82 417.00 5.25 ¥243.50 65.00 ¥22.95 ¥0.28 ¥0.63 ¥0.06 ¥417.00 ¥0.23 ¥15.30 ¥0.19 ¥0.42 ¥0.04 ¥0.15 ¥243.50 65.00 ¥15.30 ¥0.19 ¥0.42 ¥0.04 ¥0.15 ¥17.31 ¥1.02 ¥7.65 ¥30.60 ¥1.23 5.93 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80381 VerDate Sep<11>2014 Insert bladder catheter ..... HCPCS code description 22:03 Nov 11, 2016 Jkt 241001 Cystoscopy ....................... Cystoscopy ....................... 52000 .... 52000 .... 52000 .... Cystoscopy ....................... Cystoscopy ....................... 51701 .... PO 00000 Frm 00214 58558 .... Hysteroscopy biopsy ........ Hysteroscopy biopsy ........ 58555 .... Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM Hysteroscopy remove fb ... Njx interlaminar crv/thrc .... Njx interlaminar crv/thrc .... Njx interlaminar lmbr/sac .. Njx interlaminar lmbr/sac .. 58558 .... 58562 .... 62321 .... 62321 .... 62323 .... 62323 .... Njx interlaminar crv/thrc .... Hysteroscopy biopsy ........ 58558 .... Njx interlaminar crv/thrc .... Njx interlaminar lmbr/sac .. Njx interlaminar lmbr/sac .. Mri orbit/face/neck w/o dye 62325 .... Hysteroscopy biopsy ........ 58558 .... Hysteroscopy dx sep proc 52000 .... Insert bladder catheter ..... 51701 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 62325 .... 15NOR2 62327 .... 62327 .... 70540 .... ED053 ...... EQ211 ..... EF018 ...... EQ211 ..... EF018 ...... EQ211 ..... EF018 ...... EQ211 ..... EF018 ...... L037D ...... SD031 ...... SD009 ...... SA123 ...... EQ235 ..... L037D ...... ES031 ...... EQ167 ..... EF031 ...... EF027 ...... SJ031 ...... SD030 ...... Input code Professional PACS Workstation .. pulse oximeter w-printer .............. stretcher ....................................... pulse oximeter w-printer .............. stretcher ....................................... pulse oximeter w-printer .............. stretcher ....................................... pulse oximeter w-printer .............. stretcher ....................................... RN/LPN/MTA ............................... catheter, suction .......................... Hysteroscopic fluid management tubing kit. canister, suction .......................... suction machine (Gomco) ........... video system, endoscopy (processor, digital capture, monitor, printer, cart). RN/LPN/MTA ............................... light source, xenon ...................... table, power ................................. table, instrument, mobile ............. leg or urinary drainage bag ......... catheter, straight .......................... Input code description NF NF NF NF NF NF NF NF NF F NF NF NF NF F NF NF NF NF NF NF NF/F ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Conduct phone calls/call in prescriptions. ........................................... ........................................... ........................................... ........................................... Conduct phone calls/call in prescriptions. ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Labor activity (where applicable) 24 73 73 73 73 73 73 73 73 0 1 1 0 51 0 17 17 17 17 1 0 RUC recommendation or current value (min or qty) 0 1 22 75 75 75 75 75 75 75 75 3 0 0 1 0 3 22 22 22 22 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued S1: Duplicative; supply is included in EQ378. S1: Duplicative; supply is included in EQ378. L1: Refined time to standard for this clinical labor task. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy. S8: Supply item replaces another item; see preamble SD024. S7: Supply item replaced by another item; see preamble SD030. E4: Refined equipment time to conform to established policies for scopes. E4: Refined equipment time to conform to established policies for scopes. E4: Refined equipment time to conform to established policies for scopes. E4: Refined equipment time to conform to established policies for scopes. L1: Refined time to standard for this clinical labor task. E9: Equipment removed due to redundancy when used together with equipment EQ378. G1: See preamble text ....................... Comment ¥0.12 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 1.11 ¥0.62 ¥3.91 320.00 ¥0.10 1.11 0.65 0.14 0.08 0.01 ¥3.08 1.70 Direct costs change 80382 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Mri orbit/face/neck w/dye .. VerDate Sep<11>2014 22:03 Nov 11, 2016 Fluoroguide for vein device. Fluoroguide for vein device. 77001 .... 77001 .... 77001 .... Needle localization by xray Fluoroguide for vein device. 70543 .... Jkt 241001 PO 00000 Fluoroguide for spine inject. Frm 00215 Fmt 4701 77003 .... Sfmt 4700 Flowcytometry/tc 1 marker E:\FR\FM\15NOR2.SGM Flowcytometry/tc 1 marker 88184 .... 15NOR2 Flowcytometry/tc 1 marker Flowcytometry/tc 1 marker 88184 .... Flowcytometry/tc 1 marker 88184 .... Flowcytometry/tc 1 marker Fluoroguide for spine inject. 77003 .... 88184 .... Fluoroguide for spine inject. 77003 .... Needle localization by xray 77002 .... 77002 .... Needle localization by xray 77002 .... Mri orbt/fac/nck w/o &w/ dye. 70542 .... mstockstill on DSK3G9T082PROD with RULES2 88184 .... 88184 .... SL186 ...... L045A ...... L045A ...... L045A ...... L033A ...... L033A ...... L041B ...... EL014 ...... ED050 ...... L041B ...... EL014 ...... ED050 ...... L041B ...... EL014 ...... ED050 ...... ED053 ...... ED053 ...... antibody, flow cytometry (each test). Cytotechnologist .......................... Cytotechnologist .......................... Cytotechnologist .......................... Lab Technician ............................ Lab Technician ............................ Radiologic Technologist .............. room, radiographic-fluoroscopic .. PACS Workstation Proxy ............ Radiologic Technologist .............. room, radiographic-fluoroscopic .. PACS Workstation Proxy ............ Radiologic Technologist .............. room, radiographic-fluoroscopic .. PACS Workstation Proxy ............ Professional PACS Workstation .. Professional PACS Workstation .. NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF Clean room/equipment following procedure (including any equipment maintenance that must be done after the procedure). Enter data into laboratory information system, multiparameter analyses and field data entry, complete quality assurance documentation. Instrument start-up, quality control functions, calibration, centrifugation, maintaining specimen tracking, logs and labeling. Load specimen into flow cytometer, run specimen, monitor data acquisition, and data modeling, and unload flow cytometer. Print out histograms, assemble materials with paperwork to pathologists. ........................................... Prepare room, equipment, supplies. ........................................... ........................................... Prepare room, equipment, supplies. ........................................... ........................................... Prepare room, equipment, supplies. ........................................... ........................................... ........................................... ........................................... 1.6 5 10 15 4 2 2 24 27 2 24 27 2 24 27 30 25 1 2 7 13 0 1 0 22 25 0 22 25 0 22 25 28 23 G1: See preamble text ....................... L1: Refined time to standard for this clinical labor task. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. G6: Indirect Practice Expense input and/or not individually allocable to a particular patient for a particular service. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy. E18: Refined equipment time to conform to established policies for PACS Workstation Proxy. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. L6: Add-on code. Additional time for clinical labor task not typical; see preamble text. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. L6: Add-on code. Additional time for clinical labor task not typical; see preamble text. E15: Refined equipment time to conform to changes in clinical labor time. E15: Refined equipment time to conform to changes in clinical labor time. L6: Add-on code. Additional time for clinical labor task not typical; see preamble text. L1: Refined time to standard for this clinical labor task. ¥5.10 ¥1.35 ¥1.35 ¥0.90 ¥1.32 ¥0.33 ¥0.82 ¥2.79 ¥0.04 ¥0.82 ¥2.79 ¥0.04 ¥0.82 ¥2.79 ¥0.04 ¥0.12 ¥0.12 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80383 VerDate Sep<11>2014 Flowcytometry/tc add-on .. HCPCS code description 22:03 Nov 11, 2016 Microslide consultation ..... 88185 .... 88185 .... 88321 .... Microslide consultation ..... Jkt 241001 Microslide consultation ..... Microslide consultation ..... Comprehensive review of data. Comprehensive review of data. Comprehensive review of data. Comprehensive review of data. EEG 41–60 minutes ......... 88323 .... 88323 .... 88323 .... 88325 .... 88325 .... 88325 .... Fmt 4701 Sfmt 4700 Frm 00216 E:\FR\FM\15NOR2.SGM EEG 41–60 minutes ......... 15NOR2 EEG over 1 hour .............. EEG over 1 hour .............. Rcm celulr subcelulr img skn. Rcm celulr subcelulr img skn. 95812 .... 95813 .... 95813 .... 95813 .... 96933 .... 96934 .... EEG 41–60 minutes ......... EEG over 1 hour .............. 95812 .... 95812 .... 88325 .... Microslide consultation ..... 88323 .... PO 00000 Microslide consultation ..... 88321 .... Flowcytometry/tc add-on .. Flowcytometry/tc add-on .. 88185 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 EF031 ...... L047B ...... L042A ...... EQ017 ..... L047B ...... EF003 ...... EQ017 ..... EF003 ...... SL135 ...... L037B ...... L037B ...... SL135 ...... L037B ...... L037B ...... L037B ...... L037B ...... L037B ...... L037B ...... SL089 ...... SL186 ...... L033A ...... Input code table, power ................................. EEG, digital, prolonged testing system (computer w-remote camera). REEGT ........................................ RN/LPN ....................................... EEG, digital, prolonged testing system (computer w-remote camera). REEGT ........................................ bedroom furniture (hospital bed, table, reclining chair). bedroom furniture (hospital bed, table, reclining chair). stain, hematoxylin ........................ Histotechnologist ......................... Histotechnologist ......................... stain, hematoxylin ........................ Histotechnologist ......................... Histotechnologist ......................... Histotechnologist ......................... Histotechnologist ......................... Histotechnologist ......................... lysing reagent (FACS) ................. antibody, flow cytometry (each test). Histotechnologist ......................... Lab Technician ............................ Input code description NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF/F Perform procedure ............ Review imaging with interpreting physician. ........................................... ........................................... Perform procedure ............ ........................................... ........................................... ........................................... Assemble and deliver slides with paperwork to pathologists. Complete workload recording logs. Collate slides and paperwork. Deliver to pathologist. Assemble and deliver slides with paperwork to pathologists. Clean equipment while performing service. Complete workload recording logs. Collate slides and paperwork. Deliver to pathologist. ........................................... Assemble and deliver slides with paperwork to pathologists. Clean Equipment while performing service. Complete workload recording logs. Collate slides and paperwork. Deliver to pathologist. ........................................... Enter data into laboratory information system, multiparameter analyses and field data entry, complete quality assurance documentation. ........................................... ........................................... Labor activity (where applicable) 32 96 2 142 62 142 108 108 32 0 1 32 1 0 1 1 0 1 3 1.6 1 RUC recommendation or current value (min or qty) 1 0 0 1 0 2 1 0 31 80 0 129 50 129 99 99 16 1 0 16 0 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. G1: See preamble text ....................... E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. G1: See preamble text ....................... G1: See preamble text ....................... G1: See preamble text ....................... L2: Clinical labor task redundant with clinical labor task. G1: See preamble text ....................... G1: See preamble text ....................... L2: Clinical labor task redundant with clinical labor task. L2: Clinical labor task redundant with clinical labor task. G1: See preamble text ....................... L2: Clinical labor task redundant with clinical labor task. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L2: Clinical labor task redundant with clinical labor task. G1: See preamble text ....................... G1: See preamble text ....................... G6: Indirect Practice Expense input and/or not individually allocable to a particular patient for a particular service. Comment ¥0.02 ¥7.52 ¥0.84 ¥1.91 ¥5.64 ¥0.08 ¥1.32 ¥0.05 ¥0.70 0.37 ¥0.37 ¥0.70 ¥0.37 0.37 ¥0.37 ¥0.37 0.37 ¥0.37 ¥4.49 ¥5.10 ¥0.33 Direct costs change 80384 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Rcm celulr subcelulr img skn. VerDate Sep<11>2014 22:03 Nov 11, 2016 Rcm celulr subcelulr img skn. 96934 .... 96934 .... Jkt 241001 Rcm celulr subcelulr img skn. PO 00000 Frm 00217 96935 .... Rcm celulr subcelulr img skn. Rcm celulr subcelulr img skn. 96935 .... Fmt 4701 Sfmt 4700 Pt eval low complex 20 min. Pt eval low complex 20 min. Pt eval low complex 20 min. Pt eval low complex 20 min. Pt eval mod complex 30 min. 96935 .... 97161 .... 97161 .... 97161 .... 97161 .... 97162 .... 97161 .... 97161 .... 97161 .... 97161 .... Rcm celulr subcelulr img skn. Pt eval low complex 20 min. Pt eval low complex 20 min. Pt eval low complex 20 min. Pt eval low complex 20 min. 96935 .... Rcm celulr subcelulr img skn. 96935 .... 96935 .... Rcm celulr subcelulr img skn. Rcm celulr subcelulr img skn. Rcm celulr subcelulr img skn. 96934 .... 96934 .... Rcm celulr subcelulr img skn. 96934 .... mstockstill on DSK3G9T082PROD with RULES2 E:\FR\FM\15NOR2.SGM 15NOR2 L039B ...... L039B ...... L039B ...... L039B ...... L039B ...... L023A ...... EQ243 ..... EQ219 ..... EF028 ...... L042A ...... L042A ...... L042A ...... ES056 ...... EQ168 ..... EF031 ...... L042A ...... L042A ...... L042A ...... ES056 ...... EQ168 ..... Physical Therapy Assistant ......... Physical Therapy Assistant ......... Physical Therapy Assistant ......... Physical Therapy Assistant ......... Physical Therapy Assistant ......... Physical Therapy Aide ................ rehab and testing system (BTE primus). treadmill ....................................... table, mat, hi-lo, 6 x 8 platform ... RN/LPN ....................................... RN/LPN ....................................... RN/LPN ....................................... reflectance confocal imaging system. light, exam ................................... table, power ................................. RN/LPN ....................................... RN/LPN ....................................... RN/LPN ....................................... reflectance confocal imaging system. light, exam ................................... NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF Obtain/record medical and medication history, self assessment tools, and fall screening for PT review. Obtain/record medical and medication history, self assessment tools, and fall screening for PT review. Obtain vital signs .............. Assist physical therapist with exam/evaluation, obtain records/measures. Conduct phone calls/call in prescriptions. Prepare and position pt/ monitor pt/set up IV. ........................................... ........................................... Review imaging with interpreting physician. ........................................... Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist. Prepare and position pt/ monitor pt/set up IV. ........................................... ........................................... Review imaging with interpreting physician. ........................................... Patient clinical information and questionnaire reviewed by technologist, order from physician confirmed and exam protocoled by radiologist. Prepare and position pt/ monitor pt/set up IV. ........................................... ........................................... 10 3 5 0 5 0 5 5 13 2 2 2 32 32 32 2 2 2 32 32 8 5 8 3 10 2 3 10 20 0 1 0 31 31 31 1 1 0 31 31 L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. G1: See preamble text ....................... E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L6: Add-on code. Additional time for clinical labor task not typical; see preamble text. G1: See preamble text ....................... E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. L6: Add-on code. Additional time for clinical labor task not typical; see preamble text. L6: Add-on code. Additional time for clinical labor task not typical; see preamble text. G1: See preamble text ....................... E1: Refined equipment time to conform to established policies for nonhighly technical equipment. E1: Refined equipment time to conform to established policies for nonhighly technical equipment. L6: Add-on code. Additional time for clinical labor task not typical; see preamble text. ¥0.78 0.78 1.17 1.17 1.95 0.46 ¥0.03 0.89 0.07 ¥0.84 ¥0.42 ¥0.84 ¥0.37 0.00 ¥0.02 ¥0.42 ¥0.42 ¥0.84 ¥0.37 0.00 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80385 VerDate Sep<11>2014 22:03 Nov 11, 2016 Pt eval high complex 45 min. Pt re-eval est plan care .... 97163 .... Jkt 241001 PO 00000 Frm 00218 Fmt 4701 Sfmt 4700 Ot eval low complex 20 min. Ot eval min. Ot eval min. Ot eval min. Ot eval min. Ot eval min. 97165 .... 97166 .... E:\FR\FM\15NOR2.SGM 15NOR2 97167 .... 97167 .... 97167 .... 97167 .... high complex 45 high complex 45 high complex 45 high complex 45 mod complex 30 low complex 20 low complex 20 low complex 20 low complex 20 low complex 20 low complex 20 low complex 20 low complex 20 Ot eval low complex 20 min. 97165 .... 97165 .... 97165 .... 97165 .... 97165 .... 97165 .... 97165 .... 97165 .... 97165 .... low complex 20 Ot eval min. Ot eval min. Ot eval min. Ot eval min. Ot eval min. Ot eval min. Ot eval min. Ot eval min. Ot eval min. 97165 .... 97164 .... high complex 45 high complex 45 high complex 45 high complex 45 Pt eval high complex 45 min. 97163 .... 97163 .... 97163 .... 97163 .... 97163 .... high complex 45 Pt eval min. Pt eval min. Pt eval min. Pt eval min. Pt eval min. HCPCS code description 97163 .... HCPCS code mstockstill on DSK3G9T082PROD with RULES2 EQ117 ..... EQ068 ..... EL002 ...... EF033 ...... L039B ...... L039B ...... L039B ...... L039B ...... ES058 ...... ES057 ...... EQ152 ..... EQ151 ..... EQ143 ..... EQ068 ..... EL002 ...... EF033 ...... L039B ...... SM022 ..... L039B ...... L039B ...... EQ243 ..... EQ201 ..... EQ148 ..... EF028 ...... Input code balance assessment-retraining system (Balance Master). evaluation system for upper extremity-hand (Greenleaf). environmental module—kitchen .. table, treatment, hi-lo .................. Physical Therapy Assistant ......... Physical Therapy Assistant ......... Physical Therapy Assistant ......... Physical Therapy Assistant ......... environmental module—bathroom. kit, vision ...................................... kit, sensory .................................. kit, motor coordination ................. balance assessment-retraining system (Balance Master). kit, ADL ........................................ environmental module—kitchen .. table, treatment, hi-lo .................. sanitizing cloth-wipe (surface, instruments, equipment). Physical Therapy Assistant ......... Physical Therapy Assistant ......... Physical Therapy Assistant ......... treadmill ....................................... kit, hand dexterity, sensory, strength. parallel bars, platform mounted .. table, mat, hi-lo, 6 x 8 platform ... Input code description NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF NF/F ........................................... ........................................... ........................................... ........................................... Obtain measurements ...... Obtain vital signs .............. Assist physician in performing procedure (15%). Obtain measurements ...... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... ........................................... Obtain/record medical and medication history, self assessment tools, and fall screening for PT review. ........................................... Assist physical therapist with exam/evaluation, obtain records/measures. Obtain/record medical and medication history, self assessment tools, and fall screening for PT review. ........................................... ........................................... ........................................... ........................................... ........................................... Labor activity (where applicable) 5 0 14 15 8 3 4 5 0 0 2 2 8 0 10 0 5 6 12 15 0 5 5 30 RUC recommendation or current value (min or qty) 4 8 11 10 6 5 6 7 3 10 3 3 11 8 11 10 4 5 8 10 3 0 2 20 CMS refinement (min or qty) TABLE 28—CY 2017 FINAL RULE DIRECT PE REFINEMENT TABLE—Continued E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. G1: See preamble text ....................... S5: Refined supply quantity to conform with other codes in the family. G1: See preamble text ....................... E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. Comment ¥0.07 0.43 ¥0.34 ¥0.03 ¥0.78 0.78 0.78 0.78 0.00 0.64 0.00 0.00 0.00 0.43 0.11 0.05 ¥0.39 ¥0.05 ¥1.56 ¥1.95 0.04 ¥0.02 ¥0.01 ¥0.10 Direct costs change 80386 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations VerDate Sep<11>2014 Ot re-eval est plan care .... Prostate biopsy, any mthd Prostate biopsy, any mthd 97168 .... G0416 .... G0416 .... high complex 45 high complex 45 high complex 45 high complex 45 Ot eval high complex 45 min. 97167 .... 97167 .... 97167 .... 97167 .... 97167 .... high complex 45 Ot eval min. Ot eval min. Ot eval min. Ot eval min. Ot eval min. 97167 .... mstockstill on DSK3G9T082PROD with RULES2 17:02 Nov 12, 2016 SL201 ...... L039B ...... SL063 ...... L039B ...... L039B ...... ES057 ...... EQ219 ..... EQ185 ..... EQ143 ..... stain, eosin .................................. Physical Therapy Assistant ......... eosin y ......................................... Physical Therapy Assistant ......... neurobehavioral status instrument. rehab and testing system (BTE primus). environmental module — bathroom. Physical Therapy Assistant ......... kit, ADL ........................................ NF NF NF NF NF NF NF NF NF ........................................... Obtain measurements ...... ........................................... Assist physician in performing procedure (15%). Obtain measurements ...... ........................................... ........................................... ........................................... ........................................... 0 3 48 12 9 14 5 11 15 48 2 0 6 7 10 3 0 11 E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. E11: Refined equipment time to conform with other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. L3: Refined clinical labor time to conform with identical labor activity in other codes in the family. G1: See preamble text ....................... S7: Supply item replaced by another item; see preamble SL201. S8: Supply item replaces another item; see preamble SL063. 3.24 ¥0.39 ¥38.45 ¥2.34 ¥0.78 ¥0.26 ¥0.36 ¥0.59 ¥0.01 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Jkt 241001 PO 00000 Frm 00219 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80387 80388 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 29—CY 2017 FINAL RULE NO PE REFINEMENT TABLE TABLE 29—CY 2017 FINAL RULE NO PE REFINEMENT TABLE—Continued TABLE 29—CY 2017 FINAL RULE NO PE REFINEMENT TABLE—Continued HCPCS Code HCPCS Code Short Descriptor HCPCS Code Short Descriptor Establish access to artery. Access av dial grft for eval. Access av dial grft for proc. Place catheter in aorta. Place cath xtrnl carotid. Place cath intracranial art. Ins cath abd/l-ext art 1st. Ins cath abd/l-ext art 2nd. Ins cath abd/l-ext art 3rd. Ins cath abd/l-ext art addl. Insertion of catheter vein. Insert non-tunnel cv cath. Insert tunneled cv cath. Insert tunneled cv cath. Insert tunneled cv cath. Insert tunneled cv cath. Insert tunneled cv cath. Insert tunneled cv cath. Insert tunneled cv cath. Insert picc cath. Insert picvad cath. Insert picvad cath. Repair tunneled cv cath. Replace tunneled cv cath. Replace tunneled cv cath. Replace tunneled cv cath. Replace tunneled cv cath. Replace picvad cath. Removal tunneled cv cath. Percut thrombect av fistula. Balo angiop ctr dialysis seg. Stent plmt ctr dialysis seg. Dialysis circuit embolj. Remove hepatic shunt (tips). Prim art m-thrmbc sbsq vsl. Sec art thrombectomy addon. Rem endovas vena cava filter. Iliac revasc add-on. Iliac revasc w/stent add-on. Tib/per revasc add-on. Tibper revasc w/ather addon. Revsc opn/prq tib/pero stent. Tib/per revasc stnt & ather. Open/perq place stent ea add. Open/perq place stent ea add. Trluml balo angiop addl art. Trluml balo angiop addl vein. Intrvasc us noncoronary 1st. Intrvasc us noncoronary addl. Esophagoscopy flexible brush. Esoph scope w/submucous inj. Esophagoscopy flex biopsy. Esoph optical endomicroscopy. Esophagoscopy retro balloon. 43215 ............... Esophagoscopy flex remove fb. Esophagoscopy lesion removal. Esophagoscopy snare les remv. Esophagoscopy balloon <30mm. Esoph endoscopy dilation. Esophagoscopy control bleed. Esophagoscopy lesion ablate. Esophagoscop ultrasound exam. Esophagoscopy w/us needle bx. Egd diagnostic brush wash. Uppr gi scope w/submuc inj. Egd biopsy single/multiple. Egd dilate stricture. Egd remove foreign body. Egd guide wire insertion. Esoph egd dilation <30 mm. Egd cautery tumor polyp. Egd remove lesion snare. Egd optical endomicroscopy. Egd control bleeding any. Egd lesion ablation. Laps esophgl sphnctr agmntj. Rmvl esophgl sphnctr dev. Dilate esophagus 1/mult pass. Dilate esophagus. Small bowel endoscopy br/ wa. Small bowel endoscopy br/ wa. Small bowel endoscopy. Endoscopy of bowel pouch. Endoscopy bowel pouch/ biop. Colonoscopy thru stoma spx. Colonoscopy with biopsy. Colonoscopy for foreign body. Colonoscopy for bleeding. Colonoscopy & polypectomy. Colonoscopy w/snare. Colonoscopy with ablation. Colonoscopy w/injection. Colonoscopy w/dilation. Proctosigmoidoscopy dilate. Proctosigmoidoscopy w/bx. Proctosigmoidoscopy fb. Proctosigmoidoscopy removal. Proctosigmoidoscopy removal. Proctosigmoidoscopy removal. Proctosigmoidoscopy bleed. Short Descriptor 00740 00810 11730 19298 ............... ............... ............... ............... 20245 20550 20552 20553 20982 20983 22512 22515 ............... ............... ............... ............... ............... ............... ............... ............... 22526 22527 22853 22854 22859 22867 22868 22869 22870 28289 28291 28292 28295 28296 28297 28298 28299 31615 31622 31623 31624 31625 31626 31627 31628 ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... 31629 ............... 31632 ............... 31633 ............... 31634 ............... 31635 ............... 31645 ............... 31646 ............... 31652 ............... 31653 ............... 31654 ............... mstockstill on DSK3G9T082PROD with RULES2 32405 ............... 32550 32553 33340 33390 33391 35471 35472 35475 35476 36010 ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... VerDate Sep<11>2014 Anesth upper gi visualize. Anesth low intestine scope. Removal of nail plate. Place breast rad tube/ caths. Bone biopsy excisional. Inj tendon sheath/ligament. Inj trigger point 1/2 muscl. Inject trigger points 3/>. Ablate bone tumor(s) perq. Ablate bone tumor(s) perq. Vertebroplasty addl inject. Perq vertebral augmentation. Idet single level. Idet 1 or more levels. Insj biomechanical device. Insj biomechanical device. Insj biomechanical device. Insj stablj dev w/dcmprn. Insj stablj dev w/dcmprn. Insj stablj dev w/o dcmprn. Insj stablj dev w/o dcmprn. Repair hallux rigidus. Corrj halux rigdus w/implt. Correction of bunion. Correction hallux valgus. Correction of bunion. Correction of bunion. Correction of bunion. Correction of bunion. Visualization of windpipe. Dx bronchoscope/wash. Dx bronchoscope/brush. Dx bronchoscope/lavage. Bronchoscopy w/biopsy(s). Bronchoscopy w/markers. Navigational bronchoscopy. Bronchoscopy/lung bx each. Bronchoscopy/needle bx each. Bronchoscopy/lung bx addl. Bronchoscopy/needle bx addl. Bronch w/balloon occlusion. Bronchoscopy w/fb removal. Bronchoscopy clear airways. Bronchoscopy reclear airway. Bronch ebus samplng 1/2 node. Bronch ebus samplng 3/ node. Bronch ebus ivntj perph les. Percut bx lung/mediastinum. Insert pleural cath. Ins mark thor for rt perq. Perq clsr tcat l atr apndge. Valvuloplasty aortic valve. Valvuloplasty aortic valve. Repair arterial blockage. Repair arterial blockage. Repair arterial blockage. Repair venous blockage. Place catheter in vein. 22:03 Nov 11, 2016 Jkt 241001 36140 36147 36148 36200 36227 36228 36245 36246 36247 36248 36481 36555 36557 36558 36560 36561 36563 36565 36566 36568 36570 36571 36576 36578 36581 36582 36583 36585 36590 36870 36907 ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... 36908 ............... 36909 ............... 37183 ............... 37185 ............... 37186 ............... 37193 ............... 37222 37223 37232 37233 ............... ............... ............... ............... 37234 ............... 37235 ............... 37237 ............... 37239 ............... 37247 ............... 37249 ............... 37252 ............... 37253 ............... 43200 ............... 43201 ............... 43202 ............... 43206 ............... 43213 ............... PO 00000 Frm 00220 Fmt 4701 Sfmt 4700 43216 ............... 43217 ............... 43220 ............... 43226 ............... 43227 ............... 43229 ............... 43231 ............... 43232 ............... 43235 ............... 43236 ............... 43239 43245 43247 43248 43249 ............... ............... ............... ............... ............... 43250 ............... 43251 ............... 43252 ............... 43255 ............... 43270 ............... 43284 ............... 43285 ............... 43450 ............... 43453 ............... 44380 ............... 44381 ............... 44382 ............... 44385 ............... 44386 ............... 44388 ............... 44389 ............... 44390 ............... 44391 ............... 44392 ............... 44394 44401 44404 44405 45303 ............... ............... ............... ............... ............... 45305 ............... 45307 ............... 45308 ............... 45309 ............... 45315 ............... 45317 ............... E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80389 TABLE 29—CY 2017 FINAL RULE NO PE REFINEMENT TABLE—Continued TABLE 29—CY 2017 FINAL RULE NO PE REFINEMENT TABLE—Continued TABLE 29—CY 2017 FINAL RULE NO PE REFINEMENT TABLE—Continued HCPCS Code Short Descriptor HCPCS Code Short Descriptor HCPCS Code 45320 ............... Proctosigmoidoscopy ablate. Sigmoidoscopy w/fb removal. Sigmoidoscopy & polypectomy. Sigmoidoscopy for bleeding. Sigmoidoscopy w/submuc inj. Sigmoidoscopy w/tumr remove. Sig w/tndsc balloon dilation. Sigmoidoscopy w/ablation. Sgmdsc w/band ligation. Diagnostic colonoscopy. Colonoscopy w/fb removal. Colonoscopy and biopsy. Colonoscopy submucous njx. Colonoscopy w/control bleed. Colonoscopy w/lesion removal. Colonoscopy w/lesion removal. Colonoscopy w/balloon dilat. Colonoscopy w/ablation. Colonoscopy w/band ligation. Needle biopsy of liver. Percut ablate liver rf. Perq abltj lvr cryoablation. Ins mark abd/pel for rt perq. Change g-tube to g-j perc. Renal biopsy perq. Perc rf ablate renal tumor. Perc cryo ablate renal tum. Insert temp bladder cath. Insert bladder cath complex. Treatment of bladder lesion. Anal/urinary muscle study. Biopsy of prostate. Insert uteri tandem/ovoids. Hysteroscopy lysis. Hysteroscopy resect septum. 58561 ............... Hysteroscopy remove myoma. Hysteroscopy ablation. Laps abltj uterine fibroids. Dilate ic vasospasm init. Dilate ic vasospasm addon. Dilate ic vasospasm addon. Njx interlaminar crv/thrc. Njx interlaminar lmbr/sac. Njx interlaminar crv/thrc. Njx interlaminar lmbr/sac. Ndsc dcmprn 1 ntrspc lumbar. Destruction ciliary body. Repair detached retina. Repair detached retina. Revise external ear. Us abdl aorta screen aaa. Radiation treatment aid(s). Radiation treatment aid(s). Radiation treatment aid(s). Special radiation treatment. Hyperthermia treatment. Hyperthermia treatment. Hyperthermia treatment. Hyperthermia treatment. Gi tract capsule endoscopy. Esophageal capsule endoscopy. Cmptr ophth dx img ant segmt. Cmptr ophth img optic nerve. Cptr ophth dx img post segmt. Eye exam with photos. Icg angiography. Fluorescein icg angiography. Eye exam with photos. Cardioversion electric ext. Echo transesophageal. Echo transesophageal. Right heart cath. Left hrt cath w/ ventrclgrphy. R&l hrt cath w/ ventriclgrphy. Coronary artery angio s&i. 45332 ............... 45333 ............... 45334 ............... 45335 ............... 45338 ............... 45340 ............... 45346 45350 45378 45379 45380 45381 ............... ............... ............... ............... ............... ............... 45382 ............... 45384 ............... 45385 ............... 45386 ............... 45388 ............... 45398 ............... 47000 47382 47383 49411 49446 50200 50592 50593 51702 51703 ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... 51720 ............... 51784 55700 57155 58559 58560 ............... ............... ............... ............... ............... 58563 58674 61640 61641 ............... ............... ............... ............... 61642 ............... 62320 62322 62324 62326 62380 ............... ............... ............... ............... ............... 66720 67101 67105 69300 76706 77332 77333 77334 77470 77600 77605 77610 77615 91110 ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... 91111 ............... 92132 ............... 92133 ............... 92134 ............... 92235 ............... 92240 ............... 92242 ............... 92250 92960 93312 93314 93451 93452 ............... ............... ............... ............... ............... ............... 93453 ............... 93454 ............... 93455 93456 93457 93458 93459 93460 93461 93464 ............... ............... ............... ............... ............... ............... ............... ............... 93505 93566 93567 93568 93590 93591 93592 ............... ............... ............... ............... ............... ............... ............... 93642 ............... 93644 ............... 95144 95165 95957 96160 96161 ............... ............... ............... ............... ............... 96440 ............... 96931 ............... 96932 ............... 96936 ............... 99151 ............... 99152 ............... 99153 ............... 99155 ............... 99156 ............... 99157 ............... G0341 .............. Short Descriptor Coronary art/grft angio s&i. R hrt coronary artery angio. R hrt art/grft angio. L hrt artery/ventricle angio. L hrt art/grft angio. R&l hrt art/ventricle angio. R&l hrt art/ventricle angio. Exercise w/hemodynamic meas. Biopsy of heart lining. Inject r ventr/atrial angio. Inject suprvlv aortography. Inject pulm art hrt cath. Perq transcath cls mitral. Perq transcath cls aortic. Perq transcath closure each. Electrophysiology evaluation. Electrophysiology evaluation. Antigen therapy services. Antigen therapy services. EEG digital analysis. Pt-focused hlth risk assmt. Caregiver health risk assmt. Chemotherapy intracavitary. Rcm celulr subcelulr img skn. Rcm celulr subcelulr img skn. Rcm celulr subcelulr img skn. Mod sed same phys/qhp <5 yrs. Mod sed same phys/qhp 5/ yrs. Mod sed same phys/qhp ea. Mod sed oth phys/qhp <5 yrs. Mod sed oth phys/qhp 5/ yrs. Mod sed other phys/qhp ea. Percutaneous islet celltrans. TABLE 30—CY 2017 FINAL RULE NEW INVOICES TABLE Invoices received for New Direct PE inputs CMS code Average price Number of invoices ES063 8,000.00 1 541,537 rhinolaryngoscope, flexible, video, channeled .. ES064 9,000.00 1 756 Disposable biopsy forceps ................................ SD318 26.84 1 574 mstockstill on DSK3G9T082PROD with RULES2 CPT/HCPCS codes Item name 31551, 31552, 31553, 31554, 31574, 31575, 31579, 31580, 31584, 31587, 31591, 31592. 31572, 31573, 31576, 31577, 31578. 31576, 31577, 31578 ............... rhinolaryngoscope, flexible, video, non-channeled. VerDate Sep<11>2014 22:03 Nov 11, 2016 Estimated non-facility allowed services for HCPCS codes using this item Jkt 241001 PO 00000 Frm 00221 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80390 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 30—CY 2017 FINAL RULE NEW INVOICES TABLE—Continued Invoices received for New Direct PE inputs CMS code Average price Number of invoices stroboscopy system .......................................... Voice Augmentation Gel ................................... Claravein Kit ..................................................... Sotradecol Sclerosing Agent ............................ Biopsy Guide .................................................... Hysteroscopic tissue removal device ............... Hysteroscopic fluid management system ......... Hysteroscopic resection system (control unit, footpiece, handpiece, sheath, and calibration device). Hysteroscopic fluid management tubing kit ...... Professional PACS Workstation ....................... ES065 SJ090 SA122 SH108 EQ375 SF059 EQ378 EQ379 16,843.87 575.00 890.00 110.20 7,000.00 629.00 14,698.38 19,772.25 1 1 1 1 0 2 1 1 54,466 99 264 528 85,731 2,677 2,677 2,677 SA123 ED053 320.00 14,616.93 1 9 2,677 32,571,650 knee wedge/foot block system ......................... Thermoplastic tissue bolus 30X30X0.3cm ....... water bath, digital control ................................. Supine Breast/Lung Board ............................... Urethane Foaming Agent ................................. flow cytometry analytics software ..................... antigen vial transport envelope ........................ Beck Depression Inventory, Second Edition (BDI–II). IV infusion pump, ambulatory ........................... Imaging Tray ..................................................... adhesive ruler ................................................... reflectance confocal imaging system ............... environmental module—bathroom .................... kit, vision ........................................................... PACS Mammography Workstation ................... patient lift system .............................................. wheelchair accessible scale ............................. leg positioning system ...................................... Chloraprep applicator (26 ml) ........................... LED Light Source (50W LED) .......................... EQ376 SD321 EP120 EQ377 SL519 EQ380 SK127 SK128 3,290.00 23.90 2,350.00 5,773.15 53.50 14,000.00 1.50 2.26 1 1 1 1 1 1 2 1 48,831 3,493 3,493 290,969 287,476 1,680,252 6,464,311 1 EQ381 SA121 SK125 ES056 ES057 ES058 ED054 EF045 EF046 EF047 SJ091 EQ382 2,384.45 34.75 9.95 98,500.00 25,000.00 410.00 103,616.47 2,824.33 875.92 1,076.50 8.48 1,915.00 0 1 1 1 1 1 8 3 3 3 3 1 116,894 5 5 9 115,107 86,912 2,274,249 15,115,789 15,115,789 15,115,789 0 0 CPT/HCPCS codes Item name 31579 ....................................... 31574 ....................................... 36473 ....................................... 36473, 36474 ........................... 55700 ....................................... 58558 ....................................... 58558 ....................................... 58558 ....................................... 58558 ....................................... 70540, 70542, 70543; over 400 additional codes. 77332 ....................................... 77333 ....................................... 77333 ....................................... 77333, 77334 ........................... 77334 ....................................... 88184, 88185 ........................... 95144, 95165 ........................... 96161 ....................................... 96416 ....................................... 96931, 96932 ........................... 96931, 96932 ........................... 96931, 96932, 96934, 96935 ... 97166, 97167, 97168 ............... 97166, 97167 ........................... G0202, G0204, G0206 ............. G0501 ....................................... G0501 ....................................... G0501 ....................................... No Codes ................................. No Codes ................................. Estimated non-facility allowed services for HCPCS codes using this item TABLE 31—CY 2017 FINAL RULE EXISTING INVOICES TABLE Invoices received for Existing Direct PE inputs mstockstill on DSK3G9T082PROD with RULES2 CPT/HCPCS codes 19030, 19081, 19082, 19281, 19282, 19283, 19284, 77053, 77054, G0202, G0204, G0206. 31551, 31552, 31553, 31554, 31572, 31573, 31574, 31575, 31576, 31577, 31578, 31579, 31580, 31584, 31587, 31591, 31592, 190+ other codes. 58555, 58562, 58563, 58565. VerDate Sep<11>2014 Item name CMS code Current price Updated price Percent change Number of invoices Estimated non-facility allowed services for HCPCS codes using this item room, digital mammography. EL013 168,214.00 362,935.00 116 10 2,294,862 video system, endoscopy (processor, digital capture, monitor, printer, cart). ES031 33,232.50 33,391.00 0 3 1,497,130 endoscope, rigid, hysteroscopy. ES009 4,990.50 6,207.50 24 1 672 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00222 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80391 TABLE 31—CY 2017 FINAL RULE EXISTING INVOICES TABLE—Continued Invoices received for Existing Direct PE inputs CMS code Number of invoices Item name 88323, 88355, 88380, 88381. 88360, 88361 ......... stain, eosin ............ SL201 0.04 0.07 55 5 45,393 Antibody Estrogen Receptor monoclonal. kit, capsule endoscopy w-application supplies (M2A). video system, capsule endoscopy (software, computer, monitor, printer). kit, capsule, ESO, endoscopy w-application supplies (ESO). Fibroscan with printer. antigen, venom ...... SL493 3.19 14.00 339 4 216,208 SA005 450.00 520.00 16 1 30,464 ES029 17,000.00 12,450.00 ¥27 1 30,586 SA094 450.00 472.80 5 1 122 ER101 124,950.00 183,390.00 47 1 6,226 SH009 16.67 20.14 21 4 50,772 SH010 30.22 44.05 46 3 37,955 EQ167 ES020 6,723.33 6,301.93 7,000.00 4,250.00 4 ¥33 1 1 2,149,616 581,924 91110, 91111 ......... 91111 ..................... 91200 ..................... 95145, 95146, 95148, 95149. 95147, 95148, 95149. 122 codes .............. 59 codes ................ antigen, venom, trivespid. light source, xenon fiberscope, flexible, rhinolaryngoscopy. M. Therapy Caps mstockstill on DSK3G9T082PROD with RULES2 1. Outpatient Therapy Caps for CY 2017 Section 1833(g) of the Act requires application of annual per beneficiary limitations on the amount of expenses that can be considered as incurred expenses for outpatient therapy services under Medicare Part B, commonly referred to as ‘‘therapy caps.’’ There is one therapy cap for outpatient occupational therapy (OT) services and another separate therapy cap for physical therapy (PT) and speechlanguage pathology (SLP) services combined. The therapy caps apply to outpatient therapy services furnished in all settings, including the previously exempted hospital setting (effective October 1, 2012), critical access hospitals (CAHs) (effective January 1, 2014), and Maryland hospitals paid under the Maryland All-Payer Model (effective January 1, 2016). The therapy cap amounts under section 1833(g) of the Act are updated each year based on the Medicare Economic Index (MEI). Specifically, the annual caps are calculated by updating the previous year’s cap by the MEI for VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Updated price Percent change CPT/HCPCS codes 91110 ..................... Current price Estimated non-facility allowed services for HCPCS codes using this item the upcoming calendar year and rounding to the nearest $10.00. Increasing the CY 2016 therapy cap of $1,960 by the CY 2017 MEI of 1.2 percent and rounding to the nearest $10.00 results in a CY 2017 therapy cap amount of $1,980. An exceptions process for the therapy caps has been in effect since January 1, 2006. Originally required by section 5107 of the Deficit Reduction Act of 2005 (DRA), which amended section 1833(g)(5) of the Act, the exceptions process for the therapy caps has been extended multiple times through subsequent legislation as described in the CY 2015 PFS final rule with comment period (79 FR 67730) and most recently extended by the MACRA. Our current authority to provide an exceptions process for therapy caps expires on December 31, 2017. CMS tracks each beneficiary’s incurred expenses annually and counts them towards the therapy caps by applying the PFS rate for each service less any applicable multiple procedure payment reduction (MPPR) amount. As required by section 1833(g)(6)(B) of the Act, added by section 603(b) of the American Taxpayer Relief Act of 2012 PO 00000 Frm 00223 Fmt 4701 Sfmt 4700 (ATRA) (Pub. L. 112–240) and extended by subsequent legislation, the PFS-rate accrual process is applied to outpatient therapy services furnished by CAHs even though they are paid on a cost basis. As we explained in the CY 2016 PFS final rule, we use cost-based rates to track each beneficiary’s incurred expenses amounts for the outpatient therapy services furnished by the Maryland hospitals paid under the Maryland All-Payer Model, currently being tested under the authority of section 1115A of the Act. After expenses incurred for the beneficiary’s outpatient therapy services for the year have exceeded one or both of the therapy caps, therapy suppliers and providers use the KX modifier on claims for subsequent services to request an exception to the therapy caps. By using the KX modifier, the therapist is attesting that the services above the therapy caps are reasonable and necessary and that there is documentation of medical necessity for the services in the beneficiary’s medical record. Claims for outpatient therapy services over the caps without the KX modifier are denied. E:\FR\FM\15NOR2.SGM 15NOR2 80392 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Since October 1, 2012, under section 1833(g)(5)(C) of the Act as amended by the Middle Class Tax Relief and Jobs Creation Act of 2012 (MCTRJCA) (Pub. L. 112–96), we have been required to apply a manual medical review process to therapy claims when a beneficiary’s incurred expenses for outpatient therapy services exceed a threshold amount of $3,700. Just as there are two separate therapy caps, there are two separate thresholds of $3,700, one for OT services and one for PT and SLP services combined; and incurred expenses are counted towards these thresholds in the same manner as the caps. Under section 1833(g)(5) of the Act, as amended by section 202(b) of the MACRA, not all claims exceeding the therapy thresholds are subject to a manual medical review process as they were before. Instead, since MACRA, we are permitted to do a more targeted medical review on these claims using factors specified in section 1833(g)(5)(E)(ii) of the Act as amended by section 202(b) of the MACRA, including targeting those therapy providers with a high claims denial rate for therapy services or with aberrant billing practices compared to their peers. The manual medical review process required under section 1833(g)(5)(C) of the Act expires at the same time as the exceptions process for therapy caps, on December 31, 2017. For information on the manual medical review process, go to https:// www.cms.gov/Research-Statistics-Dataand-Systems/Monitoring-Programs/ Medicare-FFS-Compliance-Programs/ Medical-Review/TherapyCap.html mstockstill on DSK3G9T082PROD with RULES2 III. Other Provisions of the Final Rule for PFS A. Chronic Care Management (CCM) and Transitional Care Management (TCM) Supervision Requirements in Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) In the CY 2016 PFS final rule with comment period (80 FR 71080 through 71088), we finalized policies for payment of CCM services in RHCs and FQHCs. Payment for CCM services in RHCs and FQHCs was effective beginning on January 1, 2016, for RHCs and FQHCs that furnish a minimum of 20 minutes of qualifying CCM services during a calendar month to patients with multiple (two or more) chronic conditions that are expected to last at least 12 months or until the death of the patient, and that would place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline. Payment is made VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 when CPT code 99490 is billed alone or with other payable services on a RHC or FQHC claim, and the rate is based on the PFS national average non-facility payment rate. The requirement that RHC or FQHC services be furnished face-toface was waived for CCM services furnished to a RHC or FQHC patient because CCM services are not required to be furnished face-to-face. Medicare payment for TCM services furnished by a RHC or FQHC practitioner was effective January 1, 2013, consistent with the effective date of payment for TCM services under the PFS (77 FR 68978 through 68994; also, see CMS-Pub. 100–02, Medicare Benefit Policy Manual, chapter 13, section 110.4). TCM services are billable only when furnished within 30 days of the date of the patient’s discharge from a hospital (including outpatient observation or partial hospitalization), skilled nursing facility, or community mental health center. Communication (direct contact, telephone, or electronic) with the patient or caregiver must commence within 2 business days of discharge, and a face-to-face visit must occur within 14 days of discharge for moderate complexity decision making (CPT code 99495), or within 7 days of discharge for high complexity decision making (CPT code 99496). The TCM visit is billed on the day that the TCM visit takes place, and only one TCM visit may be paid per beneficiary for services furnished during that 30 day post-discharge period. If the TCM visit occurs on the same day as another billable visit, only one visit may be billed. TCM and CCM cannot be billed during the same time period for the same patient. In the CY 2016 PFS final rule with comment period (80 FR 71087), we responded to comments requesting that we make an exception to the supervision requirements for auxiliary personnel furnishing CCM and TCM services incident to physician services in RHCs and FQHCs (80 FR 71087). Auxiliary personnel in RHCs and FQHCs furnish services incident to a RHC or FQHC visit and include nurses, medical assistants, and other clinical personnel who work under the direct supervision of a RHC or FQHC practitioner. The commenters suggested that the regulatory language be amended to be consistent with the provision in § 410.26(b)(5) for CCM and TCM services under the PFS, which states that services and supplies furnished incident to CCM and TCM services can be furnished under general supervision of the physician (or other practitioner) when they are provided by clinical staff. It further specifies that the physician (or PO 00000 Frm 00224 Fmt 4701 Sfmt 4700 other practitioner) supervising the auxiliary personnel need not be the same physician (or other practitioner) upon whose professional service the incident to service is based, but only the supervising physician (or other practitioner) may bill Medicare for incident to services. We responded that due to the differences between physician offices and RHCs and FQHCs in their models of care and payment structures, we believe that the direct supervision requirement for services furnished by auxiliary personnel is appropriate for RHCs and FQHCs, but that we would consider changing this in future rulemaking if RHCs and FQHCs found that requiring direct supervision presents a barrier to furnishing CCM services. Since payment for CCM in RHCs and FQHCs began on January 1, 2016, some RHCs and FQHCs have informed us that, in their view, the direct supervision requirement for auxiliary personnel has limited their ability to furnish CCM services. Specifically, these RHCs and FQHCs have stated that the direct supervision requirement prevented them from entering into contracts with third party companies to provide CCM services, especially during hours that they were not open, and that they were unable to meet the CCM requirements within their current staffing and budget constraints. To bill for CCM services, RHCs and FQHCs must ensure that there is access to care management services on a 24 hour a day, 7 day a week basis. This includes providing the patient with a means to make timely contact with RHC or FQHC practitioners who have access to the patient’s electronic care plan to address his or her urgent chronic care needs. The RHC or FQHC must ensure the care plan is available electronically at all times to anyone within the RHC or FQHC who is providing CCM services. Once the RHC or FQHC practitioner has initiated CCM services and the patient has consented to receiving this service, CCM services can be furnished by a RHC or FQHC practitioner, or by auxiliary personnel, as defined in § 410.26(a)(1), which includes nurses, medical assistants, and other personnel working under physician supervision who meet the requirements to provide incident to services. Auxiliary personnel in RHCs and FQHCs must furnish services under direct supervision, which requires that a RHC or FQHC practitioner be present in the RHC or FQHC and immediately available to furnish assistance and direction. The RHC or FQHC practitioner does not need to be present E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations in the room when the service is furnished. Although many RHCs and FQHCs prefer to furnish CCM and TCM services utilizing existing personnel, some RHCs and FQHCs would like to contract with a third party to furnish aspects of their CCM and TCM services, but cannot do so because of the direct supervision requirement. Without the ability to contract with a third party, these RHCs and FQHCs have stated that they find it difficult to meet the CCM requirements for 24 hours a day, 7 days a week access to services. To enable RHCs and FQHCs to effectively contract with third parties to furnish aspects of CCM and TCM services, we proposed to revise § 405.2413(a)(5) and § 405.2415(a)(5) to state that services and supplies furnished incident to CCM and TCM services can be furnished under general supervision of a RHC or FQHC practitioner. The proposed exception to the direct supervision requirement would apply only to auxiliary personnel furnishing CCM or TCM incident to services, and would not apply to any other RHC or FQHC services. The proposed revisions for CCM and TCM services and supplies furnished by RHCs and FQHCs are consistent with § 410.26(b)(5), which allows CCM and TCM services and supplies to be furnished by clinical staff under general supervision when billed under the PFS. The following is a summary of the comments we received on revising the supervision requirements for RHCs and FQHCs to allow general supervision for auxiliary personnel furnishing CCM or TCM services. Comment: We received 23 comments on our proposal to allow services and supplies furnished incident to CCM and TCM services to be furnished under general supervision of a RHC or FQHC practitioner. All commenters supported this change. Response: We appreciate the support for this proposal. Comment: One commenter urged CMS to use the Advisory Panel on Hospital Outpatient Payment to determine RHC and FQHC supervision levels. Response: Auxiliary personnel in RHCs and FQHCs work under direct supervision of a RHC or FQHC practitioner (consistent with statutory and regulatory authority), and we proposed to make an exception for CCM and TCM services because they are the only RHC and FQHC services that have a non-face-to-face component. We do not foresee any additional exceptions to this policy. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 After considering the comments, we are finalizing this policy to revise § 405.2413(a)(5) and § 405.2415(a)(5) to state that services and supplies furnished incident to CCM and TCM services can be furnished under general supervision of a RHC or FQHC practitioner. B. FQHC-Specific Market Basket 1. Background Section 10501(i)(3)(A) of the Affordable Care Act (Pub. L. 111–148 and Pub. L. 111–152) added section 1834(o) of the Act to establish a payment system for the costs of FQHC services under Medicare Part B based on prospectively set rates. In the Prospective Payment System (PPS) for FQHC Final Rule published in the May 2, 2014 Federal Register (79 FR 25436), CMS implemented a methodology and payment rates for the FQHC PPS. The FQHC PPS base payment rate was determined using FQHC cost report and claims data and was effective for FQHC payments from October 1, 2014, through December 31, 2015 (implementation year). The adjusted base payment rate for the implementation year was $158.85 (79 FR 25455). When calculating the FQHC PPS payment, the base payment rate is multiplied by the FQHC geographic adjustment factor (GAF) based on the location of the FQHC, and adjusted for new patients or when an initial preventive physical examination or annual wellness visit are furnished. Beginning on October 1, 2014, FQHCs began to transition to the FQHC PPS based on their cost reporting periods. As of January 1, 2016, all FQHCs are paid under the FQHC PPS. Section 1834(o)(2)(B)(ii) of the Act requires that the payment for the first year after the implementation year be increased by the percentage increase in the MEI. Therefore, in CY 2016, the FQHC PPS base payment rate was increased by the MEI. The MEI was based on 2006 data from the American Medical Association (AMA) for selfemployed physicians and was used in the PFS Sustainable Growth Rate (SGR) formula to determine the conversion factor for physician service payments. (See the CY 2014 PFS final rule (78 FR 74264) for a complete discussion of the 2006-based MEI). Section 1834(o)(2)(B)(ii) of the Act also requires that beginning in CY 2017, the FQHC PPS base payment rate is to be increased by the percentage increase in a market basket of FQHC goods and services, or if such an index is not available, by the percentage increase in the MEI. For CY 2017, we proposed to create a 2013-based FQHC market basket. The PO 00000 Frm 00225 Fmt 4701 Sfmt 4700 80393 market basket uses Medicare cost report (MCR) data submitted by freestanding FQHCs. In the discussion in the CY 2017 PFS proposed rule (81 FR 46378– 46386) we provided an overview of the market basket and described the methodologies used to determine the cost categories, cost weights, and price proxies. In addition, we compared the growth rates of the proposed FQHC market basket to the growth rates of the MEI. 2. Overview of the FQHC Market Basket The 2013-based FQHC market basket is a fixed-weight, Laspeyres-type price index. A Laspeyres price index measures the change in price, over time, of the same mix of goods and services purchased in the base period. Any changes in the quantity or mix of goods and services (that is, intensity) purchased over time relative to a base period are not measured. The index itself is constructed in three steps. First, a base period is selected (in this final rule, the base period is CY 2013), total base period costs are estimated for a set of mutually exclusive and exhaustive cost categories, and the proportion of total costs that each cost category represents is calculated. These proportions are called cost weights. Second, each cost category is matched to an appropriate price or wage variable, referred to as a price proxy. These price proxies are derived from publicly available statistical series that are published on a consistent schedule (preferably at least on a quarterly basis). Finally, the cost weight for each cost category is multiplied by the established price proxy index level. The sum of these products (that is, the cost weights multiplied by their price levels) for all cost categories yields the composite index level of the market basket for the given time period. Repeating this step for other periods produces a series of market basket levels over time. Dividing the composite index level of one period by the composite index level for an earlier period produces a rate of growth in the input price index over that timeframe. As previously noted, the market basket is described as a fixed-weight index because it represents the change in price over time of a constant mix (quantity and intensity) of goods and services needed to furnish FQHC services. The effects on total costs resulting from changes in the mix of goods and services purchased subsequent to the base period are not measured. For example, a FQHC hiring more nurses to accommodate the needs of patients would increase the volume E:\FR\FM\15NOR2.SGM 15NOR2 80394 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 of goods and services purchased by the FQHC, but would not be factored into the price change measured by a fixedweight FQHC market basket. Only when the index is rebased would changes in the quantity and intensity be captured, with those changes being reflected in the cost weights. Therefore, we rebase the market baskets periodically so that the cost weights reflect a current mix of goods and services purchased (FQHC inputs) to furnish FQHC services. 3. Creating a FQHC Market Basket In 2015, we began researching the possibility of creating a FQHC market basket that would be used in place of the MEI to update the FQHC PPS base payment rate annually. A FQHC market basket should reflect the cost structures of FQHCs while the MEI reflects the cost structures of self-employed physician offices. At the time of implementation of the FQHC PPS, a FQHC market basket had not been developed, and therefore, the law stipulated that the FQHC PPS base payment rate be updated by the MEI for the first year after implementation (CY 2016). In subsequent years, the FQHC PPS base payment rate should be annually updated by a FQHC market basket, if available. The MEI cost weights were derived from data collected by the AMA on the Physician Practice Expense Information Survey (PPIS), since physicians, unlike other Medicare providers, are not required to complete and submit a Medicare Cost Report. FQHCs submit expense data annually on the Medicare Cost Report form CMS–222–92 (OMB NO: 0938–0107), ‘‘Independent Rural Health Clinic and Freestanding Federally Qualified Health Center Cost Report’’; therefore, we were able to estimate relative cost weights specific to FQHCs. We define a ‘‘major cost weight’’ as one calculated using the Medicare cost reports (for example, FQHC practitioner compensation). However, the Medicare cost report data allows multiple methods for reporting detailed expenses, either in detailed cost center lines or more broadly reported in general categories of expenses. An alternative data source is used to disaggregate further residual costs that could not be classified into a major cost category directly using only the Medicare Cost Report data. We estimated the cost weights for each year 2009 through 2013 and found the cost weights from each year to be similar, which provided confidence in the derived cost weights. We believe that the proposed methodologies for the FQHC market basket better reflect the cost structure of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 FQHC since it captures the scope of services that FQHCs furnish compared to the 2006-based MEI. 4. Development of Cost Categories and Cost Weights for the 2013-Based FQHC Market Basket a. Use of Medicare Cost Report Data The 2013-based FQHC market basket consists of eight major cost categories, which were derived from the CY 2013 Medicare cost reports for freestanding FQHCs. These categories are FQHCPractitioner Compensation, Other Clinical Compensation, Non-Health Compensation, Fringe Benefits, Pharmaceuticals, Fixed Capital, Moveable Capital, and an All Other (Residual) cost category. The All Other (Residual) cost category reflects the costs not captured in the other seven cost categories. The CY 2013 Medicare cost reports include all FQHCs whose cost reporting period began on or after January 1, 2013, and prior to or on December 31, 2013. We selected CY 2013 as the base year because the Medicare cost reports for that year were the most recent, complete set of Medicare cost report data available for FQHCs at the time of development of the cost share weights and proposed 2013-based FQHC market basket. As stated above, we compared the cost share weights from the MCR for CY 2009 through CY 2013 and the CY 2013 weights were consistent with the weights from prior years. The resulting 2013-based FQHC market basket cost weights reflect Medicare allowable costs. We define Medicare allowable costs for freestanding FQHC facilities as: Worksheet A, Columns 1 and 2, cost centers lines 1 through 51 but excluding line 20, which is professional liability insurance (PLI). We excluded PLI costs from the total Medicare allowable costs because FQHCs that receive section 330 grant funds also are eligible to apply for medical malpractice coverage under Federally Supported Health Centers Assistance Act (FSHCAA) of 1992 (Pub. L. 102–501) and FSHCAA of 1995 (Pub. L. 104–73 amending section 224 of the Public Health Service Act). Below we summarize how we derive the eight major cost category weights. (1) FQHC Practitioner Compensation: A FQHC practitioner is defined as one of the following occupations: Physicians, NPs, PAs, CNMs, Clinical Psychologist (CPs), and Clinical Social Worker (CSWs). Under certain conditions, a FQHC visit also may be provided by qualified practitioners of outpatient DSMT and MNT when the FQHC meets the relevant program PO 00000 Frm 00226 Fmt 4701 Sfmt 4700 requirements for provision of these services. FQHC Practitioner Compensation costs are derived as the sum of compensation and other costs as reported on Worksheet A; columns 1 and 2; lines 1, 2, 3, 6, 7, 13, 14. The Medicare cost reports also captures ‘‘Other’’ compensation costs (the sum of costs reported on Worksheet A; columns 1 and 2; lines 9, 10, 11, and 15). We allocated a portion of these compensation costs to FQHC Practitioner compensation by multiplying this amount by the ratio of FQHC Practitioner compensation costs to the sum of FQHC Practitioner compensation costs and Other Clinical compensation costs. We believe that the assumption of distributing the costs proportionally is reasonable since there is no additional detail on the specific occupations these compensation costs represent. We also included a proportion of Fringe Benefit costs as described in section III.B.1.a.iv of this final rule. (2) Other Clinical Compensation: Other Clinical Compensation includes any health-related clinical staff who does not fall under the definition of a FQHC practitioner from paragraph (1) (FQHC Practitioner Compensation). Other Clinical Compensation costs are derived as the sum of compensation and other costs as reported on Worksheet A; columns 1 and 2; lines 4, 5, and 8. Similar to the FQHC Practitioner compensation, we also allocate a proportion of the ‘‘Other’’ Clinical compensation costs by multiplying this amount by the ratio of Other Clinical Compensation costs to the sum of FQHC Practitioner Compensation costs and Other Clinical compensation costs. Given the ambiguity in the costs reported on these lines, we believe that the assumption of distributing the costs proportionally is reasonable since there is no additional detail on the specific occupations these compensation costs represent. We also include a proportion of Fringe Benefit costs as described in section III.B.1.a.iv of this final rule. (3) Non-Health Compensation: NonHealth Compensation includes compensation costs for Office Staff, Housekeeping & Maintenance, and Pharmacy. Non-Health Compensation costs are derived as the sum of compensation costs as reported on Worksheet A; column 1 only for lines 32 and 51; and Worksheet A; both columns 1 and 2 for line 38. We only use the costs from column 1 for housekeeping and maintenance and pharmacy since we believe that there are considerable costs other than compensation that could be reported for these categories. We use the costs from both column 1 E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations and column 2 for office salaries (line 38) since only salaries or compensation should be reported on this line. We also include a proportion of Fringe Benefit costs as described in section III.B.1.a.iv of this final rule. (4) Fringe Benefits: Worksheet A; columns 1 and 2; line 45 of the Medicare cost report captures fringe benefits and payroll tax expenses. The fringe benefit cost weight are estimated as the fringe benefits costs divided by total Medicare allowable costs. We allocate the Fringe Benefits cost weight to the three compensation cost categories (FQHC practitioner compensation, other clinical compensation, and non-health compensation) based on their relative proportions. The fringe benefits ratio is equal to the compensation cost weight as a percent of the sum of the compensation cost weights for all three types of workers. These allocation ratios are 46 percent, 14 percent, and 40 percent, respectively. Therefore, we 80395 proposed to allocate 46 percent of the fringe benefits cost weight to the FQHC practitioner cost weight, 14 percent of the fringe benefits cost weight to the clinical compensation cost weight, and 40 percent of the fringe benefits cost weight to the non-health compensation cost weight. Table 32 shows the three compensation category cost weights after the fringe benefit cost weight is allocated for the 2013-based FQHC market basket. TABLE 32—COMPENSATION CATEGORY COST WEIGHTS AFTER FRINGE BENEFITS ALLOCATION Before fringe benefits allocation % Cost category mstockstill on DSK3G9T082PROD with RULES2 FQHC Practitioner Compensation ........................................................................................................................... Other Clinical Compensation ................................................................................................................................... Non-Health Compensation ...................................................................................................................................... Fringe Benefits (distribute to comp) ........................................................................................................................ (5) Pharmaceuticals: Drugs and biologicals that are not usually selfadministered, and certain Medicarecovered preventive injectable drugs are paid incident to a FQHC visit. Therefore, pharmaceutical costs include the non-compensation costs reported on Worksheet A, column 2, for the pharmacy cost center (line 51). We note that pharmaceutical costs are not included in the MEI since pharmaceutical costs are paid outside of the PFS. (6) Fixed Capital: Fixed capital costs are equal to the sum of costs for rent, interest on mortgage loans, depreciation on buildings and fixtures, and property tax as reported on Worksheet A; columns 1 and 2; lines 26, 28, 30, and 33. (7) Moveable Capital: Moveable capital costs are equal to the sum of costs for depreciation of medical equipment, office equipment, and other equipment as reported on Worksheet A; column 1 and 2; lines 19, 31, and 39. (8) All Other (Residual): After estimating the expenses for the seven cost categories listed above, we summed all remaining costs together for each FQHC to come up with All Other (Residual) costs. The costs included in the All Other (Residual) category include all costs reported for medical supplies, transportation, allowable GME pass through costs, facility insurance, utilities, office supplies, legal, accounting, administrative insurance, telephone, housekeeping & maintenance, nondescript healthcare costs, nondescript facility costs, and nondescript administrative costs. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Although a cost weight for these categories could be obtained directly from the costs reported in that cost center’s respective line on the cost report form, some FQHCs reported significant costs in other (specify), or ‘‘free form,’’ lines which made it difficult to determine the accuracy of these costs. For example, some FQHCs reported costs only in the free form lines and not in the cost center specific lines, while other FQHCs reported costs in both the cost center specific lines and the free form lines. Since a majority of FQHCs used the free form lines, relying solely on the costs reported in the cost center specific lines for costs could lead to an inaccurate cost weights in the market basket. For example, if a FQHC reported all other healthcare costs in line 21 rather than breaking the healthcare costs into the detailed cost centers (lines 17 through 20.50), then the cost weight for medical supplies could be lower than it should be if we did not allocate the costs reported in the free form lines to medical supplies. Section III.B.1.b explains the method used to allocate the residual costs to more detailed cost categories. After we derived costs for the eight major cost categories for each FQHC using the Medicare cost report data as previously described, we addressed data outliers using the following steps. First, we divided the costs for each of the eight categories by total Medicare allowable costs for each FQHC. We then removed those FQHCs whose derived cost weights fell in the top and bottom 5 percent of provider specific derived cost weights. Five percent is the standard trim applied for all CMS PO 00000 Frm 00227 Fmt 4701 Sfmt 4700 26.8 8.1 23.1 10.7 After fringe benefits allocation % 31.8 9.5 27.4 0.0 market basket cost weights. After these outliers were removed, we summed the costs for each category across all remaining FQHCs. We then divided this by the sum of total Medicare allowable costs across all remaining FQHCs to obtain a cost weight for the 2013-based FQHC market basket for the given category. See Table 33 for the resulting cost weights for these major cost categories that we obtained from the Medicare cost reports. TABLE 33—MAJOR COST CATEGORIES AS DERIVED FROM MEDICARE COST REPORTS Cost category FQHC Practitioner Compensation ........................... Other Clinical Compensation Non-Health Compensation ... Fringe Benefits (distribute to compensation) ................... Fixed Capital ......................... Moveable Capital .................. Non Salary Pharmaceuticals All Other (Residual) .............. 2013 FQHC weight (%) 26.8 8.1 23.1 10.7 4.5 1.7 5.1 20.1 Totals may not sum to 100.0% due to rounding. b. Derivation of Detailed Cost Categories From the All Other (Residual) Cost Weight The All Other Residual cost weight was derived from summing all expenses reported on the Medicare cost report Worksheet A, columns 1 and 2 for medical supplies (line 17), transportation (line 18), allowable GME pass through costs (line 20.50), facility E:\FR\FM\15NOR2.SGM 15NOR2 80396 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations insurance (line 27), utilities (line 29), office supplies (line 40), legal (line 41), accounting (line 42), administrative insurance (line 43), telephone (line 44), non-compensation housekeeping & maintenance (line 32, column 2 only), nondescript healthcare costs (lines 21– 23), nondescript facility costs (lines 34– 36), and nondescript administrative costs (lines 46–48). To further divide the ‘‘All Other’’ residual cost weight (20.1 percent) estimated from the CY 2013 Medicare cost report data into more detailed cost categories, we used the relative cost shares from the 2006-based MEI for nine detailed cost categories: Utilities; Miscellaneous Office Expenses; Telephone; Postage; Medical Equipment; Medical Supplies; Professional, Scientific, & Technical Services; Administrative & Facility Services; and Other Services. For example, the Utilities cost represents 7 percent of the sum of the 2006-based MEI ‘‘All Other’’ cost category weights; therefore, the Utilities cost weight would represent 7 percent of the 2013- based FQHC market basket’s ‘‘All Other’’ cost category (20.066 percent), yielding a ‘‘final’’ Utilities cost weight of 1.4 percent in the 2013-based FQHC market basket (7 percent * 20.1 percent = 1.4 percent). Table 34 shows the cost weight for each matching category from the 2006based MEI, the percent each cost category represents of the 2006-baesd MEI ‘‘All Other’’ cost weight, and the resulting proposed 2013-based FQHC market basket cost weights for detailed cost categories. TABLE 34—DETAILED FQHC COST CATEGORY WEIGHTS 2006-based MEI cost weights (%) FQHC Detailed cost categories mstockstill on DSK3G9T082PROD with RULES2 Total All Other (Residual) ............................................................................................................ Utilities .................................................................................................................................. Miscellaneous Office Expenses ........................................................................................... Telephone ............................................................................................................................. Postage ................................................................................................................................. Medical Equipment ............................................................................................................... Medical supplies ................................................................................................................... Professional, Scientific, & Tech. Services ............................................................................ Administrative & Facility Services ........................................................................................ Other Services ...................................................................................................................... FQHCs have liberty in how and where certain costs are reported on the Medicare cost report form CMS–222–92. We believe that, given the ambiguity in how the data are reported for these overhead cost centers on the FQHC cost report form, relying on the relative shares determined from the MEI is reasonable. We believe that the revised FQHC cost report form will allow us to better estimate the detailed cost weights for these categories directly. We expect all FQHCs to report PPS costs on the new form for cost report periods beginning after October 1, 2014. The following is a description of the types of expenses included in the FQHC detailed cost categories derived from the All Other (Residual) cost category: • Utilities: Includes expenses classified in the fuel, oil and gas, water and sewage, and electricity industries. These types of industries are classified in NAICS and include NAICS 2211 (Electric power generation, transmission, and distribution), 2212 (Natural gas distribution), and 2213 (Water, sewage, and other systems). • Miscellaneous Office Expense: Includes expenses for office expenses not reported in other categories, miscellaneous expenses, included but not limited to, paper (such as paper towels), printing (such as toner for VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 printers), miscellaneous chemicals (such as soap and hand sanitizer). • Telephone: Includes expenses classified in NAICS 517 (Telecommunications) and NAICS 518 (Internet service providers), and NAICS 515 (Cable and other subscription programming). Telephone service, which is one component of the Telecommunications expenses, accounts for the majority of the expenditures in this cost category. • Postage: Includes expenses classified in NAICS 491 (Postal services) and NAICS 492 (Courier services). • Medical Equipment Expenses: Includes the expenses related to maintenance contracts, and the leases or rental of medical equipment used in diagnosis or treatment of patients. It would also include the expenses for any medical equipment that was purchased in a single year and not financed. • Medical Supplies Expenses: Includes the expenses related to medical supplies such as sterile gloves, needles, bandages, specimen containers, and catheters. We note that the Medical Supply cost category does not include expenses related to pharmaceuticals (drugs and biologicals). • Professional, Scientific, & Technical Services: Includes the expenses for any professional services purchased from an outside agency or party and could PO 00000 Frm 00228 Fmt 4701 Sfmt 4700 Percent of the 2006-based MEI ‘‘All other’’ cost weight (%) 2013-based FQHC detailed cost weights (%) 100.000 7.0 13.8 8.4 5.0 11.0 9.8 14.4 17.0 13.6 20.1 1.4 2.8 1.7 1.0 2.2 2.0 2.9 3.4 2.7 17.976 1.266 2.478 1.501 0.898 1.978 1.760 2.592 3.052 2.451 include fees including but not limited to, legal, marketing, professional association memberships, licensure fees, journal fees, continuing education. • Administrative & Facility Services: Includes the expenses for any administrative and facility services purchased from an outside agency or party and could include fees including but not limited to, accounting, billing, office management services, security services, transportation services, landscaping, or professional car upkeep. • Other Services: Includes other service expenses including, but not limited to, nonresidential maintenance and repair, machinery repair, janitorial, and security services. Table 35 shows the cost categories and weights for the 2013-based FQHC market basket. The resulting cost weights include combining the cost weights derived from the Medicare Cost Report Data (shown in Table 33), distributing the fringe benefits weight across the three compensation cost categories (shown in Table 32), and disaggregating the residual cost weight into detailed cost categories (shown in Table 34). Additionally, we compare the cost weights of the 2013-based FQHC market basket to the cost weights in the 2006-based MEI, where we have grouped the cost weights from the MEI to align with the FQHC cost categories. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80397 TABLE 35—PROPOSED FQHC MARKET BASKET AND MEI, COST CATEGORIES, COST WEIGHTS 2013 FQHC weight (%) FQHC cost category mstockstill on DSK3G9T082PROD with RULES2 FQHC Market Basket ................................................... Total Compensation .............................................. FQHC Practitioner Compensation ................. Other Clinical Compensation ......................... Non-health Compensation ............................. All Other Products ................................................. Utilities ............................................................ Miscellaneous Office Expenses ..................... Telephone ...................................................... Postage .......................................................... Medical Equipment ......................................... Medical Supplies ............................................ Professional Liability Insurance ..................... Pharmaceuticals ............................................. All Other Services ................................................. Professional, Scientific & Technical Services Administrative & Facility Services .................. Other Services ............................................... Capital ................................................................... Fixed Capital .................................................. Moveable Capital ........................................... Although the overall cost structure of the MEI, the index currently used to update the FQHC PPS base payment, is similar to the FQHC cost structure, there are a few key differences. First, though total compensation costs in the FQHC market basket and the MEI are each approximately 67–68 percent of total costs, non-health compensation accounts for a larger share of compensation costs in the FQHC setting than in the self-employed physician office. Likewise, physician compensation accounts for a larger percentage of costs in the MEI than FQHC practitioner compensation accounts for in the FQHC market basket. Second, the FQHC market basket includes a cost category for pharmaceuticals, while drug costs are excluded from the MEI. Drug costs are an expense in the FQHC PPS base payment rate since drugs and biologicals that are not usually selfadministered, and certain Medicarecovered preventive injectable drugs are paid incident to a visit while drug costs are reimbursed separately under the PFS. Third, as mentioned previously, PLI expenditures are excluded from the FQHC market basket since most FQHC’s PLI costs are covered under the FSHCAA, while in the MEI the PLI costs are a significant expense for selfemployed physicians. Finally, fixed capital expenses, which include costs such as office rent and depreciation, are about half of the share in the FQHC market basket as they are in the MEI. VerDate Sep<11>2014 16:58 Nov 14, 2016 Jkt 241001 100.0 68.7 31.7 9.5 27.4 16.1 1.4 2.8 1.7 1.0 2.2 2.0 — 5.1 9.0 2.9 3.4 2.7 6.1 4.5 1.7 2006 MEI weight (%) MEI cost category 100.000 67.419 50.866 6.503 10.050 14.176 1.266 2.478 1.501 0.898 1.978 1.760 4.295 — 8.095 2.592 3.052 2.451 10.310 8.957 1.353 MEI. Total Compensation. Physician Compensation. Other Clinical Compensation. Non-health Compensation. All Other Products. Utilities. Miscellaneous Office Expenses. Telephone. Postage. Medical Equipment. Medical Supplies. Professional Liability Insurance. Pharmaceuticals. All Other Services. Professional, Scientific & Technical Services. Administrative & Facility Services. Other Services. Capital. Fixed Capital. Moveable Capital. c. Selection of Price Proxies for the 2013-Based FQHC Market Basket measure the rate of change in employee wage rates and employer costs for employee benefits per hour worked. These indexes are fixed-weight indexes and strictly measure the change in wage rates and employee benefits per hour. Appropriately, they are not affected by shifts in employment mix. We evaluate the price proxies using the criteria of reliability, timeliness, availability, and relevance. Reliability indicates that the index is based on valid statistical methods and has low sampling variability. Timeliness implies that the proxy is published regularly, preferably at least once a quarter. Availability means that the proxy is publicly available. Finally, relevance means that the proxy is applicable and representative of the cost category weight to which it is applied. We believe the PPIs, CPIs, and ECIs selected meet these criteria. Table 36 lists all price proxies for the 2013-based FQHC market basket. Below is a detailed explanation of the price proxies for each cost category; we note that many of the proxies for the 2013based FQHC market basket are the same as those used for the 2006-based MEI. (1) FQHC Practitioner Compensation: We proposed to use the ECI for Total Compensation for Private Industry Workers in Professional and Related) (BLS series code CIU2010000120000I) to measure price growth of this category. There is no specific ECI for physicians and, therefore, similar to the MEI, we proposed to use an index that is based on professionals that receive advanced training. We note that the 2006-based MEI has a separate cost category for After establishing the 2013 cost weights for the FQHC market basket, an appropriate price proxy was selected for each cost category. The price proxies are chosen from a set of publicly available price indexes that best reflect the rate of price change for each cost category in the FQHC market basket. All of the proxies for the 2013-based FQHC market basket are based on indexes published by the Bureau of Labor Statistics (BLS) and are grouped into one of the following BLS categories: • Producer Price Indexes: Producer Price Indexes (PPIs) measure price changes for goods sold in markets other than the retail market. PPIs are preferable price proxies for goods and services that businesses purchase as inputs. For example, we proposed to use a PPI for prescription drugs, rather than the Consumer Price Index (CPI) for prescription drugs, because healthcare providers generally purchase drugs directly from a wholesaler. The PPIs measure price changes at the final stage of production. • Consumer Price Indexes: CPIs measure change in the prices of final goods and services bought by the typical consumer. Because they may not represent the price encountered by a producer, we use CPIs only if an appropriate PPI is not available, or if the expenditures are more like those faced by retail consumers than by purchasers of goods at the wholesale level. • Employment Cost Indexes: Employment Cost Indexes (ECIs) PO 00000 Frm 00229 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80398 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Physician Wages and Salaries and Physician Benefits. For these cost categories, the MEI uses the ECI for Wages and Salaries and ECI for Benefits for Professional and Related Occupations. (2) Other Clinical Compensation: We proposed to use the ECI for Total Compensation for all Civilian Workers in Health Care and Social Assistance (BLS series code CIU1016200000000I) to measure the price growth of this cost category. This cost category consists of compensation costs for Nurses, Laboratory Technicians, and all other health staff not included in the FQHC practitioner compensation category. Based on the clinical composition of these workers, we believe that the ECI for health-related workers is an appropriate proxy to measure compensation price pressures for these workers. The MEI uses the ECI for Wages and Salaries and benefits for Hospitals. (3) Non-health Compensation: We proposed to use the ECI for Total Compensation for Private Industry Workers in Office and Administrative Support (BLS series code CIU2010000220000I) to measure the price growth of this cost category. The Non-health compensation cost weight is predominately attributable to administrative and facility type occupations, as reported in the data from the Medicare cost reports. We note the MEI has a composite index of four price proxies, with the majority of the composite index accounted for by administrative occupations, proxied by the ECI for Wages & Salaries of Office and Administrative Support (Private). (4) Utilities: We proposed to use the CPI for Fuel and Utilities (BLS series code CUUR0000SAH2) to measure the price growth of this cost category. This is the same proxy used in the 2006based MEI. (5) Miscellaneous Office Expenses: We proposed to use the CPI for All Items Less Food and Energy (BLS series code CUUR0000SA0L1E) to measure the price growth of this cost category. We believe that using the CPI for All Items Less Food and Energy avoids double counting of changes in food and energy prices already captured elsewhere in the market basket. We note the MEI does not have a separate cost category for miscellaneous office expenses. (6) Telephone Services: We proposed to use the CPI for Telephone Services (BLS series code CUUR0000SEED) to measure the price growth of this cost category. This is the same price proxy used in the 2006-based MEI. (7) Postage: We proposed to use the CPI for Postage (BLS series code CUUR0000SEEC01) to measure the price growth of this cost category. This is the same proxy used in the 2006-based MEI. (8) Medical Equipment: We proposed to use the PPI Commodities for Surgical and Medical Instruments (BLS series code WPU1562) as the price proxy for this category. This is the same proxy used in the current 2006-based MEI. (9) Medical Supplies: We proposed to use a 50/50 blended index comprised of the PPI Commodities for Medical and Surgical Appliances and Supplies (BLS series code WPU156301) and the CPI–U for Medical Equipment and Supplies (BLS series code CUUR0000SEMG). The 50/50 blend is used in all market baskets where we do not have an accurate split available. We believe FQHCs purchase the types of supplies contained within these proxies, including such items as bandages, dressings, catheters, intravenous equipment, syringes, and other general disposable medical supplies, via wholesale purchase, as well as at the retail level. Consequently, we proposed to combine the two aforementioned indexes to reflect those modes of purchase. This is the same proxy used in the 2006-based MEI. (10) Pharmaceuticals: We proposed to use the PPI Commodities for Pharmaceuticals for Human Use, Prescription (BLS series code WPUSI07003) to measure the price growth of this cost category. We note the MEI does not have a separate cost category for Pharmaceuticals. This price proxy is used to measure prices of Pharmaceuticals in other CMS market baskets, such as 2010-based Inpatient Prospective Payment System and 2010based Skilled Nursing Facility market baskets. (11) Professional, Scientific, & Technical Services: We proposed to use the ECI for Total Compensation for Private Industry Workers in Professional, Scientific, and Technical Services (BLS series code CIU2015400000000I) to measure the price growth of this cost category. This is the same proxy used in the 2006based MEI. (12) Administrative & Facility Services: We proposed to use the ECI Total Compensation for Private Industry Workers in Office and Administrative Support (BLS series code CIU2010000220000I) to measure the price growth of this cost category. This is the same price proxy used in the 2006-based MEI. (13) Other Services: We proposed to use the ECI for Total Compensation for Private Industry Workers in Service Occupations (BLS series code CIU2010000300000I) to measure the price growth of this cost category. This is the same price proxy used in the 2006-based MEI. (14) Fixed Capital: We proposed to use the PPI Industry for Lessors of Nonresidential Buildings (BLS series code PCU531120531120) to measure the price growth of this cost category. This is the same price proxy used in the 2006-based MEI. We believe this is an appropriate proxy since fixed capital expenses in FQHCs should reflect inflation for the rental and purchase of business office space. (15) Moveable Capital: We proposed to use the PPI Commodities for Machinery and Equipment (series code WPU11) to measure the price growth of this cost category as this cost category represents nonmedical moveable equipment. This is the same proxy used in the 2006-based MEI. Table 36 lists the proposed price proxies for each cost category in the proposed FQHC market basket. TABLE 36—COST CATEGORIES AND PRICE PROXIES FOR THE FQHC MARKET BASKET FQHC price proxies FQHC Practitioner Compensation ............................................................ mstockstill on DSK3G9T082PROD with RULES2 Cost category ECI—for Total Compensation for Private Industry Workers in Professional and Related. ECI—for Total Compensation for all Civilian Workers in Health Care and Social Assistance. ECI—for Total Compensation for Private Industry Workers in Office and Administrative Support. CPI–U for Fuels and Utilities. CPI–U for All Items Less Food And Energy. CPI–U for Telephone. CP–U for Postage. Other Clinical Compensation .................................................................... Non-health Compensation ........................................................................ Utilities ...................................................................................................... Miscellaneous Office Expense ................................................................. Telephone ................................................................................................. Postage ..................................................................................................... VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00230 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80399 TABLE 36—COST CATEGORIES AND PRICE PROXIES FOR THE FQHC MARKET BASKET—Continued Cost category FQHC price proxies Medical Equipment ................................................................................... Medical supplies ....................................................................................... PPI Commodities for Surgical and Medical Instruments. Blend: PPI Commodities for Medical and Surgical Appliances and Supplies and CPI for Medical Equipment and Supplies. PPI Commodities for Pharmaceuticals for Human Use, Prescription. ECI—for Total Compensation for Private Industry Workers in Professional, Scientific, and Technical Services. ECI—for Total Compensation for Private Industry Workers in Office and Administrative Support. ECI—for Total compensation for Private industry workers in Service Occupations. PPI Industry—for Lessors of nonresidential buildings. PPI Commodities—for Machinery and Equipment. Pharmaceuticals ....................................................................................... Professional, Scientific, and Technical Services ...................................... Administrative & Facility Services ............................................................ Other Services .......................................................................................... Fixed Capital ............................................................................................. Moveable Capital ...................................................................................... mstockstill on DSK3G9T082PROD with RULES2 d. Inclusion of Multi-factor Productivity in the FQHC Market Basket Section 1834(o)(2)(B)(ii) of the Act describes the methods for determining updates to FQHC PPS payment. After the first year of implementation, the FQHC PPS base payment rate must be increased by the percentage increase in the MEI. In subsequent years, the FQHC PPS base payment rate shall be increased by the percentage increase in a market basket of FQHC goods and services as established through regulations or, if not available, the MEI published in the PFS final rule. The MEI published in the PFS final rule has a productivity adjustment. The MEI has been adjusted for changes in productivity since its inception. In the CY 2003 PFS final rule with comment period (67 FR 80019), we implemented a change in the way the MEI was adjusted to account for changes in productivity. In 2012, we convened the MEI Technical Panel to review all aspects of the MEI including and the productivity adjustment. For more information regarding the MEI Technical Panel, see the CY 2014 PFS final rule with comment period (78 FR 74264). The MEI Technical Panel concluded in Finding 5.1 that ‘‘such an adjustment continues to be appropriate. This adjustment prevents ‘double counting’ of the effects of productivity improvements, which would otherwise be reflected in both (i) the increase in compensation and other input price proxies underlying the MEI, and (ii) the growth in the number of physician services performed per unit of input resources, which results from advances in productivity by individual physician practices.’’ We proposed to include a productivity adjustment similar to the MEI in the FQHC market basket. We believe that applying a productivity adjustment is appropriate because this would be consistent with the MEI, which has an embedded productivity VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 adjustment. We note that the MEI Technical Panel concluded that a productivity adjustment is appropriate for the MEI given the type of services performed in physician’s offices. Specifically, the MEI Technical Panel report states that ‘‘The input price increases within the MEI are reflected in the price proxies, such as changes in wages and benefits. Wages increase, in part, due to the ability of workers to increase the amount of output per unit of input. Absent a productivity adjustment in the MEI, physicians would be receiving increased payments resulting both from their ability to increase their individual outputs and from the productivity gains already reflected in the wage proxies used in the index. The productivity adjustment used in the MEI ensures the productivity gains reflected in increased outputs are not double counted, or paid for twice. Currently, the productivity adjustment in the MEI is based on changes in economy-wide productivity based on the rationale that the price proxy for physician income reflects changes in economy-wide wages. Implicitly, this assumes physicians can achieve the same level of productivity as the average general wage earner.’’ We believe that the services performed in FQHC facilities are similar to those covered by physician visits, and therefore, a productivity adjustment is appropriate to avoid double counting of the effects of productivity improvements in the FQHC market basket. We proposed to use the most recent estimate of the 10-year moving average of changes in annual private nonfarm business (economy-wide) multifactor productivity (MFP), which is the same measure of MFP used in the MEI. The BLS publishes the official measure of private nonfarm business MFP. (See https://www.bls.gov/mfp for the published BLS historical MFP data). For the final FQHC market basket update, PO 00000 Frm 00231 Fmt 4701 Sfmt 4700 we proposed to use the most recent historical estimate of annual MFP as published by the BLS. Generally, the most recent historical MFP estimate is lagged two years from the payment year. Therefore, we proposed to use the 2015 MFP as published by BLS in the CY2017 FQHC market basket update. We note that MFP is derived by subtracting the contribution of labor and capital input growth from output growth. Since at the time of the proposed rule the 2015 MFP has not been published by BLS, we rely on a projection of MFP. The projection of MFP is currently produced by IHS Global Insight (IGI), a national economic forecasting firm with which CMS contracts to forecast the components of the market basket and MFP. A complete description of the MFP projection methodology is available at https:// www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-andReports/MedicareProgramRatesStats/ MarketBasketResearch.html. Using IGI’s first quarter 2016 forecast, the productivity adjustment for CY 2017 (the 10-year moving average of MFP for the period ending CY 2015) was projected to be 0.4 percent. If more recent data are subsequently available (for example, a more recent estimate of the market basket and MFP adjustment), we would use such data to determine the CY 2017 increase in the FQHC market basket in the final rule. 5. CY 2017 Market Basket Update: CY 2017 FQHC Market Basket Update Compared to the MEI Update for CY 2017 For CY 2017, we proposed to use the 2013-based FQHC market basket increase factor to update the FQHC PPS base payment rate. Consistent with CMS practice, we estimated the market basket update for the FQHC PPS based on the most recent forecast from IGI. Identical to the MEI, we proposed to use the update based on the most recent historical data available at the time of E:\FR\FM\15NOR2.SGM 15NOR2 80400 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations publication of the final rule. For example, the final CY 2017 FQHC update would be based on the fourquarter moving-average percent change of the FQHC market basket through the second quarter of 2016 (based on the final rule’s statutory publication schedule). Based on IGI’s first quarter 2016 forecast with historical data through the fourth quarter of 2015, the projected proposed FQHC market basket increase factor for CY 2017 was 1.7 percent. This reflected a 2.1-percent increase of FQHC input prices and a 0.4-percent adjustment for productivity. We also proposed that if more recent data are subsequently available (for example, a more recent estimate of the market basket or MFP) we would use such data, to determine the CY 2017 update in the final rule. For comparison, the 2006-based MEI was projected to be 1.3 percent in CY 2017; this estimate was based on IGI’s first quarter 2016 forecast (with historical data through the fourth quarter of 2015). Table 37 compares the proposed 2013-based FQHC market basket updates and the proposed 2006based MEI market basket updates for CY 2017. TABLE 37—PROPOSED FQHC MARKET BASKET AND MEI, COST CATEGORIES, COST WEIGHTS, MFP, AND CY 2017 UPDATE 1 FQHC cost category CY 2017 update (percent) FQHC Market Basket ................................................... Productivity adjustment ................................................ FQHC Market Basket (unadjusted) .............................. Total Compensation .............................................. FQHC Practitioner Comp. .............................. Other Clinical Compensation ......................... Non-health Compensation ............................. All Other Products ................................................. Utilities ............................................................ Miscellaneous Office Expenses ..................... Telephone ...................................................... Postage .......................................................... Medical Equipment ......................................... Medical Supplies ............................................ Professional Liability Insurance ..................... Pharmaceuticals ............................................. All Other Services ................................................. Professional, Scientific & Technical Services Administrative & Facility Services .................. Other Services ............................................... Capital ................................................................... Fixed Capital .................................................. Moveable Capital ........................................... mstockstill on DSK3G9T082PROD with RULES2 1 Based 1.7 0.4 2.1 2.1 1.9 1.9 2.4 2.6 ¥3.9 2.0 0.4 0.3 1.2 ¥0.4 MEI Cost category 1.3 0.4 1.7 2.0 2.0 2.0 2.4 ¥0.6 ¥3.9 ¥1.7 0.4 0.3 1.2 ¥0.4 ¥0.4 7.8 2.0 1.5 2.4 1.9 1.6 2.1 0.1 2.0 1.5 2.4 1.9 1.9 2.1 0.1 MEI. Productivity adjustment. MEI (unadjusted). Total Compensation. Physician Compensation. Other Clinical Compensation. Non-health Compensation. All Other Products. Utilities. Miscellaneous Office Expenses. Telephone. Postage. Medical Equipment. Medical Supplies. Professional Liability Insurance. Pharmaceuticals. All Other Services. Professional, Scientific & Technical Services. Administrative & Facility Services. Other Services. Capital. Fixed Capital. Moveable Capital. on IGI’s first quarter 2016 forecast. For CY 2017, the proposed 2013based FQHC market basket update (1.7 percent) is 0.4 percent higher than the 2006-based MEI (1.3 percent). The 0.4 percentage point difference stems mostly from the inclusion of pharmaceuticals in the FQHC market basket. This cost category and associated price pressures are not included in the MEI. We proposed to update the FQHC PPS base payment rate by 1.7 percent for CY 2017 based on the 2013-based FQHC market basket. The FQHC market basket would more accurately reflect the actual costs and scope of services that FQHCs furnish compared to the 2006-based MEI. We invited public comment on all aspects of the FQHC market basket proposals. 6. Summary of Comments and the Associated Responses on the Proposed FQHC Market Basket We received 12 comments on the proposed FQHC market-basket. The VerDate Sep<11>2014 16:58 Nov 14, 2016 Jkt 241001 following is a summary of the comments we received: Comment: Commenters expressed their support for the creation of a FQHCspecific market basket to update the FQHC PPS base payment rate annually. We would note that of the comments received none indicated an objection to the use of an FQHC market basket compared to the MEI. Commenters stated that the MEI is outdated and does not appropriately capture the cost of services that FQHCs furnish. Response: We appreciate the commenters support for the creation of the FQHC-specific market basket. As stated in the proposed rule, we believe that the 2013-based FQHC market basket would more accurately reflect the actual costs and scope of services that FQHCs furnish compared to the 2006-based MEI. Comment: Many commenters requested that we rebase the FQHC market basket at the earliest possible opportunity to capture new Medicare cost report data from the revised FQHC PO 00000 Frm 00232 Fmt 4701 Sfmt 4700 cost report. Commenters stated that CMS finalized and issued a revised Medicare FQHC cost report (Form CMS– 224–14) required to be submitted by FQHCs for cost reporting periods under Medicare’s PPS methodology. The commenters stated that the revised Medicare FQHC cost report would provide higher quality data than the previous cost report (Form CMS–222– 92). Response: We appreciate the commenters request to use the most appropriate and up-to-date data for the development of the FQHC market basket. We agree with the commenters that the FQHC market basket should be rebased using the costs as reported under the PPS, coinciding with data reported on the revised FQHC cost report (Form CMS–224–14). The revised cost report form must be used for all cost reports that begin on or after October 1, 2014, which coincides with the implementation of the FQHC PPS. We plan to update the FQHC market basket to reflect FQHC costs paid under E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the PPS when we have complete data from the revised cost report form and can verify that the costs reported are accurate and reliable. Comment: Many commenters that supported the creation of the FQHCspecific market basket recommended some clarifications and modifications to the proposed market basket cost-weight methodology. Several commenters recommended that the healthcare staff costs for ‘‘Visiting Nurse’’ services be included in the ‘‘FQHC Practitioner Compensation’’ cost category rather than in the ‘‘Other Clinical Compensation’’ cost category, as proposed. The commenters note that Chapter 13 of the Medicare Benefit Policy Manual includes ‘‘visiting nurse (RN or LPN)’’ as a type of practitioner that can render a medically necessary FQHC visit under certain conditions. Response: As the commenters stated, the compensation costs associated with ‘‘Visiting Nurse’’ services were allocated to the market basket cost category for ‘‘Other Clinical Compensation’’ rather than the market basket cost category for ‘‘FQHC Practitioner Compensation.’’ Commenters are correct that under certain circumstances, FQHCs can bill for a visit when an RN or LPN furnishes visiting nurse services to a homebound patient in an area with a shortage of home health agencies. In this situation only, the RN or LPN would be considered a FQHC practitioner. All other services furnished by a RN or LPN would be considered incident to a visit and not separately billable. Since most services furnished by nurses in FQHCs are considered incident to a FQHC visit and are not separately billable visits, we believe that it is prudent to keep these costs allocated to the cost category ‘‘Other Clinical Compensation’’ at this time. Additionally, only 17 FQHCs reported costs in line 4 (Visiting Nurse) of Worksheet A of the cost report, which is approximately 1.4 percent of all FQHCs that submitted cost reports. Had these costs been allocated to ‘‘FQHC Practitioner Compensation,’’ the proposed ‘‘FQHC Practitioner Compensation’’ cost share weight would essentially be unchanged (31.9 percent if we were to include the Visiting Nurse Compensation costs in that category compared to the proposed 31.7 percent). This small difference, based on a very small proportion of FQHC’s who report this data, would not impact the growth rate of the FQHC market basket. Thus, we believe that changing our proposed classification of these expenses is not necessary at this time. We will consider this issue when we rebase and revise the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 FQHC market basket in the future using the revised cost report form. Comment: Commenters requested confirmation that compensation costs related to FQHC services furnished by certified nurse midwives and qualified practitioners of outpatient diabetes selfmanagement training (DSMT) and medical nutrition therapy (MNT) are included within the ‘‘FQHC Practitioner Compensation’’ cost category. Response: There are no specific identified line items on Worksheet A of the FQHC cost report form (CMS–222– 92) for reporting these costs. We believe that costs associated with these services would have been reported in lines 9 through 11 or line 15 on Worksheet A. As explained in 81 FR 46379, we allocate a portion of these compensation costs to ‘‘FQHC Practitioner Compensation’’ and ‘‘Other Clinical Compensation’’ by multiplying the sum of costs reported on Worksheet A lines 9 through 11 and 15, by the ratio of ‘‘FQHC Practitioner Compensation’’ costs to the sum of ‘‘FQHC Practitioner Compensation’’ costs and ‘‘Other Clinical Compensation’’ costs. We believe that the assumption of distributing the costs proportionally is reasonable since there is no additional detail on the specific occupations these compensation costs represent. On the revised FQHC Medicare cost report (Form CMS–224–14), these costs are separately reported on lines 29 and 33 of Worksheet A. Therefore, when we rebase the FQHC market basket reflecting the revised FQHC Medicare cost report form, we will be able to more directly allocate these costs. Comment: Commenters requested clarification whether there was an error in the explanation of the ‘‘nondescript administrative costs.’’ Commenters stated that the proposed rule had listed the expenses reported on lines 54–56 of Worksheet A of the cost report; however, those particular lines capture ‘‘costs other than FQHC’’ rather than ‘‘administrative costs.’’ The commenters stated the appropriate lines are 46–48 of Worksheet A for ‘‘nondescript administrative costs,’’ and if so, requested that we verify this to be true and revise the line number references in the final rule language. Response: We thank the commenters for noting that there was an error in the explanation of the ‘‘nondescript administrative costs’’ in the proposed rule. We would like to clarify that the ‘‘nondescript administrative costs’’ include expenses from lines 46–48 not lines 54–56. The proposed rule used the correct data from the cost report, and therefore, no changes are necessary to the computation of the cost category PO 00000 Frm 00233 Fmt 4701 Sfmt 4700 80401 weight. Rather, we are clarifying and correcting that the nondescript administrative costs include expenses reported on Worksheet A, lines 46–48. The expenses reported on Worksheet A, lines 54–56 were excluded from the total costs for FQHC expenses. We apologize for the confusion this may have caused and appreciate the opportunity to correct this language in the final rule. Comment: Many commenters stated that the proposed productivity adjustment to the FQHC market basket is not justified and that absent further study by CMS of FQHC services, it is premature to apply a productivity adjustment to the FQHC market basket. The commenters stated that FQHC operations are not mirror images of selfemployed physician practice operations and the argument that the adjustment is similar to that used in the MEI to avoid double counting of effects of productivity improvements is not warranted at this time. Response: We respectfully disagree that a productivity adjustment to the FQHC market basket is not warranted at this time. As discussed in the proposed rule, the productivity adjustment included in the FQHC market basket is based on the 10-year moving average of changes in annual private nonfarm business (economy-wide) multifactor productivity. We believe that FQHC services are similar to those that would otherwise be provided by a primary care physician, mental health professional, or other clinical care provider, which have demonstrated the ability to achieve productivity gains consistent with the overall economy as stated in the development of the MEI. Therefore, in order to avoid the double counting of FQHC provider productivity, it is necessary to include a productivity adjustment to the FQHC market basket, consistent with inclusion of a productivity adjustment in the MEI that is used for physician services. We believe this rationale justifies the inclusion of a productivity adjustment in the FQHC market basket. We will continue to evaluate whether the productivity adjustment in the FQHC market basket (which is based on economy-wide productivity) is the most appropriate measure. 7. Final FQHC Market Basket and Final CY 2017 Market Basket Update After considering the public comments, we are finalizing the FQHC market basket, as proposed. We believe that the FQHC market basket, as proposed, more accurately reflects the actual costs and scope of services that FQHCs furnish relative to the MEI. We E:\FR\FM\15NOR2.SGM 15NOR2 80402 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations did not find any technical reason to refine the cost weight methodology based on the comments received, but will consider some of these comments in the future when we rebase the market basket based on FQHC cost report data from the revised form CMS–224–14. We are also finalizing our proposal to include a productivity adjustment to the FQHC market basket update, as we did not find any compelling technical reason that we should not implement this adjustment to the FQHC market basket. Table 38 shows the final 2013-based FQHC Market Basket cost categories, cost weights, and price proxies. TABLE 38—FINAL CY 2013-BASED FQHC MARKET BASKET COST CATEGORIES, COST WEIGHTS, AND PRICE PROXIES 2013 Cost weight (%) FQHC cost category Price proxy FQHC Market Basket ............................... Total Compensation .......................... FQHC Practitioner Comp. .......... ....................................................................................................................................... ....................................................................................................................................... ECI—for Total Compensation for Private Industry Workers in Professional and Related. ECI—for Total Compensation for all Civilian Workers in Health Care and Social Assistance. ECI—for Total Compensation for Private Industry Workers in Office and Administrative Support. ....................................................................................................................................... CPI–U for Fuels and Utilities ....................................................................................... CPI–U for All Items Less Food and Energy ................................................................ CPI–U for Telephone ................................................................................................... CP–U for Postage ........................................................................................................ PPI Commodities for Surgical and Medical Instruments ............................................. Blend: PPI Commodities for Medical and Surgical Appliances and Supplies and CPI for Medical Equipment and Supplies. PPI Commodities for Pharmaceuticals for Human Use, Prescription ......................... ....................................................................................................................................... ECI—for Total Compensation for Private Industry Workers in Professional, Scientific, and Technical Services. ECI—for Total Compensation for Private Industry Workers in Office and Administrative Support. ECI—for Total compensation for Private Industry Workers in Service Occupations .. ....................................................................................................................................... PPI Industry—for Lessors of Nonresidential Buildings ................................................ PPI Commodities—for Machinery and Equipment ...................................................... Other Clinical Compensation ...... Non-health Compensation .......... All Other Products ............................. Utilities ........................................ Miscellaneous Office Expenses Telephone ................................... Postage ...................................... Medical Equipment ..................... Medical Supplies ........................ Pharmaceuticals ......................... All Other Services .............................. Professional, Scientific & Technical Services. Administrative & Facility Services. Other Services ............................ Capital ................................................ Fixed Capital .............................. Moveable Capital ........................ We also proposed that we would use the most recent data available to determine the final FQHC market basket and MFP update for CY 2017. Based on IGI’s third quarter 2016 forecast with historical data through the second quarter of 2016, the final FQHC market basket increase factor for CY 2017 is 1.8 percent. This reflects a 2.2 percent increase of FQHC input prices and a 0.4percent adjustment for productivity. For comparison, the MEI increase factor for CY 2017 is 1.2 percent (a 1.6 percent MEI update and a 0.4 percent MFP adjustment); these updates reflect the most historical data available, with 100.0 68.7 31.7 9.5 27.4 16.1 1.4 2.8 1.7 1.0 2.2 2.0 5.1 9.0 2.9 3.4 2.7 6.1 4.5 1.7 historical data through the second quarter of 2016. Table 39 shows the final 2013-based FQHC market basket updates compared to the proposed 2013-based FQHC market basket updates for CY 2017. TABLE 39—FQHC MARKET BASKET FINAL CY 2017 UPDATE OF ALL COST CATEGORIES mstockstill on DSK3G9T082PROD with RULES2 FQHC Cost category CY 2017 Final update* (%) CY 2017 Proposed update (%) FQHC Market Basket .............................................................................................................................................. Productivity adjustment ............................................................................................................................................ FQHC Market Basket (unadjusted) ......................................................................................................................... Total Compensation ......................................................................................................................................... FQHC Practitioner Compensation ............................................................................................................. Other Clinical Compensation .................................................................................................................... Non-health Compensation ......................................................................................................................... All Other Products ............................................................................................................................................ Utilities ....................................................................................................................................................... Miscellaneous Office Expenses ................................................................................................................ Telephone .................................................................................................................................................. Postage ..................................................................................................................................................... Medical Equipment .................................................................................................................................... Medical Supplies ....................................................................................................................................... Professional Liability Insurance ................................................................................................................. Pharmaceuticals ........................................................................................................................................ All Other Services ............................................................................................................................................. Professional, Scientific & Technical Services ........................................................................................... Administrative & Facility Services ............................................................................................................. 1.8 0.4 2.2 2.0 1.6 1.8 2.5 3.1 ¥2.5 2.1 ¥0.1 0.5 1.6 ¥0.6 ........................ 8.4 2.1 1.5 2.5 1.7 0.4 2.1 2.1 1.9 1.9 2.4 2.6 ¥3.9 2.0 0.4 0.3 1.2 ¥0.4 ........................ 7.8 2.0 1.5 2.4 VerDate Sep<11>2014 17:02 Nov 12, 2016 Jkt 241001 PO 00000 Frm 00234 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80403 TABLE 39—FQHC MARKET BASKET FINAL CY 2017 UPDATE OF ALL COST CATEGORIES—Continued CY 2017 Final update* (%) FQHC Cost category CY 2017 Proposed update (%) 2.1 1.5 2.0 0.1 1.9 1.6 2.1 0.1 Other Services ........................................................................................................................................... Capital ............................................................................................................................................................... Fixed Capital ............................................................................................................................................. Moveable Capital ....................................................................................................................................... * Based on historical data through the 2nd quarter 2016. For the productivity adjustment, the 10-year moving average percent change adjustment for CY 2017 is 0.4 percent, which is based on the most historical data available from BLS at the time of the final rule, and reflects annual MFP estimates through 2015. C. Appropriate Use Criteria for Advanced Diagnostic Imaging Services Section 218(b) of the PAMA amended Title XVIII of the Act to add section 1834(q) of the Act directing us to establish a program to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services. The CY 2016 PFS final rule with comment period addressed the initial component of the new Medicare AUC program, specifying applicable AUC. In that rule we established evidence-based process and transparency requirements for the development of AUC, defined provider-led entities (PLEs) and established the process by which PLEs may become qualified to develop, modify or endorse AUC. The first list of qualified PLEs were posted on the CMS Web site at the end of June 2016 at which time their AUC libraries became specified AUC for purposes of section 1834(q)(2)(A) of the Act. This rule proposed requirements and processes for specification of qualified clinical decision support mechanisms (CDSMs) under the Medicare AUC program; the initial list of priority clinical areas; and exceptions to the requirement that ordering professionals consult specified applicable AUC when ordering applicable imaging services. mstockstill on DSK3G9T082PROD with RULES2 1. Background AUC present information in a manner that links: A specific clinical condition or presentation; one or more services; and, an assessment of the appropriateness of the service(s). For purposes of this program, AUC are a set or library of individual appropriate use criteria. Each individual criterion is an evidence-based guideline for a particular clinical scenario. Each scenario in turn starts with a patient’s presenting symptoms and/or condition. Evidence-based AUC for imaging can assist clinicians in selecting the imaging study that is most likely to improve health outcomes for patients based on their individual clinical presentation. AUC need to be integrated as seamlessly as possible into the clinical VerDate Sep<11>2014 17:02 Nov 12, 2016 Jkt 241001 workflow. CDSMs are the electronic portals through which clinicians would access the AUC during the patient workup. While CDSMs can be standalone applications that require direct entry of patient information, they may be more effective when they automatically incorporate information such as specific patient characteristics, laboratory results, and lists of co-morbid diseases from Electronic Health Records (EHRs) and other sources. Ideally, practitioners would interact directly with the CDSM through their primary user interface, thus minimizing interruption to the clinical workflow. Consistent with definitions of CDSM by the Agency for Healthcare Research and Quality (AHRQ) (https:// www.ahrq.gov/professionals/preventionchronic-care/decision/clinical/ index.html), and the Office of the National Coordinator for Health Information Technology (ONC) (https:// www.healthit.gov/policy-researchersimplementers/clinical-decision-supportcds), within Health IT applications, a CDSM is a functionality that provides persons involved in care processes with general and person-specific information, intelligently filtered and organized, at appropriate times, to enhance health and health care. 2. Previous CDSM Experience In the CY 2016 PFS final rule with comment period, we included a discussion of the Medicare Imaging Demonstration (MID), which was required by section 135(b) of the MIPPA, in addition to independent experiences of implementing AUC by several healthcare systems and academic medical centers. Two key aspects of that discussion remain relevant to the CDSM component of this program. First, AUC, and the CDSMs through which clinicians access AUC, must be integrated into the clinical workflow and facilitate, not obstruct, evidence-based care delivery. For instance, a CDSM may be fully integrated with or part of a provider’s Certified EHR system, partially integrated, or entirely outside of it. A PO 00000 Frm 00235 Fmt 4701 Sfmt 4700 CDSM that is external to a provider’s primary user interface could utilize an application program interface (API), a set of protocols and tools specifying how software components should interact, to pull relevant information into the decision support application and provide support back to the primary interface. It could also provide decision support, based on the pulled EHR data, via a separate interface. By adhering to common interoperability standards, such as the national standards advanced through certified health IT (see 2015 edition of certification criteria available in the Federal Register (80 FR 62601) and described in the Interoperability Standards Advisory at https:// www.healthit.gov/standards-advisory), CDSMs could both ensure integration of patient-specific data from EHRs, and allow clinicians to optimize the time spent using the tool. Second, the ideal AUC is an evidencebased guide that starts with a patient’s specific clinical condition or presentation (symptoms) and assists the clinician in the overall patient workup, treatment, and follow-up. Imaging would appear as key nodes within the clinical management decision tree. Other options outside of certified EHR technology exist to access AUC through CDSMs. Stand-alone, internet-based CDSMs are available and, although they will not interact with EHR data, can nonetheless search for and present AUC relevant to a patient’s presenting symptoms or condition. In communicating an appropriateness rating to the ordering practitioner, some CDSMs provide a scale with numeric ratings, some output a red, yellow, or green light while others provide a dichotomous yes or no. At this time, we do not believe there is one correct approach to communicating the level of appropriateness to the ordering professional. However, section 1834(q)(4)(B) of the Act requires that information be reported on the claim form as to whether the service would or would not adhere to the specified AUC consulted through a particular CDSM, or whether the AUC was not applicable to E:\FR\FM\15NOR2.SGM 15NOR2 80404 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 the service. We requested feedback from commenters regarding how appropriateness ratings provided by CDSMs could be interpreted and recorded for the purposes of this program. There are different views about the comprehensiveness of AUC that should be accessible within CDSMs. Some stakeholders believe that the CDSM should contain as comprehensive a collection of AUC as possible, incorporating individual criteria from across all specified AUC libraries. The intent would be for ordering professionals to avoid the frustration, experienced and voiced by many clinicians participating in the MID, of spending time navigating the CDSM only to find that no criterion for their patient’s specific clinical condition exists. Other stakeholders believe, based on decades of experience rolling out AUC in the context of robust quality improvement programs that it is best to start with a CDSM that contains AUC for a few clinical areas where impact is large and evidence is strong. This would ensure that quality AUC are developed, and that clinicians and entire care teams could fully understand the AUC they are using, including when they do not apply to a particular patient. As we stated in the CY 2016 PFS final rule with comment period, we believe there is merit to both approaches, and it has been suggested to us that the best approach may depend on the particular care setting. The second, ‘‘focused’’ approach may work better for a large health system that produces and uses its own AUC. The first, ‘‘comprehensive’’ approach may in turn work better for a smaller practice with broad image ordering patterns and fewer resources that wants to simply adopt and start using a complete AUC system developed elsewhere. We believe a successful program would allow flexibility, and under section 1834(q) of the Act, we foresee a number of sets of AUC developed by different PLEs, and an array of CDSMs from which clinicians may choose. 3. Priority Clinical Areas We established in the CY 2016 PFS final rule with comment period that we would identify priority clinical areas through rulemaking, and that these may be used in the determination of outlier ordering professionals (a future phase of the Medicare AUC program). The concept of priority clinical areas allows us to implement an AUC program that combines the focused and comprehensive approaches to implementation discussed above. Although potentially large volumes of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 AUC (as some PLEs have large libraries of AUC) would become specified across clinical conditions and advanced imaging technologies, we believe this rapid and comprehensive roll out of specified AUC should be balanced with a more focused approach when identifying outlier ordering professionals. We believe this will provide an opportunity for physicians and practitioners to become familiar with AUC in identified priority clinical areas prior to Medicare claims for those services being part of the input for calculating outlier ordering professionals. As we describe earlier, CDSMs are the access point for ordering professionals to consult AUC. We believe the combination of the comprehensive and focused approaches should be applied to CDSM requirements as we consider a minimum floor of AUC that must be made available to ordering professionals through qualified CDSMs. AUC that reasonably address the entire clinical scope of priority clinical areas could establish a minimum floor of AUC to be included in qualified CDSMs, and the number of priority clinical areas could be expanded through annual rulemaking and in consultation with physicians and other stakeholders. This allows priority clinical areas to roll out judiciously, and build over time. 4. Statutory Authority Section 218(b) of the PAMA added a new section 1834(q) of the Act entitled, ‘‘Recognizing Appropriate Use Criteria for Certain Imaging Services,’’ which directs the Secretary to establish a new program to promote the use of AUC. Section 1834(q)(3)(A) of the Act requires the Secretary to specify qualified CDSMs that could be used by ordering professionals to consult with specified applicable AUC for applicable imaging services. 5. Discussion of Statutory Requirements There are four major components of the AUC program under section 1834(q) of the Act, each with its own implementation date: (1) Establishment of AUC by November 15, 2015 (section 1834(q)(2)); (2) identification of mechanisms for consultation with AUC by April 1, 2016 (section 1834(q)(3)); (3) AUC consultation by ordering professionals and reporting on AUC consultation by furnishing professionals by January 1, 2017 (section 1834(q)(4)); and (4) annual identification of outlier ordering professionals for services furnished after January 1, 2017 (section 1834(q)(5)). As we will discuss later in this preamble, we did not identify mechanisms for consultation by April 1, PO 00000 Frm 00236 Fmt 4701 Sfmt 4700 2016 and will not have specified or published the list of qualified CDSMs by January 1, 2017; therefore, ordering professionals will not be required to consult CDSMs, and furnishing professionals will not be able to report information on the consultation, by this date. a. Establishment of AUC In the CY 2016 PFS final rule with comment period, we addressed the first component under section 1834(q)(2) of the Act—the requirements and process for establishment and specification of applicable AUC, along with relevant aspects of the definitions under section 1834(q)(1) of the Act. This included defining the term PLE and finalizing requirements for the rigorous, evidencebased process by which a PLE would develop AUC, upon which qualification is based, as provided in section 1834(q)(2)(B) of the Act and in the CY 2016 PFS final rule with comment period. Using this process, once a PLE is qualified by CMS, the AUC that are developed, modified or endorsed by the qualified PLE are considered to be specified applicable AUC under section 1834(q)(2)(A) of the Act. We defined the term PLE to include national professional medical societies, health systems, hospitals, clinical practices and collaborations of such entities such as the High Value Healthcare Collaborative or the National Comprehensive Cancer Network. Qualified PLEs may collaborate with third parties that they believe add value to their development of AUC, provided such collaboration is transparent. We expect qualified PLEs to have sufficient infrastructure, resources, and the relevant experience to develop and maintain AUC according to the rigorous, transparent, and evidence-based processes detailed in the CY 2016 PFS final rule with comment period. A timeline and process was established for PLEs to apply to become qualified and the first list of qualified PLEs was published at https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Appropriate-Use-CriteriaProgram/. b. Mechanism for AUC Consultation The second major component of the Medicare AUC program is the specification of qualified CDSMs that could be used by ordering professionals for consultation with specified applicable AUC under section 1834(q)(3) of the Act. We envision a CDSM as an interactive tool that communicates AUC information to the user. Information regarding the clinical E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations presentation of the patient would be incorporated into the CDSM from another health IT system or through data entry by the ordering professional. At a minimum, the tool would provide immediate feedback to the ordering professional on the appropriateness of one or more imaging services. Ideally, CDSMs would be integrated within or seamlessly interoperable with existing health IT systems and would automatically receive patient data from the EHR or through an API or other connection. Such integration would minimize burden on practitioners and avoid duplicate documentation. Also useful to clinicians would be the ability to switch between CDSMs that can interoperate based on common standards. Section 1834(q)(3)(A) of the Act states that the Secretary must specify qualified CDSMs in consultation with physicians, practitioners, health care technology experts, and other stakeholders. This paragraph authorizes the Secretary to specify mechanisms that could include: CDS modules within certified EHR technology; private sector CDSMs that are independent of certified EHR technology; and a CDSM established by the Secretary. The Secretary did not propose to establish a CDSM at this time. All CDSMs must meet the requirements under section 1834(q)(3)(B) of the Act, which specifies that a mechanism must: Make available to the ordering professional applicable AUC and the documentation supporting the appropriateness of the applicable imaging service that is ordered; where there is more than one applicable appropriate use criterion specified for an applicable imaging service, indicate the criteria it uses for the service; determine the extent to which an applicable imaging service that is ordered is consistent with the applicable AUC; generate and provide to the ordering professional documentation to demonstrate that the qualified CDSM was consulted by the ordering professional; be updated on a timely basis to reflect revisions to the specification of applicable AUC; meet applicable privacy and security standards; and perform such other functions as specified by the Secretary (which may include a requirement to provide aggregate feedback to the ordering professional). Section 1834(q)(3)(C) of the Act specifies that the Secretary must publish an initial list of specified mechanisms no later than April 1, 2016, and that the Secretary must identify on an annual basis the list of specified qualified CDSMs. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 80405 As we explained in the CY 2016 PFS proposed rule and final rule with comment period, implementation of many aspects of the amendments made by section 218(b) of the PAMA requires consultation with physicians, practitioners, and other stakeholders, and notice and comment rulemaking. We continue to believe the PFS calendar year rulemaking process is the most appropriate and administratively feasible implementation vehicle. Given the timing of the PFS rulemaking process, we were not able to include proposals in the PFS proposed rule to begin implementation in the same year the PAMA was enacted, as we would have had to interpret and analyze the new statutory language, and develop proposed plans for implementation in under one month. As we did prior to the CY 2016 PFS proposed rule when we met extensively with stakeholders to gain insight and hear their comments and concerns about the AUC program, we used the time prior to the CY 2017 PFS proposed rule to meet with many of the same stakeholders but also a new group of stakeholders specifically related to CDSMs. In addition, we are continuing our stepwise approach to implementing this AUC program. The first phase of the AUC program (specifying AUC including defining what AUC are and specifying the process for developing them) was accomplished through last year’s CY 2016 PFS final rule with comment period. For this second phase, we use the CY 2017 PFS rulemaking process as the vehicle to establish requirements for CDSMs, and the process to specify qualified CDSMs, in a transparent manner that allows for stakeholder and public involvement. Therefore, the final CDSM requirements and process for CDSMs to become qualified are included in this CY 2017 PFS final rule. applicable imaging service is usually not the same professional who bills Medicare for that service when furnished. Section 1834(q)(4)(C) of the Act provides for certain exceptions to the AUC consultation and reporting requirements including in the case of certain emergency services, inpatient services paid under Medicare Part A, and ordering professionals who obtain an exception due to a significant hardship. Section 1834(q)(4)(D) of the Act specifies that the applicable payment systems for the AUC consultation and reporting requirements are the PFS, hospital outpatient prospective payment system, and the ambulatory surgical center payment systems. Since a list of qualified CDSMs is not yet available and will not be available by January 1, 2017, we will not require ordering professionals to meet this requirement by that date. c. AUC Consultation and Reporting The third major component of the AUC program is in section 1834(q)(4) of the Act, Consultation with Applicable Appropriate Use Criteria. This section establishes, beginning January 1, 2017, the requirement for an ordering professional to consult with a qualified CDSM when ordering an applicable imaging service that would be furnished in an applicable setting and paid for under an applicable payment system; and for the furnishing professional to include on the Medicare claim information about the ordering professional’s consultation with a qualified CDSM. The statute distinguishes between the ordering and furnishing professional, recognizing that the professional who orders an a. Definitions In § 414.94(b), we proposed to codify and add language to clarify some of the definitions provided in section 1834(q) of the Act, as well as define terms that were not defined in statute but for which a definition would be helpful for program implementation. In this section, we provide a description of the terms we proposed to codify to facilitate understanding and encouraged public comment on the AUC program. We proposed to define CDSM under § 414.94(b) as an interactive, electronic tool for use by clinicians that communicates AUC information to the user and assists them in making the most appropriate treatment decision for a patient’s specific clinical condition. A CDSM would incorporate specified PO 00000 Frm 00237 Fmt 4701 Sfmt 4700 d. Identification of Outliers The fourth component of the AUC program is in section 1834(q)(5) of the Act, Identification of Outlier Ordering Professionals. The identification of outlier ordering professionals under this paragraph facilitates a prior authorization requirement for outlier professionals beginning January 1, 2020, as specified under section 1834(q)(6) of the Act. Although we did not propose to implement these sections in the CY 2017 PFS proposed rule, we proposed below a list of priority clinical areas which may serve as part of the basis for identifying outlier ordering professionals. 6. Proposals for Implementation We proposed to amend our regulations at § 414.94, ‘‘Appropriate Use Criteria for Certain Imaging Services.’’ E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80406 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations applicable AUC sets from which an ordering professional could select. A CDSM may be a module within or available through certified EHR technology (as defined in section 1848(o)(4) of the Act) or private sector mechanisms independent from certified EHR technology. If within or available through certified EHR technology, a qualified CDSM would incorporate relevant patient-specific information into the assessment of the appropriateness of an applicable imaging service. As prescribed in section 1834(q) of the Act and § 414.94(b) of our regulations, the Medicare AUC program imposes requirements only for applicable imaging services furnished in applicable settings. Further, as specified in section 1834(q)(4)(D) of the Act, we proposed to amend our regulation at § 414.94(b) to state that the applicable payment systems for the Medicare AUC program are the PFS under section 1848(b) of the Act, the prospective payment system for hospital outpatient department services under section 1833(t) of the Act, and the ambulatory surgical center payment systems under section 1833(i) of the Act. Applicable payment systems are relevant to implementation of section 1834(q)(4)(B) of the Act, entitled ‘‘Reporting by Furnishing Professionals.’’ We remind readers that in PFS rulemaking for CY 2016 we defined applicable imaging service in § 414.94(b) as an advanced diagnostic imaging service as defined in 1834(e)(1)(B) of the Act for which the Secretary determines (i) One or more applicable appropriate use criteria apply; (ii) There are one or more qualified clinical decision support mechanisms listed; and (iii) One or more of such mechanisms is available free of charge. The following is a summary of the comments we received on the definitions for CDSM and applicable payment system. Comment: Most comments that addressed the definitions supported our proposals. One commenter requested that in the definition of CDSM, CMS specify that it is a tool for ‘‘ordering clinicians.’’ Response: We disagree that the regulatory definition of CDSM should specify exactly who can use a CDSM and believe it should continue to focus on the function and purpose of the tool. We would not want the definition to restrict use to one type of user; however, we expect that the ordering professional would consult the tool. We appreciate commenters’ general support of the proposed definitions. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 After considering the comments, we have made no changes to the definitions and are finalizing the language at § 414.94(b) as proposed. b. Priority Clinical Areas We proposed to establish a new § 414.94(e)(5) to set forth the initial list of priority clinical areas. To compile this proposed list, we performed an analysis of Medicare claims data using the CMS Chronic Conditions Data Warehouse (CCW) as the primary data source. The CCW contains 100 percent of Medicare claims for beneficiaries who are enrolled in the fee-for-service (FFS) program. Data were derived from the CCW’s 2014 Part B non-institutional claim line file, which includes Part B services furnished during CY 2014. This is the main file containing final action claims data for non-institutional health care providers, including physicians, physician assistants, clinical social workers, nurse practitioners, independent clinical laboratories, and freestanding ambulatory surgical centers. The Part B non-institutional claim line file contains the individual line level information from the claim and includes Healthcare Common Procedure Coding System (HCPCS) code(s), diagnosis code(s) using the International Classification of Diseases, Ninth Revision (ICD–9), service dates, and Medicare payment amount. A publicly available version of this dataset can be downloaded from the CMS Web site at https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/AppropriateUse-Criteria-Program/. We encouraged stakeholders to review this dataset as a source that might help inform public comments related to the proposed priority clinical areas. In the CY 2016 PFS final rule with comment period, we stated that when identifying priority clinical areas we may consider factors such as incidence and prevalence of disease, the volume and variability of utilization of imaging services, the strength of evidence for their use, and applicability of the clinical area to the Medicare population and to a variety of care settings. Using the 2014 Medicare claims data referenced above, we ranked ICD–9 codes by the frequency with which they were used as the primary indication for specific imaging procedures, which in turn were identified by the volume of individual Current Procedural Terminology (CPT) codes for which payments were made in 2014. We extracted the top 135 ICD–9 codes from this list and formed clinically-related categories. Next, we searched manually through an electronic list of all ICD–9 PO 00000 Frm 00238 Fmt 4701 Sfmt 4700 codes to find others that would plausibly fit into each clinical grouping. This process required subjective clinical judgment on whether a particular ICD– 9 code should be included in a given clinical group. The top eight clinical groupings (by volume of procedures) are what we proposed as the initial list of priority clinical areas. The eight clinical areas account for roughly 40 percent of part B advanced diagnostic imaging services paid for by Medicare in 2014. We are aware that some stakeholders have suggested beginning the AUC program with no more than five priority clinical areas while others have suggested a far greater number. We believed the proposed eight priority clinical areas strike a reasonable balance that allows us to focus on a significant range and volume of advanced diagnostic imaging services. We also considered extracting pulmonary embolism as a separate priority clinical area from the chest pain grouping based on stakeholder consultation and feedback. However, we decided not to identify pulmonary embolism separately, but asked for public comment on whether pulmonary embolism should be included as a stand-alone priority clinical area. Based on our consultations with physicians, practitioners and other stakeholders, as required by section 1834(q)(3)(A) of the Act, we attempted to be inclusive when grouping ICD–9 codes into cohesive clinical areas. As an example of how we derived the priority clinical area for low back pain, we grouped together 10 ICD– 9 codes, incorporating six from the top 135 and four from the manual search of all ICD–9 codes. Included in this grouping are the ICD–9 codes for displacement of lumbar intervertebral disc without myelopathy (722.10), degeneration of lumbar of lumbosacral intervertebral disc (722.52), intervertebral disc disorder with myelopathy lumbar region (722.73), post-laminectomy syndrome of lumbar region (722.83), lumbago (724.2), sciatica (724.3), thoracic or lumbosacral neuritis or radiculitis unspecified (724.4), spinal stenosis, lumbar region, without neurogenic claudication (724.02), lumbosacral spondylosis without myelopathy (721.3), and spondylosis with myelopathy lumbar region (721.42) which resulted in 1,883,617 services. To see all of the priority clinical area groupings of diagnosis codes, a table is available on the CMS Web site at https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Appropriate-Use-CriteriaProgram/. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Using the above methodology, we developed and proposed eight priority clinical areas. These reflect both the significance and the high prevalence of 80407 some of the most disruptive diseases in the Medicare population. TABLE 40—PROPOSED PRIORITY CLINICAL AREAS WITH CORRESPONDING CLAIMS DATA Total services Proposed priority clinical area Chest Pain (includes angina, suspected myocardial infarction, and suspected pulmonary embolism) ....................................................................... Abdominal Pain (any locations and flank pain) ............................................... Headache, traumatic and non-traumatic ......................................................... Low back pain .................................................................................................. Suspected stroke ............................................................................................. Altered mental status ....................................................................................... Cancer of the lung (primary or metastatic, suspected or diagnosed) ............. Cervical or neck pain ....................................................................................... % Total services 1 4,435,240.00 2,973,331.00 2,107,868.00 1,883,617.00 1,810,514.00 1,782,794.00 1,114,303.00 1,045,381.00 Total payments 12 8 6 5 5 5 3 3 $470,395,545 235,424,592 89,382,087 180,063,352 119,574,141 83,296,007 154,872,814 83,899,299 % Total payments 1 14 7 3 5 4 3 5 3 mstockstill on DSK3G9T082PROD with RULES2 1 Percentage of 2014 Part B non-institutional claim line file for advanced imaging services from Medicare claims for beneficiaries who are enrolled in the fee-for-service (FFS) program (source: CMS Chronic Conditions Data Warehouse). We also engaged the CMS Alliance to Modernize Healthcare (CAMH) Federally Funded Research and Development Center (FFRDC), the MITRE Corporation (MITRE), to begin developing efficient and effective processes for managing current and future health technology assessments. MITRE generated an independent report that presents a summary of findings from claims data from the Medicare population and their utilization of advanced imaging procedures. Coupled with our internal analysis, this report has assisted in identification of proposed priority clinical areas for the Medicare AUC program for advanced diagnostic imaging services. Analysis and methods for this report are available at https://www.mitre.org/publications/ technical-papers/claims-data-analysisto-define-priority-clinical-areas-foradvanced. While this year we proposed priority clinical areas based on an analysis of claims data alone, we may use a different approach in future rulemaking cycles. As we specified in § 414.94(e) of our regulations, we may consider factors other than volume when proposing priority clinical areas including incidence and prevalence of disease, variability of use of particular imaging services, strength of evidence supporting particular imaging services and the applicability of a clinical area to a variety of care settings and to the Medicare population. We encouraged public comments on this proposed initial list of priority clinical areas, including recommendations for other clinical areas that we should include among our list of priority clinical areas. In particular, we were interested in comments on the above methodology or alternate options; whether the proposed priority clinical areas are appropriate including information on the extent to VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 which these proposed priority clinical areas may be represented by clinical guidelines or AUC in the future. Furthermore, we were interested in public comments, supported by published information, for varying levels of evidence that exist across, as well as within priority clinical areas. The following is a summary of the comments we received on the list of priority clinical areas which may serve as part of the basis for identifying outlier ordering professionals. Comment: Many commenters addressed the proposed list of priority clinical areas. Some commenters suggested that many of the proposed priority clinical areas were too large and each area was too broadly defined. Commenters expressed concerns that the proposed list does not permit a meaningful, focused approach. As an alternative, one commenter encouraged CMS to limit the number of priority clinical areas from eight to four. Other commenters noted that broadly defined priority clinical areas might result in little opportunity for a change in behavior of ordering professionals. Commenters supported inclusion of low back pain and headache in the list of priority clinical areas. One commenter specifically recommended that CMS refine the proposed clinical areas of ‘‘low back pain’’ and ‘‘headache’’ to reflect differences between the elderly and non-elderly populations. Other commenters noted the possibility of overlap between priority clinical areas of headache, suspected stroke, and altered mental status, and some commenters recommended combining such areas. Other commenters recommended eliminating suspected stroke, altered mental status, chest pain and abdominal pain, and creating a stand-alone priority clinical area for suspected pulmonary embolism. For abdominal pain, PO 00000 Frm 00239 Fmt 4701 Sfmt 4700 commenters were concerned that there were not high quality AUC available to cover such a vast clinical area. For suspected stroke, commenters were concerned that using this area for future outlier calculations would not be beneficial as advanced imaging for these patients may be exempt from this program under the emergency medical conditions exception. Commenters disagreed with both suspected stroke and altered mental status because both could fall under other priority clinical areas and they noted there was a lack of high quality AUC available to address them. Some commenters encouraged and others discouraged CMS from considering alternative priority clinical areas. Some commenters generally asked CMS to refrain from considering other clinical areas beyond what is listed in the CY 2017 PFS proposed rule. Other commenters offered alternatives in both number and scope of priority clinical areas. Other commenters suggested including musculoskeletal (hip pain, knee pain, joint pain, shoulder pain, rotator cuff injury), other cancers (breast, prostate), right upper quadrant pain, solitary pulmonary nodule, pancreatitis, appendicitis, renal colic, suspected abdominal aortic dissection, CT for minor blunt head trauma, suspected cardiac ischemia, and hematuria. One commenter noted that the top ten conditions for which advanced imaging is requested included low back pain, headache, and cervical pain. Another commenter recommended that these priority clinical areas should be phased in at a rate of two per year, with examples of pulmonary embolism and low back pain (as areas where strength of evidence was particularly high), which echoed other general comments to more gradually expand the list of E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80408 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations priority clinical areas after testing and as deemed necessary. Response: We agree that if priority clinical areas are too broadly defined, it would not be consistent with our purpose to offer both comprehensive and focused approaches to AUC rollout into qualified CDSMs. We further agree that a central goal of the AUC program is to promote appropriate ordering of advanced diagnostic imaging services. Additionally we appreciate the points made by the commenters and see merit in some of their recommended alternatives for priority clinical areas as they take into account factors such as incidence and prevalence of disease, the variability of utilization of specific imaging services, the strength of evidence and AUC available for consultation for a particular clinical scenario, and applicability of each suggested alternative clinical area to the Medicare population and to a variety of care settings, including the emergency department. We agree with commenters that chest pain is a general symptom and too broad for a focused priority clinical area. We further agree with commenters that supported creating a stand-alone priority clinical area for suspected pulmonary embolism, as discussed in detail below, and one for coronary artery disease. Chest pain may be a clinical symptom of underlying suspected pulmonary embolism and coronary artery disease. There is a solid evidence base from well designed, randomized controlled trials supporting specific protocols and guidelines that consider different signs, symptoms and history associated with working up a patient with suspected pulmonary embolism. There is also strong evidence from multiple large, randomized controlled trials to guide imaging for coronary artery disease. We note that, according to the American Heart Association Statistical Update, coronary artery disease is the leading cause of death among men and women in the United States. The evidence is less robust for many other causes of chest pain. Therefore, based on the above, we are removing chest pain as a priority clinical area and finalizing suspected pulmonary embolism and coronary artery disease as two distinct areas. We recognize, along with commenters, that the proposed list of priority clinical areas did not include scenarios specific to musculoskeletal indications. As stated in the proposed rule, CMS also engaged MITRE to generate an independent report, which indicates that almost half a million advanced diagnostic imaging services were rendered to Medicare beneficiaries VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 in 2014 for clinical presentations related to joint pain. Furthermore, we agree with commenters who suggested CMS consider additional clinical areas with a reasonably robust volume of literature on appropriate use and agree that the strength of evidence for imaging use and relevance to the Medicare population supports inclusion of hip pain and shoulder pain (to include suspected rotator cuff injury) in the final list of priority clinical areas. In addition to commenters’ support of inclusion of low back pain and headache in the list of priority clinical areas, we also note that the MID cites clinical research demonstrating that use of clinical decision support was associated with a decrease in the utilization of lumbar MRIs for low back pain and head MRIs for headache. We are finalizing the proposed areas of low back pain and headache, as well as cancer of the lung (primary or metastatic, suspected or diagnosed). We have removed altered mental status and abdominal pain based on the concerns expressed by commenters summarized above, including the lack of strong evidence to cover the breadth of each of these areas. Based on the commenters’ concerns we may review these areas in the future, possibly narrowing their scope. Regarding stroke, we acknowledge that evidence-based stroke protocols do exist, however, we believe that it is possible that an exception for emergency medical services may disproportionally apply to suspected stroke so there may be a concern for using this priority clinical area for future outlier calculations. Furthermore, there may be some overlap of the clinical areas of suspected stroke and headache. A strong level of evidence specific to headache is available and we believe headache is less likely to be impacted by the emergency medical services exception. Therefore, we are removing suspected stroke and retaining headache in the final list of priority clinical areas. We may consider adding suspected stroke through future rulemaking. In response to public comments and as supported by the additional information above and further discussion below, we have modified the list of priority clinical areas by: (1) removing chest pain, abdominal pain (any locations and flank pain), suspected stroke and altered mental status; and (2) adding coronary artery disease (suspected or diagnosed), suspected pulmonary embolism, hip pain and shoulder pain (to include suspected rotator cuff injury). We are finalizing as proposed the priority PO 00000 Frm 00240 Fmt 4701 Sfmt 4700 clinical areas of headache (traumatic and non-traumatic), low back pain, cancer of the lung (primary or metastatic, suspected or diagnosed), and cervical or neck pain. The final list of priority clinical areas is as follows: • Coronary artery disease (suspected or diagnosed). • Suspected pulmonary embolism. • Headache (traumatic and nontraumatic). • Hip pain. • Low back pain. • Shoulder pain (to include suspected rotator cuff injury). • Cancer of the lung (primary or metastatic, suspected or diagnosed). • Cervical or neck pain. Consistent with section 1834(q) of the Act, we are not AUC developers, and therefore, would not produce AUC tailored to the elderly population. However, § 414.94(c)(1) of our regulations requires qualified PLEs to utilize an evidentiary review process when developing or modifying AUC. This regulation further requires qualified PLEs to identify AUC that are relevant to priority clinical areas, and specifies that to be considered relevant, the AUC must reasonably address the entire clinical scope of the corresponding priority clinical areas. These requirements and the resulting fundamental process ensures that AUC are evidence-based to the extent feasible as required by section 1834(q)(1)(B) of the Act. Therefore, we expect that qualified PLEs will undertake evidence reviews of sufficient depth and quality to ensure that all relevant evidencebased publications in the peer-reviewed medical literature on trials, observational studies, and consensus statements are identified, considered and evaluated; and that such reviews are reproducible. We do not agree with the suggestion to reduce the total number of priority clinical areas we proposed in CY 2017 rulemaking, and reiterate that ordering professionals must consult AUC for all applicable imaging services, not only those falling within a priority clinical area. Furthermore, we anticipate that additional priority clinical areas will be proposed in future rulemaking, and we believe that Medicare beneficiaries will benefit as ordering professionals become familiar with specified applicable AUC relevant to all advanced diagnostic imaging services. Comment: One commenter suggested diagnosimetrics—the application of quantitative analysis to the art of disease diagnosis—as an alternative approach to clinical assessment and reassessment, which the commenter believed is an E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations approach that obviates the need to develop priority clinical areas. Response: We appreciate alternative considerations for implementation of the AUC program, but we disagree that utilization of diagnosimetrics can eliminate completely the need to establish priority clinical areas. We remind all commenters that we set forth the list of priority clinical areas not only to strike a balance between the focused and comprehensive approach to implementing the AUC program, but also to be transparent about the areas that we anticipate will serve as the basis for identifying outlier professionals in the future. We again note that consultation of AUC will be required for all advanced diagnostic imaging services regardless of whether they fall into a priority clinical area or not. Comment: Many commenters recommended that pulmonary embolism be included as a stand-alone priority clinical area, based in part on high strength of evidence from multiple, large multicenter, randomized controlled trials (RCTs), and several commenters disagreed. The majority of commenters in support of pulmonary embolism believed that it should be a priority clinical area distinct from chest pain, and further recommended that CMS remove or more narrowly determine any priority clinical area for chest pain. In particular, one commenter did not support inclusion of pulmonary embolism as a separate category stating that eight areas is an appropriate number for the first year of the program. Another commenter supplied published evidence that the decision rules for assessing risk of pulmonary embolism have not been shown to improve appropriate use of diagnostic imaging when compared to clinical judgment alone. One commenter suggested having the pulmonary embolism priority clinical area apply to CT angiograms only. We received one comment that ‘‘shortness of breath’’ rather than ‘‘pulmonary embolism’’ be included as a stand-alone priority clinical area. Response: We appreciate the extensive input on this topic and we agree with the majority of commenters, and thus, are finalizing suspected pulmonary embolism as a priority clinical area. We not that qualified PLEs already have AUC for suspected pulmonary embolism that are based on large, multi-center, randomized controlled trials. These evidence-based AUC in turn are further supported by the American Board of Internal Medicine (ABIM) Foundation’s Choosing Wisely® list of society recommendations. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment: Some commenters advocated for the addition of lung cancer screening to the list of priority clinical areas. The commenters suggested that the inclusion of lung cancer screening would be beneficial as there are well-defined and evidencebased criteria outlining the population that benefits from screening examinations. One commenter remarked on the opportunity it offers for qualified PLEs and CDSMs to gain experience with decision support for a population screening test which may differ from a diagnostic test. Response: We agree with the commenter that it is important for qualified PLEs and qualified CDSMs to interface to gain experience with implementing specified applicable AUC into an appropriateness rating, specifically for advanced diagnostic imaging services. We also appreciate feedback on areas for which AUC have been developed. However, section 1834(q)(1) of the Act limits this program to promoting the use of AUC for advanced diagnostic imaging services, not to include screening tests. Comment: Several commenters explicitly raised concerns regarding the scope, number, and frequency with which the list of priority clinical areas would continue to grow. Many commenters noted that a program with too many priority clinical areas would potentially obstruct any meaningful focused approach. Other commenters either supported or offered no objections to the proposed number of priority clinical areas. Some commenters provided additional considerations to impact the selection of additional priority clinical areas including but not limited to the strength of evidence supporting the use or nonuse of a particular imaging service, the variability of use of a particular imaging service, and the representation of a given clinical grouping to the existing list of priority clinical areas. Response: We recognize these concerns and reiterate that we do not believe there is just one correct criterion to form the basis for expanding the list of priority clinical areas over time. We agree with commenters who encouraged us to consider the breadth and depth of clinical scenarios within the proposed priority clinical areas, and acknowledge the impact of priority clinical areas for calculation of outlier ordering professionals. We expect the list of priority clinical areas to expand over time in a judicious and stepwise manner through consultation with physicians and other stakeholders and through the annual notice and comment rulemaking process. We have demonstrated this in PO 00000 Frm 00241 Fmt 4701 Sfmt 4700 80409 the CY 2017 PFS proposed rule, where we solicited comments on recommendations for additional or alternative areas to be included on our list of priority clinical areas. We believe that the final list of priority clinical areas is responsive and reflects the expressed needs and concerns of most commenters. Comment: Although several commenters generally agreed with the approach used to identify priority clinical areas, some expressed concern about the underlying methodology. Many commenters believed that when we provided claims data analysis and ICD–9 diagnosis codes to describe priority clinical areas, we only considered volume and cost of advanced diagnostic imaging services. Some commenters requested CMS include and/or remove ICD–9 diagnosis codes in one or more of the supplemental tables accompanying the list of priority clinical areas. Many commenters believed that the supplemental table encompassed what CMS believed to be the entire clinical scope of the proposed priority clinical area, while others believed that CMS did not explain what constitutes a priority clinical area such as low back pain. As a consequence, some commenters requested that CMS define priority clinical areas to include all applicable diagnosis codes, and map those diagnosis codes to the most recent ICD–10 diagnosis codes available. One commenter requested that CMS confirm that the data used to ascertain the priority clinical areas did not include services provided in the inpatient and emergency department settings. Another commenter questioned whether the inclusion of too many minor or common symptoms in the data gathering process would consequently weaken the implementation of the AUC program generally. Response: We equally acknowledge the commenters that agreed with our approach and those that raised concerns with our methodology. Section 414.94(e)(2) of our regulations, as finalized in the CY 2016 PFS final rule with comment period, states that, when identifying priority clinical areas, we will consider incidence and prevalence of disease, the volume and variability of use of particular imaging services, and strength of evidence supporting particular imaging services, as well as applicability of the clinical area to a variety of care settings and to the Medicare population. In the CY 2017 PFS proposed rule, we proposed priority clinical areas based on an analysis of claims data, using subjective clinical judgment on whether a E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80410 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations particular ICD–9 diagnosis code should be included in a given clinical grouping. We remind all commenters that the supplemental table was provided to lend insight into the extent to which a given diagnosis code contributes to orders for advanced diagnostic imaging services, which we used to assist us in identifying proposed priority clinical areas. We continue to believe that the list of priority clinical areas should reflect both the significance and high prevalence of some of the most disruptive diseases in the Medicare population. In particular, the claims data analysis we undertook did not include services furnished in the inpatient setting, but did include services provided in an emergency department as section 1834(q)(4)(C) of the Act excludes applicable imaging services ordered for individuals with emergency conditions as defined in section 1867(e)(1) of the Act, but does not exclude all applicable imaging services provided in the emergency department from the consultation requirement under this program. We further agree with the commenters’ observations that a high volume advanced diagnostic imaging service does not by itself indicate high rates of inappropriate testing. Therefore, we are modifying the proposed list of priority clinical areas to more closely align with feedback from commenters on the strength of evidence and AUC available for clinical scenarios within a given clinical area. Given the transition to ICD–10 in 2015 and changes in the list of priority clinical areas, as well as factors discussed above, we clarify that the supplemental table does not define the final list of priority clinical areas. We expect to address the role of ICD–10 diagnosis codes in claims based reporting, auditing and outlier identification for priority clinical areas with rulemaking next year. We note, however, that we believe that the list of priority clinical areas provides sufficient guidance to CDSMs as they decide whether to apply to be a qualified CDSM in the upcoming application cycle. Comment: Several commenters provided alternative considerations to methodically determine priority clinical areas, including ICD–10 diagnosis codes, CPT codes, hierarchical condition categories, anatomical regions, variation in treatment, and quality of the evidence. A few commenters suggested that CMS also consider the extent to which the majority of clinical scenarios within a priority clinical area would likely fall under the emergency medical VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 conditions exception, noting that there may be little impact in proposing to address clinical areas exempt from AUC consultation. Furthermore, some commenters requested that CMS exclude from priority clinical area consideration those clinical scenarios for which advanced imaging tests are rarely inappropriate, which commenters stated would reduce alert fatigue by ordering professionals and increase focus on clinical scenarios for which ordering professional behavior may be altered. Response: Although this year we proposed priority clinical areas based partly on an analysis of claims data, we also considered stakeholder feedback and commenters’ alternative considerations. We acknowledge the merit of several acceptable alternative proposals and believe the current definition of priority clinical areas encompasses these considerations. We will continue to maintain close dialogue with physicians and other stakeholders, and may use a different approach to addressing priority clinical areas in future rulemaking cycles, as needed. Comment: Some commenters expressed additional concerns about the use of diagnosis codes to help form priority clinical areas. One commenter noted that using a diagnosis for suspected stroke should also include other diagnoses in the priority clinical area, such as facial numbness, slurred speech, or limb weakness. Other commenters expressed concerns that publishing a rigid, exact mapping of ICD diagnosis codes for each priority clinical area could give rise to ‘‘gaming.’’ Other commenters noted that addressing priority clinical areas with diagnosis codes is problematic because the final diagnosis code is often not known until the advanced imaging study is completed. Response: We recognize that these comments exemplify the confusion and concerns expressed by many commenters about the definition of each priority clinical area. We did not propose to set forth a diagnosis-code based definition for each priority clinical area; rather, we will continue to use the definition of priority clinical areas in § 414.94(b) which includes clinical conditions, diseases or symptom complexes and associated advanced diagnostic imaging services identified by CMS through annual rulemaking and in consultation with stakeholders which may be used in the determination of outlier ordering professionals. In addition, we clarify that our submission of supplemental data presenting ICD–9 diagnosis codes within each proposed priority clinical PO 00000 Frm 00242 Fmt 4701 Sfmt 4700 area was intended only to explain the portion of Medicare claims data derived from the CCW 2014 Part B noninstitutional claim line file for services furnished during CY 2014. We remind all commenters that these data were used to calculate the total services furnished and total payments made to those enrolled in Medicare Part B. We included this supplemental table to be open and transparent to stakeholders regarding the process by which we developed the proposed list of priority clinical areas. We reiterate that our use of the ICD–9 diagnosis codes from CY 2014 claims data was solely a means for estimating volumes of procedures, as a stepping stone in the development of an initial list of priority clinical areas. In the event we use claims data from 2015 or later for analyses, we will use ICD– 10 codes, but will continue to assess all options for identifying and establishing priority clinical areas and not necessarily limit ourselves only to ICD diagnosis code analyses. We acknowledge the alternative opinions of commenters seeking to modify the extent of diagnosis codes in one or more priority clinical areas. We hope to discuss further with physicians and other stakeholders the relevance of mapping ICD diagnosis codes to priority clinical areas as we move forward in formulating the claims reporting implementation strategy (discussed in more detail below) and strategies to avoid areas of concern for commenters. We clarify that ICD–9 diagnosis codes will not be used for claims reporting purposes in this program given the 2015 transition to ICD–10. We expect that the role of ICD–10 diagnosis codes for the purposes of claims based reporting, auditing and outlier identification will be addressed through rulemaking next year. Comment: Some commenters stated that AUC consultation within priority clinical areas include only high-quality evidence and recommended further consideration and discussion of the level of evidence available for AUC in each priority clinical area. One commenter requested that CMS specify a standard for the strength of any evidence. Many commenters offered to share their guidelines, guidance and other expertise around AUC with CMS, and recommended that CMS engage with them directly. Other commenters suggested that the proposed priority clinical areas more closely align with the ABIM’s Choosing Wisely® initiative and/or the ACR’s Appropriateness Criteria®. One commenter recommended a number of evidencebased guidelines for imaging of patients with traumatic cervical pain. In E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations conjunction with the evidence submitted to support one or more priority clinical areas, another commenter suggested only including those priority clinical areas for clinical scenarios for which AUC from multiple PLEs are available. Some commenters also shared with CMS publications that suggested a lack of evidence-based AUC for clinical scenarios that could reasonably fall within one or more proposed priority clinical areas. In particular, one commenter believed that available appropriateness criteria do not address altered mental status. Commenters generally believed that clinical scenarios providing no appropriateness rating or contradictory recommendations from CDSMs based on AUC using lower grades of evidence or expert opinion would not result in significant modifications in ordering professional behavior. A commenter suggested CMS consider the safety margin inherent in the clinical area where imaging for acute stroke, for example, has a narrow safety margin while imaging for suspected rotator cuff injury has a wider safety margin. Many commenters identified situations when the available high-quality evidence does not cover the entire clinical scope of a priority clinical area. In these situations, a CDSM would either cover less than the entire clinical scope of a priority clinical area and only incorporate AUC based on high-quality evidence or cover the entire clinical scope and in doing so incorporate AUC based on low quality evidence and expert opinion. These commenters cautioned against requiring qualified CDSMs to incorporate specified applicable AUC that encompass the entire clinical scope given the potential for forcing consultation with AUC based on lower quality evidence. As an alternative, a few commenters encouraged CMS to separate priority clinical areas into those that have high quality AUC and those that do not. Response: We agree that priority clinical areas for which there is little evidence would likely have little impact in changing physician ordering behavior, and may indeed negatively impact patient care. We expect qualified PLEs to identify and focus on that portion of the entire clinical scope within a given priority clinical area where there is sufficient evidence to create high quality AUC. We encourage qualified PLEs to consider the ‘‘safety margins’’ discussed above along with strength of evidence and other factors when developing or modifying AUC. Furthermore, we believe that qualified CDSMs, working with qualified PLEs, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 should incorporate such high quality AUC as part of a clinical decision tree, which includes areas where imaging is triggered by other tests. We continue to believe that evidence grading is an essential component of the AUC development process for all clinical areas, including priority clinical areas. However, we acknowledge that different grading systems may be more appropriate for different clinical areas. As such, we will not require the use of specific grading mechanisms and leave that decision to qualified PLEs. We recognize that some AUC development processes could invite public comment and include a wide range of experts and stakeholders on the multidisciplinary AUC development team. However, we will not establish these as requirements, and instead require under § 414.94(c)(1) that qualified PLEs post AUC along with the process they use for developing and modifying AUC on their Web site in the public domain to allow for review by all stakeholders. Comment: Some commenters expressed confusion over which entity determines whether an exam falls within a priority clinical area for the ordering professional. Several commenters noted that determining whether an exam falls under a priority clinical area often will not be an easy yes-or-no decision. One commenter further expressed that this confusion would result in physicians being expected to know if an advanced imaging study falls within a priority clinical area, which would further confuse clinicians about which orders require consultation with CDSMs and which do not. Several commenters explained that ordering professionals may not know whether they are required to consult with AUC through a qualified CDSM at the time of order because the diagnosis is not yet known. Another commenter raised concerns that not all available specified applicable AUC within priority clinical areas, especially those developed by general hospitals or by professional societies, will be well suited for local adaptation, a particular practice, or the patients it serves. To address these concerns, commenters made a few recommendations to CMS. Specifically, commenters suggested qualified PLEs should be responsible for certifying whether an AUC set encompasses the entire scope of a priority clinical area. Additionally, commenters recommended that CMS develop and launch an educational campaign, including a Town Hall meeting. Response: We understand the commenters’ concerns about the difficulty ordering professionals may PO 00000 Frm 00243 Fmt 4701 Sfmt 4700 80411 have in identifying prospectively which clinical scenarios pertain to a priority clinical area. We remind commenters that ordering professionals will be required to consult specified applicable AUC through a qualified CDSM for all applicable imaging services and will not be required to determine which applicable imaging services fall within priority clinical areas. For the purposes of the AUC program, priority clinical areas will be used as part of the input to calculate outlier ordering professionals. We will address the identification of outlier ordering professionals for this program, as specified in section 1834(q)(5) of the Act, in future rulemaking. Regarding local adaptation, we believe it is important to fit AUC to local circumstances, while also ensuring a rigorous process for doing so. However, only AUC modified by qualified PLEs can become specified applicable AUC. Furthermore, qualified PLEs are required under our regulation at § 414.94(c)(v) to identify each appropriate use criterion or AUC subset that is relevant to a priority clinical area. Stakeholders should expect to see such delineations on the Web site of the qualified PLE. We are not launching an educational campaign at this time because this program is only partially implemented. However, we believe that physicians and other practitioners, through continued dialogue with us, will continue to become more informed as implementation of this program proceeds, and we will continue to evaluate the programmatic and educational needs of ordering and furnishing professionals impacted by the AUC program over time. Comment: Many commenters expressed confusion regarding when consultation with specified applicable AUC will be required. Some commenters believed that consultation for all advanced diagnostic imaging services will be required, while others believed that CMS proposed to limit the consultation requirement to only advanced diagnostic imaging services within priority clinical areas. Some commenters recommended that physicians and other practitioners be required to consult AUC only within the priority clinical areas. Commenters believed the impact of limiting AUC consultation to only imaging studies falling within priority clinical areas would be a decrease in the consultation and reporting for ordering professionals. Other commenters recommended a narrower requirement for only ordering professionals who meet an ordering threshold or who order from a list of E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80412 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations specified conditions within their specialty to consult AUC for only priority clinical areas. While still other commenters recommended that ordering professionals be required to consult AUC for advanced diagnostic imaging services including and beyond the priority clinical areas. Another recommendation from commenters included requiring only some ordering professionals consult AUC for limited applicable imaging services by imaging modality. Several commenters agreed with our proposed definition of the applicable payment systems under which consultation with AUC for an advanced diagnostic imaging service would be paid. Response: We understand commenters’ confusion and expect that, in general, the additional regulations we are finalizing in this final rule will provide greater clarity. Section 1834(q)(4) of the Act sets forth the requirement that ordering professionals must consult with specified applicable AUC through a qualified CDSM for an applicable imaging service furnished in an applicable setting and paid for under an applicable payment system. The applicable imaging services are not limited under the statute to any particular clinical area. Therefore, we do not have statutory authority to limit the consultation requirement to priority clinical areas. We reiterate that priority clinical areas may be used in the identification of outlier ordering professionals under a future component of this program. By starting to identify these areas now, we believe physicians and practitioners will have the opportunity to become familiar with AUC within identified priority clinical areas prior to Medicare claims for those services being part of the input for calculating outlier ordering professionals. We further believe that AUC consultation will help to improve appropriate utilization among all professionals and will continue to engage stakeholders to further this shared goal. Comment: Many commenters suggested that they agreed with the approach of CMS to use the priority clinical areas for the purposes of identifying outlier ordering professionals. In contrast, one commenter expressed that denial of medical services based on criteria designed solely to decrease the utilization of medical imaging runs counter to the underlying goal of the AUC program under section 218(b) of the PAMA. Commenters also generally agreed that the impact of the AUC program could not be fully realized until after implementation; therefore, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 many commenters urged CMS to collect at least one year of data from the start of the program and use it to identify priority clinical areas where the AUC program can help reduce variation. Response: Although commenters appreciated the utility in defining priority clinical areas for the purposes of identifying outlier ordering professionals, we reiterate that we have yet to propose the policies for the annual identification of outlier ordering professionals, and therefore, will revisit comments on this subject in the course of rulemaking for the CY 2018 PFS. We remind all commenters that section 1834(q)(5) of the Act explicitly requires that the Secretary shall use 2 years of data to identify outlier ordering professionals for the purposes of the AUC program. In response to comments, we are finalizing a modified list of priority clinical areas under § 414.94(e)(5) of our regulations, making the following changes from the proposed list: (1) removed chest pain, abdominal pain (any locations and flank pain), suspected stroke and altered mental status; and (2) added coronary artery disease, (suspected or diagnosed), suspected pulmonary embolism, hip pain and shoulder pain (to include suspected rotator cuff injury). We are finalizing the proposed priority clinical areas of headache (traumatic and nontraumatic), low back pain, cancer of the lung (primary or metastatic, suspected or diagnosed), and cervical or neck pain without change. c. CDSM Qualifications and Requirements We proposed to add a new § 414.94(g)(1) to our regulations to establish requirements for qualified CDSMs. Section 1834(q)(3)(A)(iii) of the Act provides relative flexibility for qualified CDSMs, and states that they may include mechanisms that are within certified EHR technology, private sector mechanisms that are independent from certified EHR technology or mechanisms that are established by the Secretary. We believe that, at least initially, it is in the best interest of the program to establish CDSM requirements that are not prescriptive about specific IT standards. Rather, we proposed an approach that focuses on the functionality and capabilities of qualified CDSMs. The CDSM, EHR and health IT environments are constantly changing and improving and we want to allow room for growth and innovation. However, in the future, as more stakeholders and other entities including the ONC, AHRQ, and relevant PO 00000 Frm 00244 Fmt 4701 Sfmt 4700 standards development organizations come to consensus regarding standards for CDSMs, then we may consider pointing to such standards as a requirement for qualified CDSMs under this program. We believe standards would make it possible to achieve interoperability, allowing any CDSM to incorporate any standardized AUC and for sets of AUC to be easily interchangeable among various CDSMs. We will continue to work with the ONC and AHRQ to facilitate movement in this direction. Recent work under the federallysponsored Clinical Quality Framework (CQF) initiative has successfully developed an integrated approach that harmonizes standards for electronic clinical quality measurement with those that enable shareable clinical decision support artifacts (for example, AUC) using Fast Healthcare Interoperability Resources (FHIR). The CQF initiative is working to support semantically interoperable data exchange for (1) calling a service, sending patient data to a service for clinical decision support guidance and receiving clinical decision support guidance or quality measurement results in return, and (2) enabling a system to consume and internally execute decision support artifacts. The current implementation guide supports both approaches and could be used to successfully execute and share AUC as described in this program. As this standard is considered sufficiently mature for widespread adoption, the ONC may consider it for use in future editions of certification criteria for health IT. While the current regulation requires no specific standard, the CMS and ONC are supportive of this approach and additional information is available at https://hl7-fhir.github.io/ clinicalreasoning-module.html. It should be noted that there are also existing deployed standards for clinical decision support and these and emerging standards can be found in the ONC Interoperability Standards Advisory (https://www.healthit.gov/ standards-advisory). At § 414.94(g)(1), we proposed to codify in regulations the seven requirements for qualified CDSMs set forth in section 1834(q)(3)(B)(ii) of the Act. The statute requires qualified CDSMs to make available to the ordering professional specified applicable AUC and the supporting documentation for the applicable imaging service ordered. We do not interpret this requirement to mean that every qualified CDSM must make available every specified applicable AUC. In the CY 2016 PFS final rule with comment period, we allowed for the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations approval of massive libraries of AUC (resulting from approvals for qualified PLEs with comprehensive and extensive libraries), yet we expressed our intention to establish priority clinical areas. While there is a statutory requirement to consult AUC for each applicable imaging service, we recognize that ordering professionals may choose to thoroughly improve their understanding of, and focus their internal quality improvement (QI) programs on, those priority clinical areas; and these areas will in turn serve as the basis for future outlier calculations. Consistent with that approach, we proposed to add a requirement in § 414.94(g)(1)(iii) that qualified CDSMs must make available to ordering professionals, at a minimum, specified applicable AUC that reasonably encompass the entire clinical scope of all priority clinical areas. We encourage and expect some CDSMs, based on the needs of the professionals they serve, will choose to include a far more comprehensive set of AUC going above and beyond the minimum set as we understand many ordering professionals want such comprehensive access to AUC. When this Medicare AUC program is fully implemented, all ordering professionals must consult specified applicable AUC through a qualified CDSM for every applicable imaging service that would be furnished in an applicable setting and paid for under an applicable payment system in order for payment to be made for the service. However, when identifying the outlier ordering professionals who will be subject to prior authorization beginning in 2020, we anticipate focusing on consultation with specified applicable AUC within priority clinical areas rather than the universe of specified applicable AUC. The concept of priority clinical areas will allow us to implement an AUC program that combines two approaches to implementation allowing clinicians flexibility to either engage with a rapid rollout of comprehensive specified applicable AUC or adopt a focused approach to consulting AUC. Thus, they can choose their approach and select a CDSM and AUC set(s) that fit their needs and preferences, while being sure that each qualified CDSM will include AUC that address all priority clinical areas. We further proposed to add a requirement in § 414.94(g)(1)(iv) of our regulations that qualified CDSMs must be able to incorporate specified applicable AUC from more than one qualified PLE. We believe this approach ensures that CDSMs can expand the AUC libraries they can provide access to VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 represent AUC across all priority clinical areas (consistent with the requirements under proposed § 414.94(g)(1)(iii)). We do not necessarily expect that a single qualified PLE will develop AUC addressing every priority clinical area domain, especially since we believe that over time and through future rulemaking, the list of priority clinical areas will expand and cross additional clinical domains. Ensuring that qualified CDSMs are not limited in their technology to incorporating AUC from only one qualified PLE will help to ensure that ordering professionals will not be in a position of consulting a CDSM that cannot offer them access to AUC that address all priority clinical areas. As stakeholders continue to advance CDSM technology, we look forward to standards being developed and widely accepted so that AUC are incorporated in a standardized format across CDSM platforms. Increasing standardization in this area will move the industry closer to the goal of interoperability across CDSMs and EHRs. We also proposed to add a requirement in § 414.94(g)(1)(i) that specified applicable AUC and related documentation supporting the appropriateness of the applicable imaging service ordered must be made available within the qualified CDSM. For example, the ordering professional would have immediate access to the full appropriate use criterion, citations supporting the criterion and a summary of key evidence supporting the criterion. We proposed to add a requirement in § 414.94(g)(1)(ii), consistent with section 1834(q)(3)(B)(ii)(II) of the Act, that the qualified CDSM must clearly identify the appropriate use criterion consulted if the tool makes available more than one criterion relevant to a consultation for a patient’s specific clinical scenario. We believe this is important since CDSMs that choose to incorporate a comprehensive AUC library may be offering the ordering professional access to AUC from multiple qualified PLEs. In such scenarios, it is important that the ordering professional knows which appropriate use criterion is being consulted and have the option to choose one over the other if more than one criterion accessible within the CDSM applies to the scenario. We proposed to add a requirement in § 414.94(g)(1)(v), consistent with section 1834(q)(3)(B)(ii)(III) of the Act, that the qualified CDSM must provide to the ordering professional a determination, for each consultation, of the extent to which an applicable imaging service is consistent with specified applicable AUC or a determination of ‘‘not PO 00000 Frm 00245 Fmt 4701 Sfmt 4700 80413 applicable’’ when the mechanism does not contain a criterion that would apply to the consultation. This determination would communicate the appropriateness of the applicable imaging service to the ordering professional. In addition to this determination, we also proposed that the CDSM provide the ordering professional with a determination of ‘‘not applicable’’ when the mechanism does not contain an appropriate use criterion applicable to that patient’s specific clinical scenario. We proposed to add a requirement in § 414.94(g)(1)(vi), consistent with section 1834(q)(3)(B)(ii)(IV) of the Act, that the qualified CDSM must generate and provide to the ordering professional certification or documentation that documents which qualified CDSM was consulted, the name and NPI of the ordering professional that consulted the CDSM and whether the service ordered would adhere to applicable AUC, whether the service ordered would not adhere to such criteria, or whether such criteria was not applicable for the service ordered. We proposed to require under § 414.94(g)(1)(vi)(A) that this certification or documentation must be issued each time an ordering professional consults the qualified CDSM. Since Medicare claims will be filed only for services that are rendered to beneficiaries, we will not see CDSM consultation information on the claim form specific to imaging services that are not ordered. We believe that for the CDSM to be able to provide meaningful feedback to ordering professionals, information regarding consultations that do not result in imaging is just as important as information on consultations that do result in an order for advanced imaging. Thus, we proposed to require under § 414.94(g)(1)(vi)(B) that the documentation or certification provided by the qualified CDSM must include a unique consultation identifier. This would be a unique code issued by the CDSM that is specific to each consultation by an ordering professional. This type of unique code may serve as a platform for future collaboration and aggregation of consultation data across CDSMs. In addition, at some point in the future, this unique code may assist in more seamlessly bringing Medicare data together with CDSM clinical data to maximize quality improvement in clinical practices and to iteratively improve the AUC itself. We proposed in § 414.94(g)(1)(vii), consistent with section 1834(q)(3)(B)(ii)(V) of the Act, that the specified applicable AUC content within qualified CDSMs be E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80414 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations updated at least every 12 months to reflect revisions or updates made by qualified PLEs to their AUC sets or to an individual appropriate use criterion. We proposed 12 months as the maximum acceptable time frame for updating content. We believed that in most cases it will be possible to update AUC content more frequently than every 12 months, particularly for cloud-based CDSMs. We further proposed in § 414.94(g)(1)(vii)(A) that qualified CDSMs have a protocol in place to more expeditiously remove AUC that are determined by the qualified PLE to be potentially dangerous to patients and/or harmful if followed. In addition, we proposed in § 414.94(g)(1)(vii)(B) that qualified CDSMs must make available for consultation specified applicable AUC that address any new priority clinical areas within 12 months of the priority clinical area being finalized by CMS. We believe this would allow the CDSM sufficient time to incorporate the AUC into the CDSM. Thus, any new priority clinical areas finalized, for example, in the CY 2018 PFS final rule that would be effective January 1, 2018, would need to be incorporated into a qualified CDSM by January 1, 2019. To accommodate this time frame, we would accept a not applicable determination from a CDSM for a consultation on a priority clinical area for dates of service through the 12-month period that ends, in this example, on January 1, 2019. We note that all qualified CDSMs that are approved by June 30, 2017, should be capable of supporting AUC for all priority clinical areas that are finalized in the CY 2017 PFS final rule. We proposed to add a requirement in § 414.94(g)(1)(viii), consistent with section 1834(q)(3)(B)(ii)(VI) of the Act, that the qualified mechanism must meet privacy and security standards under applicable provisions of law. Potentially applicable laws may include the HIPAA Privacy and Security rules. We proposed to add a requirement in § 414.94(g)(1)(ix), consistent with section 1834(q)(3)(B)(ii)(VII) of the Act, that qualified CDSMs must provide ordering professionals aggregate feedback in the form of an electronic report on an annual basis (at minimum) regarding their consultations with specified applicable AUC. Our intent is to require records to be retained in a manner consistent with the HIPAA Security Rule. To provide such feedback, and to make detailed consultation information available to ordering professionals, furnishing professionals (when they have authorized access to the CDSM), auditors and CMS, we proposed in VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 § 414.94(g)(1)(x) that a qualified CDSM must maintain electronic storage of clinical, administrative and demographic information of each unique consult for a minimum of 6 years. We believe CDSMs could fulfill this requirement in a number of ways, including involving a third party in the storage of information, as well as for providing feedback to ordering professionals. We recognize that these requirements represent a minimum floor that clinicians may choose to expand their local QI programs. In the event requirements under § 414.94(g)(1) are modified through rulemaking during the course of a qualified CDSM’s 5-year approval cycle, we proposed in § 414.94(g)(1)(xi) that the CDSM would be required to comply with the modification(s) within 12 months of the effective date of the modification. The following is a summary of the comments we received on CDSM qualifications and requirements. Comment: We received numerous comments both for and against including qualifying CDSMs that are freestanding, web-based and operating outside of a certified EHR environment. Some of those commenters pointed out CMS statements indicating that ideally a CDSM would be seamlessly integrated into the clinical workflow, which could be possible when the CDSM is completely integrated within an ordering professional’s EHR. Those in favor of a freestanding CDSM cited the importance of allowing choice as there are some instances where a freestanding mechanism may be preferred, particularly in cases of practitioners who do not use EHR technology or when integration of a CDSM involves high costs or other problems. Response: Particularly in the early stages of this program, we believe it is important to allow for the option of a freestanding mechanism that is independent of EHR technology, which is supported by section 1834(q)(3)(A)(iii)(II) of the Act. For some ordering professionals, this will allow compliance with the requirements of the program while still affording them time to make decisions regarding EHRintegrated CDSMs. In addition, as we understand the current marketplace, it is more likely that tools available free of charge may initially begin as web-based tools and, we note that, in accordance with section 1834(q)(1)(C) of the Act and as defined in § 414.94(b) of our regulations, an applicable imaging service is one for which there is one or more qualified CDSM available free of charge. PO 00000 Frm 00246 Fmt 4701 Sfmt 4700 As noted, we believe examples of CDSMs that seamlessly integrate with EHRs, including those that operate outside of certified EHR technology, such as those that operate in the cloud, will likely be most effective in meeting clinicians’ needs. As the market continues to mature, we would expect to see expanded availability of easily affordable tools that fully integrate AUC guidance with an efficient, clinicianfriendly workflow within the interface of the primary health IT system they use in providing and documenting care. Comment: Several comments addressed our approach to CDSM requirements and noted that we focused on functionalities and capabilities of a mechanism for flexibility as opposed to prescriptive and specific IT standards. Commenters overwhelmingly favored the approach we proposed. Commenters indicated that the current state of CDSM technology is varied and there are not yet accepted, mature standards available. Many of these commenters encouraged CMS to cooperate with ONC, Health Level Seven International (HL7) and other standards organizations to work toward identifying standards in the near future. Some commenters, however, pointed out that the lack of standards early in the program could lead to chaos in the market and increase costs since CDSM developers will not have a set of standards on which to build. Response: We do not believe it is possible to require standards at this time due to the lack of agreement among stakeholders regarding which technical standards should be identified. We understand that some CDSM developers would prefer specific guidance from us to ensure they are building tools that meet the needs of the program; therefore, we will continue to work with stakeholders like ONC, HL7 and other standards organizations in an attempt to identify standards in the future. We will continue to actively encourage and welcome the input of stakeholders in this matter. As we expect that standards will continue to develop, evolve and gain acceptance, we believe that if we were to establish standards now for CDSMs, they would serve only as initial standards and may quickly become obsolete, potentially resulting in confusion for CDSM developers. We recommend that developers refer to ONC’s Interoperability Standards Advisory (see https://www.healthit.gov/ standards-advisory) for the most up-todate standards available, which will likely be the basis of future development. Comment: The majority of commenters addressed the proposal to E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations require qualified CDSMs to contain, at a minimum, AUC that encompass the entire clinical scope of priority clinical areas. Commenters were split regarding the proposed requirement. Some commenters suggested that establishing a minimum scope for CDSM AUC content would add cost and be unnecessary for CDSMs that serve specialists. They favored allowing qualified CDSMs to determine, along with the ordering practitioners they serve, what AUC content would be made available. Other commenters favored requiring every CDSM to contain comprehensive AUC. Those commenters said this was the intent of section 218(b) of the PAMA since ordering professionals must consult for every advanced diagnostic imaging order, and they believe a comprehensive AUC requirement would take into account the lessons learned from the MID, avoiding frustration of ordering practitioners who attempt to consult AUC for imaging services and do not find relevant AUC within their CDSM. Other commenters agreed in principle with the proposal to establish a minimum floor of AUC but expressed concerns about the way CMS proposed that the priority clinical areas must be addressed, stating that the requirement that AUC encompass the entire clinical scope of priority clinical areas is not preferred and would draw in AUC without a strong evidence base. Response: We understand the significance of this aspect of the proposal, as well as the statements made by the commenters both for and against the requirement of an AUC floor, or the minimum AUC that must be available in a qualified CDSM, related to priority clinical areas. We reiterate that, in alignment with statute, ordering professionals must consult for each advanced diagnostic imaging service ordered. Therefore, we believe many professionals will choose a qualified CDSM that best fits their ordering patterns and clinical practice. Those ordering a wide array of imaging services or perhaps infrequently ordering imaging services across a broad clinical spectrum will align themselves with a mechanism that fits their needs and contains comprehensive specified applicable AUC in order to lessen the chances that they find no applicable AUC when they attempt to consult for a specific service. Specialists may seek to align themselves with a qualified CDSM that contains AUC more exhaustive in one area of medicine to reflect the imaging services that they order most often. We continue to believe that all tools should contain the specified applicable VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 AUC needed by the ordering professionals they serve, as well as contain specified applicable AUC related to the priority clinical areas, to ensure that when an ordering professional needs to consult AUC for an imaging service, they will not have to go outside their regular qualified CDSM for the consultation. We reiterate that we envision choices for qualified CDSMs that allow efficient access by ordering professionals to one or more specialty-focused specified applicable AUC sets along with more comprehensive specified applicable AUC sets. We believe the determination of which AUC sets are made accessible through a given CDSM should be demand-driven by ordering professionals, who would be choosing from a marketplace of options for both CDSMs and AUC, all of which meet basic CMS qualifications to ensure implementation of the statutory requirements established under section 218(b) of the PAMA. To balance the requirement for the minimum floor, we believe it is important to reconsider the extent to which specified applicable AUC encompass the entire clinical scope of priority clinical areas. We agree that requiring the entire clinical scope may not yield consultation of the highest quality specified applicable AUC and that ordering professionals, particularly specialists, may not have a need for specified applicable AUC addressing the entire clinical scope of a priority clinical area. We do not expect this requirement to be met by AUC that address only a narrow clinical aspect of a priority clinical area. We believe addressing less than the entire clinical scope should still result in AUC that robustly fill priority clinical areas. To avoid forcing the development of AUC based on poor evidence just for the sake of having AUC we modified this language and expect it will enable qualified PLEs to confidently develop AUC that represent a high level of evidence. Therefore, we agree with commenters’ suggestions that we keep the AUC floor but allow the requirement to be fulfilled if specified applicable AUC address less than the entire scope of the priority clinical areas and instead reasonably address the common and important clinical scenarios within each priority clinical area. We have included this modified language in § 414.94(g)(1)(iii) and § 414.94(g)(1)(vii)(C). Comment: We also received comments both for and against the proposed requirement that qualified CDSMs have the ability to incorporate specified applicable AUC from more PO 00000 Frm 00247 Fmt 4701 Sfmt 4700 80415 than one qualified PLE. Some commenters agreed with the proposal while others suggested a more stringent requirement that the relationship between the CDSM and at least two PLEs already be established and formalized prior to qualifying a CDSM. Other commenters were against making this capability a requirement. They stated that CDSMs should have the flexibility to establish as many or as few relationships with PLEs as needed. Response: We are concerned that removing the requirement for qualified CDSMs to have the ability to incorporate specified applicable AUC from more than one qualified PLE would not be in alignment with our intention to incorporate specified applicable AUC that reasonably address the common and important clinical scenarios within each priority clinical area. This is important since many qualified CDSMs will need to work with more than one qualified PLE to accomplish such a requirement and also to align with CMS’ goal to maintain flexibility of qualified CDSMs to incorporate the best available AUC. We believe, for now, it is appropriate to keep this requirement as a capability as opposed to requiring that qualified CDSMs demonstrate or share with CMS that such contracts are in place. In future years, as greater consensus emerges around common standards for interfacing with, uploading or otherwise referencing content that is not already in the system being used, we expect incorporation of AUC from a wide range of sources to become easier. We encourage systems to build standardsbased mechanisms to incorporate external AUC and anticipate that such an approach would facilitate meeting this requirement. Comment: Commenters were pleased with the requirement that the CDSM make available related documentation to specified applicable AUC supporting the appropriateness of the imaging service ordered, and indicated that having access to citations and evidence summaries would be helpful. Response: We agree with commenters and have revised this requirement at § 414.94(g)(1)(i) to increase clarity and confirm commenters’ expressed understanding that qualified CDSMs must make available specified applicable AUC and its related supporting documentation. Comment: We received comments in favor of requiring the CDSM to identify which appropriate use criterion is being consulted in the event the mechanism includes AUC from more than one qualified PLE. Additionally, we received comments regarding who E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80416 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations makes the determination of which AUC within the mechanism is to be consulted. Some commenters wanted more freedom for the ordering professional to choose at the time of the consultation which AUC should be consulted in the event that there is more than one. Other commenters were in favor of more consistency and not allowing consultation of different AUC for the same clinical scenario. Response: We agree with commenters that the capability to choose is critically important when more than one qualified PLE’s AUC are made available within the qualified CDSM. However, we do not believe we should be involved in determining whether the qualified CDSM chooses which specified applicable AUC to display upon consultation or whether the ordering practitioner should have the ability to select the specified applicable AUC to consult. Comment: Some commenters were concerned that the qualified CDSM should not be required to produce documentation when the result of a consultation is ‘‘not applicable.’’ In other words, the CDSM should not make the determination as to whether AUC available in the mechanism are relevant to the clinical scenario encountered by the ordering professional. Some suggested that the ordering professional should have the ability to notate that the result of a consultation with a CDSM was ‘‘not applicable’’ and that the programing required for a mechanism to accurately determine ‘‘not applicable’’ could be extremely difficult and possibly inaccurate. In contrast, other commenters believed this ability to produce a ‘‘not applicable’’ response was very important and suggested that such information should be provided back to the qualified PLE to encourage future development of AUC to address that clinical scenario. Other commenters questioned how this type of response from the CDSM would be implemented in a clinical workflow where the CDSM is embedded within the EHR system. In those situations, they believed it was unnecessary to interrupt the workflow of the ordering practitioner only to alert them that there are no AUC available. Response: Due to the statutory requirement that AUC consultation occur with each advanced diagnostic imaging service ordered, we agree with commenters that it is important for the qualified CDSM to have the ability to return a ‘‘not applicable’’ result. This requirement will apply to document consistently that a consultation occurred and that no applicable AUC were found. Exactly how this ‘‘not applicable’’ response is formulated, we VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 believe, can be somewhat flexible. ‘‘Not applicable’’ status could occur either when the AUC scope does not match the patient or their presentation or when no guideline exists that is appropriate to the patient or their presentation. If this situation is the case, it should be documented in the clinical or metadata around the particular application or attempted application of AUC. For example, if the system only contains AUC for ‘‘uncomplicated headache’’ but the patient has presented with ‘‘headache, fever, and altered mental status’’ the practitioner could make the determination that no applicable AUC exists for the patient under consideration and document this using a text box, check box, or dropdown menu. The documentation that the search did not match the existing AUC and that the practitioner agreed that the existing AUC was not applicable should be retained. Furthermore, manual intervention by the practitioner might not be required in all cases in which the use of AUC is not applicable. We expect that there would be a legitimate clinical reason for declaring a relevant AUC ‘‘not applicable’’ to the patient and that this reason would be documented. Likewise, we expect that when no applicable AUC exists relevant to the patient that would be similarly documented. CDSMs should not be designed to permit the use of ‘‘not applicable’’ overrides without a documented reason. Ideally, systems would evaluate scenarios in which AUC were not available on a regular basis so qualified PLEs can seek to fill in these gaps. We agree with commenters who believe the ‘‘not applicable’’ response should be able to occur in the background of some qualified CDSMs, such as a qualified CDSM integrated within an EHR system. We do not foresee any problems with this method so long as documentation is produced as a result and the needed information is available to be provided by the ordering professional to the furnishing professional. To allow flexibility for situations in which the ordering professional plays a role in the determination of ‘‘not applicable,’’ as well as those in which such determination is completely automated within the CDSM, we have revised our proposals in § 414.94(g)(1)(v) to require qualified CDSMs only to determine the extent to which the applicable imaging service is consistent with specified applicable AUC with the removal of language requiring the tool to make a determination of ‘‘not applicable’’ when it does not contain a criterion that would apply to the consultation. PO 00000 Frm 00248 Fmt 4701 Sfmt 4700 We have also revised our proposals in § 414.94(g)(1)(vi) to allow for qualified CDSMs that are embedded seamlessly into the EHR system to provide documentation or certification of CDSM consultation without stopping the workflow of the ordering professional. This minor change in language requires the qualified CDSM to develop the documentation or certification at the time of the order but will no longer explicitly state that it has to be provided directly to the ordering professional. For consistency, we have made a similar change to § 414.94(g)(1)(vi)(A) to allow for the documentation or certification to be generated but not necessarily issued directly to the ordering professional. This may be important to avoid workflow disruptions when an ordering professional is working within their EHR environment and the qualified CDSM working in the background does not alert the ordering professional when they have placed an order that is appropriate. We have further modified § 414.94(g)(1)(vi) to more clearly state the requirements that the certification or documentation must document which CDSM was consulted; the name and NPI of the ordering professional that consulted the CDSM; whether the service ordered would adhere to specified applicable AUC or whether the specified applicable AUC consulted was not applicable to the service ordered. Comment: Commenters generally favored requiring qualified CDSMs to issue unique consultation identifiers, with a few commenters opposed to the requirement until there is more interoperability. Some of the commenters in favor of the requirements suggested that CMS should establish a standard taxonomy so the identifier issued would be truly unique and not risk duplication across CDSMs. A subgroup of these commenters favored this approach to allow for CMS to match Medicare claims for advanced imaging services with their CDSM consultations. Response: Although we agree that establishing a unique consultation identifier with standard taxonomy could facilitate adding more robust data to what is available on the Medicare claim, we do not have the repository and format for the identifiers that would be needed. We would further need to establish how the identifier could be meaningfully appended to the Medicare claim form. As such, it is not feasible at this time for CMS to require qualified CDSMs to create such a narrowly defined identifier. We are looking into options to determine possible future E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations roles for that identifier. In the interim, we believe the requirement should remain a functionality of qualified CDSMs. Furthermore, we are not yet certain which standard taxonomy is best suited to the needs of this program. We do, however, encourage stakeholders to work together and welcome qualified CDSMs to determine amongst themselves if they should begin issuing identifiers with an embedded taxonomy. It would seem as though this could be valuable in the future; having one number that provides information related to an individual CDSM consultation. Comment: We received several comments regarding how frequently a qualified CDSM should be required to update AUC content. Some commenters stated that 12 months to update content was too long and we received the suggestion of 3 months while others were comfortable beginning with 12 months, but once the program is more established the time should be reduced. Other commenters suggested that adherence to the timing requirement is based primarily on the PLE and how quickly after updating AUC the PLE provides that updated content to the CDSM. Commenters also noted that the time it takes to update a CDSM is based on the format of the content delivered by qualified PLEs as some CDSMs will still have much work to do to translate the qualified PLE provided content for use in the CDSM. Response: We thank commenters for pointing out that our 12-month requirement for qualified CDSMs to update AUC content was unclear with regard to when that 12-month period would begin. We agree that the time should begin when the qualified PLE provides updated specified applicable AUC content to the qualified CDSM and have modified language in § 414.94(g)(1)(vii). Such updates would only take place if there are new or updated AUC content. We understand commenters who believe a 12-month period is too long to update specified AUC and wish to clarify that the time begins when the specified applicable AUC content is updated. We had initially selected 12 months in an attempt to allow CDSMs to batch updates and integrate them into the CDSM. We will consider shortening this time period as the program continues and as CDSMs gain more experience. We note that this 12-month requirement for updating AUC is separate from the requirement that qualified PLEs review AUC at least every 12 months to confirm that the AUC reflect the latest clinical evidence. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment: Some commenters stated that having a protocol in place to expeditiously remove dangerous or harmful AUC is not enough and that this could be accomplished very quickly, even in a matter of a day. Response: We agree that removing potentially harmful AUC is extremely important. At this time, we do not believe we have enough information about the types of CDSMs that will seek qualification to know their abilities to react quickly in these situations. Again, we believe expeditious removal is critical but we are not able to select a specific period of time at this point because there may be large differences in capabilities when removing AUC within one day, one week, or one month. We expect that CDSMs will remove potentially harmful AUC as expeditiously as possible, and will consider this issue for future rulemaking. Additionally, CDSMs may have differing components within their protocol to expeditiously remove potentially dangerous or harmful AUC which could include more timely communications with users regarding the removal through, for example, banner notices or push notifications. Comment: Commenters proposed that CDSMs should contain AUC that address the priority clinical areas at the time they are qualified by CMS as opposed to allowing 12 months for CDSMs to make them available. Response: We disagree with this comment and believe that, given the timing of the CY 2017 PFS final rule when the first priority clinical areas will be finalized, it is appropriate to allow for 12 months from the date of the final rule publication for qualified CDSMs to make available specified applicable AUC to address the priority clinical areas. There would otherwise not be enough time for qualified CDSMs to identify the needed specified applicable AUC and make them available within their mechanisms by March 1, 2017— the deadline for the first round of CDSM applications seeking CMS qualification. Comment: We received comments requesting additional clarification regarding the privacy and security standards that CDSMs must meet with some commenters suggesting that CMS provide additional guidance through subregulatory vehicles. Response: We are not the appropriate regulatory authority to specify privacy and security standards. However, there is existing guidance that we believe is instructive. For those CDSMs contained within certified EHR technology, or for which certification is sought for purposes of achieving ‘‘meaningful use’’, ONC provided the applicable PO 00000 Frm 00249 Fmt 4701 Sfmt 4700 80417 privacy and security framework in its 2015 Edition Final Rule Health IT Certification. See the 2015 Edition Final Rule (80 FR 62705, October 16, 2015) describing the privacy and security certification framework and specifying standards. In addition, the privacy and security standards set forth in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules and enforced by the Office for Civil Rights (OCR) are potentially applicable. CDSMs would also be subject to applicable state laws and regulations regarding privacy and security. We are finalizing our proposals without change, but will continue to consult with other agencies and consider whether such standards may be specified in the future. We are finalizing our proposals without change, but will continue to consult with other agencies and consider whether such standards may be specified in the future. Comment: Commenters favored the requirement for CDSMs to provide aggregate feedback to ordering professionals. Some commenters suggested that CMS be prescriptive regarding the format and content of the reports providing feedback. Response: We do not agree that we should establish standards in feedback reporting to ordering professionals at this time. We encourage qualified CDSMs and ordering professionals to work together to determine the information that would be most valuable. Comment: We received several comments regarding the proposed requirement to electronically store CDSM consultation data for a minimum of 6 years. Some commenters stated that 6 years is an appropriate amount of time to store this information while others disagreed, stating that 6 years is overly burdensome. Some commenters are seeking greater detail surrounding exactly what data is required to be stored while others state that consultation information should be backed up by a third party or registry. These commenters were particularly concerned that data would be lost if a CDSM ceased operation. Response: Generally, we agree that CDSM consultation data should be backed up to ensure that the data is not lost; however, we do not agree that we should be prescriptive at this time about how qualified CDSMs must go about ensuring their data is stored and available for 6 years. We believe 6 years is an appropriate amount of time across which ordering professionals will want to assess their ordering patterns. In E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80418 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations addition, as we discussed earlier our intent to require a unique consultation identifier, we believe there is the potential for consultation to be very valuable from a QI perspective if aggregated across qualified CDSMs, and provided to qualified PLEs and possibly to CMS. Regarding the data elements that must be stored, we have not required that qualified CDSMs collect specific data fields. Therefore, at this time, we only have a more general requirement that includes the storage of clinical, administrative and demographic information for each consultation. Comment: A commenter suggested that qualified CDSMs ensure that ordering professionals have the opportunity to access content for educational purposes. This would allow ordering professionals to review information contained within the CDSM without having to link that consultation with an order for advanced imaging services. Response: We agree that ordering professionals would benefit from being able to use qualified CDSMs to further their knowledge about the appropriateness of advanced imaging services. In response to public comments, we are finalizing the following requirements at § 414.94(g)(1): • Make available specified applicable AUC and its related supporting documentation. • Identify the appropriate use criterion consulted if the CDSM makes available more than one criterion relevant to a consultation for a patient’s specific clinical scenario. • Make available, at a minimum, specified applicable AUC that reasonably address common and important clinical scenarios within all priority clinical areas identified in paragraph (e)(5) of this section. • Be able to incorporate specified applicable AUC from more than one qualified PLE. • Determine, for each consultation, the extent to which the applicable imaging service is consistent with specified applicable AUC. • Generate and provide a certification or documentation at the time of order that documents which qualified CDSM was consulted; the name and national provider identifier (NPI) of the ordering professional that consulted the CDSM; whether the service ordered would adhere to specified applicable AUC; whether the service ordered would not adhere to specified applicable AUC; or whether the specified applicable AUC consulted was not applicable to the service ordered. Certification or VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 documentation must be generated each time an ordering professional consults a qualified CDSM and include a unique consultation identifier generated by the CDSM. • Modifications to AUC within the CDSM must comply with the following timeline requirements: make available updated AUC content within 12 months from the date the qualified PLE updates AUC; and have a protocol in place to expeditiously remove AUC determined by the qualified PLE to be potentially dangerous to patients and/or harmful if followed; and make available for consultation within 12 months of a priority clinical area being finalized by CMS specified applicable AUC that reasonably address common and important clinical scenarios within any new priority clinical area. • Meet privacy and security standards under applicable provisions of law. • Provide to the ordering professional aggregate feedback regarding their consultations with specified applicable AUC in the form of an electronic report on at least an annual basis. • Maintain electronic storage of clinical, administrative, and demographic information of each unique consultation for a minimum of 6 years. • Comply with modification(s) to any requirements under paragraph (g)(1) of this section made through rulemaking within 12 months of the effective date of the modification. • Notify ordering professionals upon de-qualification. d. Process for CDSMs To Become Qualified and Determination of NonAdherence We proposed that CDSMs must apply to CMS to be specified as a qualified CDSM. We proposed that CDSM developers who believe their mechanisms meet the regulatory requirements must submit an application to us that documents adherence to each of the requirements to be a qualified CDSM. We proposed to require in § 414.94(g)(2) that CDSM developers must submit applications to CMS for review that document adherence to each of the CDSM requirements. Applications to be specified as a qualified CDSM must be submitted by January 1 of a year to be reviewed within that year’s review cycle. For example, as proposed the first applications would be accepted from the date of publication of the PFS final rule until January 1, 2017. A determination on whether the applicants are qualified would be made by June 30, 2017. Applications must be submitted electronically to PO 00000 Frm 00250 Fmt 4701 Sfmt 4700 ImagingAUC@cms.hhs.gov. This process and timeline mirror the qualified PLE application and approval process and timeline. As we did for qualified PLEs, we will post a list of all applicants that we determine to be qualified CDSMs to our Web site at https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/AppropriateUse-Criteria-Program/ by June 30. We proposed that all qualified CDSMs must reapply every 5 years and their applications must be received by January 1 during the 5th year that they are qualified CDSMs. It is important to note that, as with PLE applications, the application for qualified CDSMs is not a CMS form; rather it is created by the applicant. A CDSM that is specified as qualified for the first 5-year cycle beginning on July 1, 2017, would be required to submit an application for requalification by January 1, 2022. A determination would be made by June 30, 2022, and, if approved, the second 5-year cycle would begin on July 1, 2022. An example of our proposed timeline for applications and the approval cycle is as follows: • Year 1 = July 2017 to June 2018. • Year 2 = July 2018 to June 2019. • Year 3 = July 2019 to June 2020. • Year 4 = July 2020 to June 2021. • Year 5 = July 2021 to June 2022 (reapplication is due by January 1, 2022). We believe it is important for us to have the ability to remove from the list of specified qualified CDSMs a CDSM that we determine fails to adhere to any of the qualification requirements, including removal outside of the proposed 5-year cycle. We proposed to state under § 414.94(h) that, at any time, we may remove from the list of qualified CDSMs a CDSM that fails to meet the criteria to be a qualified CDSM or consider this information during the requalification process. Such determinations may be based on public comment or our own review and we may consult with the National Coordinator for Health Information Technology or her designee to assess whether a qualified CDSM continues to adhere to requirements. We invited comments on how we could streamline and strengthen the approval process for CDSMs in future program years. For instance, CMS may consider a testing framework for CDSMs that would validate adherence to specific standards that enable seamless incorporation of AUC across CDSMs. The following is a summary of the comments we received on the process for CDSMs to become qualified and determination of non-adherence. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Comment: Some commenters requested that CMS review and approve qualified CDSMs more quickly. Some commenters suggested the list of qualified CDSMs be available by April 1, 2017, rather than June 30, 2017, so as to allow ordering professionals more time to prepare for implementation of consulting and reporting requirements on January 1, 2018. A commenter also suggested approval of certain types of systems, such as those intended specifically for use in the emergency department, be prioritized. Response: We recognize and appreciate the desire to more quickly specify the first list of qualified CDSMs. However, given the detailed review that will be dedicated to each application along with agency internal processes, qualification of CDSMs before June 30, 2017 is not feasible. As with qualified PLE applications, which will be under review at the same time, we intend to treat each applicant with the same level of detail and attention and will not prioritize some over others. Comment: Some commenters cited insufficient time for CDSMs to incorporate requirements between the release of the final CDSM requirements, on or around November 1, 2016, and the January 1, 2017 due date for qualified CDSM applications. These commenters requested that CMS delay the deadline and accept applications later into the year for this first round of applicants. Due to the limited time between finalization of CDSM requirements and the application deadline, another commenter recommended that CDSMs be qualified based on their commitment to support required functionality, rather than an attestation that the existing functionality is fully implemented in a CDSM. Response: We recognize the challenge CDSM developers may have submitting applications by January 1, 2017, and have extended the deadline only for the first round of applications to March 1, 2017. To this end, CDSMs will become qualified if they provide evidence that supports that they meet all CDSM requirements at the time of application. We further agree with commenters that qualification should be available to CDSMs that demonstrate a commitment to meeting the requirements. CDSM applicants whose applications are received by March 1, 2017 but who are not able to provide evidence that all requirements are met at the time of application will have the opportunity to receive preliminary qualification. Applicants eligible for a preliminary qualification must demonstrate a commitment to meeting the requirements by including expected VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 dates by which each requirement is expected to be met and information documenting how they intend to meet them. Applicants that meet most but not all of the requirements at the time of application will be considered only for preliminary qualification. CDSMs that receive preliminary qualification must achieve full qualification before the implementation of the consultation and reporting requirements. As CDSMs move from preliminary qualification to full qualification upon meeting the requirements, CMS will update the information on the AUC Web site. For those who are not able to achieve full qualification by the time of program implementation, preliminary qualification will terminate and they will be eligible to reapply in the next annual application cycle. For CDSMs that received preliminary qualification and are later converted to full qualification status, their preliminary period will be included as part of their 5-year approval period. We encourage CDSMs to strive to meet all requirements by the March 1, 2017 application submission deadline, or as soon thereafter as possible, in order to receive full qualification status. We believe this policy strikes a balance between providing sufficient time for CDSMs to prepare for full implementation, while also providing ordering professionals information on CDSMs’ qualification status to assist them in making procurement decisions. Comment: Commenters recommended that CMS require CDSMs to have already demonstrated successful implementation of the mechanism and have established relationships in place with multiple PLEs whose AUC already populate the mechanism. Response: We are finalizing section 414.94(g)(2) to state that CDSM developers must submit applications that document adherence to each CDSM requirement in § 414.94(g)(1). As such, we expect to receive applications from CDSMs that have already established these requirements and have experience with adhering to them. We believe that the final requirements largely address the above comment; however, we require that qualified CDSMs be able to incorporate specified applicable AUC from more than one qualified PLE. Therefore, we do not interpret this to require that qualified CDSMs must actually incorporate AUC from more than one qualified PLE in order to become qualified, provided concurrent requirements are also met. Comment: A commenter suggested CMS use the qualification process to ensure AUC specific to the needs of the PO 00000 Frm 00251 Fmt 4701 Sfmt 4700 80419 elderly are incorporated into qualified CDSMs. This commenter further recommended CMS engage stakeholders with expertise in geriatrics when selecting AUC and CDSMs. Response: We are confident that qualified PLEs include relevant AUC within their libraries for the Medicare population and are supportive of multidisciplinary teams composed of members with expertise even beyond those required in § 414.94(c)(1)(ii). As indicated in the CY 2016 PFS final rule with comment period (81 FR 71106), we encourage teams to be larger and include other stakeholders. Comment: Some commenters requested that CMS make all CDSM applications public. Commenters also suggested that CMS interact with applicants to communicate any questions or issues with the application prior to making a qualification determination. Response: We appreciate the interest and contributions of all stakeholders as we implement this program and understand the desire to learn more about CDSM applicants; however, we will not systematically release this information. To encourage stakeholder interactions and to assist those seeking more information about qualified CDSMs, we intend to post basic information about each qualified CDSM on the AUC Web site once the list is finalized. This should enable stakeholders to research and reach out directly to qualified CDSMs to learn more about the mechanism in support of making well informed choices moving forward. During the review process, we intend to engage in the same type of dialogue with CDSM applicants as we have with PLE applicants. During the review of the first set of PLE applications, we held at least one conference call with each applicant, often held additional calls; and we also exchanged numerous emails to ensure questions and concerns from both parties involved, CMS and the applicant, were addressed, discussed and resolved as thoroughly as possible. We fully intend to engage in the same open and transparent process for CDSM applicants as well. We remind CDSM applicants that they may mark their applications as containing proprietary business information and we will protect that information to the full extent permitted by law. Comment: Some commenters expressed concerns regarding CDSMs that either fail to requalify after the first 5-year qualification period or are found to no longer be adherent to CDSM requirements during the 5-year qualification period. A commenter E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80420 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations recommended that CDSMs be temporarily suspended before being disqualified. Other commenters recommended that CMS ensure ordering professionals using these mechanisms not be penalized while they seek a new mechanism for consultation. One commenter stated that the CDSM be required to notify ordering professionals of such a disqualification. Other commenters requested that qualification of CDSMs not be disrupted due to standard technical updates to CDSMs made during the 5-year qualification period. Response: We agree that CDSM qualification should not be disrupted due to a standard update assuming no changes are made to functionality that result in non-adherence to the CDSM requirements in § 414.94(g)(1). We agree that qualified CDSMs should be required to notify ordering professionals in the event of disqualification and have added this requirement under § 414.94(g)(1)(xii). Comment: Some commenters requested that CMS extend the amount of time qualified CDSMs are qualified to allow for more time to prepare for requalification. Other commenters recommended that CMS shorten the qualification period to better align with the pace of change to EHR security and interoperability standards with those of CDSMs. Response: We believe that a 5-year qualification period for qualified CDSMs is an appropriate timeframe at this time. As the AUC program evolves, we could revisit this requirement through future rulemaking should we find that a modification is warranted. Comment: Some commenters suggested and supported CMS developing a testing framework for CDSMs, focusing especially on interoperability, and/or convene stakeholders for the purpose of creating such a framework. Response: We will continue to explore opportunities to develop a testing framework for qualified CDSMs with ONC and other standards groups. Comment: Several commenters requested that CMS provide details on the free CDSM tool required under section 218(b) of the PAMA. Another commenter stated that all qualified CDSMs should have a free version available. Response: As stated in the CY 2017 PFS proposed rule, the Secretary did not propose to establish any free CDSM at this time. Therefore, a free CDSM would need to apply for qualification just as any other CDSM. We disagree that all qualified CDSMs must have a free version available as section VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 1834(q)(1)(C) of the Act defines the applicable imaging services for which AUC consultation is required as those for which there is at least one free mechanism available for AUC consultation. There is not a requirement that every mechanism have a version available for free. In response to the comments, we have added language to § 414.94(g)(2)(ii) delineating the process and requirements to include preliminary qualification. The first application cycle following the publication of this CY 2017 PFS final rule will be extended to March 1, 2017 for all CDSM applicants. As opposed to full qualification by which CDSMs have documented how all requirements are met at the time of application, preliminary qualification allows CDSMs to document, if not already met, how and when such requirements are reasonably expected to be met. The preliminary qualification period ends when we implement the consulting and reporting requirements under this program as specified in § 414.94(g)(2)(ii)(B). We have also added § 414.94(g)(1)(xii) to require qualified CDSMs to notify ordering professionals upon de-qualification. e. Consultation by Ordering Professional and Reporting by Furnishing Professional Although we continue to aggressively move forward to implement this AUC program, ordering professionals will not be expected to consult AUC using qualified CDSMs by January 1, 2017. At the earliest, the first qualified CDSM(s) will be specified on June 30, 2017. We anticipate that some ordering professionals could be able to begin consulting AUC through qualified CDSMs very quickly as some may already be aligned with a qualified CDSM. We expect that furnishing professionals will be required to begin reporting January 1, 2018. This timeframe is necessary to allow time for ordering practitioners who are not already aligned with a qualified CDSM to research and evaluate the qualified CDSMs so they may make an informed decision. While there will be further rulemaking next year, we are announcing this date because the agency expects physicians and other stakeholders/regulated parties to begin preparing themselves to begin reporting on that date. We will adopt procedures for capturing this information on claims forms and the timing of the reporting requirement through PFS rulemaking for CY 2018. As we expect to implement the AUC consultation and reporting requirements PO 00000 Frm 00252 Fmt 4701 Sfmt 4700 under section 1834(q)(4)(A) and (B) of the Act on January 1, 2018, we requested feedback from the public to include a discussion of specific operational considerations that we should take into account and include in such rulemaking. For example, we noted that commenters could consider alternatives for reporting data on claims and for seeking exceptions, as discussed below. We also requested information on the barriers to implementation along this timeline that allows ordering and furnishing professionals to be prepared to consult AUC and report consultation information on the claims and whether separate rulemaking outside of the payment rule cycle would be preferred. Under section 1834(q)(4)(B) of the Act, Medicare claims for applicable imaging services furnished in applicable settings can only be paid under the applicable payment systems if certain information is included on the claim including: which qualified CDSM was consulted by the ordering professional for the service; whether the service, based on the CDSM consultation, adheres to specified applicable AUC, does not adhere to specified applicable AUC or whether no criteria in the CDSM were applicable to the patient’s clinical scenario; and, the national provider identifier (NPI) of the ordering professional. This section further allows payment for these services only if the claim contains such information beginning January 1, 2017. To develop and operationalize a meaningful solution to collecting new AUC consultation-related information on the claims, we must diligently evaluate our options taking into account the vast number of claims impacted and the limitations of the legacy claims processing system. Additionally, in the case of advanced imaging services, related claims are already required to append certain HCPCS modifiers and G codes for purposes of proper payments. In the recent implementation of section 218(a) of the PAMA, we established a HCPCS modifier for CT services rendered on machines that do not meet an equipment standard. It is important that we understand and evaluate how the additional requirements for AUC reporting would impact the information that is already required for advanced imaging services. Moving too quickly to satisfy the reporting requirement could inadvertently result in technical and operational problems that could cause delays in payments. Section 1834(q)(4)(C) of the Act includes exceptions that allow claims to be paid even though they do not include the information about AUC consultation by the ordering professional. We believe E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations that, unless a statutory exception applies, an AUC consultation must take place for every order for an applicable imaging service furnished in an applicable setting and under an applicable payment system. We further believe that section 1834(q)(4)(B) of the Act accounts for the possibility that AUC may not be available in a particular qualified CDSM to address every applicable imaging service that might be ordered; and thus, the furnishing professional can meet the requirement to report information on the ordering professional’s AUC consultation by indicating that AUC is not applicable to the service ordered. We are considering the mechanisms for appending the AUC consultation information to various types of Medicare claims and expect to develop requirements for appending such information in the CY 2018 PFS rulemaking process. We encouraged stakeholders interested in sharing feedback related to reporting and claims processing to do so as part of the comment period to inform this final rule. We were particularly interested in receiving feedback on, for example, whether the information should be collected using HCPCS level II G codes or HCPCS modifiers. The following is summary of the comments we received on consultation by ordering professionals and reporting by furnishing professionals. Comment: In response to our request for information about how to reflect AUC consultation on the Medicare claim form, we received extensive feedback. In particular, we requested feedback on using HCPCS modifiers or HCPCS Level II G codes to identify the required information about the consultation on the Medicare claim form. Some commenters recognized that these options for reporting were feasible and could capture all information needed for the claim. Some commenters noted that the number of modifiers possible on a claim form was limited and questioned whether all information required for reporting could be captured by modifies. Some commenters noted that it would be difficult for G codes to include all required information for reporting which would necessitate multiple G codes and result in greater administrative burden for reporting. Some commenters noted that modifiers and G codes were not ideal solutions and provided alternate suggestions. Several commenters addressed use of the UB04/837i for reporting. Some noted that such proposals would not work when more than one test is performed on the same date of service because the form does VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 not allow reporting by line item. Others noted that the UB04/837i form would allow providers to report individual line item services, but limited space on the form prevents specific line items from being linked to other information like an ordering professional, diagnosis code or authorization code to each item. Many commenters recommended the use of a specific code issued by the CDSM that would include alphanumeric characters to represent each of the required elements for reporting. Commenters suggested that this code could be placed in field 23 (prior authorization field) of the 837P claim form. Another commenter recommended placing a unique identifier in field 19 of the 1500 form. Two other suggestions included placing the unique identifier on both the professional component and technical component (or OPPS) claims, identifying field 63 on the 837i form, or submitting a ‘‘dummy’’ claim with the unique identifier to accompany all claims for applicable imaging services furnished. A commenter suggested that the reporting requirement should apply to providers who submit claims on a 155/ 837P because line item reporting is available. We also received a comment suggesting CMS could work with X12 to add the data to the claim more quickly through the K3 segment of the electronic claim, which is reserved for new data required under legislation and regulation. A commenter suggested that the reporting requirements use a framework allowing for regular feedback to ordering professionals regarding their ordering patterns. Another commenter suggested a simple attestation that such information would be available to CMS upon request. A commenter recommended that codes be modified to reflect additional costs of CDSM services. Response: We appreciate the extensive and thoughtful information provided in response to our request. These comments will be instrumental in our development of claims reporting requirements. Comment: Many commenters requested the release of claims reporting information as quickly as possible and before rulemaking in CY 2017. Multiple commenters insisted that reporting requirements be provided before CDSMs apply for qualification as they need this information to design their mechanisms and comply with the program requirements. Some commenters requested responses to questions about precisely which codes will be required and their specific location on the claim form. PO 00000 Frm 00253 Fmt 4701 Sfmt 4700 80421 Response: Although we have been actively working with components throughout the agency to develop and establish claims processing instructions and reporting details for the AUC program, given the complexities of the Medicare legacy claims processing systems and the extensive interactions necessary to properly develop and implement these requirements, we intend to include them in rulemaking for the CY 2018 PFS and not earlier through subregulatory processes or alternate rulemaking cycles. While we appreciate that CDSMs could benefit from having information on claims reporting requirements, we note that the information to be submitted on the claim is identified in section 1834(q)(4)(B) of the Act and CDSMs may begin preparing themselves for reporting the following items: (1) Which qualified CDSM was consulted by the ordering professional for the service; (2) whether the service, based on the CDSM consultation, adheres to specified applicable AUC, does not adhere to specified applicable AUC or whether no criteria in the CDSM were applicable to the patient’s clinical scenario; and (3) the NPI of the ordering professional. We remind CDSMs that § 414.94(g)(1)(vi) requires qualified CDSMs to generate and provide a certification or documentation at the time of order that documents which CDSM was consulted; the name and NPI of the ordering professional that consulted the CDSM; whether the service ordered would adhere to specified applicable AUC or whether the specified applicable AUC consulted was not applicable to the service ordered. The information qualified CDSMs must document encompasses information required for claims reporting under section 1834(q)(4)(B) of the Act. Comment: Some commenters requested that CMS rigorously test the claims reporting requirements or facilitate a workgroup to engage in this testing before reporting requirements are established and effective. One commenter recommended that CMS have a way to account for orders that may appear to be appropriate based on AUC consultation but are actually duplicative and redundant. Response: Thank you for this suggestion. Comment: A commenter requested that CMS develop an appeals process, and share that information in a timely manner. Response: Appeal rights will continue to apply to claims after implementation of this program. Changes to the appeals process are outside the scope of this rule. E:\FR\FM\15NOR2.SGM 15NOR2 80422 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 Comment: Some stakeholders have requested CMS provide opportunities to involve and accept feedback from all stakeholders in the development of the claims reporting requirements. One commenter recommended that CMS create an agency-wide task force to work with claims standards organizations to address all demands that will be placed on the claim form due to AUC reporting. Response: We appreciate the interest by stakeholders in contributing to the development of these requirements. We are happy to receive correspondence and feedback at any time through the AUC program email box ImagingAUC@ cms.hhs.gov, and we encourage stakeholders to provide information to us as early as possible to help inform our proposals for requiring claims reporting starting January 1, 2018. We will continue to work with stakeholders as we develop reporting requirements. We appreciate all information shared by commenters. We will use this feedback to inform CY 2018 rulemaking where we expect to establish the requirements for reporting under the AUC program. f. Exceptions to Consulting and Reporting Requirements Section 1834(q)(4)(C) of the Act provides for certain exceptions to the AUC consultation and reporting requirements under section 1834(q)(4)(B) of the Act. First, the statute provides for an exception under section 1834(q)(4)(C)(i) of the Act where an applicable imaging service is ordered for an individual with an emergency medical condition as defined in section 1867(e)(1) of the Act. We believe this exception is warranted because there can be situations in which a delay in action would jeopardize the health or safety of individuals. Though we believe they occur primarily in the emergency department, these emergent situations could potentially arise in other settings. Furthermore, we recognize that most encounters in an emergency department are not for an emergency medical condition as defined in section 1867(e)(1) of the Act. We proposed to provide for an exception to the AUC consultation and reporting requirements under § 414.94(i)(1) for an applicable imaging service ordered for an individual with an emergency medical condition as defined in section 1867(e)(1) of the Act. For example, if a patient, originally determined by the clinician to have an emergency medical condition prior to ordering an applicable imaging service, is later determined not to have had an emergency medical condition at that time, the relevant claims for applicable VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 imaging services would still qualify for an exception. To meet the exception for an emergency medical condition as defined in section 1867(e)(1) of the Act, the clinician only needs to determine that the medical condition manifests itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in: placing the health of the individual (or a woman’s unborn child) in serious jeopardy; serious impairment to bodily functions; or serious dysfunction of any bodily organ or part. Orders for advanced imaging services for beneficiaries with an emergency medical condition as defined under section 1867(e)(1) of the Act are excepted from the requirement to consult AUC. We intend through the CY 2018 PFS proposed rule to propose more details around how this exception will be identified on the Medicare claim. The second exception is under section 1834(q)(4)(ii) of the Act for applicable imaging services ordered for an inpatient and for which payment is made under Medicare Part A. We proposed to codify this exception in new § 414.94(i)(2). While we are including this exception consistent with statute, we note that if payment is made under Medicare Part A, the service would not be paid under an applicable payment system, such that the AUC consultation and reporting requirements under § 414.94 would never apply. The third exception is under section 1834(q)(4)(iii) of the Act for applicable imaging services ordered by an ordering professional who the Secretary determines, on a case-by-case basis and subject to annual renewal, that consultation with applicable AUC would result in a significant hardship, such as in the case of a professional practicing in a rural area without sufficient Internet access. We proposed to codify this exception in new § 414.94(i)(3) by specifying that ordering professionals who are granted a significant hardship exception for purposes of the Medicare EHR Incentive Program payment adjustment under § 495.102(d)(4)(i), (ii), or (iii)(A) or (B) of our regulations would also be granted a significant hardship exception for purposes of the AUC consultation requirement. We proposed, to the extent technically feasible, that the year for which the eligible professional is excepted from the EHR Incentive Program payment adjustment is the same year that the ordering professional is excepted from the requirement to consult AUC through a qualified CDSM. We proposed not to adopt the PO 00000 Frm 00254 Fmt 4701 Sfmt 4700 Meaningful Use significant hardship exception under § 495.102(d)(4)(iv)(C) as an exception for purposes of the AUC consultation requirement. Therefore, ordering professionals with a primary specialty of anesthesiology, radiology or pathology will not be categorically excepted from AUC consultation requirements. We believe there is substantial overlap between the eligible professionals that would seek a hardship exception under the EHR Incentive Program and those ordering professionals that would seek a hardship exception under the AUC program and, as such, this proposal would be administratively efficient. Using an existing program is the most efficient and expeditious manner to implement the significant hardship exception under the Medicare AUC program. We also believe it is the only administratively feasible option for a national significant hardship identification process that can be implemented by January 1, 2018, though we intend to revisit this option for years after 2018 as the current EHR Incentive Program payment adjustment is set to expire after the 2018 payment adjustment year as the Merit-Based Incentive Payment System takes effect. In addition, below we discuss considerations for a supplemental process to account for hardships for ordering professionals that are not eligible to apply for a significant hardship under the EHR Incentive Program (for example, non-physician practitioners) and ordering professionals that incur a significant hardship outside of the EHR Incentive Program application deadline. The criteria for significant hardships under the EHR Incentive Program relate to insufficient internet connectivity, extreme and uncontrollable circumstances that prevent the EP from becoming a meaningful EHR user, practicing for less than 2 years, practicing at multiple locations with the inability to control the availability of Certified EHR Technology, lack of faceto-face or telemedicine interaction with patients or a primary specialty designation of anesthesiology, radiology or pathology. We believe that most of these criteria would be relevant to demonstrate a significant hardship for ordering professionals to consult AUC. Regarding hardship exceptions for certain specialty designations, based on Medicare claims data for advanced imaging services from the first 6 months of 2014, approximately 1.2 percent of those claims were for advanced imaging services that had been ordered by a professional with one of the three E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations primary specialty designations. While their combined ordering volume is small, we do not believe that categorical exclusion of certain specialties of which the practitioner selected as their primary specialty designation for Medicare enrollment would necessarily be appropriate under the AUC program. Since eligible professionals in these three specialties are categorically excepted from the EHR Incentive Program payment adjustment, few of them would have applied for an exception on the other grounds. Therefore, we must consider another mechanism to evaluate whether ordering practitioners with these medical specialties experience a significant hardship for purposes of the AUC program. We understand that there are differences between the purpose and timing of significant hardship exceptions for the EHR Incentive Program and the Medicare AUC program. Foremost, a significant hardship under the EHR Incentive Program is generally based on a hardship that occurred in a prior period, impacting meaningful EHR use that would affect payments in a subsequent calendar year. For example, a professional that submits an application in March 2017 and qualifies for the hardship exception under the EHR Incentive Program would be exempt from the EHR payment adjustment for calendar year 2018. Although significant hardship exceptions for the EHR payment adjustment year generally are based on the existence of a hardship in a prior period, we believe it would be appropriate for these professionals to also qualify for a significant hardship exception for purposes of the AUC consultation requirement during calendar year 2018. It is also our best, most efficient, administratively feasible means of determining significant hardships for ordering professionals for CY 2018. We also recognize the possibility that an ordering professional could suffer a significant hardship during the AUC program year, and therefore, is immediately unable to consult AUC. In addition, while again we believe there is significant overlap, there may be circumstances where an ordering professional is not considered to be an eligible professional for purposes of the Medicare payment adjustmentsunder the EHR Incentive Program (for example, an ordering professional that is not a physician). We solicited feedback from commenters regarding processes that could be put in place to accommodate ordering professionals with primary specialties that VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 categorically receive significant hardship exceptions under the EHR Incentive Program, real-time hardships that arise during a year, and ordering professionals that are not eligible to apply using the EHR Incentive Program significant hardship exception process and need to seek a significant hardship exception for the purposes of the AUC program. We believe this would involve only a small number of ordering professionals. To the extent technically feasible, some possibilities for implementing such hardship exceptions may include Medicare Administrative Contractors granting hardships on a case-by-case basis or establishing another mechanism to allow for selfattestation of a significant hardship for a defined period of time (for example, a calendar quarter or a calendar year). We intend to propose a process in the CY 2018 PFS proposed rule. We invited the public to comment on our proposal for ordering professionals granted a hardship exception for the EHR Incentive Program for payment adjustment year 2018 to also be granted a hardship exception to the Medicare AUC program for those years. We proposed that the year the practitioner is excepted from the EHR Incentive Program payment adjustment is the same year that the practitioner would be excepted from consulting AUC. The following is a summary of the comments we received on the proposed exceptions to consulting and reporting requirements: Comment: Most commenters concurred that if an eligible professional is exempt from the EHR Incentive Program payment adjustment, then the ordering professional should also be exempt from AUC consultation for applicable imaging services. Commenters generally were concerned that CMS proposed a more limited set of hardship exceptions than what is currently available under the EHR Incentive Program. For example, we did not propose to allow certain medical specialty designations to be exempt from CDSM consultations even though they are automatically exempted from the EHR Incentive Program. One commenter observed that for the purposes of the AUC program only some EHR Incentive Program hardships may be applicable. One commenter suggested that the operation of this exceptions process be automatic for those already enrolled in the EHR Incentive Program hardship exception. Another commenter noted their observation that while making the EHR Incentive Program operational for the AUC program, it may not allow all ordering professionals (physicians and PO 00000 Frm 00255 Fmt 4701 Sfmt 4700 80423 non-physician practitioners) with a significant hardship to seek such exceptions because the EHR Incentive Program is limited to physicians. Response: We disagree with the commenters suggesting that we replicate under the AUC program all hardship exceptions under the EHR Incentive Program, including exceptions for three medical specialty designations. We do not believe our program is authorized to except ordering professionals based on their specialty. Therefore, we have decided at this time to proceed with finalizing the significant hardship exceptions under the AUC program as proposed. We remind all commenters that this proposal included a significant hardship exception for those ordering professionals that can demonstrate inability to control the availability of Certified EHR Technology. We agree with the commenters that the agency need not create a separate process for granting a significant hardship exception where practitioner overlap is available but we understand that a separate process will need to be established to handle significant hardship requests from non-physician practitioners that order advanced imaging tests as they are not currently included in the EHR Incentive Program. However, we remind all commenters that we intend to revisit this option for years after 2018 as the current EHR Incentive Program payment adjustment is set to expire after the 2018 payment year as the Merit-Based Incentive Payment System takes effect. Comment: A few commenters urged CMS to consider additional exceptions for ordering professionals that may encounter hardship in attempting to consult of specified applicable AUC for an applicable imaging service. The additional exceptions submitted by commenters included (1) ordering professionals who lack control over the availability of CEHRT for more than 50 percent of patient encounters, such as in the case of some hospital-based physicians; (2) any physician who does not have access to a low-cost integrated CDSM; (3) ordering professionals within a small practice or with a low-volume of advanced imaging services; (4) those who participate in either alternative payment models or accountable care organizations; (5) physicians who practice in a patient-centered medical home; (6) any professional using a qualified CDSM that is either disqualified or not re-qualified; (7) any group or institution in the process of implementing a new electronic medical record and billing system; (8) clinicians who receive a 0% weighting for the advancing care information performance E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80424 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations category under the MIPS; and (9) claims for patients in clinical trials. Response: We appreciate the additional feedback received about additional categories of hardship that could be excepted from the consulting and reporting requirements. Although we did not propose additional hardship categories outside of the EHR Incentive Program in this year’s rule, we will take these comments into account as we consider hardship exceptions in the CY 2018 PFS proposed rule. Comment: Other commenters were not concerned with the determination of the hardship exceptions for ordering professionals, and instead raised concerns that a furnishing professional may not be able to accurately determine whether an ordering professional qualifies for a hardship exception. Another commenter proposed a potential solution to the other commenters’ concerns and recommended to CMS that any ordering professional with a hardship exception should have a special NPI designation. Other commenters did not propose such mechanisms and encouraged CMS to address this concern in future rulemaking. Response: We will work internally to consider this concern and may address it in future rulemaking. Comment: Commenters generally supported exceptions to AUC consultation and reporting requirements for applicable imaging services ordered for an individual with an emergency medical condition; however, there was disagreement on how best to implement this exception. Commenters stated that ambiguity regarding whether an emergency medical condition is present could cause a delay in the delivery of emergency services to patients and requested clarification on the application of the AUC program in emergency departments and exceptions for certain emergency services. A few commenters offered an alternative exception from AUC consultation for all emergency departments. One commenter proposed a simple attestation process that does not further divert physician time away from patients. Some commenters expected that to operationalize this exception, any service with revenue codes in the range of 045X or 0516 or place of service code 23 would be exempt. Other commenters recognized and remarked to CMS that encounters that may occur outside the emergency department may also be ordered for an individual with an emergency medical condition. Another commenter explained that one problem with creating an exception for individuals with an emergency medical VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 condition is that the ordering professional may not be in a position to make such a determination. As an alternative recommendation, one commenter suggested that a ‘‘reasonable person’’ should make the determination as to whether an emergency medical condition exists. The commenter states that the ‘‘reasonable person’’ standard is used by private health insurance coverage in emergency situations and would include scenarios when the patient himself has a reasonable belief that he has an emergency medical condition. A few commenters disagreed as to how many encounters in an emergency department are outside the definition of an emergency medical condition. Response: We do agree that exceptions granted for an individual with an emergency medical condition include instances where an emergency medical condition is suspected, but not yet confirmed. This may include, for example, instances of severe pain or severe allergic reactions. In these instances, the exception is applicable even if it is determined later that the patient did not in fact have an emergency medical condition. We appreciate the offer from stakeholders to work with us to determine how best to capture this exception on claims. We do not have a reason at this time to believe that a categorical exception granted to emergency departments would foster inappropriate use of advanced imaging services. However, we believe such a categorical exception would not be consistent with the statutory requirement under section 1834(q)(4)(C)(i) of the Act, which is framed in terms of individual services. In response to the comments, we have made no changes to the proposed exceptions and have finalized our proposals. 6. Summary Section 1834(q) of the Act includes rapid timelines for establishing a Medicare AUC program for advanced diagnostic imaging services. The number of clinicians impacted by the scope of this program is massive as it will apply to every physician or other practitioner who orders or furnishes applicable imaging services. This crosses almost every medical specialty and could have a particular impact on primary care physicians since their scope of practice can be quite broad. We continue to believe the best implementation approach is one that is diligent, maximizes the opportunity for public comment and stakeholder engagement, and allows for adequate advance notice to physicians and PO 00000 Frm 00256 Fmt 4701 Sfmt 4700 practitioners, beneficiaries, AUC developers, and CDSM developers. It is for these reasons we proposed to continue a stepwise approach, adopted through notice and comment rulemaking. We proposed this second component to the program to specify qualified CDSMs, identify the initial list of priority clinical areas, and establish requirements related to CDSMs, as well as consulting and reporting exceptions. However, we also recognize the importance of moving expeditiously to accomplish a fully implemented program. Under this proposal, the first list of qualified CDSMs will be posted no later than June 30, 2017, allowing ordering professionals to begin aligning themselves with a qualified CDSM. We expect that furnishing professionals will be required to begin reporting AUC information starting January 1, 2018, and will address this requirement through PFS rulemaking for CY 2018, including how to report that information on claims. In summary, we proposed definitions of terms and processes necessary to implement the second component of the AUC program. We invited the public to submit comments on these proposals. We were particularly seeking comment on the proposed priority clinical areas and the requirements that must be met by CDSMs to become qualified. We believe the proposed requirements for qualified CDSMs will allow for flexibility so mechanisms can continue to reflect innovative concepts in decision support and develop customerdriven products to ultimately provide information to the ordering professional in such a manner that will maximize appropriate ordering of advanced diagnostic imaging while seamlessly integrating into workflow. As the stakeholders continue to move to a place of consensus-based standards deemed ready for deployment, we may become more prescriptive in future requirements for CDSMs. We also solicited comment on the exceptions to the requirements to consult applicable AUC using CDSMs. The following is a summary of the other of the comments we received specific to the Medicare AUC program but not directly related to our proposals. Comment: Overall, commenters expressed their general support for the use of AUC in diagnostic imaging. Response: We appreciate the support and stakeholder involvement throughout the implementation process. Comment: Most commenters supported our staged approach to implementing this program and most commenters supported the longer time period before requiring ordering E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations professionals to consult AUC in qualified CDSMs and furnishing professionals to report consultation information on claims. Many commenters requested additional time to comply with the consultation and reporting requirements under this program. Some recommended an additional 6-months until July 1, 2018, and others encouraged waiting until 2019 noting that providers will not have time to choose a CDSM once the qualified CDSM list is posted by June 30, 2017. Many commenters urged us to allow for 18 months between the release of the list of qualified CDSMs and the start of the reporting requirement. Commenters also supported additional time for implementation by stating that the program implementation date should be dictated by the availability of CDSMs, their integration into EHR systems, physician readiness, and sufficient testing. One commenter suggested, in the absence of additional time, we could ask physicians to annually attest, subject to audit, that they are consulting a CDSM prior to ordering relevant advanced imaging services. Response: We appreciate the challenges that the aggressive timeline, established in section 218(b) of the PAMA, creates for all of us, and have taken steps to alleviate these challenges by phasing in components of this program as necessary for meaningful implementation. We continue to expect that furnishing professionals will be required to begin reporting January 1, 2018, and will address this requirement through PFS rulemaking for CY 2018. Comment: One commenter cautioned CMS to ensure ordering professionals and furnishing professionals are not penalized due to phase-in of the consulting and reporting requirements under the AUC program or any other quality program. Response: We do not foresee any situations where professionals would be penalized as a result of our decision to phase in the consulting and reporting requirements. Comment: Several commenters noted that practitioners will have to comply with the requirements of the MeritBased Incentive Payment System (MIPS) (under the Quality Payment Program) at the same time they will have to comply with the AUC consultation and reporting requirements which is overly burdensome. Some commenters recommended alignment of the AUC program with the Quality Payment Program requirements so as not to further increase burden on practitioners, and one commenter recommended alignment of the AUC program with VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 MIPS rather than creating a standalone AUC program. Response: We will continue to explore avenues for alignment of the AUC program and the Quality Payment Program. CMS issued a final rule with comment period to implement the QPP, including MIPS. The rule can be accessed at https://qpp.cms.gov/ education. Comment: Some commenters requested that CMS confirm that consulting and reporting will be required starting January 1, 2018, and stated that due to the availability of CDSMs and AUC, this start date is reasonable and feasible. One commenter expressed concern with the January 1, 2018 implementation date for consultation and reporting due to the cost and patient harm resulting from inappropriate imaging. The commenter urged CMS to work diligently to implement these requirements as quickly as is feasible. Another commenter suggested using a pilot period or starting voluntary consulting and reporting on January 1, 2018, during which information on the Medicare claim would not be considered for outlier determinations. Some commenters also suggested that the program first start with health systems and larger group practices and be rolled out to smaller settings over time. Response: We continue to expect that furnishing professionals will be required to begin reporting January 1, 2018, and will address this requirement through PFS rulemaking for CY 2018. Comment: Some commenters requested that CMS continue to implement the AUC program through rulemaking separate from the PFS so as to establish more programmatic components sooner, particularly related to consulting and reporting requirements and how this information will be documented on Medicare claims. Other commenters stated that the PFS is the appropriate cycle for establishing the AUC program and is important to ensure all stakeholders are aware of proposals and have the opportunity to comment. Response: We believe that the PFS is the most appropriate rulemaking vehicle for implementing the AUC program and will continue to use the PFS annual rulemaking process to establish future components. Comment: Many comments were submitted specific to qualified PLEs. Commenters requested both clarification and modifications to the definition of PLE finalized through rulemaking in the CY 2016 PFS final rule with comment period. Specifically, some commenters requested that we clarify that radiology PO 00000 Frm 00257 Fmt 4701 Sfmt 4700 80425 benefit management (RBM) companies cannot be involved in any way with qualified PLEs and in the development of specified applicable AUC. Some commenters further stated that RBMs should not be involved because they do not use the same rigorous AUC development process as medical specialty societies, clinicians and providers and are focused on limiting utilization rather than assisting providers in making optimal medical decisions. Other commenters requested that we better explain the third party interaction permissible between qualified PLEs and RBMs. Response: As finalized in the CY 2016 PFS final rule with comment period, the definition of PLE refers to organizations comprised primarily of providers or practitioners who, either within the organization or outside of the organization, predominantly provide direct patient care. This definition of PLE includes health care collaboratives and other similar organizations such as the National Comprehensive Cancer Network and the High Value Healthcare Collaborative. We further clarify that qualified PLEs may collaborate with third parties that they believe add value to their development of AUC, provided such collaboration is transparent. It is our expectation that PLEs will develop or modify AUC consistent with all regulations in § 414.94(c)(1). If commenters are interested in learning more about the AUC development process of any individual qualified PLE, then we remind the commenters that qualified PLEs disclose the parties external to the organization when such parties have involvement in the AUC development process. Comment: Another commenter noted that the definition of qualified PLE restricts independent, evidence-based content solutions from inclusion. The commenter further requested that we remove language from the preamble they believe adds criteria to the definition of PLE. Specifically they requested removal of language discussing expectations of qualified PLEs ‘‘to have sufficient infrastructure, resources, and the relevant experience to develop and maintain AUC. . .’’ and identified this language as an ‘‘evolving definition’’ that is ‘‘highly problematic’’ and requested revision to more accurately reflect the language in the CY 2016 PFS final rule with comment period. Response: We are not changing the requirements of qualified PLEs and disagree that the cited language adds criteria to the existing definition of PLE. The language in the background section of the CY 2017 PFS proposed rule E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80426 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations referenced above is not intended to build upon or provide more criteria to the definition of PLE in § 414.94(b). In fact this language was being used to describe the requirements of qualified PLEs under § 414.94(c)(1) and not to further explain the definition of PLE. Comment: Some commenters requested that we provide more information about qualified PLEs and facilitate interactions between qualified PLEs and other stakeholders perhaps in the form of a tool or resource containing more detailed information or by coordinating a meeting for qualified PLEs and other stakeholders to interact. Response: We do not believe we are best equipped to facilitate stakeholder interactions as suggested; however, we will continue to build out the information on the AUC Web site to enable stakeholders to research and reach out directly to qualified PLEs to learn more about their AUC libraries and processes. Comment: A commenter requested that we wait to implement the AUC program until a broader list of qualified PLEs is available. Response: On June 30, 2016, a list of 11 qualified PLEs was posted to the AUC Web site (https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/AppropriateUse-Criteria-Program/). Together these qualified PLEs include a large volume of AUC and we do not agree that it is necessary to wait to implement the program to further expand the list of qualified PLEs. Furthermore, we expect more applications from organizations seeking specification as qualified PLEs for 2017 so we expect the list to grow again in June of 2017. Comment: Several commenters requested that all applications submitted by organizations seeking qualification as a PLE be made public. Response: We appreciate the interest and contributions of all stakeholders as we implement this program and understand the desire to learn more about qualified PLEs, however we will not systematically release this information. To encourage stakeholder interactions and to assist those seeking more information about qualified PLEs, we posted general information about each qualified PLE on the AUC Web site. We intend to add more information about each qualified PLE to the AUC Web site which should enable stakeholders to research and reach out directly to qualified PLEs. We remind PLE applicants that they may mark their applications as containing proprietary business information and we will VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 protect that information to the fullest extent permitted by law. Comment: In response to our request for feedback regarding how appropriateness ratings provided by CDSMs could be interpreted and recorded for the purposes of this program, we received numerous comments. Commenters identified several ways appropriateness ratings are presented in CDSMs including: binary yes, appropriate or no, not appropriate; color coded using green for appropriate, yellow for may be appropriate and red for not appropriate; numerical ranges from 1 through 9/10 where 1–3 are not appropriate, 4–6 may be appropriate and 7–9/10 are appropriate, and a combination of color coded and numerical ratings. Commenters also used varying terminology including not appropriate, rarely appropriate, may be appropriate, usually appropriate, indicated and not indicated. Commenters recommended that appropriateness ratings that are not in a binary form need to be translated into binary values, only values equivalent to not appropriate equal no and values equal to may be appropriate and appropriate equal yes. Some commenters recommended that CDSMs be required to present appropriateness ratings in binary formats as this information will be required on the claim, while others stated that a binary appropriateness rating should not be required. Some commenters recommended CMS define standards for appropriateness ratings. Response: We appreciate the extensive and thoughtful information provided in response to our request. These comments will be instrumental in operationalizing the AUC program. Comment: We received numerous comments addressing the future outlier determinations. Many commenters agreed with using priority clinical areas to inform the outlier identifications. Other commenters questioned how we will be able to identify outliers starting in 2020 when priority clinical areas include AUC that conflict with one another. Some commenters suggested that outlier determinations be based upon the percentage of orders for which AUC consultation resulted in a recommendation of 1–3 (based on the 1– 9 appropriateness level determinations). More specifically, ordering professionals ‘‘with an ordering pattern in ‘Red Rate’ percentage two standard deviations higher than the median should be considered outliers.’’ One commenter suggested that the outlier calculation use AUC compliance for priority clinical areas as the numerator and total AUC as the denominator. PO 00000 Frm 00258 Fmt 4701 Sfmt 4700 Some commenters encouraged us to focus outlier identification where wide variance in appropriate imaging patterns appears. Commenters also recommended that ordering professionals should be made aware of ordering patterns before being subject to prior authorization under the AUC program. Some commenters opposed a strict application of all priority clinical areas for the purposes of outlier identification. Commenters requested that only ordering professionals with ordering patterns significantly misaligned with AUC be subject to prior authorization. Commenters also requested criteria used to make outlier determination be adjusted over time to allow for innovation in ordering. One commenter requested that ordering professionals not be subject to AUC consultation and prior authorization at the same time. Response: We appreciate the extensive and thoughtful information provided in response to our request. We will consider these comments when determining how to operationalize the outlier determination component of this program. Comment: Some commenters recommended that we require data submission to CMS directly or to a third party registry. Such reporting would enable professionals to track ordering patterns, especially in relation to priority clinical areas and subsequent outlier determinations. Response: We will consider this recommendation as we implement the future components of this program. Comment: Several comments focused on the communication for the image order from ordering professionals to furnishing professionals. Some commenters requested we include requirements in the final rule, and some requested that we require electronic communications. Commenters recommended that the furnishing professional be allowed to consult specified applicable AUC through a qualified CDSM if the ordering professional fails to provide consultation information to the furnishing professional to avoid claims denials. Others suggested that furnishing professionals be able to identify whether an ordering professional is considered an outlier under the AUC program and others recommended we develop a verification mechanism that would be required of the ordering professional. Response: We are not establishing requirements regarding the communication of the imaging order from the ordering professional to the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations furnishing professional. These professionals currently send and receive orders successfully via various vehicles (within EHR, fax, etc.), and we do not believe it is appropriate at this time to place further constraints or requirements on the systems for communications between these professionals. We also note that section 1834(q)(4) of the Act clearly specifies that AUC consultation is required for ordering professionals and does not provide for instances where consultation by furnishing professionals is an acceptable alternative, even if only for the purpose of avoiding claims denials. We do not believe the statute affords us the authority to allow furnishing professionals to consult in lieu of or in the absence of consultation by ordering professionals. For all other purposes, we remind commenters that furnishing professionals are not specifically prohibited from consulting specified applicable AUC through a CDSM. Comment: Some commenters requested clarification regarding the role of local coverage determinations (LCDs) and national coverage determinations (NCDs) under the AUC program. Commenters requested that CMS identify whether LCDs and NCDs take precedent over specified applicable AUC, or if advanced diagnostic imaging orders that are considered appropriate based on consultation with specified applicable AUC would be covered under Medicare if such order was not covered by an LCD or NCD. Some commenters requested that AUC be the only criteria for medical necessity of advanced imaging services and other commenters insisted that we instruct MACs to retire LCDs for advanced imaging services once the AUC program is implemented. One commenter also recommended that we instruct qualified PLEs to adhere to NCD requirements when developing AUC. Response: At this time we consider LCDs and NCDs to be active and binding policies detailing the criteria upon which Medicare coverage or noncoverage is based. For the purposes of this program, consulting with AUC is not a replacement for a determination of medical necessity. Consultation with AUC that conflict with an LCD or NCD does not modify the applicability of the LCD or NCD. Specified applicable AUC do not override LCDs or NCDs. Comment: Some commenters stated that the disproportionate burden of the AUC program is on primary care physicians. Many commenters noted in general the additional burden, both administratively and financially, the AUC program will create for providers. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 While other commenters stated that the added burden is outweighed by the cost savings and quality improvements resulting from a properly implemented AUC program and is significantly less than traditional prior authorization programs. Response: We understand that primary care physicians will be significantly impacted by the AUC program and have acknowledged this throughout implementation of this program. We are making every effort to implement a program that does not impart excess levels of burden but still includes all statutorily required provisions and is designed to achieve goals of the PAMA. Comment: Some commenters noted that since AUC consultation information will be required on the claim for the imaging service ordered, only the furnishing professional, often including the hospital where imaging services are provided, will be held accountable if AUC are not consulted. Because the ordering professional is required to consult and their action, or inaction, impacts payment for the furnishing professional, commenters stated that we should find a way to hold the ordering professional accountable as well. Response: The fourth component of the AUC program in section 1834(q)(5) of the Act includes the identification of outlier ordering professionals, which we believe will distinguish and provide consequences for those ordering professionals that fail to comply with AUC. Through facilitation of a prior authorization requirement for such identified professionals, as specified under section 1834(q)(6) of the Act, we believe we will fulfill the shared goal of assisting both ordering and furnishing professionals in making the most appropriate treatment decisions for Medicare beneficiaries. Although we did not propose to implement these sections in the CY 2017 PFS proposed rule, we continue to expect that consultations with physicians, practitioners and other stakeholders will serve as part of the process to hold accountable outlier ordering professionals, and believe that such dialogues will yield meaningful results. We recognize that this response does not address those ordering professionals that consistently fail to consult AUC at all, and we will continue to discuss internally the extent to which such professionals would be impacted by this AUC program and other Medicare programs. Comment: Some commenters requested that we ensure that AUC consultation requirements do not create issues with patient access to care due to PO 00000 Frm 00259 Fmt 4701 Sfmt 4700 80427 the additional administrative burden this program will place on providers. Commenters also requested that we ensure that AUC consultations do not interfere with physicians’ clinical judgment when treating patients. Response: We disagree with the idea that AUC consultation creates new barriers for Medicare beneficiaries, and believe that while technology itself cannot improve care coordination or patient outcomes, the use of that technology can be a tool for practitioners to use in working toward improving care for Medicare beneficiaries. To this end, CDSMs can provide efficiencies in administrative processes which support clinical effectiveness, leveraging automated patient safety checks, supporting clinical decision making, enabling wider access to health information for patients, and allowing for dynamic communication between providers. We believe that as ordering professionals continue to engage with qualified PLEs, qualified CDSMs and CMS, AUC consultations will complement the practice of medicine. Comment: Some commenters questioned the overall approach we are taking in implementing this program. Commenters noted that the program should not be set in place until it is determined that use of AUC actually improves utilization of diagnostic imaging. Other commenters reiterated their opposition to using the AUC consultation requirement to withhold payment for rendered services. Response: Section 1834(q) of the Act as amended by section 218(b) of the PAMA identifies specific requirements for the implementation of the Medicare AUC program. The program must be implemented and must include all detailed components in the statute. We believe the approach we are taking is consistent with the requirements in the PAMA. Comment: Some comments focused on requests for practitioner and patient education efforts. Commenters requested that we educate practitioners and allow for adequate time to do so. Another commenter recommended that we inform patients on the AUC program and explain both the need for the program and supposed benefits. This commenter also recommended that we encourage other payers to use the same criteria as the Medicare AUC program to avoid additional administrative burden on providers. This commenter recommended that we inform clinicians of the expected cost associated with compliance with the AUC program requirements. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80428 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Response: We plan to develop and provide educational materials about the AUC program before implementation of this program. We also expect many stakeholders will work to educate and inform providers and the public and other interested parties about the program. We do not have control over what other payers choose to implement and do not have cost projections associated with implementation of this program at this time as they relate to regulations yet to be proposed through notice and comment rulemaking. Comment: One commenter noted that different terminology is used in the two proposed rules with the CY 2017 OPPS proposed rule using the term ‘‘imaging supplier’’ and the CY 2017 PFS proposed rule using ‘‘furnishing professional.’’ The commenter noted that the PAMA uses the term ‘‘furnishing professional’’ and asks that CMS use consistent terminology for the parties furnishing the radiology service and more clearly define the parties/ entities that would fall into the standard term. Response: We understand commenters’ confusion. All components of the Medicare AUC program are being implemented through the PFS. The use of ‘‘imaging supplier’’ in the OPPS is not relevant to the AUC program. Under the AUC program and as specified in section 1834(q)(1) of the Act, the term ‘‘furnishing professional’’ is defined as a physician (as defined in section 1861(r) of the Act) or a practitioner described in section 1842(b)(18)(C) of the Act who orders an applicable imaging service which we codified in § 414.94(b) as discussed in the CY 2016 PFS final rule. Comment: Several commenters made various recommendations and suggestions regarding the development of AUC, the type of AUC that should be used under this program and their involvement in identifying and/or developing AUC for use under this program. Response: We remind readers that through the CY 2016 PFS final rule with comment period, we established new § 414.94 and included requirements regarding the development of AUC and who can be qualified to develop, modify and endorse AUC. We will not be developing specified applicable AUC for consultation under this program. Rather specified applicable AUC, that ordering professionals will be required to consult, are those developed, modified or endorsed by qualified PLEs. The first list of qualified PLEs was released in June of 2016 and can be found on the CMS AUC program Web site at https:// www.cms.gov/Medicare/Quality- VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Initiatives-Patient-AssessmentInstruments/Appropriate-Use-CriteriaProgram/. Comment: Many commenters communicated their appreciation of efforts by CMS to actively engage with stakeholders to implement this program as mandated by the section 218(b) of the PAMA amending section 1834(q) of the Act. Other commenters asked how they can become involved and when CMS will reach out directly to them. Response: We have found the extensive interactions we have had with a wide range of stakeholders over the past several years to be highly instrumental and essential to the development of this program. Many stakeholders reached out to us from early on and we have reached out to other organizations when issues particularly relevant to their areas of focus arise. We have also expanded our stakeholder interactions through numerous conferences and meetings held by various organizations. Furthermore we receive regular email inquiries that create an open dialogue with more stakeholders and are always happy to interact with any individual or organization with an interest in the AUC program. The best way to contact the CMS AUC Team is through the AUC program resource box: ImagingAUC@ cms.hhs.gov. We check the resource box regularly and respond to all inquiries. These additional comments will assist us in further building out the AUC program as we move into the next component for implementation in future rulemaking and have not resulted in any changes to our proposals. We have discussed above, throughout the preamble, our changes in response to public comment. We thank the public for their comments and appreciate the detailed feedback and recommendations from stakeholders. We believe the changes based on public comments have improved the identified priority clinical areas and the qualified CDSM requirements and process for qualification. We are finalizing without change the proposals for the determination of non-adherence and the exceptions under this program. We will continue to post information on our Web site for this program accessible at www.cms.gov/Medicare/QualityInitiatives/Patient-AssessmentInstruments/Appropriate-Use-CriteriaProgram. PO 00000 Frm 00260 Fmt 4701 Sfmt 4700 D. Reports of Payments or Other Transfers of Value to Covered Recipients: Summary of Public Comments 1. Background In the February 8, 2013 Federal Register (78 FR 9458), we published the ‘‘Transparency Reports and Reporting of Physician Ownership or Investment Interests’’ final rule (Open Payments Final Rule) which implemented section 1128G of the Act, as added by section 6002 of the Affordable Care Act. Under section 1128G(a)(1) of the Act, manufacturers of covered drugs, devices, biologicals, and medical supplies (applicable manufacturers) are required to submit, on an annual basis, information about certain payments or other transfers of value made to physicians and teaching hospitals (collectively called covered recipients) during the course of the preceding calendar year. Section 1128G(a)(2) of the Act requires applicable manufacturers and applicable group purchasing organizations (GPOs) to disclose any ownership or investment interests in such entities held by physicians or their immediate family members, as well as information on any payments or other transfers of value provided to such physician owners or investors. The Open Payments program creates transparency around the nature and extent of relationships that exist between drug, device, biologicals and medical supply manufacturers, and physicians and teaching hospitals (covered recipients and physician owner or investors). The implementing regulations are at 42 CFR part 402, subpart A, and part 403, subpart I. In addition to the Open Payments final rule, we issued final regulations in the CY 2015 PFS final rule with comment period (79 FR 67758) that revised the Open Payments regulations. Specifically, we: (1) Deleted the definition of ‘‘covered device’’; (2) removed the continuous medical education (CME) exclusion; (3) expanded the marketed name reporting requirements to biologicals and medical supplies; and (4) required stock, stock options, and any other ownership interests to be reported as distinct forms of payment. Since the publication and implementation of the Open Payments Final Rule and the CY 2015 PFS, various stakeholders have provided feedback to us regarding a variety of aspects of the Open Payments program. As a result, we have identified areas of the rule that might benefit from revision or subregulatory clarification. To consider the views of all stakeholders, E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations in the CY 2017 PFS proposed rule (81 FR 46395 through 46396), we solicited public comments regarding policy and operational issues related to the Open Payments program. Examples of subject matter areas for which we solicited public comments included: (1) Expansion of the nature of payment categories; (2) length of continued reporting obligations; (3) length of time in which Open Payments data remains relevant to users; (4) mandatory registration for applicable manufacturers and GPOs; (5) pre-vetting of payment information with physicians and teaching hospitals prior to submission; (6) definition of a teaching hospital; (7) new teaching hospital reporting elements; (8) option for early or continuous data submission; (9) the impact of mergers, acquisitions, and other business dealings on reporting; (10) clarification on the definitions of ownership and investment interest terms; and (11) definition of, and collection of data from, Physician Owned Distributors (PODs). In response to our solicitation, we received 136 timely comments, 95 of which were deemed relevant to the solicitation in that they suggested matters to consider in future rulemaking and system enhancements. The majority of the comments focused on: • Expanding or clarifying the nature of payment categories enumerated in § 403.904(e)(2). • Changing the continued reporting obligation to a specific period of time, such as 5 years after the payment or transfer of value was made. • Publishing or refreshing the Open Payments data so that it is accessible to stakeholders for an appropriate period of time, such as 5 years or the number of years in which an applicable manufacturer or GPO is required to report. • Streamlining the Open Payments registration process and maintaining voluntary registration for those applicable manufacturers or GPOs that do not report. • Requiring applicable manufacturers and GPOs to pre-vet financial information with physicians and teaching hospitals before it is reported to Open Payments. • Clarifying the regulatory definition of a teaching hospital. • Adding non-public data elements that allow additional detail about the specific recipient or department of a teaching hospital that received a payment or transfer of value. • Expanding the timeframe in which the Open Payments program can accept data submissions from applicable manufacturers and GPOs, such as by VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 implementing multiple submission windows. • Implementing flexible reporting requirements so that applicable manufacturers and GPOs can properly and easily represent changes resulting from mergers, acquisitions, and other business dealings. • Clarifying the definition of PODs and how Open Payments requirements apply to PODs. These comments, submitted by a variety of parties, broadly supported our effort to engage the program’s stakeholders before revising or creating new reporting requirements. We appreciate the commenters’ views and recommendations and we will consider the public comments received in the future through possible rulemaking or publication of subregulatory guidance. No Open Payments program changes are being proposed or finalized within this final rule. E. Release of Part C Medicare Advantage Bid Pricing Data and Part C and Part D Medical Loss Ratio (MLR) Data 1. Overview of Proposed Rule In the CY 2017 PFS proposed rule (81 FR 46162) we proposed to release certain data related to the bids submitted annually by Medicare Advantage Organizations (MAOs) and certain Medical Loss Ratio (MLR) data submitted annually by MAOs and Part D plan sponsors. In general, we proposed to release the data submitted by MAOs in the Medicare Advantage (MA) Bid Pricing Tool (BPT), subject to a 5-year delay; and to release data submitted by MAOs and Part D sponsors in accordance with MLR requirements, subject to an 18-month delay. In both cases, the proposed release is subject to specified exclusions. 2. Release of Bid Pricing Data a. Summary of Proposed Rule The proposed rule included a discussion of both the statutory and regulatory authority for collecting bids, as well as an overview of how the information is collected. Each year, MAOs submit bids to CMS for participation in the Medicare Advantage program. Information from these bids is primarily collected through the MA BPT, which was developed by CMS. The data collected in the BPT demonstrates the actuarial bases of the plan bid. Each MA plan bid is an estimate of the plan’s revenue requirement to cover plan benefits for a projected population, including benefit costs net of cost-sharing, non-benefit expenses, and gain/loss margin. PO 00000 Frm 00261 Fmt 4701 Sfmt 4700 80429 The following summary describes the types of data collected in the BPT, which we described in greater detail in the proposed rule at 81 FR 46397–99: • Base period experience data. • Trend assumptions. • Manual rates and credibility assumptions. • Projected allowed costs. • Effective value of a plan’s costsharing. • Projected administrative expenses and information related to the plan’s gain/loss margin. • Plan-specific bid and benchmark, based on projected enrollment and risk scores. • Beneficiary rebate and beneficiary premium for the plan. • Rebate allocations to MA mandatory supplemental benefits and buy down of the Part D basic premium, the Part D supplemental premium, and/ or the Part B premium. • Actuarial pricing elements for any optional supplemental benefit packages. In addition to these categories of data collected in the BPT, MAOs must submit supporting documentation to substantiate the actuarial basis of pricing and an actuarial certification of the bid. We described the proposed regulatory changes to allow for the release of MA bid pricing data, along with the manner in which we proposed to make the release. We proposed to codify the requirements for release of MA bid pricing data by adding new § 422.272 to subpart F of part 422. We proposed to release to the public each year, after the first Monday in October, MA bid pricing data for MA plan bids that we accepted or approved for a contract year at least 5 years prior to the upcoming calendar year, subject to specific exclusions described in proposed § 422.272(c). We proposed to amend the regulation text at § 422.504 by adding a new paragraph (n)(2), which would require that an MAO acknowledge the release of MA bid pricing data as provided in § 422.272 as a mandatory contract provision; we also proposed certain technical changes to § 422.504(n). The proposed rule did not discuss these changes to § 422.504(n) in detail as part of the proposal to release MA bid data, but they were reflected in the proposed regulation text at 81 FR 46471. Specifically, we proposed to move the existing provisions regarding the release of summary CMS payment data at existing paragraph (n) to paragraph (n)(1) and to redesignate the existing paragraphs (n)(1)(i) through (iv) and (n)(2) as (n)(1)(i)(A) through (D) and (n)(1)(ii), respectively. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80430 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations We also described the data that would be subject to exclusion from release. We proposed not to include any Part D bid pricing data, or any information pertaining to the Part D prescription drug bid amount for an MA plan offering Part D benefits. We also proposed to exclude any narrative information included in the MA BPT, MSA BPT, and ESRD–SNP BPT regarding base period factors, manual rates, cost-sharing methodology, optional supplemental benefits, or other topics for which narratives are required by us under § 422.254. We proposed to exclude supporting documentation that is provided outside of the BPT template. We proposed to exclude any information identifying Medicare beneficiaries or other individuals. Regarding other individuals, we explained that our proposal would exclude the names and contact information of certifying actuaries and MAO contacts from the releases. Finally, we proposed to exclude any bid review correspondence between us or our contractors and the MAO. We detailed the rationale for the proposed releases. We discussed how the release of this data is in support of the Administration’s commitment to transparency. We indicated that release of MA bid pricing data could support public research into the MA program that could support the agency’s goals for the program, including the delivery of better healthcare. We also suggested the data release would promote public accountability of the program. We also addressed past and ongoing attempts to achieve release of this data under the Freedom of Information Act, 5 U.S.C. 552 (FOIA). We have received several requests under the FOIA for the type of MA bid pricing data we proposed to release. Under the FOIA, we are required to make available any data released under the FOIA that the agency determines are likely to become the subject of subsequent requests, or that have been requested by three or more requesters. As a result of one such FOIA request, we have already released publicly a limited set of MA bid pricing data. This data, from 2011, is available at https://www.cms.gov/Medicare/ Health-Plans/ MedicareAdvtgSpecRateStats/ DataRequests.html. This data was posted in June 2013. We solicited comments on the scope of the proposed release of MA BPT worksheets and data elements. We were particularly interested in comments on whether the MA bid pricing data we proposed to release contains proprietary information, and if so, we requested detailed explanations of good cause for VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 its redaction from public availability and suggestions for what safeguards might be implemented to appropriately protect those portions of the data. We noted that detailed explanations should contain specific examples which show how this information disclosure could cause substantial competitive harm to MAOs. Specific examples should have (1) cited the particular information proposed to be released and explained how that information differs from publicly available data; (2) pointed to the particular entity or entity type that could gain an unfair competitive advantage from the information release; and (3) fully explained the mechanism by which the release of that particular information would create an unfair competitive advantage for that particular entity. Similarly, we were interested in comments that our proposed scope for release was too narrow and unnecessarily protects data that is not confidential and should not be protected. We also solicited comments on the proposed 5-year delay and its effect with respect to any competitive disadvantages to MAOs that could result from the disclosure of MA bid pricing data. We solicited comments on whether a shorter period would suffice to protect MAOs from competitive harm associated with the disclosure of confidential commercial information or if a longer period is necessary to adequately protect the information. b. Comments We received 30 comments from the public, some in support and some in opposition to our proposed release of MA bid pricing data. We reviewed these comments closely, and we appreciate the concerns identified in comments on our proposed release. These comments are addressed below. Comment: About half of the commenters expressed support for the proposal to release MA bid pricing data. Response: We appreciate the support. Comment: A number of commenters stated that the release of MA bid pricing data would result in substantial competitive harm to MAOs and to the MA program. Commenters expressed concern that release of plan-level financial data, even with the 5-year delay, would provide current and future competitors with sensitive information such as gain/(loss) margin and the profitability of serving beneficiary populations in specific markets, which could expose business strategies, reduce innovation, and undermine the functioning of a competitive marketplace. These commenters stated that the detailed claims cost, cost PO 00000 Frm 00262 Fmt 4701 Sfmt 4700 sharing, and utilization information collected in the MA BPT could be used by a competitor to derive not only future bid amounts in the aggregate, but also to derive components of future bids for specific benefits contained in the bid. Some commenters remarked that this could incent the gaming of bids, cause MAOs to exit markets, and create disincentives for new market entrants. Response: We share the commenters’ interest in the continued success of the MA program. In recent years, enrollment has grown while plan quality has demonstrated continued improvement. Our goal is to continue to make the MA program a strong and healthy one. As discussed in the proposed rule, we believe this disclosure is consistent with Presidential directives to make information available to the public, and with our goals of allowing public evaluation of the MA program, encouraging research into better ways to provide health care, and reporting to the public regarding federal expenditures and other statistics involving this program. Analysis of this data could inform future bidding and payment policies. Further, releasing MA bid pricing data, particularly in conjunction with information already released under § 422.504(n), will provide insight into the use of public funds for the MA program, providing appropriate transparency about the administration of the program. We discussed the need to balance these goals with the need to protect the proprietary information of the MAOs that submit this bid pricing information to us. Our proposed time lag of 5 years prior to the upcoming calendar year was an important element in our decision to release the MA bid pricing data. As part of our efforts to balance our mission to effectively administer federal health care programs and increase data transparency with MAOs’ proprietary interests, we requested that commenters who oppose release of MA bid pricing data provide a ‘‘detailed explanation of good cause’’ for the redaction of some or all MA bid data from public release. As noted in section III.E.2.a of this final rule (‘‘Summary of Proposed Rule’’), we stated that detailed explanations should contain specific examples which show how this information disclosure could cause substantial competitive harm to MAOs. Specific examples should have (1) cited the particular information proposed to be released and explained how that information differs from publicly available data; (2) pointed to the particular entity or entity type that could gain an unfair competitive advantage from the information release; E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations and (3) fully explained the mechanism by which the release of that particular information would create an unfair competitive advantage for that particular entity (81 FR 46402). We believe that commenters did not provide data analysis that met this requested standard of specificity to help us determine that release of the data as proposed would cause unfair competitive harm or negative consequences for the MA program. We did not receive specific examples that illustrated how the structure of a particular healthcare market (for example, a particular county or multicounty healthcare market), combined with universal access to certain 5-yearold data elements in the MA BPT, could create an unfair competitive advantage. A number of commenters expressed concern about the use of MA bid pricing data to reverse-engineer provider payment rates, stating that this could cause competitive harm, especially in highly consolidated markets in which there are a limited number of providers for a specific service. A few commenters stated that a provider might determine whether its payment rates were higher or lower than the average in such a consolidated market (especially for MA bids for single-county MA plans) by comparing its negotiated rate to the average unit price reported in the BPT, in order to increase its leverage in future negotiations with the MAO. We understand this concern and appreciate the sensitivity of the negotiations between private health plans and healthcare providers. We discuss these comments a greater length below. However, as discussed in more detail throughout this final rule, we believe that the 5-year delay in the release of MA bid pricing data would make any information about payment rates that could be obtained from an examination of plan bids stale and no longer commercially sensitive. Finally, in 2013, we released certain 2009 actual costs (worksheet 1) from the 2011 MA bid pricing data, as required by the U.S. District Court for the District of Columbia in Biles v. Dep’t of Health and Human Services, 931 F. Supp. 2d 211 (D.D.C. 2013). (Discussion of this case is at 81 FR 46403 of the proposed rule.) Given that this information has been released to the public, and we have not been made aware of any instances of competitive harm, we do not see any reason why the release of 5-year-old data could cause competitive harm. In the absence of any evidence or analysis demonstrating that competitive harm would result from the proposed release of MA bid pricing data, and in consideration of the important policy VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 goals that we believe will be served by publicly releasing MA bid pricing data, discussed above, we are finalizing our proposal to release MA bid pricing data after a 5-year delay, subject to certain specified exclusions. Comment: A few commenters expressed skepticism that the release of MA bid pricing data will cause competitive harm to MAOs, and stated that there is no real competition among MAOs for government approval of bids because we approve multiple reasonable bids. Another commenter stated that if MA bid pricing data is publicly released, there cannot be competitive harm or unfair commercial gain because each MAO would have the same information about its competitors and would be equally capable of using that information. The commenter stated that such symmetrical access to data obviates the potential for any unfair commercial gain for one MAO over another, and that only asymmetric disclosure can be a condition for substantial competitive harm. Response: We do not agree entirely with the comments stating that the public release of MA bid pricing data cannot cause competitive harm or unfair commercial gain. We note that the public release of MA bid pricing data could give new market entrants information on competitors’ MA plan bids while such information about their own bid(s) would not have been released, allowing them to potentially benefit from asymmetric disclosure. However, we believe that our proposed time lag of 5 years prior to the upcoming calendar year is an important element in mitigating competitive harm to MAOs or the potential for unfair commercial gain for new market entrants when releasing MA bid pricing data. Comment: Many commenters stated that MA bid pricing data could be used to calculate an MA plan’s negotiated provider payment rates. Several commenters cited a Federal Trade Commission (FTC) letter (at https:// www.ftc.gov/system/files/documents/ advocacy_documents/ftc-staffcomment-regarding-amendmentsminnesota-government-data-practicesact-regarding-health-care/ 150702minnhealthcare.pdf) stating that the public disclosure of competitively sensitive pricing information may be used in an anticompetitive manner that increases costs and adversely impacts consumers. The commenters stated that when a provider knows that another provider is receiving a higher payment rate for a service, the provider will demand at least the same rate as the higher-paid provider, thereby raising the ‘‘price floor’’ for the service. Some PO 00000 Frm 00263 Fmt 4701 Sfmt 4700 80431 commenters stated that with knowledge of MA bid pricing data, lower-priced providers would negotiate for known higher rates, and that providers may be less likely to agree to lower-cost arrangements if the details will be shared with their competitors, which leads to higher unit prices for healthcare services across the MA program and thus higher total costs. Several commenters also described, at a general level, various methods for reverse engineering provider payment rates using certain information that MAOs submit in their bids. A few commenters stated that the release of an MA plan’s average historical cost per unit could be used to calculate negotiated rates by service category and market, particularly where health care markets are highly concentrated. Response: A negotiated rate between an MAO and a provider (facility, physician, or other provider) refers to the payment rate that an MAO has established by contract with a provider. Typically negotiated rates are specified at a unit of payment such as per person per month, per diem rate, per service rate, or a global capitation rate (for example, a physician is paid a negotiated rate for managing all services received by a beneficiary under a specific health plan). We do not have access to these negotiated rates between an MAO and its contracted network of providers, so we cannot determine how closely an entry in the BPT may represent negotiated rates in provider contracts. Since payment figures in the MA BPTs are grouped into general service categories (such as ‘‘Inpatient Facility’’ and ‘‘Skilled Nursing Facility’’) and represent average costs across multiple providers, beneficiaries, services, and sites of service, we believe that the BPT information is unlikely to give more than high-level insight into contractual negotiated rates. Even if reverse engineering of provider rates were possible, the 5-year delay renders that information even less competitively useful or relevant. We do not believe that any commenters established that a provider who uses MA bid data to estimate the negotiated rate that a competitor was receiving 5 years earlier would be greatly advantaged by this information. Delivery of health care is constantly evolving and MAOs are continually seeking ways to gain efficiency in providing care. For example, the number of providers, the cost of services, and utilization patterns associated with an MAO are very likely to change over a 5-year period; we believe that these changes—particularly E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80432 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations as the health care industry moves toward alternative payment methodologies—mitigate any risk associated with reverse engineering of historical payment rates. As such, we remain unconvinced that releasing this information has potential to cause harm to the marketplace as a whole or to the competitive position of MAOs. Comment: Some commenters stated that our proposal to release multiple years of data initially, followed by the release of more recent bid data on an annual basis, would make it possible for providers and competitors to analyze cost trends, which could inform negotiations and adversely impact competition by providing insight into profit objectives and growth strategies. One commenter noted that the Biles court indicated that its conclusion (that the MA bid pricing data requested by the plaintiff could be released without impacting market conditions) was specific to the request for a single year’s data, and that a request for second year’s data that could be trended creates a distinguishable factual situation that requires a new and separate analysis. 931 F.Supp.2d at 227 n.22. The commenter stated that, if the proposal to release bid data after a 5-year delay is finalized, we should deny FOIA requests for more recent data, both because this data is precluded under Exemption 4 as ‘‘trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential,’’ and because this data could be analyzed in combination with the bid data that we are proposing to release after a 5-year delay to potentially reveal competitively sensitive trend information. Finally, one commenter stated that we did not explain the rationale for our assumption that the MA bid data is no longer commercially sensitive after 5 years. Response: We appreciate the commenters’ concerns about how bid data for multiple years can both reveal actual trends in the past and can be trended into the future to predict an MAO’s projected gains and losses, which could give competitive insight into business strategies. However, as we stated in the proposed rule at 81 FR 46400, we believe that our proposed 5year delay renders multi-year comparisons of pricing trends less relevant to the current year of MA plan pricing. We selected a 5-year delay, in part, due to the requirements associated with projected margins in the bids submitted by MAOs, particularly when the margin is projected to be negative. MAOs with negative margins in their bids are expected to achieve profitability within VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 5 years (that is, bids should not have negative margins for more than 4 consecutive years). Absent the 5-year delay, we were concerned that the public might be able to use this margin rule to deduce competitively sensitive information from a plan’s bids. We also believe that 5 years is sufficient time for competitively sensitive bid data to become no longer competitively sensitive. The time lag represents a buffer between the development and implementation of pricing strategies that can be distilled from multiple years of data and the observed relationship and trend from 1 year to the next, and we believe that this buffer mitigates any competitive disadvantage that might otherwise result from the disclosure of multiple years of bid data. As an example, we noted that an MAO looking to enter a new market is significantly less likely to gain an unfair commercial advantage from being able to examine and trend 5-year-old bid pricing data than if the MAO were able to examine and trend more recent bid pricing data (81 FR 46400). We continue to believe that the proposed exclusion of MA BPT narrative fields and supporting documentation is appropriate because MAOs provide information in narrative fields and supporting documentation that is commercially sensitive information in a way that the cost and enrollment estimates in the BPT are not. MA BPT narrative fields and supporting documentation can include sensitive information such as multi-year regional or national-level information on an MAO’s approach to cost-sharing methodology or projection factors, which can provide insight into longerterm strategies, or they may include information on provider contracting, such as fee schedules or summaries of provider contract terms. Provider contract terms and actual fee schedules, for example, would be more competitively sensitive than the estimated provider payment rates that could be generated from 5-year-old bid figures at the broad service level categories in the MA BPT. In addition, we believe that supporting documentation could cause misinterpretation of the MA bid pricing data that we proposed to release. We proposed to release only the MA bid pricing data for MA plan bids that were accepted or approved by CMS. However, MAOs often upload multiple versions of each plan bid in response to our requests for further information or corrections. Given the volume of supporting documentation submitted by MAOs, it may be difficult for a member of the public to identify clearly which PO 00000 Frm 00264 Fmt 4701 Sfmt 4700 documents support the final accepted version of the bid. We proposed, and finalize here, that these documents will not be included in the data that we release under this rule. We agree that more recent MA bid data is more competitively sensitive than bid data that is at least 5 years old, and we recognize that, even if the release of bid pricing data for a single, more recent year would not itself create a risk of substantial competitive harm, there could be an increased likelihood of substantial competitive harm resulting from the release of a more recent year’s bid pricing data when that data can be analyzed in combination with publicly-released bid data for previous years and trended forward to predict current or future bids. If a FOIA request is received, we will follow our ordinary FOIA procedures and not release data the agency determines are trade secrets, or commercial or financial information protected by Exemption 4 to the FOIA (5 U.S.C. 552(b)(4)). We also note that we do not view data releases made under the authority of the new § 422.272 as FOIA releases. These releases are discretionary disclosures of data to the public, rather than in response to a request under the FOIA. Section 422.272 permits the release of data, but does not require it. As noted in the proposed rule (81 FR 46396–97), we believe that these releases are consistent with the principles of transparency in government that underlie the FOIA and that regular release of this data might mitigate the number of FOIA requests and the associated need for repeated analyses of this data. Comment: A number of commenters suggested that bid pricing data is inherently proprietary, and therefore, should not be released. A few commenters stated that pricing data is confidential, proprietary information covered by Exemption 4 of the FOIA. Response: We disagree with the commenters. Absent detailed analytical evidence, which we solicited in the rulemaking process but did not receive, as discussed above, we do not believe the release of bid pricing data on a 5year lag poses a threat of competitive harm. Specifically, regarding the comment that MA bid pricing data is proprietary and covered by Exemption 4 of the FOIA, we restate here that we are finalizing our proposal to expand the basis and scope of our regulations on MA bidding to incorporate section 1106(a) of the Act (42 U.S.C. 1306(a)), which authorizes disclosure of information filed with this agency in accordance with regulations adopted by E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the agency. A substantive regulation issued following rulemaking provides the legal authorization for government officials to disclose commercial information that would otherwise be required to be kept confidential in accordance with 18 U.S.C. 1905. See Chrysler Corp. v. Brown, 441 U.S. 281, 306–08 (1979). We note as well that under 45 CFR 401.105(a), we have adopted a regulation that permits publication and release of data that would not be exempt from disclosure under the FOIA or prohibited from disclosure under other law, even if a request has not been submitted. Comment: Many commenters offered alternative ideas for what MA bid pricing data to release. These commenters stated that the data should be aggregated above the level of the MA plan bid, such as at the contract level because it would be more difficult to reverse-engineer provider payment rates and other proprietary information. Another commenter suggested releasing only an aggregate financial measure that reflects the sum of non-benefit expenses and gain/(loss) margin. Some commenters recommended additional data exclusions, for example, that all plan-level financial data should be excluded because it would provide current and potential future competitors with proprietary, competitively sensitive information such as profitability of specific beneficiary populations. One commenter stated that information used to project an MA plan’s revenues and costs, such as enrollment and population projections, should not be released at granular levels (for example, county-level details). Commenters stated their concern that the 5-year timeline we proposed for releasing the MA bid data is too short, and one commenter stated that bid data should be released only after 10 years and that any release after that time exclude all plan-identifying information. Response: We appreciate the concerns raised by the commenters. However, based on our analysis of the comments we received, we did not find that any commenter provided sufficiently detailed evidence of competitive harm associated with the release of any of the fields proposed for release after the proposed 5-year delay. As such, we do not consider these exclusions or any further aggregation of bid data to be necessary. Comment: Several commenters recommended that the MA bid pricing data not be released to the public on the CMS Web site, but be made available through other mechanisms. One commenter suggested that, to avoid any VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 competitive use of the MA bid pricing data, the data should be released only through the ResDAC portal for researchers as Research Identifiable Files (RIFs). Another commenter urged us to aggregate the MA bid pricing data and release it through our established methodology of public data release, the Public Use File (PUF), which generally can be understood by technical audiences after a review of supporting documentation. Response: We appreciate the recommendation that the bid pricing data be released through ResDAC. CMS’ Research Data Assistance Center (ResDAC at www.resdac.org) is a critical part of the Administration’s commitment to transparency, and has been a valuable resource for researchers (in releasing RIFs) and the public (in releasing PUFs). However, we do not agree that this release should be through the ResDAC resource or require the signing of a Data Use Agreement (DUA) that restricts use and disclosure of the data (which is required for use of RIFs). Because commenters did not identify a specific competitive harm associated with the public release of the bid data, we will publish it without restriction on the CMS Web site (www.cms.gov), subject to the exclusions as finalized in this rule. Comment: Several commenters stated that bid pricing data should not be released because such data is not useful to beneficiaries, and it has a high risk of being misinterpreted. One commenter stated that beneficiaries will likely find bid data confusing and less informative than our Star Ratings, which are considered a more accessible and straightforward measure by which to compare plan value and quality. One commenter stated that we should refrain from releasing bid data to the public ‘‘until there is a proven case that the release would lead to improvements in the quality of care overall in the Medicare program.’’ Response: We appreciate the concerns that were raised regarding the possibility that the bid data we proposed to release could be misinterpreted. We intend to release with each year’s bid data the BPT instructions and data dictionary for that year to minimize confusion and the possibility of misinterpretation of the data. Further, as noted in the proposed rule at 81 FR 49396, we anticipate that researchers, as well as other members of the public will have use for this information and that research based on the data may provide important insights for future MA policy development and for developing health care policy. Disclosing MA bid pricing data will PO 00000 Frm 00265 Fmt 4701 Sfmt 4700 80433 allow the public to better understand how public dollars are spent in the MA program. Beneficiaries may or may not seek to use this data to make plan choices and we did not identify that as a specific reason for the release of MA bid pricing data. Comment: Some commenters stated that the release of the MA bid pricing data would likely result in an increase in the cost of MA plan basic benefits and supplemental services (for example, dental benefits) as MAOs respond to a new competitive situation. Commenters stated that this would harm beneficiaries because it will cause MA plans to offer fewer supplemental benefits, increase cost-sharing, or both. Response: We expect that the MA program will continue providing affordable and comprehensive health plan options to Medicare beneficiaries. We did not receive any detailed analysis to demonstrate that releasing 5-year-old MA bid pricing data is likely to have the harmful impact on beneficiaries raised by the commenters. Comment: Commenters expressed support for our proposal to not release Part D bid pricing data. Two commenters argued against the release of Part D bid pricing or manufacturer’s rebate data, and one commenter stated that the release of Part D bid pricing or rebate data would violate the Takings Clause of the U.S. Constitution, as well as the Part D noninterference clause (section 1860D–11(i) of the Act). One commenter expressed concern that our broad interpretation of our authority to release MA bid data through notice-andcomment rulemaking could cause us to ignore legal barriers to the release of Part D pricing data. Response: We appreciate the support. Since we proposed to exclude Part D bid data from our proposed release of MA bid pricing data and are finalizing those exclusions in this final rule, we consider the comments arguing against the release of Part D bid pricing and rebate data to be beyond the scope of the proposed rule. To the extent that these comments support the exclusion in our rule, we appreciate the support. Comment: Several commenters expressed support for the proposed release of MA bid pricing data, but stated that the 5-year lag in release was too long for timely analysis that would still be beneficial to informing future policymaking and reforms. Some commenters stated that MA organizations are paid with public funds to provide a public benefit, and transparency should outweigh the concern of competitive harm, in part because there is limited competition in the program in that we approve multiple E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80434 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations reasonable bids, not merely the lowest bidders. Some commenters also stated that significant changes in the health care landscape can occur over the course of 5 years, and bid pricing data that is 5 years old will constrain researchers’ ability to do meaningful policy analysis. Finally, one commenter suggested a 3-year lag instead of a 5-year lag in release of MA bid pricing data. Response: We appreciate the comments, and the interest in having access to more recent data. Through notice and comment rulemaking, we have sought to balance an interest in transparency with the need to protect proprietary information. We received comments on both sides of this issue, and have reviewed these comments critically. In this case, we believe it is important to maintain the 5-year delay we originally proposed. As discussed above, data more recent than 5 years old may impose substantial competitive harm on market participants, such as by providing an unfair competitive advantage to new market entrants, who could use more recent data to determine current pricing arrangements between existing plans and providers and undermine their negotiation strategies. Such information would not be similarly available about new market entrants to existing plans. Comment: One commenter stated that, if we release MA bid data without including MAO names or plan IDs, it is likely that some plan sponsors with unique internal cost structures will be publicly identifiable while other competitors may not be identifiable, giving certain plan sponsors serious competitive advantage over others. Response: All MA plan sponsors will be identifiable in the bid data that we will release through the field labeled ‘‘Organization Name.’’ While there are some organization names in MA bids that differ from the name of the parent organization, a link can be established through an internet search if a member of the public is interested in making that connection. Comment: Several commenters expressed skepticism about the necessity of using bid data for health policy research. One commenter stated that the proposed bid data release is unnecessary for purposes of ensuring program oversight or development of health policy; the commenter noted that MA bids are already subject to our review and approval and a bid audit process, and MedPAC analyzes bid data and issues an annual report describing program-wide trends. Another commenter expressed skepticism about the ability of researchers to use the data we proposed to release in an effective, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 appropriate way; the commenter supported our proposed exclusion of narrative information from the proposed release of MA bid pricing data but argued that researchers would find it extremely challenging if not impossible to fully understand a plan’s bid without this excluded information. Finally, one commenter noted that we have made available on our Web site MA bid data that was requested under the FOIA, and asked whether this data had proven useful to researchers. Response: As stated in the proposed rule, we believe that facilitating public research using MA bid pricing data could lead to better understanding of the costs and utilization trends in MA and support future policymaking for the MA program. We do not believe that it is possible for one researcher or one set of researchers to address all policy questions regarding the MA program. We expect that a wide range of research studies could complement the work published by MedPAC. We believe that MA bid data could be useful to researchers even without access to the narrative fields or supporting documentation, and we have not received any comments that demonstrate convincingly or with specific examples to change our position. Finally, regarding the usefulness of currently available MA bid pricing data to researchers, one commenter pointed to research conducted by Dr. Brian Biles on behalf of the Commonwealth Fund, and his work to examine costs in MA. We believe that the data may be accessed again in the future for further research. After consideration of the public comments received, we are choosing to finalize the proposed MA bid pricing data release, codified at § 422.272, and the proposed contractual acknowledgment of the release, codified at § 422.504(n)(2), without modification. We also finalize our proposal to amend § 422.504 by moving the existing provisions regarding the release of summary CMS payment data at existing paragraph (n) to paragraph (n)(1) and redesignating existing paragraphs (n)(1)(i) through (iv) and (n)(2) as (n)(1)(i)(A) through (D) and (n)(1)(ii), respectively. We appreciate the concerns raised by some commenters, and we believe that these concerns are addressed by our decision to delay our release of MA bid data by 5 years and to exclude certain information from release, as discussed above. We continue to believe that the release of MA bid pricing data is consistent with the Administration’s directives regarding the transparency of program PO 00000 Frm 00266 Fmt 4701 Sfmt 4700 data, and will support public research that can potentially strengthen the program. While we are not modifying any of the proposed exclusions, we note that we will withhold certain fields within the BPT where necessary to comply with our current cell size suppression policy. This policy stipulates that no cell (for example, admissions, discharges, patients, services, etc.) 10 or less may be displayed. For example, a plan with more than 11 enrollees may have fewer than 11 beneficiaries who receive benefits that fall under one of the BPT’s service categories. The policy is designed and implemented in order to protect against disclosure of individually identifiable data as our analysis has indicated the potential to identify individuals where the information in the cell is based on 10 or fewer individuals. We interpret the regulation text in this final rule (that protects against and excludes from these disclosures ‘‘information that could be used to identify Medicare beneficiaries or other individuals’’) to support this suppression policy. Further, to the extent that the suppression policy is revised in the future for these purposes to apply to cell sizes based on more than 10 individuals, we will apply that updated policy under this rule. In order for our release of MA bid pricing data to be consistent with our cell size suppression policy, we may determine that certain fields in the BPT should be withheld or redacted. c. Summary of Proposed Technical Change and Response to Public Comments We proposed to amend § 422.250 on the basis and scope of the MA program to add a reference to section 1106 of the Act. As discussed in the proposed rule (81 FR 46396), section 1106(a) of the Act (42 U.S.C. 1306(a)) addresses requirements, including rulemaking, for the agency to release information filed with it by outside parties. We received a few comments on the proposed technical change, summarized below with our response. Comment: A few commenters expressed concern that we proposed releasing MA bid pricing data in the CY 2017 PFS proposed rule, rather than through a Part C and D rulemaking process. The commenters stated that this approach increased the likelihood that many stakeholders would have been unaware of our proposal in time to provide detailed analysis of the impacts of the proposed data releases, and one commenter suggested reissuing this proposal in a Parts C and D rulemaking. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Response: The Administrative Procedure Act (APA) and section 1871 of the Act generally require that rules be published in the Federal Register in proposed form, with a basis and purpose statement explaining the proposal, and then published in the Federal Register in final form, with revisions based on comments received, and responses to such comments. There is no requirement governing how proposed or final rules are packaged or organized, as long as the public is given proper notice. The proposed rule (81 FR 46162) clearly listed all Parts of the Medicare regulations that would be affected by the proposed regulations (including part 422) and its title included a reference to release of Medicare Advantage data (‘‘. . . Medicare Advantage Pricing Data Release; Medicare Advantage and Part D Medical Low [sic] Ratio Data Release . . .’’), so there was adequate notice to the public of the content of the proposed rule. That fully satisfies the requirements of the APA and section 1871 of the Act. The presence of this rider was clearly discussed in the title of the proposed rule, and was also discussed in the Fact Sheet we released to the public at the time of the rule’s display. We received many comments from across the industry, including a number of comments from MAOs and their trade associations. This further demonstrates that adequate notice was provided. After consideration of the public comments we received on the proposed technical amendment, we are finalizing the amendment as proposed. 3. Release of MLR Data mstockstill on DSK3G9T082PROD with RULES2 a. Summary of Proposed Rule The proposed rule provided background on the Part C and Part D Medical Loss Ratio requirements, including the statutory and regulatory authority. An MLR is expressed as a percentage, generally representing the percentage of revenue used for patient care rather than for such other items as administrative expenses or profit. In the May 23, 2013 final rule (78 FR 31284), we codified the MLR requirements for MAOs and Part D sponsors in the regulations at 42 CFR part 422, subpart X, and part 423, subpart X, respectively. For contracts beginning in 2014 or later, MAOs and Part D sponsors are required to report their MLRs and are subject to financial and other penalties for failure to meet the statutory requirement that they have an MLR of at least 85 percent (see § 422.2410 and § 423.2410). Section 1857(e)(4) of the Act requires several levels of sanctions VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 for failure to meet the 85 percent minimum MLR requirement, including remittance of funds to CMS, a prohibition on enrolling new members, and ultimately contract termination. Under the regulations at § 422.2410 and § 422.2460, with respect to MAOs, and § 423.2410 and § 423.2460, with respect to Part D sponsors, for each contract year, each MAO and Part D sponsor is required to submit a report to us, in a timeframe and manner that we specify, which includes the data needed to calculate and verify the MLR and remittance amount, if any, for each contract. For each contract year beginning in 2014 or later, MAOs and Part D sponsors are required to enter their MLR data and upload their MLR Reports to our Health Plan Management System (HPMS). The MLR Report is on our Web site at https://www.cms.gov/ Medicare/Medicare-Advantage/PlanPayment/medicallossratio.html, accompanied by instructions on how to populate the Report. In the proposed rule, we summarized the information collected in conjunction with the MLR requirement. We described the categories of information, including: • Revenue. • Claims. • Federal and State Taxes and Licensing or Regulatory Fees. • Health Care Quality Improvement Expenses. • Non-claims Costs. • Member Months. We also described the process used to calculate the MLR with this information, including the numerator and denominator. We explained the proposed regulatory changes to provide for the release of Part C and Part D MLR data, along with the manner in which we proposed to make the release. We proposed to codify the new requirements for the release of Part C and Part D MLR data by adding new regulations at § 422.504 (related to contract terms) and § 422.2490 (related to the details of the MLR data release) of part 422, with respect to Part C MLR data, and § 423.505 (related to contract terms) and § 423.2490 (related to the details of the MLR data release) of part 423, with respect to Part D MLR data. We proposed to define Part C MLR data at § 422.2490(a), and Part D MLR data at § 423.2490(a), as the data the MAOs and Part D sponsors submit to us in their annual MLR Reports, as required under existing § 422.2460 and § 423.2460. At § 422.2490(b) and § 423.2490(b), we proposed certain exclusions to the definitions of Part C MLR data and Part D MLR data, respectively. We proposed PO 00000 Frm 00267 Fmt 4701 Sfmt 4700 80435 at § 422.2490(c) and § 423.2490(c) to release the Part C MLR data and Part D MLR data, respectively, for each contract for each contract year, no earlier than 18 months after the end of the applicable contract year. We proposed to amend the regulation text at § 422.504 by adding a new paragraph (n)(2), which would require that an MAO acknowledge the release of Part C MLR data as provided in § 422.2490 as a mandatory contract provision. We also proposed to amend the regulation text at § 423.505(o) by adding a new paragraph (o)(2), which would require that a Part D sponsor acknowledge the release of Part D MLR data as provided in § 423.2490 as a mandatory contract provision. We proposed certain technical changes to § 422.504(n) and to § 423.505(o). The proposed rule did not discuss these changes to § 422.504(n) and § 423.505(o) in detail as part of the proposal to release Part C and Part D MLR data, but they were reflected in the proposed regulation text at 81 FR 46471–72. Our proposed technical changes to § 422.504(n) are described in section III.E.2.a of this final rule (‘‘Summary of Proposed Rule’’). With respect to § 423.505(o), we proposed to move the existing provisions regarding the release of summary CMS payment data at existing paragraph (o) to paragraph (o)(1) and to redesignate the existing paragraphs (o)(1) through (5) as (o)(1)(i) through (v). We also explained the rationale for the proposed data release. As with our release of MA bid pricing data, discussed in section III.E.2.b of this final rule (‘‘Comments’’), our release of Part C and Part D MLR data is consistent with Administration initiatives to improve federal management of information resources by increasing data transparency and access to federal datasets. We also noted in the proposed rule that we already publicly release MLR data that issuers of commercial health plans submit each year as required by section 2718 of the Public Health Service Act. This data is listed publicly at https://www.cms.gov/CCIIO/ Resources/Data-Resources/mlr.html. In releasing Part C and Part D MLR data, we are seeking to align with the disclosure of commercial MLR data. Finally, we discussed our belief that Part C and Part D MLR data could be a valuable tool for consumers, researchers, and the public. We believe that the release of this data will facilitate public evaluation of the MA and Part D programs by providing insight into the efficiency of health insurers’ operations. In addition, we believe that the release of certain MLR E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80436 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations data will provide beneficiaries with information that can be used to assess the relative value of Medicare health and drug plans. We acknowledged in the proposed rule that the commercial MLR varies from the Part C and Part D MLR in certain ways. For example, commercial MLR data is collected from issuers at the state level, aggregated by market, while Part C and Part D MLR data is collected at the contract level. Although the data is reported differently, we do not believe these differences are significant enough to merit a different approach to the public disclosure of data. We also believe that the availability of Part C and Part D MLR data will enhance the competitive nature of the MA and Part D programs. The proposed access to data will support potential new plan sponsors in evaluating their participation in the Part C and Part D programs and will facilitate the entry into new markets of existing plan sponsors. With knowledge of historical MLR data, new business partners might emerge, and better business decisions might be made by existing partners. As a result, we believe that releasing Part C and Part D MLR data as proposed is both important and appropriate for the effective operation of these programs. Further, we believe that the release of Part C and Part D MLR data, as described in this final rule, strikes the appropriate balance between our goals for the release of Part C and Part D MLR data and safeguarding information that could be commercially sensitive or proprietary. Costs in the MLR numerator are aggregated across providers, beneficiaries, and sites of service. Costs and revenues are further aggregated across all plans under the contract. We do not believe that there is a realistic possibility that the MLR data we release could be disaggregated or reverse engineered to reveal commercially sensitive or proprietary information. We described the data we proposed to exclude from the public release. We stated that we would exclude the following four categories of data from release: narrative information, planlevel information (Part C MLR data and Part D MLR data that we will release is aggregated at the contract level), any information identifying beneficiaries or other individuals, and any MLR review correspondence. First, at proposed § 422.2490(b)(1) and § 423.2490(b)(1), we proposed to exclude from release any narrative information that MAOs and Part D sponsors submit to support the amounts that they include in their MLR Reports, such as descriptions of the methods used to allocate expenses. MAOs and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Part D sponsors are required to describe the methods they used to allocate expenses, including incurred claims, quality improvement expenses, federal and state taxes and licensing or regulatory fees, and other non-claims costs. A detailed description of each expense element is provided, including how each specific expense meets the criteria for the type of expense in which it is categorized. MAOs and Part D sponsors may provide information that is pertinent to more than the individual MA or Part D contract for which the MLR Report is being submitted (see, for example, § 422.2420(d)(1)(ii) and § 423.2420(d)(1)(ii), which requires that expenditures that benefit multiple contracts, or contracts other than those being reported, be reported on a pro rata share), such as an MAO’s or Part D sponsor’s approach to setting payment rates in contracts with providers, or its strategies for investing in activities that improve health quality. We proposed to exclude this narrative information because we believe that it is more competitively sensitive than the contract-level figures that are used to populate the non-narrative fields in the MLR Report. We are concerned that MAOs and Part D sponsors would be reluctant to submit narrative descriptions that include information that they regard as proprietary or confidential if they know that it will be disclosed to the public, which could impair our ability to assess whether their allocation methods are appropriate. Second, at proposed § 422.2490(b)(2) and § 423.2490(b)(2), we proposed to exclude from release any plan-level information that MAOs and Part D sponsors submit in their MLR Reports. Some of the plan-level data in MAO’s and Part D sponsors’ MLR Reports is also included in their plan bids as base period experience data, such as plan IDs, plan member months, and Medicaid per member per month gain/ loss. As discussed in our proposal to release certain MA bid pricing data, we believe bid data would no longer be competitively sensitive after 5 years; however, we do not believe that bid data becomes no longer competitively sensitive within the 18-month timeframe for our proposed release of MLR data. Therefore, we proposed to exclude from release plan-level data that is included as base period experience data in plan bids. We also proposed to exclude the plan-level information submitted in MLR Reports because we do not regard it as relevant to the purposes of our proposed release of Part C and Part D MLR data, which include PO 00000 Frm 00268 Fmt 4701 Sfmt 4700 giving the public access to data that can be used to evaluate the efficiency of MAOs and Part D sponsors and providing enrollees with information that can be used to compare the relative value of health plans. For example, our proposed release excludes MAOs’ and Part D sponsors’ responses to questions in the MLR Report that ask whether each plan under a contract is a Special Needs Plan for beneficiaries who are dually eligible for both Medicare and Medicaid (D–SNP), or whether the plan’s defined service area includes counties in one of the territories. Third, at proposed § 422.2490(b)(3) and § 423.2490(b)(3), we proposed to exclude from release any information identifying Medicare beneficiaries or other individuals. This exclusion was proposed for the same reason we proposed to exclude similar information from MA bid submission data that will be released: we believe that it is important to protect the privacy of individuals identified in these submissions, particularly Medicare beneficiaries. We explained that, consistent with our longstanding data release policy for protecting individually identifiable information, if a data field in the MLR Report for an MA or Part D contract is calculated based on figures associated with fewer than 11 enrollees (or 132 member months, assuming each individual is counted for 12 months), we would suppress all the data from such fields in the public release file for that contract. Regarding other individuals, we require that MAOs and Part D sponsors provide in their MLR Reports the names and contact information of individuals who can answer questions about the data submitted in an MLR Report. We proposed to exclude this information from release. We do not believe that the release of this information serves the purposes of our proposed release of certain MLR data, which are to provide the public with data that can be used to evaluate MA and Part D contracts’ efficiency, and to provide beneficiaries with information that can be used to compare the relative value of Medicare plans. Further, release of this identifying and contact information appears to be an unnecessary intrusion into information about private individuals. Fourth, at proposed § 422.2490(b)(4) and § 423.2490(b)(4), we proposed to exclude from release any MLR review correspondence. In the course of the MLR review process, our reviewers may engage in correspondence with MAOs and Part D sponsors in order to validate amounts included in their MLR Reports. Such correspondence may include E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations requests for evidence of amounts reported to us. Responses to these requests could include proprietary or confidential information, such as MAOs’ and Part D sponsors’ negotiated rates of reimbursement. We believe that such information is more competitively sensitive than the contract-level figures that are used to populate the nonnarrative fields in the MLR Report. Further, we are concerned that, if we were to publicly release this correspondence, it could cause MAOs and Part D sponsors to be less forthcoming in the information provided to us or our reviewers, which would impede our access to information that would we could use to verify the information submitted by MAOs and Part D sponsors. We proposed to release the MLR data specified in this rule for each MA and Part D contract on an annual basis no earlier than 18 months after the end of the contract year to which the MLR data applies. We proposed to follow the commercial MLR approach in making the data we receive in MLR Reports available to the public. For Part C and Part D MLR reporting, the data is due about 12 months after the end of the contract year. After we receive MAOs’ and Part D sponsors’ MLR Reports, we anticipate that it will take approximately 6 months for us to review and finalize the data submitted by MAOs and Part D sponsors. We recognize that the 18-month time lag time for the release of Part C and Part D MLR data differs from the 5-year delay used for the release of MA bid pricing data (discussed in section III.E.2.a of this final rule (‘‘Summary of Proposed Rule’’)). This difference in the length of the delay that applies to each of these data releases reflects key differences between the MA bid pricing data that we proposed to release in accordance with § 422.272 and the Part C and Part D MLR data that we proposed to in accordance with § 422.2490 and § 423.2490. Most importantly, the Part C and Part D MLR data that we proposed to release is aggregated at the contract level, and we are excluding any plan-level data. The MA bid pricing data that we proposed to release includes plan-level information. We believe that contractlevel information is sufficiently aggregated such that it would be difficult to obtain an unfair competitive advantage from its review. For example, we do not believe it is possible to reverse-engineer provider rates from contract-level information. Finally, we proposed to amend § 422.2400, which identifies the basis and scope of the MLR regulations for VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 MAOs, and § 423.2400, which identifies the basis and scope of the MLR regulations for Part D sponsors, to add a reference to section 1106 of the Act, which governs the release of information gathered in the course of administering our programs under the Act. We solicited comment on the release of MLR data as outlined above. We also solicited comment on whether the Part C and Part D MLR data we proposed to release contain proprietary information, and if so, what safeguards might be appropriate to protect those data, such as recommended fields to be redacted, the minimum length of time that such data remains commercially sensitive, and any suggestions for publishing aggregations of Part C and Part D MLR data in lieu of publishing the MLR data as submitted by MAOs and Part D sponsors. We invited commenters to provide analysis and explanations to support comments that information should be protected for a longer—or shorter—period of time so that we could properly evaluate our proposal in adopting a final rule. Analysis and explanations were requested to (1) cite the particular information proposed to be released and explain how that information differs from publicly available data; (2) point to the particular entity or entity type that could gain an unfair competitive advantage from the information release; and (3) fully explain the mechanism by which the release of that particular information would create an unfair competitive advantage for that particular entity. We requested this level of detail in order to substantiate the positions taken by commenters and to better inform our rulemaking and decisions (81 FR 46403). b. Comments The following is summary of the comments we received on our proposed regulatory changes providing for the release of Part C and Part D MLR data. Comment: Several commenters expressed support for our proposal to release Part C and Part D MLR data, noting the benefits of transparency and advancing research, and improving healthcare delivery, as well as the cost of healthcare. A number of commenters also stated that release of Part C and Part D MLR data would help beneficiaries make informed choices when choosing between health plans. Two commenters added that releasing Part C and Part D MLR data would allow the public to see how MAOs and Part D sponsors administer Medicare and supplemental benefits in an effective and efficient manner. PO 00000 Frm 00269 Fmt 4701 Sfmt 4700 80437 Response: We appreciate the support. Comment: Some commenters suggested that Part C and Part D MLR data would be unhelpful to the public, including researchers and beneficiaries, because it could be misconstrued. A few commenters stated that release of Part C and Part D MLR data as proposed would lead to misinterpretation and inappropriate comparisons across MA or Part D contracts, causing erroneous conclusions and misinformed policy decisions. Many commenters questioned whether the MLR data would be valuable or useful to Medicare beneficiaries. Response: We appreciate the concerns raised. However, we continue to believe that releasing the MLR data is consistent with the Administration’s commitment to transparency. In addition, while Medicare beneficiaries have multiple tools available to assist them in evaluating MA and Part D plans, we continue to believe that beneficiaries should have the opportunity to review Part C and Part D MLR information as an additional tool. We continue to believe that making the MLR data available to the research community will spur research that could support the goals of federal policymakers. Furthermore, we believe it is important to mirror the transparency created by the commercial MLR to the extent possible. As commercial MLR data is already being released, our proposal to release Part C and Part D MLR data is the next step in maintaining consistency. Comment: Some commenters indicated that the commercial MLR data that we release each year is substantively different from the Part C and Part D MLR data, making the decision to release Part C and Part D MLR data one that should not be tied to the current disclosure of commercial MLR data. Two commenters noted that because the MLR Reports for MAOs and Part D sponsors are contract-based and MLR Reports for issuers in the commercial market are state-based, the Part C and Part D MLR Reports could be confusing to consumers and subject to misinterpretation. Response: We acknowledge that there are differences between Part C and Part D MLR data and commercial MLR data. However, we do not believe these differences are substantial enough to merit withholding the Part C and Part D MLR data from public consumption when commercial MLR data is released annually. Although there are some differences between how the Part C and Part D MLR is reported in comparison with the commercial MLR, in all cases, the data is used to produce a final MLR E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80438 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations ratio, and we continue to believe that this data can be a valuable tool for beneficiaries and researchers, as discussed earlier in this rule. Comment: Several commenters expressed support for our proposed exclusions of certain data from our proposed release of Part C and Part D MLR data, stating that aggregation and exclusions would help safeguard against the release of proprietary information. Response: We appreciate the support. Comment: Several commenters stated that the proposed release of Part C and Part D MLR data would cause significant competitive harm to plans in the MA and Part D markets through the disclosure of confidential and proprietary information. Some commenters suggested the data in the proposed release could provide insight into a plan’s strategies related to provider agreements, pricing, or quality improvement activities. Response: We appreciate the concerns raised by the commenters with respect to protecting proprietary information. We take very seriously the need to safeguard proprietary and confidential business information shared with the agency for purposes of participation in the MA and Part D programs. However, we do not believe that the information included in the proposed MLR release represents a threat to the competitive position of MAOs and Part D sponsors particularly as comparable data is already released for commercial plans. Through the comment period and rulemaking process, we provided MAOs and Part D sponsors the opportunity to offer specific, detailed examples of how the release of MLR data could lead to competitive harm. We do not believe any of the commenters provided such examples. Further, we believe that the exclusions described in the final rule will help protect plans’ proprietary information. However, to address concerns raised by commenters, we are expanding the data that would be subject to exclusion. First, we are revising our proposed exclusion of plan-level data at proposed § 422.2490(b)(2) and § 423.2490(b)(2) to state that we will not be releasing any MLR data submitted for contracts that consist of only one plan. Contract-level data for single-plan contracts is equivalent to plan-level data, which we regard as more competitively sensitive because it is at a lower level of aggregation. In expanding the exclusion at proposed § 422.2490(b)(2) and § 423.2490(b)(2) to include MLR data submitted for single-plan contracts, we are confirming our commitment not to release any plan-level MLR data. Second, we are excluding from release VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 any MLR data for a contract in a contract year that the contract is determined to be non-credible, as defined in accordance with § 422.2440(d) for MA contracts and § 423.2440(d) for Part D contracts. Although, as we explain more fully below, we are adopting this new exclusion of non-credible contracts’ MLR data for reasons other than the protection of proprietary information, we expect that this exclusion will address concerns about competitive harm for MAOs or Part D sponsors operating contracts with limited enrollment. Comment: Several commenters asked us to aggregate the data further or expand the list of exclusions before release, in order to protect plans’ proprietary and confidential information. One commenter suggested that we limit the release of MLR data to the aggregate categories that we listed in the preamble of the proposed rule at 81 FR 46404 (that is, ‘‘Revenue,’’ ‘‘Claims,’’ ‘‘Federal and State Taxes and Licensing or Regulatory Fees,’’ ‘‘Health Care Quality Improvement Expenses,’’ and ‘‘Non-Claim Costs’’) and the MLR calculation itself, without releasing the data for the component fields that make up each of these categories. Another commenter requested that we exclude any part of the MLR substantiation, including but not limited to the narrative included in the substantiation. In addition, we received two comments requesting that we not release Part C and Part D MLR data at a more granular level than the contract level. This would exclude the ‘‘Plan-Specific Data’’ section of the MLR Report. Another commenter stated that if we believe it is important for the public to further understand the breakdown of how revenue is spent, then we could consider releasing only the percent of revenue associated with incurred claims, quality improvement activities, and Part B premium rebates, in order to limit potential competitive harm. Response: We appreciate the concerns raised by commenters, along with the proposed alternatives. We believe that the list of exclusions provided in the final rule is sufficient to protect plans against competitive harm. Where possible, we have sought to mirror the release policies for the commercial MLR, and we are not aware of any evidence demonstrating that the release of commercial MLR data has caused any competitive harm. We have also broadened the data subject to exclusion, as discussed above. Comment: Several commenters urged us to not release Part C or Part D MLR data for single-plan contracts. One PO 00000 Frm 00270 Fmt 4701 Sfmt 4700 commenter requested further clarification regarding the plan-level information that we are proposing to exclude. The commenter asked that we state whether plan-level means at the plan benefit package (PBP) level or something else. Response: We appreciate the comments submitted, and have expanded the data exclusions to not release data for single-plan contracts, since single-plan contract level data is functionally the same as plan-level data. The exclusion of plan-level data would also apply to data that is captured by the section of the MLR Report that is labeled ‘‘Plan-Specific Data.’’ We described the information collected in this section of the MLR Report in the proposed rule at 81 FR 46404. We explain above why the release of planlevel data that is as recent as 18 months old could cause substantial competitive harm. Comment: One commenter expressed concern about the release of MLR data for contracts with a limited number of beneficiaries. This commenter suggested that we not release data for a contract in a year that the contract does not meet the minimum credibility threshold of 2,400 member months for MA contracts or 4,800 member months for Part D contracts. Response: We agree with the commenter’s concern about releasing Part C and Part D MLR data for contracts that have non-credible experience. We believe that publishing the MLR data for a contract in a contract year in which it has non-credible experience may be misleading and cause incorrect assumptions. As such, we have added an exclusion to our proposed release of Part C and Part D MLR data to specify that we will not release the MLR data for a contract in any contract year in which the contract is determined to be non-credible. This exclusion is added at § 422.2490(b)(5), with respect to Part C MLR data, and at § 423.2490(b)(5), with respect to Part D MLR data. Currently, MA contracts are considered to be non-credible if they have fewer than 2,400 member months, and Part D contracts are considered noncredible if they have fewer than 4,800 member months. In the February 23, 2013 proposed rule (78 FR 12428, 12438–40), we explained our rationale for taking into account the number of enrollees under a contract when assessing Part C and Part D MLRs, stating, ‘‘To avoid requiring MA organizations and Part D sponsors to pay remittances due to random claim variation, rather than due to their underlying pricing and benefits structure, it is necessary to assess MLRs E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations on sufficient numbers of member months for statistical credibility.’’ In excluding from release MLR data submitted for contracts with noncredible experience, we recognize that these contracts’ MLRs are more vulnerable to the effects of random variations in claims experience and may fail to reflect their efficiency or relative value. We wish to release MLR data that accurately and meaningfully reflects the value of MA and Part D plans; we do not believe that pro-active public release of MLR Reports for contracts that have non-credible experience furthers that goal. Therefore, we are finalizing the rule with an exclusion for any MLR data submitted for a contract in a year that the contract is determined to be noncredible. Comment: A small number of commenters asked that we only release the final MLR for MA and Part D contracts (that is, the ratio that is calculated by dividing the MLR numerator by the MLR denominator), instead of the additional data included with MLR submissions. They stated that this would fulfill our goal of increased transparency, while protecting beneficiaries and researchers from drawing incorrect conclusions, and would safeguard confidential and proprietary information that could hurt competition. Response: We appreciate the suggestion. Given that we already release annually the MLR data submitted by commercial plans, we believe that it would be inconsistent to release only the final MLR for MA and Part D contracts. As previously discussed, we do not believe that differences between the Part C and Part D MLRs and the commercial MLR are significant enough to merit a different approach to the public disclosure of data. We have proposed appropriate exclusions and safeguards to protect proprietary business strategies. Completely excluding other information would not be consistent with the Administration’s commitment to transparency. Comment: Several commenters expressed support for our proposal to release MLR data on an annual basis no earlier than 18 months after the end of the contract year to which the MLR data applies. A few commenters stated that the proposed 18-month delayed release of MLR data would help balance the need for transparency and the potential for competitive harm. Response: We appreciate the support. Comment: We received one comment encouraging us to consider releasing MLR data that is more recent, and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 therefore, more useful to beneficiaries and researchers. Response: We appreciate the commenter’s concern. The decision to follow an 18-month delay was not intended only for the purpose of protecting proprietary interests. Part C and Part D MLR data is typically not collected until the end of the year following the contract year (for example, contract year 2014 data was not collected until December 2015). We must then review all submitted data for completeness and accuracy before determining whether MLRs are final. We continue to believe that the 18month delay is appropriate, given these operational constraints. Comment: Several commenters expressed concern that 18 months was not a sufficient period of time to ensure the release of data would not cause competitive harm. One commenter pointed out that because our revenue settlement is 8 months after the close of the year, and Part C and Part D MLR Reports are submitted at the end of that calendar year, MLR data would end up being released only 6 months after the data is filed with CMS, not the 18 months envisioned by the policy. Another commenter stated that data generally does not change significantly from year-to-year or across plans within a contract, and therefore, neither aggregation at the contract level nor an 18-month delay of release will provide sufficient protection. Several commenters asked that we release Part C and Part D MLR data using the same 5-year delay that was proposed for the release of bid data. A few commenters added that releasing such competitively sensitive information sooner than the 5year lag could potentially injure plans and the program by harming competition among MA plans and driving up costs. Response: We believe that the proposed 18-month delay of release of Part C and Part D MLR data will balance the need to make sure the data is complete with the desire to provide beneficiaries and researchers with data that is meaningful and helpful in plan selection and research. We selected a 5year delay for bid pricing data because much of that data is collected at the plan level. Part C and Part D MLR data is aggregated to the contract level, and also includes a more limited range of information. Further, as we have noted, we do not believe that there will be competitive harm to MAOs or Part D plan sponsors as a result of the release of MLR reports as provided under this rule. Contract-level data is, as described above, sufficiently aggregated to avoid creating an unfair competitive PO 00000 Frm 00271 Fmt 4701 Sfmt 4700 80439 advantage for particular entities, such as new market entrants, who would have access to such data without having to release such data themselves. It is not likely that entities, such as new market entrants, could use aggregated data to reverse-engineer pricing strategies, payments rates, or other competitively sensitive information. Comment: One commenter urged us to utilize established public data release methodologies for the release of Part C and Part D MLR data. A few commenters also asked that we only release data through ResDAC to researchers. Response: Through the Administration’s continued commitment to transparency, we have significantly increased the amount of Medicare data available to the public in recent years, in part through the ResDAC portal. While we agree that ResDAC is a valuable resource, we believe that it is more appropriate in this instance to post the data directly to our Web site (cms.gov) for broader consumption. Because the data is aggregated to the contract level, we do not believe there is a significant risk associated with making the data more widely available. Comment: A few commenters expressed concern that we proposed releasing Part C and Part D MLR data in the CY 2017 PFS proposed rule, rather than through a Part C and Part D rulemaking process. The commenters stated that this approach increased the likelihood that many stakeholders would have been unaware of our proposal in time to provide detailed analysis of the impacts of the proposed data releases, and one commenter suggested reissuing this proposal in a Parts C and D rulemaking. Response: The Administrative Procedure Act (APA) and section 1871 of the Act generally require that rules be published in the Federal Register in proposed form, with a basis and purpose statement explaining the proposal, and then published in the Federal Register in final form, with revisions based on comments received, and responses to such comments. There is no requirement governing how proposed or final rules are packaged or organized, as long as the public is given proper notice. The proposed rule here clearly listed all Parts of the Medicare regulations that would be affected by the proposed regulations (including parts 422 and 423) and its title included a reference to release of Medicare Advantage and Part D data (‘‘. . . Medicare Advantage Pricing Data Release; Medicare Advantage and Part D Medical Low [sic] Ratio Data Release E:\FR\FM\15NOR2.SGM 15NOR2 80440 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 . . .’’), so there was adequate notice to the public of the content of the proposed rule (81 FR 46162). That fully satisfies the requirements of the APA and section 1871 of the Act. The presence of this rider was clearly discussed in the title of the rule and in the Fact Sheet that we released publicly at the time of the rule’s display. We received 26 comments on our proposed release of Part C and Part D MLR data from across the industry, including a number of comments from MAOs, Part D sponsors, and their trade associations. This further demonstrates that adequate notice was provided. We also proposed to amend § 422.2400, which identifies the basis and scope of the MLR regulations for MAOs, and § 423.2400, which identifies the basis and scope of the MLR regulations for Part D sponsors, to add a reference to section 1106 of the Act, which governs the release of information gathered in the course of administering our programs under the Act. After consideration of public comments received on the technical changes, we are finalizing these technical changes to § 422.2400 and § 423.2400 as proposed. After reviewing the comments we received, we are choosing to finalize the proposed MLR data release with two modifications. First, we will revise the exclusion at § 422.2490(b)(2), with respect to Part C MLR data, and at § 423.2490(b)(2), with respect to Part D MLR data, to exclude from release any MLR data submitted for a single-plan contract. Second, we add a new exclusion at § 422.2490(b)(5), with respect to Part C MLR data, and at § 423.2490(b)(5), with respect to Part D MLR data, to exclude from release any MLR data submitted for a contract in a contract year for which the contract is determined to be non-credible, as defined in accordance with § 422.2440(d) for MA contracts and § 423.2440(d) for Part D contracts. We continue to believe that the release of MLR data is consistent with the Administration’s directives regarding the transparency of program data, and we support public research that can potentially strengthen the program. F. Prohibition on Billing Qualified Medicare Beneficiary Individuals for Medicare Cost-Sharing As we stated in the CY 2017 proposed rule, we remind all Medicare providers (including providers of services defined in section 1861 of the Act and physicians) that federal law prohibits them from collecting Medicare Part A and Medicare Part B deductibles, coinsurance, or copayments, from VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 beneficiaries enrolled in the Qualified Medicare Beneficiaries (QMB) program (a Medicaid program which helps certain low-income individuals with Medicare cost-sharing liability). In July 2015, we released a study finding that confusion and inappropriate balance billing persist notwithstanding laws prohibiting Medicare cost-sharing charges for QMB individuals, Access to Care Issues Among Qualified Medicare Beneficiaries (QMB) (‘‘Access to Care’’) https://www.cms.gov/MedicareMedicaid-Coordination/Medicare-andMedicaid-Coordination/MedicareMedicaid-Coordination-Office/ Downloads/Access_to_Care_Issues_ Among_Qualified_Medicare_ Beneficiaries.pdf. These findings underscore the need to re-educate providers about proper billing practices for QMB enrollees. In 2013, approximately 7 million Medicare beneficiaries were enrolled in the QMB program. State Medicaid programs are liable to pay Medicare providers who serve QMB individuals for the Medicare cost-sharing. However, as permitted by federal law, states can limit provider payment for Medicare cost-sharing to the lesser of the Medicare cost-sharing amount, or the difference between the Medicare payment and the Medicaid rate for the service. Regardless, as stated in the CY 2017 proposed rule, Medicare providers must accept the Medicare payment and Medicaid payment (if any, and including any permissible Medicaid cost sharing from the beneficiary) as payment in full for services rendered to a QMB individual. Medicare providers who violate these billing prohibitions are violating their Medicare Provider Agreement and may be subject to sanctions. (See sections 1902(n)(3), 1905(p), 1866(a)(1)(A), and 1848(g)(3) of the Act.) Additionally, as we stated in the CY 2017 proposed rule, Medicare providers should take steps to educate themselves and their staff about QMB billing prohibitions and to exempt QMB individuals from impermissible Medicare cost-sharing billing and related collection efforts. For more information about these requirements, steps to identify QMB patients and ways to promote compliance, see https:// www.cms.gov/Outreach-and-Education/ Medicare-Learning-Network-MLN/ MLNMattersArticles/downloads/ se1128.pdf. Given that original Medicare providers may also serve Medicare Advantage enrollees, we again note that the CY 2017 Medicare Advantage Call Letter reiterates the billing prohibitions applicable to dual eligible beneficiaries PO 00000 Frm 00272 Fmt 4701 Sfmt 4700 (including QMBs) enrolled in Medicare Advantage plans and the responsibility of plans to adopt certain measures to protect dual eligible beneficiaries from unauthorized charges under § 422.504(g). (See pages 181–183 at https://www.cms.gov/Medicare/HealthPlans/MedicareAdvtgSpecRateStats/ Downloads/Announcement2017.pdf). Although we did not solicit comments on this statement of current law and policy, we appreciate the comments received, which included comments from national beneficiary advocacy organizations, and professional, insurance, and medical billing associations. Comment: Commenters concurred that confusion and improper QMB billing problems remain pervasive and affirmed their negative toll on beneficiaries. Commenters were supportive of CMS’s expanded efforts to educate providers regarding QMB billing rules to reduce the incidence of improper QMB billing. Some commenters also noted that Medicare providers encounter difficulties discerning which patients are QMBs and advised CMS to adopt strategies to help providers ascertain this information. Additionally, one commenter noted that the variation in state policies to pay providers for Medicare cost-sharing fuels confusion, frustration and compliance problems. Response: We continue to pursue opportunities to educate providers and welcome partnering with commenters and others in these efforts. Currently, Medicare providers must determine a patient’s QMB status through information from State Medicaid agencies, including online eligibility systems and beneficiary identification cards. We are actively exploring additional mechanisms for Medicare providers to readily identify the QMB status of patients. G. Recoupment or Offset of Payments to Providers Sharing the Same Taxpayer Identification Number 1. Overview and Background Medicare payments to providers and suppliers may be offset or recouped, in whole or in part, by a Medicare Administrator Contractor (MAC) if the MAC or CMS has determined that a provider or supplier has been overpaid. Historically, we have used the Medicare provider billing number or National Provider Identifier (NPI) to recoup overpayments from Medicare providers and suppliers until these debts were paid in full or eligible for referral to the Department of Treasury (Treasury) for further collection action under the Debt E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 Collection Improvement Act of 1996 and the Digital Accountability and Transparency Act of 2014. Once an overpayment is referred to Treasury, the Treasury’s Debt Management Services uses various tools to collect the debt, including offset of federal payments against entities that share the same provider Taxpayer Identification Number (TIN). Hence, Treasury has the ability to collect our overpayments using the provider TIN and we pay a fee for every collection made. On March 23, 2010, the Affordable Care Act (ACA) was enacted. Section 6401(a)(6) of the Affordable Care Act established a new section 1866(j)(6) of the Act. Section 1866(j)(6) of the Act allows the Secretary to make any necessary adjustments to the payments to an applicable provider of services or supplier to satisfy any amount due from an obligated provider of services or supplier. The statute defines an applicable provider of services or supplier (applicable provider) as a provider of services or supplier that has the same taxpayer identification number as the one assigned to the obligated provider of services or supplier. The statute defines the obligated provider of services or supplier (obligated provider) as a provider of services or supplier that owes a past-due overpayment to the Medicare program. For purposes of this provision, the applicable and obligated providers must share a TIN, but may possess a different billing number or National Provider Identifier (NPI) number than one another. For example, a health care system may own a number of hospital providers and these providers may share the same TIN while having different NPI or Medicare billing numbers. If one of the hospitals in this system receives a demand letter for a Medicare overpayment, then that hospital (Hospital A) will be considered the obligated provider while its sister hospitals (Hospitals B and C) will be considered the applicable providers. This authority allows us to recoup the overpayment of the obligated provider, Hospital A, against any or all of the applicable providers, Hospitals B and C, with which it, Hospital A, shares a TIN. 2. Provisions of the Proposed Regulations If CMS or a Medicare contractor has decided to put into effect an offset or recoupment, then § 405.373(a) requires the Medicare contractor to notify the provider or supplier in writing of its intention to fully or partially offset or recoup payment and the reasons for the offset or recoupment. Currently, the written demand letter sent by the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Medicare contractor to a provider or supplier serves as notification of the overpayment and intention to recoup or offset if the obligated provider, Hospital A, fails to repay the overpayment in a timely manner. With the passage of section 1866(j)(6) of the Act, the requirements in § 405.373(a) could be interpreted to require the Medicare contractor to provide notification to both the obligated provider, Hospital A, and the applicable provider, Hospital B, of its intention to recoup or offset payment. Because we don’t think it is necessary to provide separate notice to both the obligated provider and the applicable provider, we proposed to amend the notice requirement in § 405.373. Specifically, we proposed to create a new paragraph (f) in § 405.373 to state that § 405.373(a) does not apply in instances where the Medicare Administrative Contractor intends to offset or recoup payments to the applicable provider of services or supplier to satisfy an amount due from an obligated provider of services or supplier when the applicable and obligated provider of services or supplier share the same Taxpayer Identification Number. Before the effective date of this rule, we intend to notify all potentially affected Medicare providers of the implementation of section 1866(j)(6) of the Act through Medicare Learning Network (MLN) or MLN Connects Provider eNews article(s). We also intend to update the current Internet Only Manual instructions including, the Medicare Financial Management Manual, and the addition of clarifying language in the demand letters issued to obligated providers. We believe these actions would provide adequate notice to providers and suppliers sharing a TIN, if they choose, provide the opportunity to implement a tracking system of Medicare overpayments on the corporate level for the affected providers. We also believe these actions are sufficient because of Treasury’s analogous practice of offsetting using a TIN without furnishing notice to all potentially affected providers and suppliers. It has been a long standing practice for Treasury to offset federal payments using the TIN and Treasury currently does not issue a notice of intent to recoup or offset to applicable providers and suppliers when Treasury recoups CMS overpayments. Additionally, in our review of § 405.373(a) and (b), we proposed to replace the terms intermediary and carrier with the term Medicare Administrative Contractor as PO 00000 Frm 00273 Fmt 4701 Sfmt 4700 80441 intermediaries and carriers no longer exist. The following is a summary of the comments we received on recoupment or offset of payments to providers sharing the same taxpayer identification number. Comment: One commenter disagreed with our assertion that there is no need for its contractors to notify either party when such a recoupment will be made. The commenter recommended that CMS should not finalize its proposal to eliminate notice to the applicable provider and the obligated provider in the event of a recoupment of an overpayment. Response: We continue to believe it is not necessary to provide separate notice to both the obligated provider and the applicable provider. We believe that updating the Medicare Financial Management Manual, as well as including clarifying language in the demand letters issued will provide sufficient notification to providers and suppliers sharing a TIN. In addition, we believe the publication of this rule and notification through a Medicare Learning Network article provides sufficient notice to providers and suppliers sharing the same TIN and allows these providers and suppliers sufficient time to implement a tracking system of Medicare overpayments on a corporate level, should they choose. Finally, offsetting using a TIN without furnishing notice to all potentially affected providers and suppliers is a long standing practice used by Treasury to collect Medicare overpayments. Comment: One commenter recommended CMS recoup payments based upon the combination of the TIN and individual NPI. Response: We do not believe the intent of section 1866(j)(6) of the Act is to use a combination of the TIN and individual NPI to offset Medicare overpayments. We view section 1866(j)(6) of the Act as giving the agency the authority to recoup payments from an applicable provider or supplier that are due from an obligated provider or supplier that shares the same TIN. Accordingly, we will finalize the rule as proposed. H. Accountable Care Organization (ACO) Participants Who Report Physician Quality Reporting System (PQRS) Quality Measures Separately The Affordable Care Act gives the Secretary authority to incorporate reporting requirements and incentive payments from certain Medicare programs into the Shared Savings Program, and to use alternative criteria to determine if payments are warranted. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80442 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Specifically, section 1899(b)(3)(D) of the Act affords the Secretary discretion to incorporate reporting requirements and incentive payments related to the physician quality reporting initiative (PQRI), under section 1848 of the Act, including such requirements and such payments related to electronic prescribing, electronic health records, and other similar initiatives under section 1848, and permits the Secretary to use alternative criteria than would otherwise apply (under section 1848 of the Act) for determining whether to make such payments. Current Shared Savings Program regulations at § 425.504(c) do not allow eligible professionals (EPs) billing through the Taxpayer Identification Number (TIN) of an Accountable Care Organization (ACO) participant to participate in PQRS outside of the Shared Savings Program, and these EPs and the ACO participants through which they bill may not independently report for purposes of the PQRS apart from the ACO. This policy was designed to ease reporting burden for individual EPs and group practices and promote integration of providers and suppliers within the ACO in order to help achieve the Shared Savings Program goals of improving quality and coordination of care. While over 98 percent of ACOs satisfactorily report their quality data annually, if an ACO fails to satisfy the PQRS reporting requirements, the individual EPs and group practices participating in that ACO will receive the PQRS payment adjustment along with the automatic VM downward payment adjustment. We proposed to amend the regulation at § 425.504 to permit EPs that bill under the TIN of an ACO participant to report separately for purposes of the 2018 PQRS payment adjustment when the ACO fails to report on behalf of the EPs who bill under the TIN of an ACO participant. Specifically, we proposed to remove the requirement at § 425.504(c)(2) so that, for purposes of the reporting period for the 2018 PQRS payment adjustment (that is, January 1, 2016, through December 31, 2016), EPs who bill under the TIN of an ACO participant have the option of reporting separately as individual EPs or group practices. If the ACO fails to satisfactorily report on behalf of such EPs or group practices, we proposed to consider this separately reported data for purposes of determining whether the EPs or group practices are subject to the 2018 PQRS payment adjustment. We also proposed to amend § 425.504(c)(2) to apply only for purposes of the 2016 payment adjustment. We proposed revised requirements for the 2017 and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 2018 PQRS payment adjustments under the Shared Savings Program at § 425.504(d). We refer readers to section III.K.1.e. of this final rule for a more detailed discussion of the proposed revisions to the requirements at § 425.504 and the policies that are being finalized in this final rule. In the proposed rule, we noted that the registration deadline for participating in the PQRS Group Practice Reporting Option (GPRO) is June 30 of the applicable reporting period. Since affected EPs are not able to register for the PQRS GPRO by the applicable deadline for the 2018 PQRS payment adjustment, we proposed that such EPs would not need to register for the PQRS GPRO for the 2018 PQRS payment adjustment, but rather could mark the data as group-level data in their submission. Thus, we proposed to eliminate a registration process for groups submitting data using third party entities. When groups submit data utilizing third party entities, such as a qualified registry, qualified clinical data registry (QCDR), direct Electronic Health Record (EHR) product, or EHR data submission vendor, we are able to obtain group information from the third party entity and discern whether the data submitted represents a group-level submission or an individual-level submission once the data is submitted. In addition, we proposed that an affected EP may utilize the secondary reporting period either as an individual EP using one of the registry, QCDR, direct EHR product, or EHR data submission vendor reporting options or as a group practice using one of the registry, QCDR, direct EHR product, or EHR data submission vendor reporting options. We noted that this would exclude, for individual EPs, the claims reporting option and, for group practices, the Web Interface and certified survey vendor reporting options. Furthermore, we recognized that certain EPs are similarly situated with regard to the 2017 PQRS payment adjustment, which will be applied beginning on January 1, 2017. We stated that we believe it is appropriate and consistent with our stated policy goals to afford these EPs the benefit of this proposed policy change. Accordingly, as noted above, we proposed to permit EPs that bill through the TIN of an ACO participant to report separately for purposes of the 2017 PQRS payment adjustment if the ACO failed to report on behalf of the EPs who bill under the TIN of an ACO participant. Specifically, we proposed to remove the requirements at § 425.504(c)(2) so that, for purposes of the reporting period for PO 00000 Frm 00274 Fmt 4701 Sfmt 4700 the 2017 PQRS payment adjustment, EPs who bill under the TIN of an ACO participant have the option of reporting separately as individual EPs or group practices. As noted in this final rule, we proposed to amend § 425.504(c)(2) to apply only for purposes of the 2016 payment adjustment. We proposed to include the revised requirements for the 2017 and 2018 PQRS payment adjustments under the Shared Savings Program at § 425.504(d). We refer readers to the discussion of this proposal and the final policies that we are adopting in section III.K.1.e. of this final rule. The previously established reporting period for the 2017 PQRS payment adjustment is January 1, 2015, through December 31, 2015. To allow affected EPs that participate in an ACO to report separately for purposes of the 2017 PQRS payment adjustment, we proposed at § 414.90(j)(1)(ii) to establish a secondary PQRS reporting period for the 2017 PQRS payment adjustment for individual EPs or group practices who bill under the TIN of an ACO participant if the ACO failed to report on behalf of such individual EPs or group practices during the previously established reporting period for the 2017 PQRS payment adjustment. We proposed that this option would be limited to EPs that bill through the TIN of an ACO participant in an ACO that failed to satisfactorily report on behalf of its EPs and would not be available to EPs that failed to report for purposes of PQRS outside the Shared Savings Program. In addition, we proposed that these affected EPs may utilize the secondary reporting period either as an individual EP using the registry, QCDR, direct EHR product, or EHR data submission vendor reporting options or as a group practice using one of the registry, QCDR, direct EHR product, or EHR data submission vendor reporting options. We noted that this would exclude, for individual EPs, the claims reporting option and, for group practices, the Web Interface and certified survey vendor reporting options. We note that the registration deadline for the participating in the PQRS GPRO is June 30 of the applicable reporting period. Since the applicable deadline for the 2017 PQRS payment adjustment has passed, we proposed that such EPs would not need to register for the PQRS GPRO for the 2017 PQRS payment adjustment, but rather would be able to report as a group practice via the registry, QCDR, direct EHR product, or EHR data submission vendor reporting options. Therefore, we proposed at § 414.90(j)(4)(v) that sections E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations § 414.90(j)(8)(ii), (iii), and (iv) would apply to affected EPs reporting as individuals using this secondary reporting period for the 2017 PQRS payment adjustment. In addition, we proposed at § 414.90(j)(7)(viii) that sections § 414.90(j)(9)(ii), (iii), and (iv) would apply to affected EPs reporting as group practices using this secondary reporting period for the 2017 PQRS payment adjustment. Further, we proposed at § 414.90(k)(4)(ii) that § 414.90(k)(5) would apply to affected EPs reporting as individuals or group practices using this secondary reporting period for the 2017 PQRS payment adjustment. We also proposed that the secondary reporting period for the 2017 PQRS payment adjustment would coincide with the reporting period for the 2018 PQRS payment adjustment (that is, January 1, 2016 through December 31, 2016). In addition, for operational reasons and to minimize any additional burden on affected EPs (who are already required to report for CY 2016 for purposes of the 2018 PQRS payment adjustment), we proposed to assess the individual EP or group practice’s 2016 data using the applicable satisfactory reporting requirements for the 2018 PQRS payment adjustment (including, but not limited to, the applicable PQRS measure set). We invited comment on any 2018 requirements that might need to be modified when applied for purposes of the 2017 PQRS payment adjustment. As a result, individual EP or group practice 2016 data could be used with respect to the secondary reporting period for the 2017 PQRS payment adjustment or for the 2018 PQRS payment adjustment or for both payment adjustments if the ACO in which the affected EPs participate failed to report for purposes of the applicable payment adjustment. We explained that we believe this change to our program rules is necessary for affected individual EPs and group practices to be able to take advantage of the additional flexibility proposed for the Shared Savings Program (81 FR 46426 through 45427). If an affected individual EP or group practice decides to use the secondary reporting period for the 2017 PQRS payment adjustment, we explained that this EP or group practice should expect to receive a PQRS payment adjustment for services furnished in 2017 until CMS is able to determine that the EP or group practice satisfactorily reported for purposes of the 2017 PQRS payment adjustment. First, we would need to process the data submitted for 2016. Second, we would need to determine whether or not the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 individual EP or group practice met the applicable satisfactory reporting requirements for the 2018 PQRS payment adjustment. Third, we would need to update the individual EP or group practice’s status so that the EP or group practice stops receiving a negative payment adjustment on claims for services furnished in 2017 and reprocess all claims that were previously paid. In addition, as discussed in the proposed rule, the EP or group practice would also avoid the automatic downward VM adjustment, but would not qualify for an upward adjustment since the ACO failed to report (81 FR 46446). Since EPs and group practices taking advantage of this secondary reporting period for the 2017 PQRS payment adjustment will have missed the deadline for submitting an informal review request for the 2017 PQRS payment adjustment, we proposed that the informal review submission periods for these EPs or group practices would occur during the 60 days following the release of the PQRS feedback reports for the 2018 PQRS payment adjustment. We requested comments on these proposals. The following is summary of the comments we received on ACO participants who report PQRS quality measures separately. Comment: The majority of commenters supported CMS’s proposal to allow affected EPs or group practices to use CY 2016 as a secondary reporting period for purposes of the 2017 PQRS payment adjustment, in which case such EPs or group practices should expect to receive a PQRS payment adjustment for services furnished in 2017 until CMS is able to determine that the EP or group practice satisfactorily reported for purposes of the 2017 PQRS payment adjustment. In addition, the commenters supported CMS’s proposal to allow EPs or group practices that bill under the TIN of an ACO participant to report separately for purposes of the PQRS payment adjustment if the ACO fails to report on their behalf; the commenters believed this proposal provides flexibility for EPs and group practices to avoid penalties under PQRS and VM when ACOs fail to report the data. Another commenter supported the proposal to retain the requirement that an ACO satisfactorily report on behalf of the EPs who bill under the TIN of an ACO participant for purposes of the PQRS payment adjustment. One commenter stated that they appreciated the elimination of the registration process for groups using third party entities. PO 00000 Frm 00275 Fmt 4701 Sfmt 4700 80443 Response: We would like to clarify that the elimination of the GPRO registration process would only apply to EPs and groups that participate in ACOs that fail to report on their behalf. Comment: One commenter stated that affected EPs or group practices would not be aware that the ACO did not satisfactorily report for purposes of the 2018 PQRS payment adjustment and, absent such information, would not choose to report outside the ACO during the CY 2016 reporting period. Another commenter noted that many EPs in an ACO will not report data separately during the reporting period if they are operating under the assumption that their ACO is reporting on their behalf. In addition, other commenters urged CMS to invest in strategies to prevent these situations from occurring in the first place, such as providing ACOs with more frequent feedback on their reporting compliance throughout the year. Response: We expect that any ACO that is unable to meet satisfactory reporting requirements for any reason would inform the EPs participating in the ACO in a timely and transparent manner to allow the EPs to report separately using the registry, QCDR, direct EHR or EHR data submission vendor reporting options. Therefore, if an EP or group practice has reason to believe their ACO may not report on their behalf in 2016, they have the ability to report separately for purposes of the 2018 PQRS payment adjustment. In regards to providing ACOs with more frequent feedback on their reporting compliance, we provide many opportunities for ACOs to monitor their progress toward the satisfactory reporting requirement while the Web Interface is open for data collection. Throughout the data collection period, and when the ACO has finished its abstraction, ACOs may use reports available in the Web Interface to confirm whether or not the Web Interface reporting requirements have been met. Leading up to the data collection period and during the data collection period, we provide frequent reminders to ACOs on the importance of reporting and how to satisfactorily report. We also provide targeted outreach to ACOs who have not entered data into the Web Interface in the final weeks of the data collection period, in an effort to ensure that all ACOs completely report. Comment: One commenter acknowledged the difficulty in adding a second reporting period for affected EPs and group practices, and therefore, urged flexibility on the part of CMS to determine a way to provide an E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80444 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations additional reporting period in 2017 for purposes of the 2018 PQRS payment adjustment for EPs and group practices that participate in ACOs that fail to report for purposes of the 2018 PQRS payment adjustment. Another commenter encouraged CMS to allow affected EPs and group practices to report PQRS data separately during the year following the CY 2016 reporting period in order for them to avoid penalties during the 2018 payment year. Response: As discussed in section III.K.1.e. of this final rule, we are finalizing our proposal to remove the requirement at § 425.504(c)(2) so that, for purposes of the reporting periods for the 2017 and 2018 PQRS payment adjustments, EPs who bill under the TIN of a Shared Savings Program ACO participant have the option of reporting separately as individual EPs or group practices. We disagree with the commenter’s suggestions to establish a secondary reporting period for the 2018 PQRS payment adjustment, in addition to the 2017 PQRS payment adjustment. We believe there is adequate time for EPs or group practices to report separately for the 2018 payment adjustment given that this final rule will be issued more than a month prior to the end of the reporting period for the 2018 payment adjustment (that is, January 1, 2016 through December 31, 2016). Comment: Several commenters stated their support for CMS’s recognition of the individual commitment to quality improvement of EPs in ACOs and CMS’s proposals that would enable them to avoid penalties in situations where their ACO fails to meet satisfactory reporting requirements. The commenters stated that individual EPs and group practices are not in direct control of decisions or actions taken by the larger ACO, and therefore, should not be penalized. In fact, the commenters stated that many EPs do not even know they are part of an ACO and prefer instead to report more directly relevant measures, such as those available through a QCDR. As an alternative to giving these EPs another opportunity to report data, a few commenters believed that EPs should instead be held harmless or provided a waiver from a negative payment adjustment if the ACO fails to report. Response: We appreciate the commenters’ support. However, we do not believe that EPs should be held harmless or provided a waiver if the ACO fails to report on their behalf. As discussed above, we believe it is reasonable and appropriate to expect that any ACO that is unable to meet satisfactory reporting requirements for any reason would inform the EPs VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 participating in the ACO in a timely and transparent manner to allow the EPs to report separately using the registry, QCDR, direct EHR or EHR data submission vendor reporting options. However, if an EP or group practice has reason to believe their ACO may not report on their behalf in 2016, they have the ability to report separately for purposes of the 2018 PQRS payment adjustment. In addition, by permitting EPs and group practices to report separately from the ACO in such cases, we are giving them flexibility to report more directly relevant measures if they so choose. Comment: One commenter supported CMS’s proposal to allow affected EPs to report separately via a registry, QCDR, direct EHR or EHR data submission vendor. Response: We appreciate the commenter’s support for our proposal. Comment: One commenter recommended that for the CY 2016 reporting period: (1) In cases where measures data are submitted by both the EP and the ACO, the best performance should be counted and the EP should be eligible for a positive payment adjustment; or (2) in cases where the EP does not opt to report outside the ACO, and the ACO fails to report, the EP should receive a neutral payment adjustment (that is, the EP should be held harmless from a negative payment adjustment and be ineligible for a positive payment adjustment). Response: PQRS only assesses whether or not an EP or group practice satisfactorily reported quality data or satisfactorily participated in a QCDR. PQRS does not apply positive payment adjustments or adjust payments based on an EP or group practice’s performance on the quality measures. However, the VM does apply positive payment adjustments and adjust payments based on the EP or group practice’s performance. We refer readers to section III.L.3.b. of this final rule for a discussion of the VM policies in this scenario. Comment: One commenter stated that reporting the previous year’s data is burdensome, particularly for registry measures. The commenter believed that requiring EPs to report separately from the ACO effectively penalizes the EP for the ACO’s error. Instead, the commenter suggested that CMS impose a negative payment adjustment on the ACOs when they fail to report. For the 2017 PQRS payment adjustment, the commenter recommended that affected EPs be held harmless by receiving no payment adjustment. The commenter stated that retroactive reporting would be burdensome to the EPs and would PO 00000 Frm 00276 Fmt 4701 Sfmt 4700 require information reported using QCDRs and EHRs to simultaneously meet the reporting requirements and measures of multiple years. Response: We would like to clarify that we are not requiring affected EPs or group practices to report the previous year’s data. EPs or group practices that are taking advantage of the secondary reporting period for the 2017 PQRS payment adjustment would be reporting data from CY 2016 and would be assessed using the applicable reporting requirements for the 2018 PQRS payment adjustment (including, but not limited to, the applicable PQRS measure set). In addition, we note that the PQRS payment adjustment does not apply to ACOs, and therefore, we cannot impose a negative payment adjustment on the ACOs when they fail to satisfactorily report. Out of Scope Comments We received a few comments for this section that are out of scope for this final rule. We received comments pertaining to the following: (1) Support for CMS’ proposal that EPs participating in an ACO under the Shared Savings Program that satisfy the CQM reporting component of meaningful use for the Medicare EHR Incentive Program when the EP extracts data necessary for the ACO to satisfy the quality reporting requirements under the Shared Savings Program from CEHRT and when the ACO reports the ACO GPRO measures through the CMS Web Interface; (2) recommendation that under MIPS, CMS use the PQRS data (either submitted by the ACO or separately by the ACO participant) which would generate the highest score for the quality performance category; and (3) requested guidance in the final rule for EPs, such as rehabilitation therapists, who are currently subject to PQRS, but will not be subject to MIPS until 2021 at the earliest. After consideration of the comments received regarding our proposed policies for EPs and group practices participating in ACOs that report PQRS quality measures separately from the ACO, we are finalizing the policies as proposed. At § 414.90(j)(1)(ii), we are finalizing our proposal to establish a secondary PQRS reporting period for the 2017 PQRS payment adjustment for individual EPs or group practices who bill under the TIN of an ACO participant if the ACO failed to report on behalf of such individual EPs or group practices during the previously established reporting period for the 2017 PQRS payment adjustment. This option is limited to EPs and group practices that bill through the TIN of an E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations ACO participant in an ACO that failed to satisfactorily report on behalf of its EPs and would not be available to EPs and group practices that failed to report for purposes of PQRS outside the Shared Savings Program. We are finalizing our proposal that these affected EPs may utilize the secondary reporting period either as an individual EP or as a group practice using one of the registry, QCDR, direct EHR product, or EHR data submission vendor reporting options. We are also finalizing our proposal that such EPs do not need to register for the PQRS GPRO for the 2017 PQRS payment adjustment. In addition, we are finalizing at § 414.90(j)(4)(v) our proposal that sections § 414.90(j)(8)(ii), (iii), and (iv) would apply to affected EPs reporting as individuals using this secondary reporting period for the 2017 PQRS payment adjustment. Further, we are finalizing at § 414.90(j)(7)(viii) our proposal that sections § 414.90(j)(9)(ii), (iii), and (iv) would apply to affected EPs reporting as group practices using this secondary reporting period for the 2017 PQRS payment adjustment. We are finalizing at § 414.90(k)(4)(ii) our proposal that § 414.90(k)(5) would apply to affected EPs reporting as individuals or group practices using this secondary reporting period for the 2017 PQRS payment adjustment. We are finalizing our proposal that the secondary reporting period for the 2017 PQRS payment adjustment would coincide with the reporting period for the 2018 PQRS payment adjustment (that is, January 1, 2016 through December 31, 2016). In addition, we are finalizing a policy under which we will assess the individual EP or group practice’s 2016 data using the applicable satisfactory reporting requirements for the 2018 PQRS payment adjustment (including, but not limited to, the applicable PQRS measure set). If an affected individual EP or group practice decides to use the secondary reporting period for the 2017 PQRS payment adjustment, the EP or group practice should expect to receive a PQRS payment adjustment for services furnished in 2017 until we are able to determine that the EP or group practice satisfactorily reported for purposes of the 2017 PQRS payment adjustment. Further, we are finalizing our proposal that the informal review submission periods for these EPs or group practices would occur during the 60 days following the release of the PQRS feedback reports for the 2018 PQRS payment adjustment. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 I. Medicare Advantage Provider Enrollment 1. Background a. General Overview The Medicare program is the primary payer of health care for approximately 54 million beneficiaries and enrollees. Section 1802(a) of the Act permits beneficiaries to obtain health services from any individual or organization qualified to participate in the Medicare program. Providers and suppliers furnishing items or services must comply with all applicable Medicare requirements stipulated in the Act and codified in the regulations. These requirements are meant to promote quality care while protecting the integrity of the program. As a major component of our fraud prevention activities, we have increased our efforts to prevent unqualified individuals or organizations from enrolling in Medicare. The term ‘‘provider of services’’ is defined in section 1861(u) of the Act as a hospital, a critical access hospital (CAH), a skilled nursing facility (SNF), a comprehensive outpatient rehabilitation facility (CORF), a home health agency (HHA), or a hospice. The term ‘‘supplier’’ is defined in section 1861(d) of the Act as, unless context otherwise requires, a physician or other practitioner, facility or other entity (other than a provider of services) that furnishes items or services under title XVIII of the Act. Other supplier categories may include, for example, physicians, nurse practitioners, and physical therapists. Providers and suppliers that fit into these statutorily defined categories may enroll in Medicare if they meet the proper screening and enrollment requirements. This final rule will require providers and suppliers in MA organization networks and other designated plans (hereafter including MA–PD plans, FDRs, PACE, Cost HMOs or CMPs, demonstration programs, pilot programs, locum tenens suppliers, and incident-to suppliers) to be enrolled in Medicare in an approved status. We generally refer to an ‘‘approved status’’ as a status whereby a provider or supplier is enrolled in, and is not revoked from, the Medicare program. For example, a provider or supplier that has submitted an application, but has not completed the enrollment process with their respective Medicare Administrative Contractor (MAC), is not enrolled in an approved status. The submission of an enrollment application does not deem a provider or supplier enrolled in an approved status. A PO 00000 Frm 00277 Fmt 4701 Sfmt 4700 80445 provider or supplier that is currently revoked from Medicare is not in an approved status. Out-of network or noncontract providers and suppliers are not required to enroll in Medicare to meet the requirements of this final rule with respect to furnishing items and services to MA enrollees. b. Background To receive payment for a furnished Medicare Part A or Part B service or item, or to order, certify, or prescribe certain Medicare services, items, and drugs, a provider or supplier must enroll in Medicare. The enrollment process requires the provider or supplier to complete, sign, and submit to its assigned Medicare contractor the appropriate Form CMS–855 enrollment application. The CMS–855 application form captures information about the provider or supplier that is needed for CMS or its contractors to screen the provider or supplier, verify the information provided, and determine whether the provider or supplier meets all Medicare requirements. This screening prior to enrollment helps to ensure that unqualified individuals and entities do not bill Medicare and that the Medicare Trust Funds are accordingly protected. Data collected and verified during the enrollment process generally includes, but is not limited to: (1) Basic identifying information (for example, legal business name, tax identification number); (2) state licensure information; (3) practice locations; and (4) information regarding ownership and management control. We strive to further strengthen the provider and supplier enrollment process to prevent problematic providers and suppliers from entering the Medicare program. This includes, but is not limited to, enhancing our program integrity monitoring systems and revising our provider and supplier enrollment regulations in 42 CFR 424, subpart P, and elsewhere, as needed. With authority granted by the Act, including provisions in the Affordable Care Act, we have revised our provider and supplier enrollment regulations by issuing the following: • In the February 2, 2011 Federal Register (76 FR 5861), we published a final rule with comment period titled, ‘‘Medicare, Medicaid, and Children’s Health Insurance Programs; Additional Screening Requirements, Application Fees, Temporary Enrollment Moratoria, Payment Suspensions and Compliance Plans for Providers and Suppliers.’’ This final rule with comment period implemented major Affordable Care Act provisions, including the following: E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80446 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations ++ A requirement that institutional providers and suppliers must submit application fees as part of the Medicare, Medicaid, and CHIP provider and supplier enrollment processes. ++ Establishment of Medicare, Medicaid, and CHIP provider and supplier risk-based enrollment screening categories and corresponding screening requirements. ++ Authority that enabled imposition of temporary moratoria on the enrollment of new Medicare, Medicaid, and CHIP providers and suppliers of a particular type (or the establishment of new practice locations of a particular type) in a geographic area. • In the April 27, 2012 Federal Register (77 FR 25284), we published a final rule titled, ‘‘Medicare and Medicaid Programs; Changes in Provider and Supplier Enrollment, Ordering and Referring, and Documentation Requirements and Changes in Provider Agreements.’’ The rule implemented another major Affordable Care Act provision and required, among other things, that providers and suppliers that order or certify certain items or services be enrolled in or validly opted-out of the Medicare program. ++ This requirement was expanded to include prescribers of Medicare Part D drugs in the final rule published in the May 23, 2014 Federal Register (79 FR 29844) titled, ‘‘Medicare Program; Contract Year 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs.’’ Through improved processes and systems, since March 2011 we have: • Saved over $927 million by revoking Medicare Part A and B providers and suppliers that did not comply with Medicare requirements; • Avoided over $2.4 billion in costs by preventing further billing from revoked and deactivated Medicare Part A and B providers and suppliers; • Deactivated more than 543,163 Medicare Part A and B providers and suppliers that did not meet Medicare enrollment standards; • Revoked enrollment and billing privileges under § 424.535 for more than 34,888 Medicare Parts A and B providers and suppliers that did not meet Medicare enrollment standards, and • Denied 4,949 applications for providers and suppliers in Medicare Parts A and B that did not meet Medicare enrollment standards within a recent 12-month period.14 The public may review the Annual Report to Congress on the Medicare and Medicaid Integrity Programs each year for more information on program integrity efforts, including how we calculate savings to the Medicare and Medicaid programs. The Department of Health and Human Services (HHS), Office of Inspector General (OIG), Government Accountability Office (GAO), and other federal agencies routinely review Medicare’s provider and supplier enrollment processes and systems, including a recent study stating that ‘‘as part of an overall effort to enhance program integrity and reduce fraud risk, effective enrollmentscreening procedures are essential to ensure that ineligible or potentially fraudulent providers or suppliers do not enroll in the Medicare program.’’ (GAO– 15–448) The enrollment screening authorities granted in the Affordable Care Act and used to prevent and detect ineligible or potentially fraudulent providers and suppliers from enrolling in the Medicare program are working to protect beneficiaries and the Medicare Trust Funds. Under applicable provisions of the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982, Medicare began to pay health plans on a prospective risk basis for the first time. The Balanced Budget Act of 1997 (BBA) modified these provisions and established a new Part C of the Medicare program, known as Medicare+Choice (M+C), effective January 1999. As part of the M+C program, the BBA authorized us to contract with public or private organizations to offer a variety of health plan options for enrollees, including both traditional managed care plans (such as those offered by HMOs, as defined in section 1876 of the Act) and new options not previously authorized. The M+C program was renamed the Medicare Advantage (MA) program under Title II of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108–173), which was enacted on December 8, 2003. The MMA updated the choice of plans for enrollees under MA and changed how benefits are established and payments are made. In addition, Title I of the MMA established the Medicare prescription drug benefit (Part D) program and amended the MA program to allow most types of MA plans to offer prescription drug coverage. All Medicare health plans, with the exception of PACE organizations, operating in geographic areas that we 14 Taken from Shantanu Agrawal, M.D. testimony to Congress on July 22, 2015 https:// www.aging.senate.gov/imo/media/doc/CMS%20_ Agrawal_7_22_15.pdf. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00278 Fmt 4701 Sfmt 4700 determine to have enough qualified providers and suppliers with which to contract in order for enrollees to have access to all Medicare Part A and Part B services, must develop a network of qualified providers and suppliers that meet our network adequacy standards. As a condition of contracting with us, the health plans’ contracted network of providers and suppliers must be approved by us as part of application approval (§ 417.406). PACE organizations must furnish comprehensive medical, health, and social services that integrate acute and long-term care in at least the PACE center, the participant’s home, or inpatient facilities, and must ensure accessible and adequate services to meet the needs of its participants. Individuals receiving care through MA organizations are typically referred to as enrollees, while in other parts of the Medicare program, benefit recipients are referred to as beneficiaries. This rule does not change the proper meaning of either term; however, for ease of reading, the terms ‘‘beneficiary’’ and ‘‘enrollee’’ are used synonymously throughout the preamble of this final rule. 2. Provisions of the Proposed Regulation a. Need for Regulatory Action This final rule will require providers or suppliers that furnish health care items or services to a Medicare enrollee who receives his or her Medicare benefit through an MA organization to be enrolled in Medicare and be in an approved status. The term ‘‘MA organization’’ refers to both MA plans and also MA plans that provide drug coverage, otherwise known as MA–PD plans. This final rule creates consistency with the provider and supplier enrollment requirements for all other Medicare (Part A, Part B, and Part D) programs. We believe that this final rule is necessary to help ensure that Medicare enrollees receive items or services from providers and suppliers that are fully compliant with the requirements for Medicare enrollment and that are in an approved enrollment status in Medicare. This final rule will assist our efforts to prevent fraud, waste, and abuse and to protect Medicare enrollees by carefully screening all providers and suppliers, especially those that potentially pose an elevated risk to Medicare, to ensure that they are qualified to furnish Medicare items and services. Out-of-network or non-contract providers and suppliers are not required to enroll in Medicare to meet the requirements of this final rule. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations We consider provider and supplier enrollment to be the gateway to the Medicare program and to beneficiaries. Requiring enrollment of those that wish to furnish items or services to MA beneficiaries gives us improved oversight of the providers and suppliers treating beneficiaries and the Medicare Trust Funds dollars spent on their care. However, Medicare has not historically had direct oversight over all providers and suppliers in MA organizations. We note that § 422.204 requires MA organizations to conduct screening of their providers. We believe that we, through our enrollment processes, can further ensure that only qualified providers and suppliers treat Medicare beneficiaries by conducting rigorous screening and rescreening of providers and suppliers that includes, for example, risk-based site visits and, in some cases, fingerprint-based background checks. We also have access to information and data not available to MA organizations, making oversight to ensure compliance with all federal and state requirements more robust. We also continually review provider and supplier enrollment information from multiple sources, such as judicial and law enforcement databases, state licensure databases, professional credentialing sources, and other systems of record. In short, we collect and carefully review and verify information prior to the provider’s or supplier’s enrollment and, of great importance, continue this monitoring throughout the period of enrollment. Section 422.204, on the other hand, neither requires MA organizations to, for instance, review a provider or supplier’s final adverse action history (as defined in § 424.502), nor to verify a provider or supplier’s practice location, ownership, or general identifying information. We believe that MA organization enrollees should have the same protections against potentially unqualified or fraudulent providers and suppliers as those afforded to beneficiaries under the fee-for-service (FFS) and Part D programs. Indeed, Medicare beneficiaries and enrollees, the Medicare Trust Funds, and the program at large, are at risk when providers and suppliers that have not been adequately screened, furnish, order, certify, or prescribe Medicare services and items and receive Medicare payments. For instance, a network provider with a history of performing medically unnecessary tests, treatments, or procedures could threaten enrollees’ welfare, as could a physician who routinely overprescribes dangerous drugs. Lack of sufficient oversight could VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 also result in improper Medicare payments, harming the Medicare Trust Funds and taxpayers. Requiring enrollment allows us to have proper oversight of providers and suppliers, making it more difficult for these types of providers and suppliers to enroll in Medicare and remain enrolled in Medicare. Furthermore, it allows us to remove a enrolled provider or supplier that does not comply with our rules across Medicare (Part A, Part B, MA, and Part D). Information regarding a provider or supplier’s enrollment status is housed in our enrollment repository called the Provider Enrollment, Chain and Ownership System (PECOS). A link to that information is located on the CMS Web site. Initial data show a large percent of MA providers and suppliers are already enrolled in Medicare. We do not believe that this final rule will have a significant impact on MA organizations’ ability to establish networks of contracted providers and suppliers that meet CMS’ MA network requirements. However, we solicited industry comment on the potential impact of this final rule on MA organizations ability to establish or maintain an adequate networks of providers and suppliers. To clarify, this rule only requires the enrollment of providers and suppliers that are of a provider or supplier type eligible to enroll in Medicare. Categoricallyeligible providers and suppliers unable to meet the specific enrollment requirements are not exempt from this rule. For example, if a clinical social worker cannot meet an education requirement as required by § 410.73, the clinical social worker cannot enroll because he or she fails to meet program requirements. Therefore, this clinical social worker may not provide items and services to beneficiaries that receive items and services through FFS, MA, MA–PD, PACE, and Cost plans, as well as demonstration and pilot programs, regardless of whether the provider or supplier is listed on a specific claim for payment. We believe that preventing questionable providers or suppliers from participating in the MA program and removing existing unqualified providers and suppliers will help ensure that fewer enrollees are exposed to risks and potential harm, and that taxpayer monies are spent appropriately. Such a policy will also help comply with the GAO’s recommendation that we improve our provider and supplier enrollment processes and systems to increase the protection of all beneficiaries and the Medicare Trust Funds. (GAO–15–448). PO 00000 Frm 00279 Fmt 4701 Sfmt 4700 80447 The additional resources and oversight that we provide in our processes for enrolling providers and suppliers will enhance and complement the screening processes that MA organizations already are required to perform. b. Statutory Authority The following are the principal legal authorities for these provisions: • Section 1856(b) of the Act provides that the Secretary shall establish by regulation other standards for Medicare+Choice organizations and plans consistent with, and to carry out, this part. In addition, section 1856(b) states that these standards supersede any state law or regulation (other than those related to licensing or plan solvency) for all MA organizations. • Sections 1102 and 1871 of the Act, which provide general authority for the Secretary to prescribe regulations for the efficient administration of the Medicare program. • Section 1866(j) of the Act, which provides specific authority with respect to the enrollment process for providers and suppliers in the Medicare program. 3. Major Provisions Given the foregoing and the need to safeguard the Medicare program and its enrollees, we are finalizing most provisions included in the proposed rule, with limited exceptions and explained herein. Although existing regulations at § 422.204 address basic requirements for MA provider credentialing, we are finalizing the requirement in § 422.204(b)(5) to require plans to verify that they are compliant with the provider and supplier enrollment requirements. We believe this addition would help facilitate MA organizations’ compliance. In §§ 422.222, 417.478, 460.50, 460.70, and 460.71 we are finalizing the provisions requiring providers and suppliers to enroll in Medicare and be in an approved status in order to provide health care items or services to a Medicare enrollee who receives his or her Medicare benefit through an MA organization. This requirement would apply to network providers and suppliers; first-tier, downstream, and related entities (FDR); providers and suppliers participating in the Program of All-inclusive Care for the Elderly (PACE); suppliers in Cost HMOs or CMPs; providers and suppliers participating in demonstration programs; providers and suppliers in pilot programs; locum tenens suppliers; and incident-to suppliers. Based on a comment we received, we made a change from the proposed rule when E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80448 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations finalizing a specific provision relating to the PACE program. Commenters were concerned that the requirement to update PACE program agreements with the name and NPIs of all enrolled providers and suppliers was extremely burdensome based on the nature of the agreements and it imposed more of a burden than was established for other plans and programs required to comply with this rule. Instead of requiring PACE organizations to update the program agreement with the name and NPI of all providers and suppliers (§ 460.32), we added language to § 460.70 and § 460.71 that better reflect the enrollment requirements imposed on MA organizations. We agree that we can achieve the same program integrity goals, without the added burden of having PACE organizations reflect this information in the program agreement. Based on a comment we received, we also moved the requirement for PACE that was included in 422.222 and relocated it to better align with the PACE program. The requirements remain the same; however, the enrollment requirements are now contained in part 460. We are finalizing the provisions in § 422.510, § 422.752, § 460.40, and § 460.50 stating that organizations and programs that do not ensure that providers and suppliers comply with the provider and supplier enrollment requirements may be subject to sanctions and termination. Considering the serious risks to the Medicare program and enrollees from fraudulent or unqualified providers and suppliers, we believe that these are actions may be appropriate. Current rules allow MA organizations to contract with different entities to provide services to beneficiaries. These contracted entities are referred to as first-tier, downstream, and related entities or FDRs, as defined in § 422.500. FDRs must enroll to comply with this rule. PACE is a Medicare and Medicaid program that helps people meet their health care needs in the community instead of going to a nursing home or other care facility, wherein a team of health care professionals works with participants and their families to make sure participants get the coordinated care they need. A participant enrolled in PACE must receive Medicare and Medicaid benefits solely through the PACE organization. To ensure consistency within our programs, we believe that our provider and supplier enrollment requirements should extend to this program. Medicare Cost HMOs or CMPs are a type of Medicare health plan available VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 in certain areas of the country. Some Cost HMOs or CMPs only provide coverage for Part B services. Cost HMOs or CMPs do not include Part D. These plans are either sponsored by employer or union group health plans or offered by companies that do not provide Part A services. Demonstrations and pilot programs, also called research studies, are special projects that test improvements in Medicare coverage, payment, and quality of care. They usually operate only for a limited time for a specific group of people and may only be offered only in specific areas. Providers and suppliers in these programs would not be exempt from the requirements of this final rule. In §§ 422.224 and 460.86, we are finalizing the prohibition on MA, PACE, the other designated programs and organizations from paying individuals or entities that are excluded by the OIG or revoked from the Medicare program. These provisions also require MA, PACE, the other designated programs and organizations to notify the enrollee and the excluded or revoked provider or supplier that payment shall not be made. We are not, however, finalizing a first time allowance for payment. Based on further analysis, we believe a first time payment allowance would violate existing statute. However, we believe that beneficiaries are adequately protected in these situations based upon regulatory protections afforded at 42 CFR 1001.1901(b) and § 424.555(b) that preclude OIG excluded individuals and entities, as well as revoked, deactivated, or Medicare enrollment denied providers or suppliers from recouping payment from beneficiaries. We continue to believe such excluded or revoked individuals and entities pose a significant risk to enrollees and the Medicare program and should not receive federal dollars, even if payment is made through an intermediary such as an MA organization. Based upon the inclusion of PACE in § 422.222 in the proposed rule, and our relocating the PACE requirement to part 460, the application of the prohibition to pay excluded and revoked providers and suppliers also needs to be separately designated. Therefore, in this final rule, the sections applicable to not paying excluded or revoked providers and suppliers is now designated in § 460.86. In § 422.501(c)(2), we are finalizing language requiring MA organization applications to include documentation demonstrating that all applicable providers and suppliers are enrolled in Medicare in an approved status. We believe that this will assist CMS in the MA organization application process by PO 00000 Frm 00280 Fmt 4701 Sfmt 4700 requiring MA organizations to provide assurance that the designated providers and suppliers are properly screened and enrolled in Medicare. In § 422.504(a)(6), we are finalizing language with respect to contract conditions. MA organizations must agree to comply with all applicable provider requirements in subpart E of this part, including provider certification requirements, antidiscrimination requirements, provider participation and consultation requirements, the prohibition on interference with provider advice, limits on provider indemnification, rules governing payments to providers, and limits on physician incentive plans. In § 422.504(a)(6), we are finalizing the extension of this requirement to suppliers. In this same section, we also are finalizing the requirement for MA organizations to comply with the provider and supplier enrollment requirements referenced in § 422.222. We believe these revisions would help facilitate the MA organizations’ compliance with § 422.222. In §§ 422.504(i)(2)(v), 417.484, 460.70, and 460.71, we are finalizing provisions that require MA organizations, Cost plans, and PACE organizations to require all FDRs and contracted entities to agree to comply with the provider and supplier enrollment provision. Finally, the provisions are effective the first day of the next plan year that begins 2 years from the date of publication of the CY 2017 PFS final rule. For PACE organizations, these requirements will be effective the first day of the calendar year that is 2 years after the publication of this final rule. We believe this would give all stakeholders sufficient time to prepare for these requirements. We are unable to impose new requirements on MA organizations mid-year, and therefore, must wait to make these rules effective. The following is a summary of the comments we received on MA provider enrollment. Enrollment File Comment: A commenter expressed concern that CMS’ requirements for plan validation are overly burdensome. The commenter noted that, as a condition of contracting with CMS, an MA organization would have to agree to provide documentation that all providers and suppliers in the MA or MA–PD plan who could enroll in Medicare were indeed enrolled. Believing that the providers themselves should be involved in this process, the commenter stated that providers should submit the required documentation to CMS (as in the FFS program) and that E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations CMS should in turn maintain a ‘‘source of truth’’ document for audit and compliance purposes. The commenter stated that provider information can change frequently and become outdated; without a ‘‘source of truth’’ to confirm a provider’s enrollment in Medicare, the commenter said, unintended consequences could arise. Response: We do not agree that this requirement is overly burdensome. We have made compliance simple by providing a file of enrolled providers and suppliers. We maintain all provider enrollment information in PECOS, our enrollment repository. In an effort to provide MA organization with the necessary information, an online, public file listing enrolled providers and suppliers has already been made available to MA organizations and will continue to be updated at a frequency to be determined and announced through established processes such as a Medicare Learning Network (MLN) article. We believe this approach will provide MA organizations with sufficient access to the necessary provider enrollment information for the relevant requirements under this final rule. In addition, providers and suppliers will be required to submit documentation to a CMS contractor, consistent with current Medicare enrollment processes. Comment: Several commenters asked how CMS will communicate provider and supplier information to individual MA organizations so that they can remain compliant with our proposed requirement. Another commenter asked how CMS will verify the inclusion or exclusion of enrolled providers and suppliers. Several commenters stated that if CMS finalizes its proposed requirement, it must grant the MA organizations full access to PECOS so they can confirm a provider’s or supplier’s enrollment status. A commenter recommended that CMS make publicly available a list of all Medicare revocations, including the date and reason for the revocation. Several commenters suggested that MA organizations be given access to PECOS or some other means of verifying an MA provider’s or supplier’s enrollment in Medicare. This would, they contended, reduce the burden on the plans and help ensure the plans’ compliance with the requirements of § 422.222. Response: We have created a public file that will be regularly updated with provider and supplier enrollment information at a frequency to be determined and announced through established processes such as a MLN article. As mentioned previously, we believe this is an efficient and sufficient VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 approach to providing information to plans, and we do not believe that MA organizations need full access to PECOS to obtain the information necessary to comply with this final rule. Regarding revoked providers, providers or suppliers that are revoked from the program will not be included in the enrollment file because they are not validly enrolled. Comment: A commenter asked how CMS will communicate with MA organizations if it revokes a provider’s or supplier’s enrollment and what steps the MA organization would be required to take in response to the revocation. Response: We will periodically update our enrollment file made available to MA organizations. Providers or suppliers that are revoked from the program will not be included in the enrollment file because they are not validly enrolled. MA organizations will be expected to check the enrollment file to ensure all providers and suppliers are validly enrolled and may not have an unenrolled provider and supplier in their network. As we move toward implementation, we will provide subregulatory guidance with respect to revoked providers and suppliers. Comment: A commenter asked whether our proposed enrollment requirement represents a mere clarification of § 422.204(b)(2)(i), which outlines the provider credentialing process, or constitutes a new and expanded process that MA organizations must address in their policies and contracting processes. If it is the latter, the commenter requested specific information on the ‘‘source of truth’’ and the method for MA organizations to verify this information (for example, whether MA organizations will have to confirm the enrollment statuses of providers and suppliers via a CMS Web site or whether CMS will furnish a list of enrolled providers and suppliers to the MA organizations). Response: This requirement is not a mere clarification of § 422.204(b)(2)(i) but imposes additional requirements on plans to ensure that their providers and suppliers are screened and enrolled in Medicare. These requirements are an expansion of § 422.204(b)(2)(i). Verification of enrollment can be found by accessing the online enrollment file we have provided to the public, which will be updated to reflect changing enrollment data. Authority and Burden Comment: A commenter suggested that CMS estimate the number of providers and suppliers that furnish care to Medicare beneficiaries through an MA organization only and not PO 00000 Frm 00281 Fmt 4701 Sfmt 4700 80449 through the Medicare FFS program and that CMS include this figure and the associated cost in its regulatory burden and Paperwork Reduction Act estimates. Response: We appreciate the opportunity to clarify that these are the exact figures reflected in the proposed rule and in this final rule in the regulatory burden and Paperwork Reduction Act sections. Comment: A commenter asked that CMS: (1) Monitor the impact of these requirements on MA organization networks and physician enrollment and, if negative effects are found, to either roll-back the requirement or implement appropriate changes; (2) create realistic implementation timeframes and comprehensive outreach plans; and (3) establish beneficiary financial protections during the transition. Another commenter recommended that CMS improve its enrollment processes so that those affected can enroll in a timely manner. Response: We appreciate the commenters’ suggestions and will take these suggestions into consideration as we move forward with operational plans. Comment: A commenter asked whether CMS has conducted a preliminary assessment of the potential nationwide impact this requirement. Response: We have made that assessment, and it is reflected in our Regulatory Impact Analysis. Comment: A commenter sought clarification on how the provisions of § 422.222 would improve program integrity and quality of care. Response: This final rule would assist our efforts to prevent fraud, waste, and abuse and to protect Medicare enrollees by carefully screening all providers and suppliers, especially those that potentially pose an elevated risk to Medicare, to ensure that they are qualified to furnish Medicare items and services. These requirements are not a clarification of § 422.204(b)(2)(i), but impose additional requirements on plans to ensure that their providers and suppliers are screened and enrolled in Medicare. Requiring enrollment of those that wish to furnish items or services to MA beneficiaries gives us improved oversight of the providers and suppliers treating beneficiaries and the Medicare Trust Fund dollars spent on their care. Prior to this rule, Medicare did not have direct oversight over all providers and suppliers furnishing items and services to enrollees of MA organizations. Section 422.204 requires MA organizations to conduct screening of their providers. We believe that we can, through our enrollment processes, conduct more robust verification of the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80450 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations information provided during enrollment so that only qualified providers and suppliers treat Medicare beneficiaries by conducting rigorous screening and rescreening of providers and suppliers, risk-based site visits and fingerprintbased background checks. We also have access to information and data not available to MA organizations, making oversight to ensure compliance with all federal and state requirements more robust. These checks prevent certain providers and suppliers from furnishing items and services to beneficiaries, such as a doctor convicted of a felony for abusing patients. While we are hopeful that licensing boards would take action to prevent providers and suppliers such as this from lawfully providing services to patients in the future, we cannot always rely on the boards to take the action we believe is appropriate when serving beneficiaries. We believe that MA organization enrollees should have the same protections against potentially unqualified or fraudulent providers and suppliers as those afforded to beneficiaries under the FFS and Part D programs. Our program integrity concerns are furthered by having the ability to easily consolidate data across all lines of Medicare to see billing patterns and schemes for a particular provider or supplier. For example, a network provider with a history of performing medically unnecessary tests, treatments, or procedures could threaten enrollees’ welfare, as could a physician who routinely overprescribes dangerous drugs. This could also result in improper Medicare payments, harming the Medicare Trust Funds and taxpayers. A benefit of enrolling all providers and suppliers in Medicare is the ability to remove a provider or supplier for failure to meet our requirements or violates federal rules and regulations. Not only is the provider or supplier unable to bill a particular MA organization, but they also may not bill any other plan, bill Medicare, order and certify Medicare items and services, or prescribe Part D drugs. Comment: A commenter opposed our proposed enrollment requirement, stating that it would be redundant in that all payers have rigorous screening and rescreening processes, as well as programs to ensure quality and cost effectiveness. The commenter also stated that: (1) physician quality data is transparent and made available through payer Web sites and portals to provide members with the opportunity to choose highly rated qualified physicians; and (2) MA plans should be responsible for ensuring that they are enrolling the most qualified physicians into their networks. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 In addition, the commenter encouraged CMS to ensure that health plans are consulting the OIG exclusion list to guarantee that physicians who have been convicted of crimes are not in the MA networks. Response: We appreciate the commenter’s concerns; however, we respectfully disagree and believe that our enrollment screening processes (for example, risk-based site visits and fingerprint-based background checks) help to ensure that qualified providers and suppliers treat Medicare beneficiaries. We conduct rigorous screening and rescreening of providers and suppliers. We also have access to information and data that is not available to MA organizations, which enhances enrollment screening and helps ensure that providers and suppliers are in compliance with all federal and state requirements. Moreover, we also continually review provider and supplier enrollment information from multiple sources, such as judicial, law enforcement, state licensure, professional credentialing, and other databases for which MA organizations do not have access. In short, we collect and verify information prior to the provider’s or supplier’s enrollment and, of great importance, continue this monitoring throughout the period of enrollment. Section 422.204, on the other hand, neither requires MA organizations to, for instance, review a provider or supplier’s final adverse action history (as defined in § 424.502), nor to verify a provider or supplier’s practice location, ownership, or general identifying information. Comment: A commenter questioned the need for our proposal by stating that CMS did not provide empirical evidence of problems in MA for which our enrollment requirement would be appropriate or fully address the proposal’s impact on network adequacy and potential downstream beneficiary access issues. The commenter stated that the requirement is a FFS solution developed for FFS program integrity issues and is improper for the MA program. The commenter urged CMS to withdraw the proposal and work with plans to develop solutions that are better applicable to the MA program. Another commenter suggested that CMS cite the specific OIG or GAO reports that recommend that MA providers and suppliers be enrolled in Medicare FFS and furnish evidence that our proposed requirement would improve care for MA beneficiaries. Response: We believe that the vulnerabilities identified by the GAO (GAO–15–448) provide sufficient justification to impose this requirement. PO 00000 Frm 00282 Fmt 4701 Sfmt 4700 Based upon our analysis of unenrolled providers and suppliers that only provide services for MA organizations and do not bill Medicare FFS, we do not believe there will be network adequacy issues or beneficiary access issues. Regarding the commenter’s concern that Medicare enrollment and screening is a FFS solution and is improper for the MA program, we note that MA organizations’ requirements for screening providers and suppliers are similar to Medicare screening and enrollment in that MA organizations have requirements to, for example, perform site visits, check licensure, and to complete background checks. However, MA organizations have discretion in administering their screening and verification procedures. The Medicare enrollment process is much more robust and provides heightened consistency to the MA organizations’ screening processes and also allows for screening using databases that are not available to MA organizations. As discussed in the preamble, a recent GAO study stated that ‘‘as part of an overall effort to enhance program integrity and reduce fraud risk, effective enrollment-screening procedures are essential to ensure that ineligible or potentially fraudulent providers or suppliers do not enroll in the Medicare program.’’ (GAO–15–448) This study’s recommendations did not specifically recommend MA provider and supplier enrollment; however, these new provisions are part of an overall plan to ensure standard screening for those providers and suppliers treating MA beneficiaries. Evidentiary support for improved care for beneficiaries can be seen by reviewing the Annual Report to Congress on the Medicare and Medicaid Integrity Programs, which gives more information on program integrity efforts and administrative actions. This report demonstrates statistical evidence of the judicial and administrative actions taken against providers and suppliers, such as, licensure suspensions, felony convictions, and Medicare revocations. Comment: A commenter recommended that CMS identify the types of oversight it currently uses to ensure that MA organizations do not have unlicensed or fraudulent providers and suppliers participating in their network. Response: These regulatory requirements are specified at § 422.204 and impose obligations on plans. Comment: A commenter recommended that CMS streamline and improve the enrollment process before implementing its proposed MA enrollment requirements. Another E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations commenter urged CMS to administer the enrollment requirements in a manner that limits the burden on physician practices as much as possible. Response: We appreciate the commenters’ concerns and have taken steps to make the enrollment process as streamlined as possible, but we do not believe that implementation should be delayed. The application process, especially for physicians and physician practices, requires the provision of basic information that should be easily obtained, such as name, NPI, practice locations, licensure number, criminal history, and education. We do not believe that furnishing this information will be overly burdensome for providers and suppliers. Moreover, this information provides great value in assessing the risk to beneficiaries and the program. Consequently, we decline to delay the requirements in this rule. Comment: A commenter urged CMS to work with plans so that an informed assessment of the potential impact of our proposed requirements can be developed before the rule is finalized. Response: We remain committed to working with plans to help them understand and be compliant with these requirements; however, we decline to delay implementation. We have reviewed all public comments and considered the potential impacts provided by commenters and internal stakeholders prior to finalizing this rule. Comment: Several commenters opposed CMS’ proposal. One commenter stated that it represents a regulatory overreach and asked CMS to cite the legal authority for the proposal, explain our justification for the proposal, and identify the specific problem the proposal is intended to resolve. The commenter stated that CMS did not furnish evidence that MA providers are unqualified or fraudulent and suggested that CMS provide examples of where (1) an MA provider or supplier was not licensed to practice medicine and where the MA organization did not take the appropriate action to terminate the provider or supplier; (2) CMS has taken a compliance action against an MA organization for failing to exclude unlicensed or fraudulent providers or suppliers from their network; and (3) CMS imposed civil money penalties or sanctions on an MA organization for its failure to protect its members from unlicensed or fraudulent providers or suppliers. Other commenters stated that the proposed requirement would be overly burdensome on plans and providers. Response: Our legal authority is based upon section 1856(b) of the Act, which VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 provides that the Secretary shall establish by regulation other standards for Medicare+Choice organizations and plans ‘‘consistent with, and to carry out, this part.’’ In addition, section 1856(b) of the Act states that these standards supersede any state law or regulation (other than those related to licensing or plan solvency) for all MA organizations. We have also relied on sections 1102 and 1871 of the Act, which provide general authority for the Secretary to prescribe regulations for the efficient administration of the Medicare program. Section 1866(j) of the Act gives us specific authority with respect to the enrollment process for providers and suppliers in the Medicare program. Our justification for broadening our enrollment requirements is based upon a desire for MA organization enrollees to have the same protections against potentially unqualified or fraudulent providers and suppliers as those afforded to beneficiaries under the FFS and Part D programs. We believe that robust screening is fundamentally important to promote quality of care. Medicare beneficiaries and enrollees, the Medicare Trust Funds, and the program at large, are at risk when providers and suppliers that have not been adequately screened furnish, order, certify, or prescribe Medicare services and items and receive Medicare payments. Requiring enrollment allows us to have proper oversight of providers and suppliers, making it more difficult for these types of providers and suppliers to enroll in Medicare and remain enrolled in Medicare. Furthermore, it allows us to remove a provider or supplier that does not comply with our rules across Medicare (Part A, Part B, MA, and Part D). We believe the GAO report cited herein provides specific examples and evidence of our need to standardize the enrollment process and take advantage of the information available to Medicare that the MA organizations cannot access. We believe the enrollment file provides an efficient way for the plans to ensure that providers and suppliers are enrolled, which will minimize burden on plans. Comment: A commenter expressed concern that some of the operational challenges encountered in CMS’ implementation of the Part D prescriber enrollment requirement could also occur during implementation of a similar requirement in MA. The commenter urged CMS to implement its MA enrollment requirement in a manner that avoids such issues. Specifically, the commenter urged CMS to improve application processing timeframes, test file protocols, and file PO 00000 Frm 00283 Fmt 4701 Sfmt 4700 80451 layouts while developing a mechanism to require providers to update their taxonomy codes. Response: We appreciate this comment and will continue our ongoing work to minimize burden on MA organizations, as well as providers and suppliers, while ensuring that an effective and efficient enrollment process, as well as outreach and education efforts, exist to operationalize the requirements under this final rule. Comment: A commenter expressed concern that certain contractual arrangements that are currently required for SNFs under Medicare Parts A and B might be disallowed under the proposed rule. The commenter stated that SNFs are statutorily required under consolidated billing to submit charges for certain ancillary services, such as rehabilitation therapy and portable x-ray services as a part of the nursing facility’s institutional claim; that is, Medicare Part B requires that the nursing facility bill Medicare for these services. The commenter sought clarification on the question of contractual disallowance, given the proposed rule’s objectives of achieving consistency between MA and Medicare Parts A and B and whether such ancillary service providers must enroll as Medicare providers. Response: This rule does not address the payment arrangements described by the commenter. We note that Part A and B providers and suppliers are already required to enroll in Medicare. These provisions only provide for requirements for the Medicare enrollment of MA organization providers and suppliers and prohibition of payment in certain circumstances such as an OIG exclusion or Medicare revocation. Plan Noncompliance Comment: A commenter contended that sanctioning or terminating plans for non-compliance with our enrollment requirements is too aggressive. The commenter stated that plans will need to ensure that systems are updated with current provider information and that new information can be received and reviewed in a timely manner. The commenter stated that legitimate errors could arise throughout the process, and that rather than immediately sanction or terminate a plan (which would have negative consequences on its members), CMS should instead put into place a process for remediation. Plans that are consistently found to be in noncompliance with the rules, the commenter said, should face enforcement action, but first time ‘‘offenders’’ should be given the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80452 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations opportunity to work through challenges with both CMS and providers. Response: We will work with MA organizations and all other stakeholders as we move forward with implementation. We have discretion in determining the appropriate action to take for noncompliant plans, such that any remedial actions or penalties imposed on plans that do not comply with the requirements of this rule will be the result of thorough analysis of all relevant factors. Furthermore, we have provided the stakeholders with more than 2 years to make the changes necessary to accommodate this requirement. Comment: A commenter asked whether beneficiary complaints about the MA organization due to the impact of the enrollment requirement (for example, the beneficiary can no longer receive covered services from a nonenrolled provider) will affect a plan’s Star Rating. The commenter believed it would be unfair to penalize plans that are merely attempting to comply with CMS’ enrollment requirement. Response: We do not expect the requirements of this final rule to have a significant impact on Star Ratings, given the relatively few number of providers and suppliers that need to enroll to meet the requirements of this rule. Issues regarding the potential impact that beneficiary complaints have on plans’ Star Ratings will be addressed by CMS in future guidance. Furthermore, any remedial actions or penalties imposed on MA organizations that do not comply with the requirements of this rule will be the result of thorough analysis of all relevant factors. Comment: A commenter sought clarification as to the extent an MA organization may be subject to contract termination, intermediate sanctions, or civil monetary penalties. Response: It is difficult to predict, prior to our enforcement of these provisions, how and when we will use these sanctions. We cannot yet assess plans’ compliance with this requirement and the steps they will take to become compliant. We will consider issuing guidance in the future related to this rule. Comment: Several commenters expressed concern about the potential penalties for plans that do not adhere to our enrollment requirements. One commenter stated that data or other system issues might prevent plans from having complete and accurate information about a provider’s or supplier’s status at a certain point in time. The commenter added that it may be critical for beneficiaries to retain access to a provider for continuity of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 care, that plans should not be sanctioned for ensuring that beneficiaries are protected in these cases, and that appropriate exceptions would need to be developed. Response: We will work with MA organizations and all other stakeholders as we move forward with implementation. We have discretion in determining the appropriate action to take for noncompliant plans, such that any remedial actions or penalties imposed on plans that do not comply with the requirements of this rule will be the result of a thorough analysis of all relevant factors. Furthermore, we have provided the stakeholders with more than 2 years to make the changes necessary to accommodate this requirement. Clarification and Exemptions Comment: A commenter recommended that CMS explain whether a DMEPOS supplier that services Medicare beneficiaries through an MA organization, a cost contract plan under section 1876 of the Act, or a health care pre-payment plan under section 1833 of the Act will be subject to surety bonding, accreditation, and other DMEPOS provisions contained in the Medicare FFS program. The commenter also asked how CMS will address access-to-care issues when such DMEPOS suppliers are unable to comply with § 424.57 and §§ 424.500– 424.570. Another commenter recommended that CMS clarify whether Part A providers serving Medicare beneficiaries through an MA organization, a section 1876 cost contract plan, or a section 1833 health care pre-payment plan must obtain a CMS survey or accreditation to enroll in Medicare FFS. Response: All providers and suppliers that enroll in Medicare are subject to the Medicare enrollment requirements, as assigned by their provider or supplier type. For example, provider and supplier types subject to surety bonding are required to obtain a surety bond to complete the enrollment process. There are no exceptions to the enrollment requirements based on this rule. If a CMS survey or accreditation is required for a particular provider or supplier type, it must comply in order to enroll. We do not anticipate any issues with regard to access to care based on the relatively small number of providers and suppliers that need to enroll to meet the requirements of this rule. If there are access to care issues, the plans will follow established protocols to ensure all beneficiaries have access to needed items and services. PO 00000 Frm 00284 Fmt 4701 Sfmt 4700 Comment: A commenter requested more explicit definitions of the terms ‘‘provider’’ and ‘‘supplier,’’ particularly in the context of Medicare-Medicaid plans (MMPs), which the commenter stated would not otherwise qualify for Medicare enrollment but furnish needed services to MMP members; the commenter believed that such providers should be excluded from our proposal. Response: As stated in the preamble of the rule, those terms are defined in sections 1861(u) and 1861(d) of the Act. We are only requiring enrollment for providers and suppliers that are categorically-eligible to enroll in Medicare. This rule is not requiring MMP plans to enroll. Comment: A commenter recommended that CMS clarify whether our proposal applies to providers and suppliers furnishing services to a Medicare beneficiary through the Railroad Retirement Board or the Indirect Payment Procedure (IPP) under § 424.66 and, if so, that CMS adjust the regulatory impact analysis accordingly. Response: This particular rule is not applicable to the Railroad Retirement Board or the IPP. Comment: A commenter requested clarification as to whether the proposed requirements add MA provider enrollment burdens that extend beyond the current FFS enrollment process requirements. Response: No, the enrollment requirements do not extend beyond our current requirements. Providers and suppliers that are already enrolled in Medicare for purposes of billing the Medicare program, rather than enrolled to order, refer, certify, or prescribe, have met the enrollment requirements for this rule and are compliant. Part A providers and suppliers that are validly enrolled in the Medicare program do not need to separately enroll to meet the requirements of this rule. In-network providers and suppliers that are not already enrolled in Medicare and that are currently providing services to MA enrollees will need to enroll in Medicare to continue to provide those services to MA enrollees. Comment: A commenter asked how our proposed requirement applies to providers and suppliers for MMPs. The commenter stated that these plans might have atypical providers and suppliers that would be unable to enroll in Medicare but provide needed care to MMP members. The commenter recommended that such providers be excluded from this requirement. Response: This rule specifies requirements for providers and suppliers that provide services to beneficiaries enrolled in MA, MA–PD, E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations PACE, and Cost plans, as well as demonstration and pilot programs. The requirements also apply to FDRs, locum tenens, and incident-to suppliers. To the extent that MMPs are MA or MA–PD plans they would be subject to these requirements. We are not providing any exemptions and are only requiring enrollment in Medicare for providers and suppliers that are categoricallyeligible to enroll in Medicare. Comment: A commenter asked whether providers associated with FDRs would need to be enrolled in Medicare, even if they are not directly engaged in providing services to plan members. The commenter cited the example of dentists and expressed concern that a requirement for dentists to enroll in Medicare to participate in an MA network would threaten beneficiary access to a supplemental dental benefit that many members have as part of their MA benefit package. In general, the commenter urged CMS to clarify which providers are affected by the provision, and how providers associated with FDRs are to be treated in this respect. Response: FDRs, such as dentists, will need to enroll to meet the requirements of this rule. All providers and suppliers that are categorically-eligible to enroll in Medicare must enroll in Medicare in an approved status in order to meet the requirements of this final rule. A determination as to whether a provider or supplier is eligible to enroll will be based on the type of provider or supplier. For example, if an audiologist works for a PACE organization or an FDR, he or she would need to enroll in Medicare because an audiologist is a type of provider or supplier eligible to enroll. Furthermore, section 1861(ll)(4)(B) of the Act states that a qualified audiologist must have a masters or doctoral degree in audiology, among other requirements. If the audiologist cannot enroll because he or she fails to meet program requirements, such as this educational requirement, he or she may not enroll in the program or provide services to beneficiaries enrolled in programs under this final rule. It does not mean that providers and suppliers, that are of the type of providers or suppliers eligible to enroll in Medicare, are exempt from enrolling because they cannot or do not meet the necessary requirements for their specific provider or supplier type to enroll in Medicare. Providers and suppliers that cannot or do not meet the enrollment requirements may not provide items and services to beneficiaries that receive items and services through FFS, MA, MA–PD, PACE, and Cost plans, as well as demonstration and pilot programs. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment: A commenter asked whether there would be a grandfathering provision or grace period for un-enrolled MA providers and suppliers. Response: We believe that the effective date of the provisions of this rule and length of time we have allowed for plans to comply with these provisions provides enough time for providers and suppliers to enroll. We do not believe that providing a grace period or a grandfathering provision would serve the goals of ensuring consistent screening. Comment: A commenter recommended that CMS clarify proposed § 422.222 to state that enrollment in Medicare in an ‘‘approved status’’ includes providers and suppliers that are deactivated for lack of claims submission. Response: Providers and suppliers that are deactivated are not considered in an approved status. Deactivated providers and suppliers may reactivate their enrollment by contacting their Medicare Administrative Contractor and following the applicable reactivation procedures which are set forth in our enrollment regulations at § 424.540(b). Comment: A commenter recommended that the proposed MA enrollment requirement for in-network providers and suppliers extended to out-of-network providers; the commenter believed this would help ensure that all MA beneficiaries have access to fully screened and qualified providers and suppliers. Response: We appreciate the commenter’s support and suggestion. Because we did not propose an expansion to out-of-network providers and suppliers, we are not able to finalize that in this rule. We proposed including only in-network providers and suppliers in this rule to ensure only a minimal impact to beneficiaries. We may consider future rulemaking to address the commenter’s concerns. Comment: A commenter requested clarification as to whether the proposed enrollment requirement extends to employees and contracted services furnished through properly enrolled and approved Medicare providers of services, including SNFs; that is, whether such employees or contractual professionals or agencies of providers meet the definition of FDRs. The commenter stated that, under FFS Medicare, there is no requirement that professional employees or contracted professionals or agencies of a properly enrolled provider of services, such as a SNF, must be independently enrolled in FFS. Another commenter asked whether MA organizations will be responsible PO 00000 Frm 00285 Fmt 4701 Sfmt 4700 80453 for ensuring that the entire staff or all the employees of such organizations (including nurses, medical students, interns and residents of a facility or other ancillary personnel, others in a provider’s office, or in an inpatient setting that the MA organization does not directly contract with for the provision of services) are enrolled. Another commenter recommended that these requirements be limited to MA first tier contracted providers and facilities that provide basic Medicare A, B, and D benefits and that the scope of those needed to enroll be scaled back significantly. Response: We are using the definitions for first-tier, downstream, and related entities in § 422.500. The MA organizations will be responsible for ensuring that the providers and suppliers that are required to enroll, are indeed enrolled. Comment: A commenter sought clarification as to whether the rule would extend existing requirements for Part A and B providers to MA organization networks, rather than requiring expanded screening for subcontracted providers. Response: The rule extends Parts A and B enrollment requirements to MA organization networks including other providers and suppliers, such as FDRs. Comment: A commenter stated that because Medicare FFS does not offer a dental benefit, CMS should not require MA organizations to adhere to the standard of mandating that dentists enroll as MA suppliers in order to provide dental care to MA beneficiaries. Another commenter sought clarification concerning the impact of the enrollment requirement on supplemental providers that are not covered by Medicare Part A or Part B. The commenter cited the example of dental services, which are often included as part of a supplemental services package; the commenter asked whether dentists who are in-network with MA organizations would be required to enroll in Medicare. The commenter urged CMS to consider (1) whether extending its enrollment requirement to dentists and other affected supplemental service providers is in the best interest of beneficiaries and (2) delaying such a requirement for providers of supplemental services until CMS gains experience and understands the effects of the requirement on Part A and Part B providers, and can make any modifications needed to ensure access. Response: We appreciate the commenter’s recommendations; however, we are committed to ensuring that beneficiaries receive items and services from providers and suppliers that are the categorical types of E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80454 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations providers and suppliers eligible to enroll, that are subject to uniform screening processes, including when receiving dental services or other services not covered by Medicare in Part A or Part B. Comment: A commenter stated that our proposed requirement is too broad, citing as examples its application to locum tenens suppliers and incident-to suppliers. In particular, the commenter stated that MA beneficiaries may receive covered Medicare services from noncontracting and/or out-of-network providers in the case of a local or regional preferred provider organization (PPO), or from hospitals and physicians not under contract with the MA organization for urgent or emergency services; MA organizations, the commenter stated, generally have no relationships to physician staffing organizations for correctional facilities or government and military facilities, yet they are listed as having the MA requirements apply to them. The commenter contended that this is a requirement that appears to be placed on MA organizations, rather than on the traditional Medicare program, but that MA organizations cannot be, and should not be, required to carry out functions that may belong to the Medicare program overall. If Medicare wants to widen its scope of providers enrolled in Medicare for the purpose of expanding its program integrity program, the commenter stated, Medicare’s enrollment efforts should be housed in a single source or database, not merely in MA organizations. Response: The rule specifically applies to network providers and suppliers, including locum tenens and incident-to suppliers. We are unsure of what the commenter means by stating that the MA organizations are required to carry out functions that belong to the Medicare program. Consistent with existing enrollment practices, enrollment will be completed by our MACs, and all enrollment data will be housed in our enrollment repository, PECOS. Information on a provider or supplier’s enrollment status will be available on a public file for ease of access to the plans. We do not agree that the application of this rule is too broad. We have limited the provisions to innetwork providers and suppliers. Furthermore, we believe it is important that all beneficiaries have the benefits of being treated by providers and suppliers that have been adequately screened by the Medicare program. Comment: A commenter stated that the proposed rule could be misconstrued as treating all FDRs as Medicare providers and suppliers, thus VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 requiring them to enroll in Medicare; the commenter cited as an example PBMs, which do not provide covered health care services but instead arrange for their provision. The commenter encouraged CMS to make clear that only those entities that meet the definition of a Medicare ‘‘provider’’ or ‘‘supplier’’ would be required to enroll in Medicare in order to provide services to MA beneficiaries. Response: This provision does not change enrollment parameters concerning the types of providers and suppliers eligible to enroll in Medicare. The commenter is correct that only providers and suppliers meeting those statutory definitions will be required and allowed to enroll in Medicare. Comment: Concerning the term ‘‘Medicare-covered services’’ as referenced in the rule, a commenter sought clarification as to whether the enrollment requirement only applies to providers and suppliers of Medicare Part A, B, MA, and D covered benefits and not to other services potentially offered by an MA organizations, such as routine eye care services, dental services, wellness programs, and other non-Medicare covered services. Response: To clarify, we did not use the term ‘‘Medicare-covered services’’ in either the preamble or the regulation text with respect to these specific provisions of the rule. However, we expect all providers and suppliers that are categorically-eligible to enroll in Medicare and that fall under the requirements of this rule, to enroll in Medicare if they wish to participate in the MA program. This includes providers and suppliers of dental, eye care, and other supplemental services. Comment: Several commenters recommended that CMS exclude pharmacies from the MA enrollment requirement, stating that pharmacies are excluded from the Part D prescriber enrollment requirement. Other commenters stated that Part D sponsors and their FDRs are equipped to perform the necessary vetting and credentialing with respect to pharmacy providers, which, one commenter contended, was the rationale for excluding pharmacies from the Part D enrollment requirement. The commenter stated that the same considerations apply in the MA program and added that applying the proposed requirement to pharmacies would create costly, burdensome, and potentially disruptive redundancies without commensurate benefits. Response: We decline to exempt pharmacies or other individuals or entities that fall within the framework of this rule. We believe that requiring enrollment in Medicare serves a PO 00000 Frm 00286 Fmt 4701 Sfmt 4700 valuable purpose in protecting beneficiaries and safeguarding the Trust Funds and will help reduce the burden on MA organizations as we move forward with operationalizing this policy. However, we note that we currently do not have a process in place to enroll pharmacies for the purpose of dispensing drugs, except in very limited circumstances, such as for Part B drugs. We are working on operationalizing such a process for network pharmacies in MA–PD plans that do not provide only those limited Part B benefits to enroll in Medicare to be able to comply with this rule. We recognize that plans can be compliant only to the extent that our enrollment requirements and processes in place allow at any given time. Comment: A commenter asked whether our proposed requirement will impact coverage determinations. The comment stated that, with respect to the Part D enrollment requirement, there is uncertainty regarding the actions that Part D sponsors must take upon receiving a coverage determination request from a non-enrolled prescriber or beneficiary regarding a claim that is denied solely because of that enrollment requirement. Response: This rule establishes requirements that services provided to Medicare beneficiaries by MA organizations must be provided by providers and suppliers that are enrolled in Medicare. This rule does not address any other criteria affecting coverage determinations. Comment: A commenter requested that CMS exempt emergency medicine physicians from the enrollment requirements. The commenter added that if this were not feasible, CMS at a minimum should: (1) establish a provision similar to § 423.120(c)(6) that would allow CMS to provide reimbursement for covered items, services or drugs ordered, certified, referred or prescribed by emergency medicine physicians on a provisional basis (for example, for a period of 90days from the date of service); and (2) exclude from the enrollment requirements those providers whose enrollment applications are pending with the Medicare Administrative Contractor (MAC). Response: We have not provided for any exemptions; however, we have a provision in § 422.224 that provides for allowances for some payments for emergency or urgently needed services, as defined in § 422.113. We also appreciate the suggestion that we exclude providers and suppliers with pending applications from our requirements. We believe that the rule E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations furnishes sufficient time for providers and suppliers to enroll to meet the requirements of this rule and decline to provide an exemption in these circumstances. Comment: A commenter asked for more information regarding the providers and suppliers that are covered under this proposal; the commenter specifically sought clarification regarding providers and suppliers that are not currently subject to credentialing (such as hospital-based providers) and only provide supplemental benefits that are not part of the basic benefits under Medicare Parts A and B. Response: Regarding the commenter’s inquiry, neither category of provider would be exempt from the requirements of this provision simply based on those factors. If a provider or supplier falls into the categories articulated in the rule, there will be no exemptions provided. mstockstill on DSK3G9T082PROD with RULES2 Concerns for Beneficiaries Comment: A commenter stated that if CMS terminates a contract with an MA organization for failing to meet provider enrollment requirements or payment prohibitions, CMS should allow impacted patients to continue with their physicians on an in-network basis until the next enrollment period, with the physician’s consent. The commenter said that effectively requiring a beneficiary to find a new provider in the middle of an enrollment period with little advanced notice could be extremely disruptive and harmful to the enrollee’s health. Response: We will follow existing protocols and rules regarding beneficiary care if CMS terminates a contract with an MA organization. Beneficiary care and access are always of the highest concern when determining contract action. Furthermore, we have access to tools other than contract termination to ensure MA organizations are compliant with this rule. Comment: A commenter expressed concern about the potential financial impact on beneficiaries if a provider or supplier requests payment (1) for multiple beneficiaries at once, or (2) for Medicare beneficiaries after notification that the provider or supplier is revoked from Medicare. The commenter recommended that CMS clarify that beneficiaries would not be financially responsible in these cases. Overall, the commenter urged CMS to ensure that beneficiaries are financially protected and do not lose access to care during the transition phase as providers enroll in Medicare. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Response: As we work towards the implementation date, we will continue to monitor beneficiary impact. The public should be aware of the provisions in § 422.224 regarding prohibition of payment for excluded or revoked individuals or entities. This rule also does not change beneficiaries’ ability to ask for a coverage determination prior to receiving an item or service if they are unsure of a provider or supplier’s enrollment status. The issue of beneficiary liability resulting from an OIG exclusion is addressed in 42 CFR 1001.1901(b). The issue of beneficiary liability resulting from revoked providers and suppliers, deactivated providers and suppliers, or enrollment denials is addressed in § 424.555(b). Any needed additional clarification of this provision will be provided in subregulatory guidance. Comment: A commenter noted the provision to prohibit MA organizations from paying individuals or entities that are excluded by the OIG or revoked from Medicare. Citing the requirement that the MA organization in such cases must notify the physician and the beneficiary that no future payment will made beyond the first one, the commenter stated that the notification may only reach the beneficiary after numerous services have been provided and billed. The commenter expressed concern that either the beneficiary or the physician would be without reimbursement or payment for the subsequent services provided before notification was received. Response: We understand the concerns of the commenter and do believe it is important for MA organizations and the other programs and plans that fall within the context of this rule to notify beneficiaries and providers and suppliers that payments will not be made. However, after further analysis, we are not able to finalize the first time payment provision that was proposed because all payments to excluded individuals or entities is prohibited. Beneficiaries have the ability to ask for a coverage determination prior to receiving an item or service if they are unsure of a provider or supplier’s enrollment status. The issue of beneficiary liability resulting from an OIG exclusion is addressed in § 1001.1901(b). The issue of beneficiary liability resulting from revoked providers and suppliers, deactivated providers and suppliers, or enrollment denials is addressed in § 424.555(b). All individuals and entities that are excluded or revoked are notified of their exclusion or revocation status, and therefore, should not request PO 00000 Frm 00287 Fmt 4701 Sfmt 4700 80455 or receive payment for items or services that violate federal law. Comment: A commenter stated that CMS must assess the impact of our proposed requirement on beneficiaries. The commenter specifically asked how the requirement will be explained to beneficiaries and whether beneficiaries themselves will have to pay for services obtained from a non-enrolled provider (for example, an out-of-network PPO provider) if they were unaware of the enrollment requirement. Response: As we work towards the implementation date, we will continue to assess beneficiary impact, though we believe that based on the low number of providers and suppliers that need to enroll, this impact will be small. This rule applies to in-network providers and suppliers and other providers and suppliers listed herein. This rule does not modify existing rules on out-ofnetwork providers and suppliers; however, the public should be aware of the provisions in § 422.224 regarding prohibition of payment for excluded or revoked individuals or entities. This rule also does not change beneficiaries’ ability to ask for a coverage determination prior to receiving an item or service if they are unsure of a provider or supplier’s enrollment status. Operations Comment: A commenter stated that CMS should engage in robust provider and practice education to ensure that enrollment updates are implemented efficiently and without complication. Response: We appreciate the suggestion and will incorporate this into our operational plan. Comment: A commenter asked CMS to address the claims and coding technical components that CMS will implement for our proposed requirement. Response: We will issue subregulatory guidance that addresses this issue. Comment: A commenter asked CMS to clarify the components of its provider education campaign. Response: We will issue subregulatory guidance detailing educational efforts in the future as we move forward in operationalizing this program. Comment: A commenter suggested that CMS explain how it will communicate provider and supplier information to individual MA organizations so that the latter can remain compliant with our requirements and identify the types of enforcement actions it will take against an MA organization that permits an unenrolled provider or supplier to furnish care in an MA setting. The commenter asked us to list all of the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80456 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations enforcement actions imposed against MA providers and suppliers based on the provider being unqualified or fraudulent. Response: We will continue to provide outreach and education to the provider and supplier community about these enrollment requirements and will work with our stakeholders, including MA organizations, to assist them in ensuring compliance. Specific operational plans and guidance are forthcoming as we move towards operationalizing this policy. Regarding enforcement actions, we have provided a number of options and have discretion when determining the appropriate action to take for noncompliant plans. Those specific sanctions and contract actions are in existing policy. Comment: A commenter supported our proposed requirement to notify the enrollee when the provider’s or supplier’s enrollment is revoked from Medicare but encouraged CMS to ensure that such notices are consumer-friendly. Another commenter urged CMS to furnish additional details on how plans are to operationalize these new requirements in a format that allows plans to provide feedback on the proposed processes. Response: We appreciate the commenter’s support and will use the suggestion to help operationalize this policy. Comment: Regarding proposed § 422.224, a commenter asked whether ‘‘first time allowance’’ for payment is a requirement or is at the discretion of the MA organization. Response: After further legal analysis, we have determined that we lack the authority to allow a first time payment granted in the proposed § 422.224. Therefore, MA organizations have no discretion and may not pay an individual or entity that is excluded by the OIG or revoked from the Medicare program. Comment: Regarding proposed § 422.501, a commenter sought clarification regarding the method of submission and the frequency of checks, and how this process differs from the current standard attestation process. Response: Further information and direction on this provision will be issued in subregulatory guidance. Comment: Stating that the proposed requirement contains no specifications for how often plans would be required to confirm the status of a network provider, a commenter sought clarification on the following issues: (1) Whether a plan has met its obligations under the proposed requirements if, for example, the plan confirms the provider’s enrollment status before VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 signing the provider to a 5-year contract for network participation; (2) if the provider fails to notify the MA organization of changes to its Medicare enrollment status, whether the plan is responsible for all payments made to the provider beginning as of the date of disenrollment; (3) if a provider’s Medicare enrollment status changes and the plan removes the provider from its network, whether and what consequences would ensue if this results in the plan failing network adequacy requirements; and (4) whether there are requirements concerning continuity of care with respect to providers that lose Medicare status. Response: The requirements of this rule require that after the effective date, MA and MA PD plans must ensure that only enrolled providers and suppliers are providing services to Medicare beneficiaries who are enrolled in their plans. We have developed informational tools—the list of enrolled providers and suppliers referenced in several places throughout this rule—that further support plans’ ability to meet these requirements and not rely on notification by providers in ensuring compliance. Based on the small number of providers and suppliers that need to enroll to comply with the provisions of this rule, we do not believe this requirement will cause network adequacy issues. As to the frequency with which the plans will be expected to update their records, further guidance will be provided as we operationalize this requirement; however, it is anticipated that the plans will be expected to update their records with the same frequency that the applicable online files are updated. This rule does not require providers and suppliers to notify the plans, as the enrollment status on the file will change. This rule also does not change any rules regarding continuity of care. Comment: A commenter sought clarification regarding whether CMS’ use of the term ‘‘enrollment’’ indicated enrollment in the Medicare program through PECOS or an MA organization’s enrollment of health professionals for the purpose of identifying them as legitimate health professionals on claims. The commenter expressed concern that if Medicare enrollment is required without a concomitant requirement that the MA organization enroll the provider or supplier, CMS risks perpetuating the concealment of certain types of health professionals. Citing the example of physician assistants, the commenter stated that when an MA organization requires that a physician’s assistant bill under a physician’s name, the physician’s PO 00000 Frm 00288 Fmt 4701 Sfmt 4700 assistant becomes a ‘‘hidden’’ provider, which the commenter stated is contrary to CMS’ goal of proper attribution to the health professional who furnished the service. The commenter stated that MA organization should be required to enroll relevant health professionals, including physician’s assistants, and mandate the inclusion of the appropriate professional’s NPI on a claim. Response: The term ‘‘enrollment’’ is specific to enrollment in Medicare. The enrollment data repository is PECOS. We believe the commenter is referring to incident-to services. Incident-to suppliers and locum tenens suppliers are also required to enroll in Medicare, meaning that the supplier actually furnishing the service, not only the billing supplier, must be enrolled. We believe that this is an important step in addressing the concerns of the commenter and may consider future rulemaking to further prevent the scenario offered by the commenter. Network Adequacy Comment: A commenter expressed concern that the enrollment requirement would unduly burden physical therapists, which could harm access to physical therapy services as MA organizations struggle to find physical therapy providers for their networks. Response: This rule seeks to ensure that beneficiaries receive care from providers and suppliers that have been uniformly screened. We have found relatively few physical therapists that are not already enrolled in Medicare. Therefore, we do not believe this will have an impact on network adequacy. Comment: A commenter recommended that CMS proceed with its enrollment requirement for only a limited number of providers and suppliers at first, specifically, for those provider types for which MA organizations are required to maintain adequate networks, as specified in the Health Services Delivery Guidance that CMS issues each contract year. Response: We believe the requirements should be implemented simultaneously and have structured our efforts to accomplish that task. As we have stated throughout this rule, we think the timeframe afforded plans for compliance coupled with the relatively small number of providers and suppliers that are not already enrolled in Medicare will allow plans to ensure that all necessary providers and suppliers can be enrolled and there are no access issues. Comment: A commenter requested clarification regarding what MA organizations must do if the termination E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 of providers or suppliers from the plan’s network results in network adequacy deficiencies. Response: Based on the small number of providers and suppliers that need to enroll to comply with the provisions of this rule, we do not believe this requirement will cause network adequacy issues. However, MA organizations should use existing resources and processes to address any network adequacy concerns. Comment: A commenter stated that the administrative steps involved in enrolling in Medicare will deter some physicians from entering into MA arrangements, thereby potentially impacting the plan’s network adequacy and beneficiary access to care. Response: The vast majority of providers and suppliers providing services in the MA program are already enrolled in Medicare. Based on the number of providers and suppliers needing to enroll to become compliant with this requirement, we do not anticipate this impacting network adequacy and access to care. PACE Comment: A commenter asked whether the requirements that are applicable to FDR entities of MA organizations will also apply in the context of PACE organizations. Response: The requirements for FDR entities also apply to PACE organizations. Comment: A commenter stated that our proposals should not be applied to the PACE program for several reasons. First, the proposed requirements are duplicative of exclusion screening requirements established by the OIG, which are often reinforced by state screening requirements. Second, PACE organizations are already Medicarecertified provider entities responsible for the comprehensive medical, health and social well-being of their PACE participants; existing regulations under part 460 have requirements in place concerning these policies. The commenter stated that PACE is a different model of care from MA organizations. The latter are insurers while PACE programs are Medicarecertified provider entities that are directly responsible for the care of Medicare and Medicaid beneficiaries. At a minimum, the commenter stated, PACE organization personnel (for example, employees and contractors) should be exempt from the enrollment requirement; the burden of requiring the enrollment of staff members, the commenter contended would be enormous. Another commenter suggested that CMS clarify in the final VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 rule how its MA enrollment policies do not inadvertently exclude long-term services and supports (LTSS) caregivers who cannot presently bill Medicare directly. Another commenter also expressed concern about the rule’s effect on LTSS caregivers. Response: This rule only requires the enrollment of providers and suppliers that are of a type this are eligible to enroll. Staff members that are not of a provider or supplier type that is eligible to enroll, are not subject to this rule. A determination on if a provider or supplier is eligible to enroll will be based on the type of provider or supplier. For example, if a clinical social worker works for a PACE organization, he or she would need to enroll in Medicare because a clinical social worker is a type of provider or supplier eligible to enroll. Furthermore, § 410.73(a) defines clinical social worker and states they must have a masters or doctoral degree in social work, among other requirements. If the clinical social worker cannot enroll because he or she fails to meet program requirements, such as this educational requirement, he or she may not enroll in the program or provide services to beneficiaries enrolled in programs under this final rule, such as the PACE program. It does not mean that providers and suppliers, that are of the type of providers or suppliers eligible to enroll in Medicare, are exempt from enrolling because they cannot or do not meet the necessary requirements for their specific provider or supplier type to enroll in Medicare. Providers and supplier that cannot or do not meet the enrollment requirements may not provide items and services to beneficiaries that receive items and services through FFS, MA, MA–PD, PACE, and Cost plans, as well as demonstration and pilot programs. We have decided to finalize the proposal to include PACE organizations in this rule because we believe it is in the best interest of the beneficiaries to receive items and services from Medicare providers and suppliers that are subject to the same screening requirements. The screening efforts mentioned by the commenter are not duplicative to any other process, specifically OIG and state screening. We have access to information and authority for keeping certain providers and suppliers out of the program that are not available to these entities. Additionally, while it may be true that PACE organizations are Medicare-certified provider entities, the individual providers and suppliers have not been required to enroll. We do not anticipate that this rule will have a PO 00000 Frm 00289 Fmt 4701 Sfmt 4700 80457 significant impact on LTSS caregivers because of the relatively small number of providers and suppliers that need to enroll. Furthermore, some of the LTSS caregivers are not of a provider or supplier type that is eligible to enroll in Medicare. Comment: A commenter expressed concern about our proposal to amend § 460.32 to require that the PACE program agreement include the name and NPI of providers and suppliers reflecting enrollment in Medicare. The commenter stated that the program agreement is a three-way agreement between CMS, the state, and the PACE organization, and that any change to the agreement would require the three parties to reenter and resign the document. The commenter contended that this would prove burdensome because new agreements would have to be signed each time a provider or supplier enters or departs a contractual relationship with a PACE organization. The commenter recommended that CMS (1) devise an alternative approach, or (2) require PACE organizations to furnish this information only on an annual basis; concerning the latter, the commenter said that this would not absolve PACE organizations from ensuring that all contracted providers and suppliers, but would reduce the reporting burden. Another commenter shared these concerns and added that uninterrupted access to PACE services should be ensured. Response: We understand the operational concerns and thank the commenters. Based on this concern, we have reduced the burden this requirement would have imposed on PACE organizations by aligning the requirements to the provisions applicable to MA organizations. We have removed the requirement in 42 CFR 460.32 and simply added §§ 460.70 and 460.71. We believe this change will ensure that PACE organizations employ and contract with enrolled providers and suppliers without the additional burden of having the parties update the program agreement. Comment: A commenter recommended that any enrollment regulatory requirements imposed on PACE organizations be made in part 460 and that such requirements have the same specificity and precision as the regulation changes proposed for part 422. Response: We believe the appropriate requirements have been reflected in part 460. Other Comments Comment: A number of commenters supported our proposal to require E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80458 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations providers or suppliers who furnish health care items or services to an MA beneficiary be enrolled in Medicare in an approved status. A commenter stated that many MA organizations already have this requirement in place, and supported our efforts to standardize this practice across all organizations. Response: We appreciate the commenters’ support. Comment: A commenter disagreed with the use of the term ‘‘intermediary’’ being applied to MA organizations. The commenter stated that MA organizations are state licensed, risk-bearing entities that contract with CMS to provide Medicare Part A, B, and D benefits and services. An intermediary, the commenter stated, is a Medicare Administrative Contractor that bears no risk but is under contract with CMS to pay Medicare covered claims and perform other functions for CMS. The commenter sought greater clarification on this issue. Response: We used intermediary as a general term to describe an entity that holds a position between CMS and the provider and supplier communities; we did not mean ‘‘intermediary’’ as the former contractor entity that paid Medicare claims in the past before there were MACs. As the public is likely aware, we do not pay providers and suppliers directly in the MA program. We appreciate the opportunity to clarify. Comment: Several commenters requested that CMS delay the implementation of the MA enrollment requirement. They generally stated that a delay would give all stakeholders (for example, MA organizations, providers, suppliers, beneficiaries, and CMS) adequate time to prepare for the requirement. They added that the delay would enable CMS to resolve certain issues encountered in the Part D enrollment process so they are avoided in the MA enrollment process. Some commenters stated that CMS must establish an implementation plan, provide operational and technical guidance (including clarity around FDRs), and develop a comprehensive education and outreach strategy for relevant stakeholders, and that a delay would give CMS time to perform these activities. Several commenters recommended that the requirement be implemented at the same time as the Part D enrollment requirement, with one commenter specifically suggesting an effective date in CY 2020 for both requirements. Other commenters recommended an effective date for the MA enrollment requirement of least 3 years from the date of this final rule; VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 several commenters suggested 4 years from the date of this rule. Response: We believe that the 2019 implementation date is appropriate and takes into account the concerns raised by the commenters. We thank the comments for the suggestions regarding operational planning and will take them into consideration as we issue future guidance. Comment: A commenter contended that an increasing number of physician practices may provide most or all of their Medicare services to MA patients. The commenter encouraged CMS to develop means by which such physicians can remain enrolled, for purposes of furnishing MA services, without having to submit Part B claims. Response: If the commenter is concerned about possible deactivations due to 12 consecutive months of nonbilling, we can say that although § 424.540(a)(1) is part of our regulatory authority, its use is limited due to the expansion of our enrollment requirements in Medicare that extend beyond billing Parts A and B. We have thousands of providers and suppliers enrolled in Medicare that do not submit claims for payment, such as providers and suppliers ordering and certifying certain items and services and prescribers of Part D drugs. Thus, systematic deactivations for 12 consecutive months of non-billing would not be appropriate for providers and suppliers that enrolled exclusively for purposes unrelated to billing the Medicare program. We are mindful of the scenario described as we operationalize this rule. Scope Comment: A commenter asked CMS to clarify the MA enrollment requirement’s relationship to the Part D prescriber enrollment rule and the latter’s implementation date. Response: The Part D prescriber enrollment requirement states that nearly all prescribers of Part D drugs must be enrolled in Medicare or validly opted-out. The requirement in this rule is that providers and suppliers that provide services to Medicare beneficiaries in MA organizations or MA–PD plans, including FDRs, must be enrolled in Medicare. These are separate requirements; therefore, the implementation date for the Part D prescriber rule is outside the scope of this rule. Comment: A commenter asked CMS to clarify the benefits of increased opportunities for private practice physical therapists to become innetwork providers under MA organizations. PO 00000 Frm 00290 Fmt 4701 Sfmt 4700 Response: We believe this request is outside the scope of the rule. Comment: A commenter asked whether CMS is collaborating with state Medicaid agencies to discuss implementation issues related to a similar enrollment requirement on the Medicaid side; the commenter indicated that such discussions could assist CMS in effectively implementing the MA enrollment requirement. Response: On May 6, 2016, we published the ‘‘Medicaid and Children’s Health Insurance Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, and Revisions Related to Third Party Liability’’ final rule (81 FR 27498) that includes requirements for providers and suppliers that provide services to Medicaid beneficiaries in a managed care setting to be screened and enrolled in Medicaid. We collaborate regularly with state Medicaid agencies when operationalizing rules and appreciate the commenter’s suggestion. Comment: A commenter asked whether the enrollment requirements apply to providers that are participating in special CMS initiatives, such as Accountable Care Organizations initiatives and, if not, why not, and which entity in these initiatives would be held accountable as to their participating providers and suppliers are enrolled in Medicare. The commenter stated that it would be reasonable to have this requirement extend beyond the MA and Part D programs. Response: We believe this comment is outside the scope of this rule. Comment: One commenter expressed support for requiring MA network providers to publicly report quality data in a manner consistent with Part A and B providers, specifically, requiring these providers to submit administrative data sets to CMS such as claims and encounter data in a manner consistent with Medicare Part A and B programs. The commenter stated that there currently is little insight as to the quality, volume, and utilization patterns of beneficiaries who elected MA coverage. Response: We appreciate this comment but believe it is outside the scope of this rule. Comment: One commenter, while supporting our proposed requirement, made two recommendations. The first was that CMS should use the MA enrollment requirement as an opportunity to begin deeming providers for general compliance training as well. The second was that CMS should obtain the demographic data for providers at the point of enrollment into Medicare E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations and require providers to supply CMS with updates; plans would be expected to use the most up-to-date information CMS has on file for providers when updating the directories. This would create a provider demographic repository, which the commenter believed would help ensure consistency between CMS and MA records. Response: We believe these comments are outside the scope of this rule. Comment: A commenter recommended that CMS explain whether providers and suppliers participating in a section 1876 cost contract plan, a section 1833 health care prepayment plan, the Railroad Retirement Board, or an Indirect Payment Procedure (IPP) entity that does not treat Medicare FFS beneficiaries, are subject to the $500 application fee. Response: We believe this comment is outside the scope of this final rule. J. Expansion of the Diabetes Prevention Program (DPP) Model 1. Summary mstockstill on DSK3G9T082PROD with RULES2 This final rule finalizes our proposal to expand the duration and scope of the Diabetes Prevention Program (DPP) model test, which we refer to as the Medicare Diabetes Prevention Program (MDPP) expanded model.15 The MDPP expanded model aims to prevent the onset of type 2 diabetes among Medicare beneficiaries diagnosed with prediabetes. Services available through the MDPP expanded model are MDPP services, which will be furnished in community and health care settings by coaches, such as trained community health workers or health professionals. The MDPP expanded model is a Center for Medicare and Medicaid Innovation (Innovation Center) model that is being expanded in duration and scope under section 1115A(c) of the Act and will be covered as an additional preventive service under Medicare. We received approximately 700 timely pieces of correspondence containing multiple comments on the MDPP expanded model. We note that some of these public comments were outside of the scope of the proposed rule. Summaries of the public comments that are within the scope of the proposed rule and our responses to those public comments are set forth in 15 Centers for Medicare & Medicaid Services, Proposed Rules, ‘‘Proposed Expansion of the Diabetes Prevention Program (DPP) Model,’’ Federal Register 81, no. 136 (July 15, 2016): 46413– 46418, https://www.federalregister.gov/documents/ 2016/07/15/2016–16097/medicare-programrevisions-to-payment-policies-under-the-physicianfee-schedule-and-other-revisions. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the various sections of this final rule under the corresponding heading. Commenters ranged from professional organizations, health plans, advocacy groups, individual physicians, and numerous individuals who have direct experience with the National Diabetes Prevention Program (National DPP), and expressed overwhelming support for this model expansion. Commenters raised key considerations as well. Because the MDPP expanded model will be implemented through at least two rounds of rulemaking, we have chosen in this final rule to finalize aspects of this model expansion that will enable organizations to prepare for enrollment. This includes finalizing the framework for expansion and finalizing details of the MDPP benefit, beneficiary eligibility criteria, and MDPP supplier eligibility criteria and enrollment policies. We are finalizing our proposal to expand the duration and scope of the DPP model test as proposed. We are also finalizing our proposal to designate MDPP services as ‘‘additional preventive services’’ as defined by section 1861(ddd) of the Act. We are finalizing our proposal to use the Secretary’s waiver authority under section 1115A(d)(1) of the Act to waive two requirements of the benefit category of additional preventive services: the requirement in section 1861(ddd)(1)(B) of the Act that the services be recommended by a grade of A or B from the United States Preventive Services Task Force (USPSTF) and the requirement of section 1861(ddd)(2) of the Act that the Secretary make the determinations required under section 1861(ddd)(1) of the Act using the National Coverage Determination (NCD) process. We are finalizing our proposal that the MDPP core benefit is 12 consecutive months and consists of at least 16 weekly core sessions over months 1–6 and at least six monthly core maintenance sessions over months 6– 12, furnished regardless of weight loss. Eligible beneficiaries will have access to ongoing maintenance sessions after the MDPP core benefit if they achieve and maintain the required minimum weight loss of five percent. We are adding definitions of ‘‘maintenance session bundle’’ and ‘‘maintenance of weight loss’’ to help provide clarity. We are revising the definition of ‘‘CDCapproved core curriculum’’ to remove specific curriculum topic names. We are also revising the session duration requirement to specify that any session must have a duration of approximately one hour. PO 00000 Frm 00291 Fmt 4701 Sfmt 4700 80459 We are finalizing the beneficiary eligibility criteria and our referral policy as proposed. We are finalizing the proposed high screening level for MDPP supplier enrollment, the requirement for coaches to obtain National Provider Identifiers (NPIs), and for DPP organizations to submit a roster of coach NPIs and other coach information upon applying for enrollment. We are modifying our proposal regarding the enrollment of existing Medicare providers or suppliers, and are requiring all DPP organizations, regardless of any existing enrollment in Medicare, to enroll in Medicare as MDPP suppliers in order to furnish and bill for MDPP services. We are not finalizing our proposal that organizations that deliver DPP virtually or through remote technologies will be eligible to furnish MDPP services to future rulemaking. We intend to address policies related to the delivery of virtual MDPP services in future rulemaking. We are also not finalizing the definition of preliminary recognition. We intend to seek comment on recognition standards in future rulemaking. We are also deferring certain policies, specifically related to payment, use of coach information during enrollment and monitoring, and other program integrity safeguards to future rulemaking. In particular, specific policies regarding monitoring and enforcement actions for supplier enrollment require future rulemaking. Because we are not implementing such requirements in this rule, we cannot begin any enrollment for organizations seeking to enroll as MDPP suppliers until after the next round of rulemaking is complete in 2017. We intend to begin supplier enrollment before the model expansion becomes effective on January 1, 2018. We intend for organizations to be able to apply to enroll as MDPP suppliers at the conclusion of the next round of rulemaking. We may issue subregulatory guidance to assist in this preparation before subsequent rulemaking is finalized. We will address public comments on sections of the proposed rule we sought comment on, including payment, quality reporting, and program integrity, in future rulemaking. The MDPP expanded model will become effective nationwide beginning on January 1, 2018. We will continue to evaluate this expanded model test. 2. Background In January 2015, the Administration announced the vision of ‘‘Better Care, Smarter Spending, Healthier People’’ with emphases on improving the way E:\FR\FM\15NOR2.SGM 15NOR2 80460 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 providers are paid, improving and innovating in care delivery, and sharing information to support better decisions, and that set goals for payments made through alternative payment models and tied to quality or value. In March 2016, the United States Department of Health and Human Services (HHS) announced that an estimated 30 percent of Medicare payments are tied to alternative payment models that reward the quality of care over quantity of services provided to beneficiaries, nearly a year ahead of schedule. Diabetes affects more than 25 percent of Americans aged 65 or older 16 and its prevalence is projected to increase approximately 2 fold for all U.S. adults (ages 18–79) by 2050 if current trends continue.17 Additionally, the risk of progression to type 2 diabetes in an individual with pre-diabetes is 5–10 percent per year, or 5–20 times higher than in individuals with normal blood glucose.18 Care for Americans aged 65 and older with diabetes accounts for roughly $104 billion annually, and these costs are growing.19 In total, we estimate that Medicare will spend $42 billion more in the single year of 2016 on feefor-service, non-dual eligible, over age 65 beneficiaries with diabetes than it would spend if those beneficiaries did not have diabetes—$20 billion more for Part A, $17 billion more for Part B, and $5 billion more for Part D. On a perbeneficiary basis, this disparity is just as clear. In 2016 alone, Medicare will spend an estimated $1,500 more on Part D prescription drugs, $3,100 more for hospital and facility services, and $2,700 more in physician and other clinical services for those with diabetes than those without diabetes.20 16 Centers for Medicare & Medicaid Services, ‘‘Chronic Conditions Among Medicare Beneficiaries, Chartbook: 2012 Edition,’’ Centers for Medicare & Medicaid Services, 2012, https:// www.cms.gov/research-statistics-data-and-systems/ statistics-trends-and-reports/chronic-conditions/ downloads/2012chartbook.pdf. 17 James Boyle, et al., ‘‘Projection of the Year 2050 Burden of Diabetes in the US Adult Population: Dynamic Modeling of Incidence, Mortality, and PreDiabetes Prevalence,’’ Population Health Metrics 8, no. 29 (2010): 1–12. 18 X Zhang et al., ‘‘A1C Level and Future Risk of Diabetes: A Systematic Review,’’ Diabetes Care 33, no. 7 (2010): 1665–1673. 19 James Boyle, et al., ‘‘Projection of the Year 2050 Burden of Diabetes in the US Adult Population: Dynamic Modeling of Incidence, Mortality, and PreDiabetes Prevalence,’’ Population Health Metrics 8, no. 29 (2010): 1–12. 20 Erkan Erdem and Holly Korda, ‘‘Medicare FeeFor-Service Spending for Diabetes: Examining Aging and Comorbidities,’’ Diabetes & Metabolism 5, no. 3 (2014); The Boards of Trustees: Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, ‘‘2016 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,’’ Centers for VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Fortunately, type 2 diabetes is typically preventable with appropriate lifestyle changes. The National DPP, administered by the Centers for Disease Control and Prevention (CDC), is an evidence-based intervention targeted to individuals with pre-diabetes, meaning those with blood sugar that is higher than normal but not yet in the diabetes range. The National DPP is a structured health behavior change program delivered in community and health care settings by trained community health workers or health professionals. The National DPP consists of 16 intensive core sessions of a CDC-approved curriculum in a group-based setting that provides practical training in long-term dietary change, increased physical activity, and problem-solving strategies for overcoming challenges to sustaining weight loss and a healthy lifestyle. After the 16 core sessions, monthly maintenance sessions help to ensure that the participants maintain healthy behaviors. The primary goal of the intervention is to reduce incidence of type 2 diabetes by achieving at least 5 percent average weight loss among participants. To learn more about the National DPP, please visit https:// www.cdc.gov/diabetes/prevention/ lifestyle-program/. In 2012, the Innovation Center awarded a Health Care Innovation Award (HCIA) to The Young Men’s Christian Association (YMCA) of the USA (Y–USA) to test whether DPP services could be successfully furnished by non-physician, community-based organizations to Medicare beneficiaries diagnosed with pre-diabetes and therefore at high risk for development of type 2 diabetes (referred to hereafter as the DPP model test). The DPP model test has been conducted under the authority of section 1115A of the Act, which authorizes the Innovation Center to test innovative health care payment and service delivery models that have the potential to reduce Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) expenditures while preserving or enhancing the quality of patient care. Between February 2013 and June 2015, the Y–USA, in partnership with 17 local YMCAs, the Diabetes Prevention and Control Alliance, and seven other non-profit organizations, enrolled a total of 7,804 Medicare beneficiaries into the model. Enrolled beneficiaries represented a diverse demographic across the eight states of Medicare & Medicaid Services, 2016, https:// www.cms.gov/Research-Statistics-Data-andSystems/Statistics-Trends-and-Reports/ ReportsTrustFunds/downloads/tr2016.pdf.; and CMS estimates. PO 00000 Frm 00292 Fmt 4701 Sfmt 4700 Arizona, Delaware, Florida, Indiana, Minnesota, New York, Ohio, and Texas. According to the second year independent evaluation report of the DPP model test, Medicare beneficiaries demonstrated high rates of participation and sustained engagement in the Diabetes Prevention Program. Approximately 83 percent of recruited Medicare beneficiaries attended at least four core sessions and approximately 63 percent completed nine or more core sessions. The first and second independent evaluation reports are available on the Innovation Center’s Web site at https://innovation.cms.gov/ initiatives/Health-Care-InnovationAwards/. 3. Requirements for Expansion Section 1115A(c) of the Act provides the Secretary of the U.S. Department of Health and Human Services (the Secretary) with the authority to expand (including implementation on a nationwide basis) through rulemaking the duration and scope of a model that is being tested under section 1115A(b) of the Act if the following findings are made, taking into account the evaluation of the model under section 1115A(b)(4) of the Act: (1) The Secretary determines that the model expansion is expected to either reduce spending without reducing quality of care or improve the quality of patient care without increasing spending; (2) the CMS Chief Actuary certifies that the expansion would reduce (or would not result in any increase in) net program spending; and (3) The Secretary determines that the expansion would not deny or limit the coverage or provision of benefits. • Improved Quality of Care without Increased Spending: The DPP model test was designed to improve care through diabetes-related preventive services in community- and primarycare based settings. Weight loss is a key indicator of success among persons enrolled in a DPP due to the strong association between weight loss and reduction in the risk of diabetes.21 According to the second year independent evaluation of the DPP model test, those beneficiaries who attended at least one core session lost an average of 7.6 pounds while beneficiaries who attended at least four core sessions lost an average of 9 pounds. Body Mass Index (BMI) was reduced from 32.9 to 31.5 among Medicare beneficiaries that attended at least four core sessions. The evaluation 21 RF Hamman et al., ‘‘Effects of Weight Loss with Lifestyle Intervention on Risk of Diabetes,’’ Diabetes Care 29, no. 9 (2006): 2102–2107. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations also demonstrated a statistically significant reduction in inpatient admissions following the intervention. Based on these findings and results from other DPP evaluations demonstrating the effectiveness of DPP programs in preventing diabetes onset in nonMedicare beneficiaries, some of which were over 65, the Secretary determined that expansion of the DPP model test is expected to improve the quality of patient care for Medicare beneficiaries without increasing spending. • Impact on Medicare Spending: The CMS Chief Actuary (referred to hereafter as the Chief Actuary) has certified that expansion of the DPP model test would not result in an increase in Medicare spending. The Chief Actuary has determined that DPP is likely to reduce Medicare expenditures if made available to eligible Medicare beneficiaries based on historical evidence from evaluations of the DPP model test and other DPPs. In addition, to evaluate the longer-term impact of the expanded model, the Chief Actuary developed a model to estimate lifetime per participant savings of a Medicare beneficiary receiving DPP services. The full Chief Actuary Certification is available at https://www.cms.gov/ Research-Statistics-Data-and-Systems/ Research/ActuarialStudies/Downloads/ Diabetes-Prevention-Certification-201603-14.pdf. • No Alteration in Coverage or Provision of Benefits: The MDPP model expansion would make MDPP services available to beneficiaries in addition to existing Medicare services, and beneficiaries receiving MDPP services would retain all benefits covered in traditional Medicare. Therefore, the Secretary has determined that expansion of the DPP model test would not deny or limit the coverage or provision of Medicare benefits for Medicare beneficiaries. The following is a summary of the comments received and our responses. Comment: Commenters were overwhelmingly in favor of the proposed expansion and Medicare covering the MDPP services as an additional preventive service. Many commenters offered personal stories of their battles with type 2 diabetes, or caring for those with type 2 diabetes, and expressed gratitude toward the agency for proposing to cover the benefit to prevent future beneficiaries from the challenges posed by type 2 diabetes. Commenters encouraged us to consider ways to increase beneficiary awareness and lower barriers to access. Several commenters expressed their desire to assist us in further development of the model expansion. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Commenters also encouraged us to continue to align with the CDC Diabetes Prevention Recognition Program Standards and Operating Procedures (CDC DPRP Standards) on various policies such as supplier requirements, recognition status, and required minimum weight loss percentage. Another commenter recommended that we reimburse for technology such as the continuous glucose monitor. Some commenters encouraged us to continue to take steps toward more preventive models. One commenter disagreed altogether with the proposed MDPP model expansion, stating it allows another high risk supplier type into the Medicare program. Response: We appreciate the commenters’ suggestions to increase beneficiary awareness of the benefit, and look forward to exploring ways we can achieve our shared aims through stakeholder engagement and communications efforts, such as updates to the Medicare & You Handbook. We also hope to engage the public and MDPP stakeholders in further developments and any adjustments we make through future rulemaking, subregulatory guidance, or other guidance, as appropriate. We appreciate the comments to test more preventive models and to pay for technology that could be used in connection with the MDPP expanded model, but those are outside the scope of what we proposed to expand, and we decline to include them in the MDPP model expansion. We disagree with the commenter who believed we should not expand the DPP model test. We describe later in this rule some of the enrollment policies that are intended to protect against the risks introduced by the new supplier class. Additionally, we intend to propose specific program integrity policies in future rulemaking. Comment: A few commenters expressed concerns that the MDPP model expansion will set a flawed precedent for future model expansions. For example, two commenters expressed concerns that the Secretary’s determination that the MDPP model expansion would improve the quality of care is not substantiated by the evidence, and asked for more discussion of how the MDPP expansion will improve other elements within quality of care, such as patient experience. Response: We are undertaking the MDPP model expansion in a manner consistent with the statutory requirements of section 1115A(c) of the Act. Therefore we do not agree that expansion of the DPP model test sets a flawed precedent. We also note that the specific data, analyses, and other factors PO 00000 Frm 00293 Fmt 4701 Sfmt 4700 80461 informing the MDPP expansion are unique to this particular model. For example, different approaches to actuarial modeling may be required for a preventive service payment and service delivery model as compared to a payment model focused on treatment. We expect to take into account the specific aspects of each model when evaluating it for expansion. We found that the DPP model test has been shown to reduce risk of type 2 diabetes through weight loss and behavior change. The second year independent evaluation of the DPP model test also found statistically significant reductions in inpatient and emergency room visits and robust engagement by beneficiaries. Expansion of the DPP model test will give eligible beneficiaries access to MDPP services, which are evidencebased, to improve their health. The Secretary has determined that by improving health outcomes, as measured by participation in the DPP and weight loss, the MDPP expanded model will improve beneficiaries’ quality of care. Weight loss is a key indicator of success among persons enrolled in the DPP as it predicts the reduced incidence of type 2 diabetes.22 According to the second year independent evaluation of the DPP model test, which included 6,874 Medicare beneficiaries, those beneficiaries who attended at least one core session lost an average of 7.6 pounds while beneficiaries who attended at least four core sessions lost an average of nine pounds. BMI was reduced from 32.9 to 31.5 among Medicare beneficiaries that attended at least four core sessions. Comment: Regarding the Chief Actuary’s certification, some commenters expressed appreciation that the determination was made available to the public several months before the proposed rule. One commenter also asked us to clarify if, and how, stakeholders can engage with the certification process in the event that there are outstanding questions of methodology and model assumptions. Two commenters criticized the Chief Actuary’s consideration of findings in addition to the DPP model test, such as other DPPs in the National DPP, in making the certification. A commenter stated that the Chief Actuary certified the expansion of a model that is different than the tested model, which the commenter viewed as contrary to the statute. MedPAC expressed concern that the MDPP expanded model would 22 RF Hamman et al., ‘‘Effects of Weight Loss with Lifestyle Intervention on Risk of Diabetes,’’ Diabetes Care 29, no. 9 (2006): 2102–2107. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80462 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations expand far beyond the structure of the initial model test. One commenter expressed concern that this determination was made based on a preliminary, 2-year evaluation. Response: We appreciate commenters’ interest in the certification process. The CMS Office of the Actuary, led by the Chief Actuary, functions in accordance with professional standards of actuarial independence. The statute does not require that in certifying an expansion the Chief Actuary may consider data only from the model evaluation; rather, the statute requires only that the evaluation be taken into consideration. The Chief Actuary also reviewed data from other sources besides the model evaluations in certifying the Pioneer Accountable Care Organization (ACO) Model, the first Innovation Center model determined eligible for expansion. In April 2015, the Chief Actuary certified that expansion of the Pioneer ACO Model, as it was tested in the model’s first 2 years, would reduce net program spending. The Chief Actuary used historical evidence from the formal evaluation of the Pioneer ACO Model as well as the Chief Actuary’s independent internal analysis of financial impacts. The Chief Actuary’s certification of the Pioneer ACO Model is available at https:// www.cms.gov/Research-Statistics-Dataand-Systems/Research/ ActuarialStudies/Downloads/PioneerCertification-2015-04-10.pdf. The Secretary also determined that expansion would not limit coverage or benefits, and that expansion would maintain or improve patient care without increasing spending. While the Pioneer ACO Model has not been expanded through section 1115A(c) of the Act, CMS has incorporated successful design elements of the Pioneer ACO Model into the Medicare Shared Savings Program. The statute does not require that an expanded model test be identical to the initial model test. Indeed, section 1115A(c) of the Act authorizes the Secretary to expand (including implementation on a nationwide basis) the duration and the scope of a model being tested under subsection (b) or a demonstration project under section 1866C of the Act through rulemaking. The rulemaking requirement indicates that the expansion is to be subject to public comment, which, in turn, indicates that the expansion can and should be modified as appropriate to reflect the outcome of the rulemaking process. In addition, we expect that we will need to modify some design features in nearly all cases of expanded model tests, by virtue of the shift in VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 duration or scope. For example, a nationwide expansion may require different policies and operations to manage large-scale provider enrollment or payment than does the initial model test. The Chief Actuary certified expansion of the DPP model test understanding that the expansion would include specific changes driven by policies and operations necessary in bringing the model to a national scale. As the expansion’s full design is implemented in future rulemaking, the Chief Actuary will assess whether such expansion will reduce or not increase net program spending, and will update the certification as appropriate. Comment: Some commenters supported the determination that the DPP model expansion would not deny or limit the coverage or provision of Medicare benefits for Medicare beneficiaries as the MDPP expanded model makes additional services available to eligible beneficiaries. Two commenters asked that in future model expansions we assess the impact of a model on patient access to covered items and services based on a broad evaluation of the direct and indirect barriers to care that may result from a model’s expansion. Response: We appreciate the commenters’ support regarding the determination that the expansion of the DPP model test would not deny or limit the coverage or provision of Medicare benefits. We will apply the statutory criteria for expanding a model on an individual basis and will take the particular features of each model into account when making any determinations. Comment: Several commenters encouraged us to continue to collect data and evaluate the impact of the expanded model test. Response: We will continue to evaluate this expanded model test as indicated in the proposed rule. Using an evaluation design that could include a before and after assessment and or matched comparison groups, we will examine the impact of the model on utilization of services and cost of care, particularly whether the model has had an impact on the development of diabetes, and other health consequences of diabetes. We will also examine the expanded model’s impact on changes in health metrics, such as weight loss. In general, evaluations of Innovation Center models address the impact of the models on use of services and the quality of care provided, relative to a comparison group, using CMS administrative data and relevant beneficiary experience data when available. Utilization measures can be PO 00000 Frm 00294 Fmt 4701 Sfmt 4700 used to monitor whether beneficiaries are receiving the services that would be expected given beneficiaries’ health status. The comparison group generally consists of beneficiaries who are similar to the beneficiaries receiving services under the model, and are often matched on underlying health status and other important characteristics, including whether the beneficiary is part of another model test. We intend to apply additional information on the evaluation in the future. We will continue to assess whether the MDPP expanded model is expected to improve the quality of care without increasing spending, reduce spending without reducing the quality of care, or improve the quality of care and reduce spending, and we will terminate or modify the MDPP expanded model if the expanded model is not expected to meet these criteria. 4. Expansion of the Diabetes Prevention Program Model We proposed to expand the duration and scope of the DPP model test under section 1115A(c) of the Act, and we proposed to refer to this expanded model as the MDPP. In this section of this final rule, we are finalizing a framework for the MDPP expanded model. We intend to engage in additional rulemaking in 2017, to establish additional requirements of the MDPP expanded model. We solicited comment on all of the proposals below and on other policy or operational issues that need to be considered in implementing this expansion. a. Designation of MDPP Services as Additional Preventive Services Under Section 1861(ddd) of the Act We proposed to designate MDPP services as ‘‘additional preventive services’’ available under Medicare Part B. Section 1861(ddd) of the Act defines ‘‘additional preventive services’’ as services (other than screening or other preventive services or personalized prevention plan services described in other sections of the Act) that identify medical conditions or risk factors, and that the Secretary determines, using the National Coverage Determination (NCD) process, are (A) reasonable and necessary for the prevention or early detection of an illness or disability; (B) recommended with a grade of A or B by the United States Preventive Services Task Force (USPSTF); and (C) appropriate for individuals entitled to benefits under Part A or enrolled in Part B. We believe that MDPP services are consistent with the types of additional preventive services that are appropriate E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations for Medicare beneficiaries. In particular, we believe that MDPP services meet the requirements of section 1861(ddd)(1)(A) of the Act (that is, that they are reasonable and necessary for the prevention or early detection of an illness or disability) because they are specifically designed to prevent prediabetes from advancing into type 2 diabetes and their effectiveness is supported by the evaluations of the DPP model test. We proposed to use the Secretary’s waiver authority under section 1115A(d)(1) of the Act to waive two requirements of the benefit category of additional preventive services. MDPP services do not meet the requirement in section 1861(ddd)(1)(B) of the Act in that MDPP services have not been recommended with a grade of A or B by the USPSTF, and thus a waiver of that requirement is necessary. We proposed to use the Secretary’s waiver authority to waive this requirement with respect to MDPP services. We proposed to waive the requirement of section 1861(ddd)(2) of the Act that the Secretary make the determinations required under section 1861(ddd)(1) of the Act using the NCD process. We proposed to waive this requirement because applying the NCD process to the MDPP model expansion is inappropriate, and thus the waiver is necessary. The creation of a new supplier class is necessary for coaches to furnish MDPP services, which the NCD process was not designed to address. Since Medicare cost-sharing does not apply to additional preventive services, MDPP services would not be subject to Medicare cost-sharing. We solicited comment on these proposals. The following is a summary of the comments we received on designating MDPP services as additional preventive services and our responses. Comment: While some commenters supported the Secretary’s use of the waiver authority provided by section 1115A(d)(1) of the Act in expansion of the DPP model test, a few commenters stated that the statute does not permit the Secretary to waive statutory or regulatory requirements when a model is expanded under section 1115A(c) of the Act. These commenters stated that any use of waiver authority in an expanded model is not made ‘‘with respect to testing models described in subsection (b).’’ As a consequence, these commenters stated, the Secretary lacks the authority to waive the provisions of section 1861(ddd) of the Act proposed in the proposed rule. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Response: We disagree with the commenters. Section 1115A(d)(1) of the Act authorizes the Secretary to waive certain requirements as may be necessary solely for purposes of carrying out this section with respect to testing models described in subsection (b). We believe that the phrase ‘‘described in subsection (b)’’ is simply a reference that describes the models that are authorized under subsection (b), and that the waiver authority extends to expanded models because they continue to be models described in subsection (b). The language of section 1115A(c) of the Act itself supports this view because it gives the Secretary authority to expand the duration and scope of a model that is being tested under subsection (b). Therefore, in our view, the Secretary is authorized to waive requirements of Title XI, Title XVIII, and sections 1902(a)(1), 1902(a)(13), 1902(m)(2)(A)(iii), and 1934 of the Act (other than subsections (b)(1)(A) and (c)(5) of such section) in connection with expanded model tests. As the MDPP model expansion is an expansion of the duration and scope of a model described in and tested under subsection (b), the Secretary may waive Medicare requirements as necessary for the purposes of the expanded model. Comment: Many commenters believed that the Secretary’s waiver of section 1861(ddd)(1)(B) of the Act, which requires that a benefit must be recommended with a grade of A or B by the USPSTF, is unnecessary. These commenters stated that the USPSTF issued guidance in October 2015 entitled Abnormal Blood Glucose and Type 2 Diabetes Mellitus: Screening, which provided a B rating for intensive behavioral counseling interventions for patients with abnormal blood glucose based on National DPP clinical trial evidence. This recommendation is available at https:// www.uspreventiveservicestaskforce.org/ Page/Document/ RecommendationStatementFinal/ screening-for-abnormal-blood-glucoseand-type-2-diabetes. Because of this recommendation, these commenters suggested, the Secretary does not need to waive the requirement in section 1861(ddd)(1)(B) of the Act. Response: While the interventions mentioned in the USPSTF’s recommendation bears some similarity to the expanded DPP model test, and provides evidence to support DPPs generally, there are differences between the USPSTF’s recommendation and the design of the MDPP expanded model, both as initially tested and as we have proposed to expand it. We believe these PO 00000 Frm 00295 Fmt 4701 Sfmt 4700 80463 differences make USPSTF’s recommendation inapplicable to MDPP, and therefore the waiver is necessary. In particular, the specific USPSTF recommendation cited by commenters is for ‘‘adults aged 40 to 70 years who are overweight or obese who are seen in primary care settings,’’ which does not include Medicare beneficiaries over 70 who would be eligible for MDPP services or the furnishing of MDPP services by a community service organization. While the USPSTF recommendation discussed by the commenters does not match with the elements of the MDPP model expansion, we do note that the recommendation supports the principle of the MDPP expanded model. In addition, we have spoken to the USPSTF about its recommendation and shared the findings of the evaluation of the model in case the USPSTF would like to reconsider its recommendation. Similarly, we note that in 2014, the Community Preventive Services Task Force (CPSTF), a ‘‘sister entity’’ to the USPSTF that is focused on populationbased interventions, issued a recommendation for Diabetes: Combined Diet and Physical Activity Promotion Programs to Prevent Type 2 Diabetes Among People at Increased Risk, specifically recommending ‘‘combined diet and physical activity promotion programs for people at increased risk of type 2 diabetes based on strong evidence of effectiveness in reducing new-onset diabetes.’’ The CPSTF recommendation is available at https://www.thecommunityguide.org/ findings/diabetes-combined-diet-andphysical-activity-promotion-programsprevent-type-2-diabetes. We believe that the MDPP expanded model is consistent with the CPSTF recommendation. Comment: One commenter suggested that the Secretary should not waive the National Coverage Determination (NCD) process required by section 1861(ddd)(2) of the Act. One commenter suggested that it is irrelevant that the NCD process does not address the creation of a new supplier class. This commenter also suggested that the statute does not require CMS to implement an additional preventive service via the NCD process; all it requires is that CMS make the three determinations that are prerequisites for additional preventive service status using the NCD process. This commenter also stated that the timing of the NCD process will not hinder this expansion, suggesting that we have the discretion to expedite the NCD process. Another commenter suggested that waiving the NCD process is unnecessary because the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80464 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations creation of a supplier class is not hindered by the NCD process. Response: We disagree that waiving requirements of section 1861(ddd)(2) of the Act is unnecessary. In particular, we disagree with the commenters who believe that using the NCD process would not create timing challenges for the MDPP expanded model. To the contrary, we believe that the use of the NCD process is inappropriate for the MDPP expanded model. The MDPP expanded model necessitates the creation of a new supplier class that must be able to enroll in Medicare so that it may furnish MDPP services as of the effective date of the expanded model. We are establishing the new supplier class through rulemaking, in conjunction with the model expansion. Contrary to commenters’ assertions, using the NCD process to designate MDPP services as additional preventive services would create significant timing challenges, given that we need to expand the model and establish the MDPP supplier class through rulemaking. If we were to use the NCD process to determine that MDPP services are additional preventive services, we would not be able to begin covering MDPP services on the date the NCD was issued, even if it were issued simultaneously with the effective date of a final rule establishing the supplier class. This is because in order to align the effective dates, we would have had to issue a final rule establishing the MDPP supplier class 60 days before we determined that MDPP services were covered by Medicare. Were we to instead issue an NCD simultaneously with the release of a final rule establishing a new supplier class, the benefit would be unavailable for a period of time after the NCD’s effective date because of the 60-day delay in effectiveness of the final rule plus time needed thereafter to process MDPP supplier enrollment applications. Because we cannot allow MDPP suppliers to enroll specifically to provide a service that is not yet a Medicare service, we find that it is necessary for purposes of expanding the MDPP model to waive the requirements of section 1861(ddd)(2) of the Act. This rulemaking establishes MDPP services as additional preventive services that will become available after there is sufficient time to enroll MDPP suppliers to furnish those services, which allows us to avoid timing and logistics problems while also providing the public with the opportunity to comment in a manner similar to the NCD process. Comment: Commenters overwhelmingly supported the proposal to not hold beneficiaries responsible for VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 cost sharing for MDPP services. A few commenters asked us to clarify that beneficiaries would not have to pay cost-sharing, particularly because they were concerned that cost sharing would restrict beneficiary access. Response: MDPP services are additional preventive services under section 1861(ddd) of the Act and therefore, consistent with section 1833(a)(1)(W) of the Act, are not subject to the Medicare Part B coinsurance or deductible. Final Decision: We finalize our proposal to expand the duration and scope of the DPP model test as proposed. We finalize our proposal to designate this benefit as an additional preventive service according to section 1861(ddd) of the Act as proposed, and we also finalize our proposals to waive the requirements of sections 1861(ddd)(1)(B) and (ddd)(2) of the Act as proposed. b. Timing of the Expansion of the Medicare Diabetes Prevention Program Model We proposed that the expansion of the duration and scope of the DPP model test would become effective on a nationwide basis beginning on January 1, 2018. Expanding the DPP model test is a complex undertaking, which could be approached in different ways, such as expanding the scope of the DPP model test nationally in its first year of implementation or expanding the duration and scope using a phase-in approach. The phase-in approach could expand MDPP initially for a period of time in certain geographic markets or regions or among a subpopulation of MDPP suppliers, with the goal of addressing technical issues prior to broader expansion. We solicited comment on whether to expand the scope of the DPP model test nationally or use a phase-in approach, and if phased-in, what factors we should consider in the possible selection of initial phased-in MDPP suppliers. Comment: We received many comments related to the timing of the MDPP expansion. Commenters overwhelmingly supported nationwide expansion of the DPP model test on January 1, 2018, over a phase-in approach. Several commenters, including MedPAC, supported a phasein approach, to allow CMS to address program integrity issues before nationwide expansion. Some commenters made suggestions for where and with which providers to phase the benefit in if CMS were to adopt the phase-in approach. Others asked for clarification on what criteria would be PO 00000 Frm 00296 Fmt 4701 Sfmt 4700 used to determine the details of a phased-in approach. Response: We believe that nationwide expansion of the scope of the model would allow the greatest access to the MDPP services for beneficiaries. We also acknowledge the concerns that the MDPP expanded model introduces a new service and a new supplier type to the Medicare program, and we will prioritize beneficiary safety and the need to consider program integrity concerns in our implementation of this expansion. MDPP services will be available to eligible beneficiaries beginning on January 1, 2018, subject to additional rulemaking on issues such as payment for the service. However, as a factual matter, eligible beneficiaries’ access to MDPP services will increase over time as more organizations seek and receive CDC DPRP recognition, enroll in Medicare as MDPP suppliers, and therefore furnish MDPP services. As of October 2016, more than 1,000 organizations have pending or full recognition from the CDC DPRP to provide DPP services. As described in section III.J.7.a. of this final rule, these organizations will have to meet certain standards before becoming eligible to enroll as a Medicare supplier. This will provide a de facto phase in that will allow us to gain experience with the MDPP expanded model with fewer organizations initially who meet the supplier eligibility criteria, and more over time as supplier enrollment increases. c. Other Comments on the Expansion of the Medicare Diabetes Prevention Program Model Comment: A few commenters expressed concern that MDPP suppliers should be coordinating with primary care providers or other physicians, and a few commenters did not support the MDPP expanded model because they believed it would further fragment the health care system. Response: We appreciate and respect the concern regarding coordination with the clinical care system, and we encourage MDPP suppliers to promptly communicate with the beneficiary’s health care providers as appropriate with the beneficiary’s consent to promote care coordination. We also expect that some clinicians will furnish MDPP services on behalf of organizations that have or will obtain CDC DPRP recognition and enroll in Medicare as MDPP suppliers. However, we did not propose specific rules or requirements around coordination with primary care providers or other health care entities for the purposes of this E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations MDPP expanded model because the DPP model test did not require this level of coordination. We also want to provide organizations with the flexibility they need to effectively coordinate care with physicians while decreasing the administrative burden of offering the services. We will take these comments into consideration as we finalize various aspects of MDPP in future rulemaking. Comment: One commenter suggested the use of mobile application-based technology with built in incentives for beneficiaries. Response: We appreciate the suggestion and we will consider it as we engage in future rulemaking. Comment: A few commenters recommended they be allowed to apply Diabetes Self-Management Training (DSMT) to beneficiaries with prediabetes. One commenter suggested that CMS merge DSMT and MDPP because core training elements are identical. Response: While we acknowledge that there may be similarities between the two benefits, DSMT and MDPP have different eligibility criteria and goals. Beneficiaries with a type 2 diabetes diagnosis have different needs than those with pre-diabetes. We therefore do not believe we should merge these benefits. Comment: Several commenters recommended that we add MDPP services to the personalized prevention plan offered as part of the Medicare Annual Wellness Visit (AWV). A few commenters expressed disagreement with the focus on weight loss, citing fitness and physical activity, metabolic and behavioral markers, and other alternatives that CMS should consider as outcomes for value-based payments. Response: We did not test the other indicators that commenters recommended such as fitness, metabolic activity and behavioral markers. We will make adjustments through rulemaking, as necessary, if through our continuing evaluation we find that such adjustments are warranted. One of the elements of the AWV is for the health professional to furnish personalized health advice to the beneficiary, and a referral, as appropriate, to health education or preventive counseling services or programs. An eligible beneficiary can be referred for MDPP services as part of a personalized prevention plan. We reiterate, however, that we did not propose to require that beneficiaries obtain a referral for MDPP services, though as discussed in section III.J.7.c. of this final rule, referrals are permitted. Comment: Some commenters suggested using the term ‘‘delay’’ rather than ‘‘prevent’’ diabetes, and others VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 suggested using the name National Diabetes Prevention Program (National DPP), rather than MDPP, citing confusion in the market of payers that currently cover DPP for their members. Response: We believe prevention of type 2 diabetes is the goal of the MDPP expanded model even though some beneficiaries may still be diagnosed with type 2 diabetes, so we decline to change the name to reference a ‘‘delay’’ in diabetes onset. We also believe MDPP is the appropriate name for this expanded model because there are differences between MDPP and the National DPP, such as the age of the beneficiaries served, beneficiary eligibility criteria, and the DPP organization or MDPP supplier eligibility criteria. 5. MDPP Benefit Description We proposed the MDPP core benefit to be 12-months of sessions using a CDC-approved DPP curriculum, consisting of at least 16 core sessions furnished over a range of 16 to 26 weeks (that is, the first 6 months) and at least 6 monthly core maintenance sessions over weeks 27–52 (second 6 months). We proposed that beneficiaries who complete the 12-month core benefit, and achieve and maintain a required minimum weight loss of 5 percent from the first core session, in accordance with the CDC Diabetes Prevention Recognition Program Standards and Operating Procedures (CDC DPRP Standards), would be eligible for monthly ongoing maintenance sessions for as long as the weight loss is maintained. The CDC DPRP Standards are available at https://www.cdc.gov/ diabetes/prevention/pdf/dprpstandards.pdf. We proposed to require each MDPP core and maintenance session (both core and ongoing) be at least one hour in duration. We proposed that the MDPP expanded model will use the CDC-approved curriculum. Details pertaining to the content of both the core sessions and maintenance sessions, as set by the CDC, are available at https:// www.cdc.gov/diabetes/prevention/pdf/ curriculum_toc.pdf. We proposed that during the first 6 months (weeks 1–26) of the MDPP core benefit, each of the 16 core sessions must address a different curriculum topic included on the list of 16 curriculum topics, ensuring all topics are addressed by the end of the 16 sessions. We proposed that the second 6 months (weeks 27–52) of the MDPP core benefit must include at least one core maintenance session furnished in each of the 6 months (for a minimum of six sessions), and all core maintenance sessions must address different topics. PO 00000 Frm 00297 Fmt 4701 Sfmt 4700 80465 We proposed that ongoing maintenance sessions adhere to the same curriculum requirements as the core maintenance sessions. We solicited comment on these proposals. The following is a summary of the comments received and our responses. Comment: Several commenters suggested that we clarify whether MDPP suppliers must furnish MDPP services in the second 6 months of the core benefit (the core maintenance sessions) or Medicare payment for services furnished in the second 6 months of the core benefit without achievement of the required 5 percent weight loss. The commenters recommended that we allow MDPP suppliers to document and bill for achievement of beneficiary weight loss at any time during the first year, rather than during only the first 6 months. One commenter suggested that CMS clarify if there is a minimum or maximum number of beneficiaries that an MDPP supplier must/may serve. Response: We clarify that core maintenance sessions in the second 6 months are furnished as part of the 12month core benefit, regardless of weight loss. We refer readers to section III.J.7.b. of this final rule for discussion of the requirement that organizations maintain CDC DPRP recognition to enroll in Medicare to bill for furnishing MDPP services. The CDC DPRP Standards require that DPP-eligible individuals be able to access the core maintenance sessions, regardless of weight loss, in order for an organization to maintain CDC DPRP recognition. Therefore, we are finalizing our proposal that the MDPP core benefit is a 12-month program that consists of at least 16 weekly core sessions, over months 1–6, and at least 6 monthly core maintenance sessions over months 6–12, furnished regardless of weight loss. We are making corresponding changes to the regulations text to address when the MDPP core benefit will be available. We intend to address payment for MDPP services in future rulemaking. We will not require a minimum or maximum number of beneficiaries at this time, recognizing that MDPP suppliers will vary in capacity and mode of delivery. However, we will monitor for signs of adverse selection of beneficiaries and propose specific program integrity requirements in future rulemaking, as appropriate. Comment: Numerous commenters expressed general support for ongoing maintenance sessions after the 12month core benefit and recommended that CMS allow beneficiaries access to ongoing maintenance sessions if they achieve the required 5 percent weight E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80466 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations loss any time during the 12-month core benefit. A few commenters recommended that CMS clarify the definition of maintenance of weight loss, noting that it is common for individuals to lose, regain, and lose weight again. One commenter recommended that beneficiaries whose weight increases during the maintenance period should have up to 3 months to bring their weight back to the maintenance level. Another commenter requested clarification on when and how MDPP suppliers should track weight on an ongoing basis to ensure a beneficiary qualifies for maintenance sessions, and whether beneficiaries should be weighed every month to qualify. Several commenters recommended allowing beneficiaries who did not achieve and maintain the required 5 percent weight loss to still be able to access the ongoing maintenance sessions. The commenters stated various reasons, including that weight loss of less than 5 percent is clinically relevant and also reduces type 2 diabetes risk; the evidence base suggests greater impact on onset of diabetes through reenrolling beneficiaries who are regaining weight than through continuing the service for those who can maintain weight loss; weight regain is common due to metabolic adaptation or receding behavior changes; discontinuing the service for beneficiaries who do not lose weight will discourage them and increase their risk for diabetes; the opportunity to provide a safe environment of recovery for individuals who have a binge-eating disorder; and that the intervention will still reduce diabetes among beneficiaries who are unable to achieve or maintain weight loss. Additionally, commenters stated that exclusion from maintenance sessions for beneficiaries who do not achieve the required weight loss would be punitive, particularly for beneficiaries who need the additional support to achieve the desired weight loss goal. Some commenters suggested that MDPP expanded model risks perpetuating health inequities because low-income beneficiaries who need MDPP services the most struggle disproportionately to achieve the required weight loss and will not be able to access ongoing maintenance sessions. One commenter suggested that CMS use an aggregate, not individual, 5 percent weight loss across a supplier’s beneficiaries to align with the CDC DPRP Standards and promote ongoing maintenance session eligibility for populations that experience difficulty achieving the 5 percent weight loss due VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 to socioeconomic or demographic factors. Another recommendation was to allow participants within 2 percentage points of the minimum weight loss to have their maintenance sessions covered to account for weight gain during extenuating circumstances (for example, falling ill or other circumstances that interfere with weight loss). Several commenters recommended that access to ongoing maintenance sessions, and payments for maintenance session attendance, depend not on the 5 percent weight loss, but instead on attendance of monthly maintenance sessions. Other commenters suggested that payment should be linked to alternative measures rather than weight loss, such as A1C, waist measurement, and knowledge tests. Response: As noted previously, MDPP eligible beneficiaries are eligible to access core maintenance sessions in the second 6 months of the 12-month core benefit regardless of weight loss. MDPP eligible beneficiaries are eligible to access ongoing maintenance sessions after the 12 month core benefit if the beneficiary achieves and maintains the required minimum weight loss percentage. We understand that beneficiaries’ weight may fluctuate after meeting the 5 percent required weight loss. We are defining maintenance of weight loss, which allows a beneficiary to access ongoing maintenance sessions, as achieving the required minimum weight loss from baseline weight at any point during each 3 months of core maintenance or ongoing maintenance sessions. In other words, a beneficiary can access the next three months of ongoing maintenance sessions if the beneficiary achieved maintenance of weight loss at any point during the previous three months of maintenance sessions. As mentioned in comments, 3 months is the appropriate interval because it aligns with the proposed payment structure that pays for each three maintenance sessions attended with maintenance of weight loss. A beneficiary’s weight must be measured and recorded during every core session and maintenance session the beneficiary attends. In response to comments, we are also adding a definition for maintenance session bundle to refer to each 3-month interval of core maintenance or ongoing maintenance sessions. Each bundle must include at least one maintenance session per month, for a minimum of three sessions in each bundle. We acknowledge some commenters’ desire for CMS to cover ongoing maintenance sessions for beneficiaries who do not achieve and maintain the PO 00000 Frm 00298 Fmt 4701 Sfmt 4700 required 5 percent weight loss. The requirement that eligible beneficiaries must maintain 5 percent weight loss is consistent with the weight loss goal tested in the DPP model test, and was factored into the Secretary’s determination to expand the model and the Chief Actuary’s certification that MDPP expansion would not result in an increase of Medicare spending. We are not changing the requirement that beneficiaries must maintain the 5 percent minimum weight loss in order to receive ongoing maintenance sessions. We acknowledge commenters’ concerns regarding potential unintended consequences if the MDPP expanded model results in low-income or other disadvantaged populations having less access to ongoing maintenance sessions. We may consider making adjustments as appropriate if, through our monitoring and evaluation and through tribal consultation, we find that such adjustments are warranted to address disparities in access. We disagree with a commenter’s suggestion that we use an aggregate, not individual, 5 percent weight loss for ongoing maintenance session eligibility. We do not believe aggregate weight loss is an appropriate application for individuals’ eligibility for ongoing maintenance sessions. We believe it is unfair to deny a beneficiary access to ongoing maintenance sessions if the beneficiary achieves 5 percent or more weight loss but happens to attend MDPP sessions with other beneficiaries who gain or do not lose the minimum weight. Aggregate weight loss can be arbitrary because there is no minimum or maximum number of beneficiaries per MDPP supplier, and there is no way to ensure equal access to the benefit. It decreases a beneficiary’s incentive to meet the weight loss goal in order to access ongoing maintenance sessions and a suppliers’ incentive to actively help each beneficiary to meet that weight loss goal, particularly if a few people lost a large percent of their weight. The goal of the DPP model test is at least 5 percent weight loss for each individual, which is expected to lead to a reduction in the incidence of diabetes. We do not have data to support an expanded model that does not require the achievement and maintenance of the minimum weight loss. We clarify that beneficiaries have access to the MDPP core benefit regardless of weight loss. This provides all eligible beneficiaries with access to 12 months of MDPP services, without cost-sharing, to achieve the target weight loss. We believe the incentive to achieve the target weight loss would be diluted for E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations beneficiaries if they could access the ongoing maintenance sessions regardless of weight loss. Comment: Commenters recommended limiting the number of years of payment for ongoing maintenance sessions due to the limited administrative and operational capability of many MDPP suppliers to provide ongoing maintenance sessions in perpetuity. A few commenters opposed payment for ongoing maintenance sessions at all, stating that indefinite monthly maintenance sessions extend beyond what is supported by scientific research. The commenters recommended additional review of clinical effectiveness and cost implications of payment for ongoing maintenance sessions, suggesting that we study the optimal number of maintenance sessions for beneficiaries who achieve and maintain the required weight loss. One commenter recommended that we eliminate ongoing maintenance sessions or make them voluntary for MDPP suppliers to furnish. The commenter noted the potential difficulty of assembling enough ongoing maintenance session attendees to cover a supplier’s costs due to factors such as beneficiary attrition or schedule variation and administrative burdens associated with documenting beneficiary eligibility. The commenter also suggested that we clarify whether MDPP suppliers can offer and charge beneficiaries directly for additional services, such as health coaching beyond MDPP services or counseling to beneficiaries who regain weight and are no longer receiving MDPP services. One commenter recommended that we clarify whether beneficiaries must participate with the same coach or group of beneficiaries upon the transition from the core benefit to ongoing maintenance sessions. Another commenter recommended that CMS use different terminology for the ongoing maintenance sessions after the 12month core benefit because it is confusing that the core maintenance sessions in the second 6 months are also called maintenance sessions. Response: We believe it is important for CMS to cover ongoing maintenance sessions after the 12-month core benefit to better equip beneficiaries to maintain healthy lifestyle changes and prevent type 2 diabetes. As part of the expanded model, MDPP suppliers are required to provide eligible beneficiaries access to ongoing maintenance sessions. We acknowledge commenters’ concern regarding the sustainability of ongoing maintenance sessions in perpetuity, and we intend to propose a limit to the duration of ongoing maintenance VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 sessions in future rulemaking. As acknowledged by several commenters, continued participation by an individual in a DPP after year 3 has been generally untested, and we intend to take this into consideration when we address a limit in future rulemaking. In response to comments on the provision of services outside of MDPP, the MDPP model expansion only includes MDPP services. We note the distinction between core maintenance sessions and ongoing maintenance sessions is important in that core maintenance sessions are a part of the core benefit and are accessible to all eligible beneficiaries, while ongoing maintenance sessions require beneficiaries to maintain weight loss after the 12 month core benefit. As mentioned in section III.J.6. of this final rule, we defer questions of beneficiary attribution, such as how to address beneficiaries who switch suppliers upon the transition from the core benefit to ongoing maintenance sessions, to future rulemaking. Comment: Numerous commenters supported the use of CDC’s DPRP Standards for the MDPP curriculum. Several commenters suggested that we permit MDPP suppliers to furnish any CDC-approved curriculum, rather than requiring the use of a particular curriculum. Commenters stated that CDC regularly updates its suggested curriculum, as well as reviews and approves alternative curricula that are submitted with an organization’s application for CDC DPRP recognition. Commenters requested clarification on whether suppliers may use the 2016 CDC Prevent T2 Curriculum or the 2012 CDC-developed curriculum, both of which are permitted by the CDC DPRP Standards. Commenters recommended that CMS clarify whether CMS would need to undergo a rule change if CDC makes changes to the curriculum. Commenters also suggested clarification on the curriculum topics that MDPP suppliers should follow for ongoing maintenance sessions, as the National DPP curriculum only specifies content for what is analogous to the MDPP core benefit. Other commenters recommended allowing MDPP suppliers to use the CDC-approved DPP curriculum in another language or making the curriculum more culturally sensitive. Commenters suggested changes to the curriculum, such as shifting the focus away from calorie counting, emphasizing physical activity and exercise goals, training coaches to handle emotional issues and offering oral hygiene sessions. One commenter suggested we consider ways to embed the curriculum PO 00000 Frm 00299 Fmt 4701 Sfmt 4700 80467 into the Diabetes Self-Management Training (DSMT) benefit. Response: We agree with commenters that MDPP suppliers should be permitted to, consistent with their CDC DPRP recognition, use any curriculum approved by the CDC. The CDCpreferred curriculum is available at https://www.cdc.gov/diabetes/ prevention/lifestyle-program/ curriculum.html. We note that if a DPP organization chooses to use a different curriculum, it must send the curriculum to the CDC DPRP so it can be evaluated to ensure that it covers similar content and is consistent with the current evidence base. To mitigate confusion surrounding the use of specific topic names, we will remove specific curriculum topics from the regulations text and instead specify that the sessions must be furnished consistent with any CDC-approved curriculum. We believe this change also will make it unnecessary for us to undertake rulemaking to address regular CDC curriculum updates. This will reduce the risk that MDPP suppliers would need to have two separate curricula, one for their Medicare beneficiaries and one for the rest of their enrollees, which could be unnecessarily burdensome. For the ongoing maintenance session curriculum, we are requiring that MDPP suppliers use a CDC-approved curriculum. The purpose of ongoing maintenance sessions is to reinforce and revisit what was learned and practiced in the core benefit, so beneficiaries can maintain healthy behavioral changes and weight loss. Coaches can offer any of the curriculum topics except for the introductory sessions. We support the use of culturally sensitive curricula based on the MDPP supplier’s population and furnishing MDPP services in languages other than English. If the CDC approves a curriculum that has adjustments to address language barriers or cultural differences, the MDPP supplier can use the curriculum. We remind organizations that the policies and procedures of approved curricula must ensure accessibility to persons with disabilities, persons with limited English proficiency, and other populations in compliance with HHS civil rights non-discrimination regulations, including those implementing section 504 of the Rehabilitation Act of 1973, Title VI of the Civil Rights Act, section 1557 of the Patient Protection and Affordable Care Act, and Title IX of the Education Amendments of 1972, as amended. More information is available at https:// www.hhs.gov/civil-rights. With respect to embedding the DPP curriculum into DSMT, we decline to adopt this E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80468 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations recommendation. As noted previously, DSMT and MDPP services, though similar, serve different purposes and are for individuals with different needs. Comment: Some commenters recommended that CMS modify the session duration requirement from ‘‘at least one hour’’ to align with the CDC DPRP Standards of ‘‘each session must be of sufficient duration to convey the session content—or approximately one hour in length.’’ Commenters stated that the time it takes to complete a curriculum topic depends on the number of attendees, how the services are furnished, beneficiaries’ assessed need, the curriculum topic, and the approach to the curriculum, and the one-hour requirement would be too rigid and too long for many CDCrecognized organizations. Other commenters recommended we focus on completion of modules in the required curriculum, not session-based time standards, since module completion requires active participation and the ability to turn learning into action, while a time-based standard does not correlate with impact on outcomes. Some commenters stated that valuebased care de-emphasizes the amount of time involved with furnishing a given service and focuses on the results achieved. Response: We agree with commenters that the one-hour requirement may be too rigid when compared against CDCapproved DPP curricula that vary in approach and mode of delivery. We agree that ‘‘approximately one-hour in duration’’ is an appropriate requirement for in-person sessions because completion of a curriculum topic may vary depending on factors such as number of attendees, how the program is delivered, beneficiaries’ assessed need, the curriculum topic, and the approach to the curriculum. We do not believe the CDC DPRP Standard that ‘‘each session must be of sufficient duration to convey the session content’’ is an auditable requirement, and therefore, we decline to adopt it for MDPP because, as noted in the proposed rule, having auditable requirements is a critical component of our program integrity efforts. For these reasons, we are amending our regulations to specify that sessions must be ‘‘approximately one-hour in duration.’’ Final Decision: After consideration of the public comments received, we are finalizing the proposal that the MDPP core benefit is a 12 consecutive month program that consists of at least 16 weekly core sessions over months 1–6 and at least six monthly core maintenance sessions over months 6– 12, furnished regardless of weight loss. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 We are also finalizing the proposal that beneficiaries have access to ongoing maintenance sessions after the 12month core benefit if they achieve and maintain the required minimum weight loss of 5 percent. We are modifying the regulations in § 410.79 to add the definition of ‘‘maintenance session bundle’’ to refer to each 3-month interval of core maintenance or ongoing maintenance sessions, with at least one maintenance session delivered in each of the 3 months. We are also adding the definition of ‘‘maintenance of weight loss’’ to clarify that maintenance of weight loss is achieving the required minimum weight loss from baseline weight at any point during each 3month core maintenance or ongoing maintenance session bundle. We are revising the definitions of the CDCapproved core curriculum to remove specific curriculum topic names and to indicate MDPP suppliers must use any CDC-approved curriculum. We are revising the session duration to specify that sessions must have a duration of approximately one hour. We are also making minor technical changes to the proposed definitions to improve clarity. 6. Beneficiary Eligibility a. MDPP Eligible Beneficiaries We proposed that coverage of MDPP services would be available for beneficiaries who meet all of the following criteria: (1) Are enrolled in Medicare Part B; (2) have, as of the date of attendance at the first core session, a body mass index (BMI) of at least 25 if not self-identified as Asian or a BMI of at least 23 if self-identified as Asian. The CDC DPRP Standards have defined a lower BMI for self-identified Asian individuals based on data that show Asians develop abnormal glucose levels at a lower BMI; (3) have, within the 12 months prior to attending the first core session, a hemoglobin A1c (HgA1c) test with a value between 5.7 and 6.4 percent, or a fasting plasma glucose of 110–125 mg/dL, or a 2-hour postglucose challenge of 140–199 mg/dL (oral glucose tolerance test); (4) have no previous diagnosis of type 1 or type 2 diabetes with the exception of a previous diagnosis of gestational diabetes; and (5) does not have endstage renal disease (ESRD). Comment: MedPAC commented that the proposed eligibility requirements may be too broad and could result in the inclusion of beneficiaries who meet the stated eligibility criteria but have other conditions such as dementia or frailty that could render a weight loss program inappropriate. PO 00000 Frm 00300 Fmt 4701 Sfmt 4700 Response: We appreciate the views of commenters, including MedPAC. We are considering ways to monitor for MDPP suppliers who consistently bill for session attendance and not weight loss, and intend to address this in our program integrity and payment proposals in future rulemaking. We recognize that performing mental capacity assessment prior to enrollment would be difficult and create an additional burden for MDPP suppliers. We will consider how to address the issue of beneficiaries who are eligible to receive MDPP services, but for whom MDPP may not be clinically appropriate, in future rulemaking, as necessary. Comment: Many commenters stated that differences between the MDPP expanded model’s proposed eligibility criteria and the National DPP eligibility criteria will cause confusion for providers and beneficiaries. Commenters specifically noted that the BMI cut off for National DPP eligibility is 24 kg/m2 and 22 kg/m2 for those selfidentified as Asian, whereas the proposed BMI cut offs for the MDPP expanded model are 25 kg/m2 and 23 kgm2 for those self-identified as Asian. Commenters also noted the differences in the blood test criteria for the fasting plasma glucose test between the National DPP (range is 100–125 mg/dL) and MDPP expanded model (range is 110–125 mg/dL). Commenters who pointed out these differences recommended that CMS align its eligibility criteria with CDC’s eligibility criteria. Several commenters also supported the lower BMI threshold for selfidentified Asians. Response: We agree with commenters that there are differences between the MDPP beneficiary eligibility criteria and National DPP eligibility criteria, which may be a source of confusion for suppliers, providers and beneficiaries. However, we proposed a BMI cut off for non-Asians of 25 kg/m2 because this was the cut off used in the DPP model test. In addition, the generally accepted clinical definition of overweight is a BMI of 25.0—29.9 in adults over age 20.23 We proposed a lower BMI cut off for self-identified Asians of 23 kg/m2 which is endorsed by the American Diabetes Association and aligns with the CDC DPRP Standards which allow for a lower BMI in self-identified Asians 23 Centers for Disease Control and Prevention, ‘‘Healthy Weight,’’ Centers for Disease Control and Prevention, 2015, https://www.cdc.gov/ healthyweight/assessing/bmi/adult_bmi/ index.html. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 consistent with the latest research.24 In summary, the evidence used to make the certification determination indicated that individuals who fall into the 100– 110mg/dL range for fasting plasma glucose and those with BMIs of 24 kg/ m2 (22 kg/m2 for Asians) or less have lower risk for developing type 2 diabetes. We have chosen to focus on the highest risk population, and therefore the Chief Actuary’s analysis for certification focused on this population.25 26 Comment: Several commenters stated that Medicare currently does not cover the HgA1c test for people without diabetes. These commenters recommended that the HgA1c test be covered with no cost-sharing under Medicare for those seeking to receive MDPP services. Commenters suggested the precedent of Diabetes SelfManagement Training (DSMT) requiring HgA1c as a diagnostic test for DSMT eligibility, and that the test is covered for this purpose. Commenters recommended a parallel coverage determination should be made for the MDPP expanded model. One commenter stated that the oral glucose tolerance test should be covered if it is being considered as one of the eligibility tests. Response: CDC standards for eligibility, which align with the American Diabetes Association definition for pre-diabetes, include an option for demonstrating eligibility using an HgA1c test and we proposed to adopt these eligibility standards for the MDPP expanded model. However, the blood tests that are permitted to be used to demonstrate MDPP eligibility are not covered as part of the MDPP services and occur before the start of the beneficiary’s participation in MDPP. We did not propose to cover HgA1C tests for purposes of screening for pre-diabetes, but we note that the other blood tests that can be used to demonstrate eligibility for MDPP services, the oral glucose tolerance test and fasting plasma glucose test, are covered for prediabetes screening under Medicare. To cover HgA1C tests for purposes of screening for pre-diabetes, we would first need to make a separate coverage determination. 24 William Hsu et al., ‘‘BMI Cut Points to Identify At-Risk Asian Americans for Type 2 Diabetes Screening,’’ Diabetes Care 38, no. 1 (2015): 150– 158. 25 Gregory Nichols et al., ‘‘Trends in Diabetes Incidence Among 7 Million Insured Adults, 2006– 2011: the SUPREME–DM Project,’’ American Journal of Epidemiology 181, no. 1 (2015): 32–39. 26 DH Morris et al., ‘‘Progression Rates from HbA1c 6.0–6.4% and Other Prediabetes Definitions to Type 2 Diabetes: a Meta-Analysis,’’ Diabetologia 56, no. 7 (2013): 1489–1493. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment: Commenters requested clarity on how suppliers would verify that beneficiaries meet certain eligibility criteria. Specifically, commenters asked how suppliers would determine whether a Medicare beneficiary has had a prior diagnosis of type 1 or type 2 diabetes, or whether they have already used the benefit. Commenters requested clarity that beneficiaries would be able to self-report their history of gestational diabetes to become eligible for MDPP. Commenters also encouraged us to explain what documentation MDPP suppliers will be required to collect from participants who are presenting MDPP-qualifying blood test results to confirm eligibility. Commenters also suggested allowing beneficiaries to complete an eligible risk questionnaire in lieu of the qualifying lab tests for up to 50 percent of their participants as this would align with the current CDC DPRP Standards for eligibility. Commenters suggested using other types of criteria such as family history, hypertension, high cholesterol, and high triglycerides, to determine eligibility among patients for whom abnormal blood glucose values are not available. One commenter requested that we clarify the timeframe in which the BMI and blood tests must occur to qualify for participation, such as whether the beneficiary has to have a qualifying BMI either when the blood tests were completed or upon enrollment. Other commenters requested guidance on whether the blood tests have to come from a lab or primary care physician or if the supplier can provide HgA1c finger pricks to determine eligibility. Commenters also asked if proof of lab work is required or if documentation of the values is sufficient. MedPAC commented that beneficiaries should receive blood tests by a provider other than the MDPP supplier as a safeguard to prevent fraud. Response: The following eligibility criteria can be self-reported: Asian ethnicity; no history of type 1 or type 2 diabetes; and no previous receipt of MDPP services. We cannot verify selfreported eligibility criteria when beneficiaries begin receiving MDPP services. We will know which beneficiaries are participating in MDPP when the MDPP supplier submits claims with beneficiary identifiers. In our next round of rulemaking we intend to propose specific policies and requirements to protect MDPP suppliers from furnishing services that may not be covered by Medicare in cases where the beneficiary’s eligibility for MDPP services is assessed based on selfreported eligibility criteria that cannot be verified prospectively. We clarify PO 00000 Frm 00301 Fmt 4701 Sfmt 4700 80469 that beneficiaries can participate in MDPP regardless of a history of gestational diabetes (so long as they do not have a history of type 1 or type 2 diabetes), but must also meet the other criteria such as qualifying BMI and blood test results. We believe the requirement to obtain blood test results is important for maintaining program integrity, and use of risk questionnaires presents opportunities for invalid and unreliable data reporting. The DPP model test required blood test results as part of its eligibility criteria to show a beneficiary has pre-diabetes, and therefore we are requiring blood tests for MDPP eligibility. In considering how to expand the DPP model test, we relied on eligibility criteria that was either tested in the initial DPP model test and/or set forth by the American Diabetes Association or World Health Organization, and we do not intend to include additional eligibility criteria at this time. Regarding comments about the timeframe of eligibility tests and required documentation: We did not propose specific requirements for how or where blood test results may be obtained as we do not want to create unnecessary obstacles for beneficiaries and MDPP suppliers. An MDPP supplier may administer an HgA1c finger prick to determine eligibility. We note that Medicare only covers the fasting plasma glucose test and the oral glucose tolerance test when the beneficiary has a referral from his or her primary care physician or qualifying provider. Similarly, we did not propose specific documentation methods beyond our proposal that MDPP suppliers maintain records that document each beneficiary’s eligibility status. We will consider whether it is necessary or appropriate to establish specific documentation standards in future rulemaking. Comment: Commenters requested guidance on how to handle beneficiaries who are diagnosed with diabetes during the screening process or while receiving MDPP services. Commenters recommended we work with CDC to develop a protocol of how to address beneficiaries who receive a diagnosis of diabetes while being screened for or while receiving MDPP services. Several commenters stated that this protocol should ensure participants receive proper care and a referral into a DSMT program. Response: We reiterate that beneficiaries who are diagnosed with diabetes before they begin receiving MDPP services, such as during the enrollment process, based on their lab E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80470 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations results or history of type 1 or type 2 diabetes are not eligible beneficiaries. These beneficiaries may be eligible for other types of diabetes-related care under Medicare, such as DSMT. We did not propose an eligibility policy for beneficiaries who receive a diagnosis of diabetes while receiving MDPP services. However, we agree with commenters that a protocol needs to be developed to ensure beneficiaries who are diagnosed with diabetes while receiving MDPP services are receiving the proper care for their condition. We intend to address this issue in future rulemaking. Comment: A number of commenters requested that we include populations beyond those that meet the eligibility criteria, such as all Medicare beneficiaries, Medicaid beneficiaries, those with ESRD and those who have been diagnosed with type 1 or type 2 diabetes. Additionally, one commenter suggested that beneficiaries who do not meet the BMI criteria, but have a family history of diabetes and motivation to receive MDPP services, should be able to do so. Response: We believe that beneficiaries who meet the eligibility criteria that we proposed are the most appropriate population to access MDPP services because these beneficiaries are among the highest risk within the prediabetic population for developing diabetes. Targeting lower risk beneficiaries is not consistent with the model that we are expanding. Beneficiaries with type 1 or type 2 diabetes do not meet the eligibility criteria for MDPP but may be eligible for services such as Medicare’s obesity counseling benefit and DSMT. We do not believe MDPP is appropriate for those with ESRD because beneficiaries with ESRD have more complex dietary requirements that are better addressed by dieticians and other health care professionals. We appreciate the commenters’ interest in Medicaid coverage. However, this model expansion pertains only to Medicare beneficiaries, though we note that Medicaid beneficiaries who are also Medicare beneficiaries are eligible if they meet the MDPP beneficiary eligibility requirements. We encourage states to work with the Center for Medicaid & CHIP Services (CMCS) to discuss options to cover diabetes preventive services within the Medicaid program. Final Decisions: We are finalizing the beneficiary eligibility criteria as proposed. These criteria are set forth in § 410.79. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 b. Limitations on Coverage We proposed that beneficiaries who meet the beneficiary eligibility criteria would be able to receive MDPP services only once in their lifetime. Comment: Many commenters asked CMS to allow exceptions to the once per lifetime restriction based on significant life events. Commenters recommended that CMS allow beneficiaries to access the benefit again after a certain period of time (for example, 6 months or 1 year) and to allow beneficiaries to access MDPP services at least two times in their lifetime. Several commenters suggested the lifetime benefit policy may be unfair due to extenuating circumstances that may arise throughout the core benefit, such as hospitalization or death of a loved one. Commenters also requested clarity on how we may handle attribution if beneficiaries switch suppliers. One commenter believed there may be operational implications of managing this benefit across hundreds of suppliers should participants change suppliers or elect to withdraw from MDPP while it is underway and re-enroll at a later date. The commenter recommended that we issue guidelines on how MDPP suppliers should address changes, particularly with respect to beneficiary eligibility and billing and reimbursement. Response: We understand concerns regarding the potential for life events to disrupt the beneficiary’s receipt of MDPP services. However, the MDPP expansion is designed to generate savings for the Medicare program by preventing individuals with prediabetes from developing type 2 diabetes. We believe the once per lifetime restriction is necessary in order to generate enough savings to offset the cost of delivering MDPP services. We are finalizing the policy that eligible beneficiaries can participate in MDPP only once in their lifetimes. However, we acknowledge the commenters’ concerns, and plan to address any exceptions to the once per lifetime restriction in future rulemaking as appropriate. As we did not propose to restrict eligible beneficiaries’ choice of MDPP suppliers, we are confirming that they will be able to change suppliers at any time; however, because beneficiary attribution directly relates to payment, we will consider the comments on how to address attribution and its attendant effect on payment in developing proposals for future rulemaking. Final Decision: We will finalize limitations on coverage of MDPP as proposed. The MDPP core benefit is PO 00000 Frm 00302 Fmt 4701 Sfmt 4700 available only once per lifetime per MDPP eligible beneficiary, and ongoing maintenance sessions are available only if the MDPP eligible beneficiary has achieved maintenance of weight loss. These limitations are specified in § 410.79. c. Referrals The DPP currently allows communityreferral such as by Y–USA and selfreferral of patients, in addition to referral by physicians and other health care practitioners, if the patient presents DPP-qualifying blood test results that the DPP organization keeps on record. We proposed to similarly permit beneficiaries who meet our eligibility criteria to obtain MDPP services by selfreferral, community-referral, or health care practitioner-referral. The following is a summary of the comments received and our responses. Comment: Commenters generally supported our proposal allowing for self-referral, community-referral, or health care practitioner referral to obtain MDPP services, although MedPAC expressed concern that MDPP services could be inappropriately used and suppliers could initiate services without a referral. Commenters suggested that we broaden the types of providers eligible to make referrals to MDPP suppliers. For example, a commenter recommended clarification of what types of provider referrals would be permitted for MDPP and recommended that such providers include nurse practitioners to broaden program access; another commenter suggested that we will be able to increase access to and streamline beneficiary access to MDPP services by allowing community-based organizations to refer beneficiaries. Many commenters recommended that we promote referrals from MDPP suppliers to psychologists to help address psychosocial components of their care. Other commenters opposed a physician referral requirement. One commenter opposed the requirement of blood tests as part of referral pathway. Some commenters recommended that we explicitly state that MDPP services will be paid for when ordered/referred by non-physician practitioners. A commenter recommended that we require non-clinician health care MDPP suppliers to ask beneficiaries about their usual source of care and mandate that MDPP suppliers share results with the beneficiary’s self-identified primary care physician. Response: We agree with commenters that there should be broad program access, which is why we are not requiring any specific type of referral for this expanded model test. With respect E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations to the comments on program integrity, we will take these comments into consideration in future rulemaking, as discussed in section III.J.8.b. of this final rule. We agree with commenters and clarify that non-physician practitioners can order or refer eligible beneficiaries for MDPP services. We understand the value of coordinating results from the MDPP with a beneficiary’s primary care provider, however, we will not require this type of coordination because we believe it creates an additional burden for this new supplier type that will discourage DPP organizations from enrolling in Medicare as MDPP suppliers. Additionally, the MDPP suppliers have no reimbursement mechanism for coordinating services with primary care physicians, specialists or other providers. The value-based payment proposed for the MDPP expanded model affords no compensation for coordination among providers. We are concerned that holding MDPP suppliers to a higher service coordination standard than other Medicare suppliers and providers may negatively impact MDPP supplier capacity. We do not believe it is appropriate to address referrals from MDPP suppliers to other providers in this expansion because suppliers may or may not employ providers with the credentials to make referrals to other providers, and we believe this is beyond the parameters of the MDPP expanded model. Final Decision: We are finalizing the procedure for referrals to MDPP as proposed. 7. Enrollment of MDPP Suppliers mstockstill on DSK3G9T082PROD with RULES2 a. MDPP Supplier Enrollment Requirements We proposed that any organization with preliminary or full CDC DPRP recognition would be eligible to apply for enrollment in Medicare as an MDPP supplier beginning on or after January 1, 2017. This proposal would promote timely enrollment of CDC-recognized organizations before the MDPP expanded model becomes effective on January 1, 2018. We proposed that MDPP suppliers would be subject to the enrollment regulations set forth in 42 CFR part 424, subpart P. Organizations seeking to enroll in Medicare to become MDPP suppliers would be subject to screening under § 424.518. We proposed that potential MDPP suppliers be screened according to the high categorical risk category defined in § 424.518(c) because the MDPP expanded model allows organization types that are new to Medicare to enroll. We also believe that VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 MDPP suppliers have some similarities to home health agencies, a provider screened according to the high categorical risk category, because nonlicensed personnel may furnish MDPP services in a non-clinical setting, such as at Y–USA. We proposed that existing Medicare providers and suppliers that wish to bill for MDPP services would have to inform us of that intention and satisfy all other requirements, such as preliminary or full CDC DPRP recognition, but would not need to enroll a second time. These existing Medicare providers and suppliers would be eligible to bill for MDPP services furnished on or after January 1, 2018. We also considered an alternative approach where existing Medicare providers and suppliers would have to submit a separate enrollment application (including any applicable enrollment application fee) and be separately screened to be eligible to bill for MDPP services. This alternative would enable all organizations furnishing MDPP services to have the same classification as MDPP suppliers and undergo the same application requirements. Under this option, should an entity have an issue related to their MDPP enrollment, for example, falsely attesting to beneficiary weight loss, CMS would have discretion to apply revocation to its MDPP enrollment, rather than affecting their broader enrollment in Medicare. We proposed to require that all MDPP suppliers comply with applicable Medicare supplier enrollment, program integrity, and payment rules. These regulations include, but are not limited to, time limits for filing claims (§ 424.44), requirements to report and return overpayments (§ 401.305), and procedures for suspending, offsetting or recouping Medicare payments in certain situations (§ 405.371). The following is a summary of the comments we received regarding supplier enrollment. Comment: Several commenters supported the proposal to allow organizations that previously would not be eligible to enroll in Medicare to enroll as MDPP suppliers. One commenter stated that enabling organizations with either preliminary or full CDC DPRP recognition to furnish MDPP services as officially enrolled suppliers is an important step in validating community health workers’ place in the health care system. Other commenters stated that these organizations should be able to enroll and furnish MDPP services, but that they should do so with a clinical affiliate to serve as a resource to provide PO 00000 Frm 00303 Fmt 4701 Sfmt 4700 80471 medical insight or oversight as necessary. Many commenters who supported allowing these organizations to enroll in Medicare as MDPP suppliers recommended that the enrollment policies should be aligned as closely to CDC DPRP Standards as possible to avoid additional burden to organizations that are less familiar with Medicare rules and regulations. Response: We appreciate the commenters’ support for allowing organizations that meet the MDPP supplier eligibility criteria to enroll in Medicare, even for those that in other circumstances would be ineligible to enroll in Medicare. As described in detail in section III.J.7.c. of this final rule, the literature does not support the need for coaches to have clinical credentials to successfully achieve the behavior change MDPP seeks to encourage. Therefore, we disagree with commenters who suggested requiring that these new suppliers enroll with a clinical affiliate, that is, a provider or supplier that is currently enrolled in Medicare and currently furnishes services. For those who requested that we closely align MDPP supplier eligibility requirements to the DPP organization recognition requirements in the CDC DPRP Standards, an organization that obtains CDC DPRP recognition can become an MDPP supplier if they meet a few additional Medicare requirements. Comment: Some commenters disagreed with requiring communitybased organizations to enroll as an MDPP supplier in order to furnish MDPP services, stating that the enrollment process would be too burdensome. Others recommended that due to the burden that enrolling as a Medicare supplier could place on smaller, community-based organizations that wish to furnish MDPP services, we should offer them an easier, expedited enrollment process that is less complex and burdensome. Other commenters noted that given the burden that enrolling, recordkeeping, and billing could impose on these organizations, particularly smaller community-based organizations, many such organizations utilize third party administrators to assume these roles on their behalf. Commenters recommended that we consider the role that third party administrators, which are not CDCrecognized to deliver DPP, could play in MDPP, particularly providing administrative services to new Medicare suppliers to lighten their burden. Response: We acknowledge that smaller, community-based organizations without experience in the traditional E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80472 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations health care system may not be familiar with Medicare’s enrollment requirements, and may find Medicare enrollment burdensome. Medicare enrollment is the process through which suppliers acquire eligibility to submit claims to Medicare to bill for services furnished. (In other contexts enrollment can also be the process used to establish eligibility to order or certify Medicare covered items and services.) Furthermore, enrolling into Medicare also enables us to maintain program integrity through screening, monitoring and revocation. Thus, we believe the benefits of enrollment, even for smaller community-based organizations, outweigh the costs of the associated administrative burden. We note that organizations that face financial difficulty related to the enrollment application fee may apply for a hardship exception. For more information on the hardship exemption, please visit: https://www.cms.gov/Outreach-andEducation/Medicare-Learning-NetworkMLN/MLNMattersArticles/downloads/ MM7350.pdf. We recognize the role that third party administrators may play in facilitating the enrollment process for DPP organizations. We intend to allow MDPP suppliers to utilize third-party administrators for the purposes of enrollment but will further consider how these entities may fit into the MDPP enrollment and policy framework in future rulemaking, as appropriate. Comment: A few commenters questioned whether new suppliers could obtain a National Provider Identifier (NPI) to become eligible to enroll in Medicare. Some commenters believed that many DPP organizations with CDC DPRP recognition do not meet the requirements to obtain an NPI given the definition of health care provider under 45 CFR 160.103, and requested that we explain how unlicensed organizations and individuals with no health care experience qualify for an NPI. Commenters requested clarity regarding what supplier type an MDPP supplier would indicate on the Medicare enrollment application. Other commenters requested clarity on what taxonomy code suppliers would use when applying for their NPI. Response: We disagree with commenters who stated that some organizations that meet the MDPP supplier requirements would be unable to obtain an NPI. Under 45 CFR part 162, subpart D, health care providers, as defined in 45 CFR 160.103, may obtain NPIs. The definition of health care provider at 45 CFR 160.103 specifies, in part, that any person or organization VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 who furnishes health care in the normal course of business is a health care provider. Section 45 CFR 160.103 defines ‘‘health care’’ to include, among other things, preventive services. Because MDPP services are considered additional preventive services, we believe MDPP suppliers and coaches who furnish MDPP in the normal course of business are furnishing health care and therefore qualify as health care providers that are eligible for NPIs under 45 CFR part 162, subpart D. We acknowledge commenters’ questions regarding which provider taxonomy to include when applying for an NPI, as well as which supplier type MDPP organizations would denote when enrolling. We plan to issue additional details through guidance or future rulemaking as appropriate to help guide organizations in applying for an NPI. For the purposes of providing guidance in this final rule, we would like to note for DPP organizations that we believe the taxonomy code of Health Educator (174H00000X) could be appropriate for MDPP suppliers when applying for an NPI. As for supplier type to denote upon applying to enroll in Medicare, we intend to create a new supplier type, specific to MDPP suppliers, and may release an appropriate application form accordingly. Comment: Many commenters sought clarity regarding enrolling suppliers new to Medicare. One commenter asked whether these suppliers could furnish MDPP services at community locations such as faith-based organizations and community centers, as was permitted in the DPP model test. One commenter stated that DSMT and MDPP should be subject to consistent rules, but noted that current rules for DSMT do not permit hospital-based programs to be offered at community locations. Another commenter noted that while we do not define ‘‘qualified physical practice location,’’ the Medicare Program Integrity Manual suggests that in order to enroll in Medicare, organizations must have a physical location where a Medicare beneficiary could visit in person. This commenter recommended that CMS clarify how suppliers furnishing virtual DPP services would meet this physical location requirement, whether it would be waived, or whether their company headquarters would serve as the ‘‘qualified physical practice location.’’ Response: Consistent with the DPP model test, MDPP suppliers will be able to provide the service at communitylocations such as faith-based organizations and community centers. Given that MDPP services can be PO 00000 Frm 00304 Fmt 4701 Sfmt 4700 furnished in community-based settings, the physical location associated with the MDPP supplier’s base of operations in each state, as indicated on their enrollment application, would meet the requirements for the qualified physical practice location, provided that the location was open and operational as described in Chapter 15 of Medicare’s Program Integrity Manual, Section 19.2.2. As described in III.J.7.e. of this final rule, we will address policies related to virtual DPP organizations in future rulemaking. Comment: Several commenters agreed with our proposal that we would screen MDPP suppliers as high categorical risk. Many other commenters disagreed and stated that MDPP, like Diabetes SelfManagement Training (DSMT), is educational by teaching beneficiaries about eating healthy and being active, which makes MDPP suppliers more analogous to DSMT organizations than Home Health Agencies (HHAs). Both the MDPP expanded model and DSMT are educational in nature, and both MDPP and DSMT organizations require recognition or accreditation by a third party organization or agency to be eligible to furnish services. Given these similarities, commenters noted that organizations that enroll as DSMT providers are screened according to the limited categorical risk, and therefore MDPP suppliers should similarly be screened at the limited categorical risk. Some commenters stated that MDPP suppliers should face less scrutiny and screening than that of medical professionals because of the fundamental difference between the educational MDPP and the medical services furnished by traditional Medicare providers. Other commenters disagreed with CMS’ parallel between HHAs and MDPP, noting that the requirement to obtain CDC DPRP recognition establishes a higher level of program integrity than that faced by HHAs. One commenter noted that Durable Medical Equipment, Prosthetics/Orthotics, and Supplies (DMEPOS) suppliers and HHAs became classified as high categorical risk in response to reports issued by the HHS Office of Inspector General (HHS–OIG) and the Government Accountability Office (GAO). Response: We understand that MDPP bears similarities to an educational service like DSMT, but do not agree with commenters who stated MDPP suppliers should face less scrutiny or screening than that of medical professionals. CMS assigns risk level based not on the nature of the benefit that the supplier furnishes, but on the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations level of risk that the supplier type may pose to the Medicare program. Therefore, we disagree with commenters who sought a limited screening level for MDPP suppliers on the basis that DSMT suppliers face limited screening. Fewer organizations are eligible to furnish DSMT than MDPP because DSMT organizations must already be enrolled in Medicare to furnish services other than DSMT. Due to their existing enrollments, all DSMT providers are affiliated with medical professionals enrolled in Medicare. Medical professionals face many additional regulations outside of those set by Medicare, including state licensure requirements that help to protect against fraud or abuse by these individuals. This is not comparable to MDPP suppliers that are not required to have an existing enrollment in Medicare. Given the requirements that credentialing and licensure place on these providers, the DSMT supplier type poses less risk to Medicare than suppliers like HHAs and DMEPOS suppliers that do not have the same credentialing and licensure requirements to serve as an additional check on fraud or abuse in addition to Medicare efforts. Similar to home health aides, individuals who furnish MDPP services are not required to have medical credentials or state licensure. Given the similarities between MDPP suppliers and HHAs, we believe the concerns HHS–OIG and GAO have regarding HHAs’ vulnerability for fraud and abuse could also apply to MDPP. We believe our policy to require highrisk screening during enrollment will safeguard against potential fraud and abuse associated with this new supplier type. Comment: Some commenters stated that the high categorical risk screening requirement would carry a substantial financial burden that may discourage MDPP supplier enrollment. One commenter noted that the on-site visits required in moderate and high categorical risk screenings would be redundant to the CDC DPRP Standards that already subject recognized organizations to random audits and site visits. These commenters noted that financial burdens may disproportionally affect community-based organizations that are well-suited to furnish a behavioral change program like the DPP. Commenters highlighted that the burden of collecting fingerprints would disproportionately affect independently run community-based organizations more so than corporate entities that typically only have one central board. Commenters also requested additional information on the requirements for VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 high categorical risk screening. One commenter stated that for entities that are corporately owned or traded, requirements for regional, privately owned suppliers may not be appropriate given the different ownership structures that are not well captured by CMS’s enrollment applications. A few commenters also noted that suppliers newly enrolled into Medicare for MDPP, and providers or suppliers with existing enrollment in Medicare who wish to furnish MDPP, should be screened at the same level. Response: While we agree that CDC ensures the quality of DPP programs using performance data, which will help ensure the quality of MDPP suppliers, CDC is not a regulatory body responsible for the integrity of Medicare payments. We therefore disagree that program integrity policies in Medicare would duplicate CDC’s random site visits and audits of DPP organizations because the agencies play different roles. CMS’s program integrity and audits focus on payments, whereas CDC focuses on monitoring whether organizations are meeting the CDC DPRP standards. We agree with commenters who noted that suppliers newly enrolling into Medicare for MDPP should be screened at the same level as those with existing enrollment in Medicare who wish to furnish MDPP services. We acknowledge the financial burden that enrolling may place on some community-based DPP organizations. It is not our intent to hinder smaller organizations’ ability to enroll in Medicare. We do not, however, believe that a high screening level as opposed to limited or moderate would greatly affect participation given the minimal additional requirements the higher screening levels entail. The difference between limited and high categorical risk screening includes a site visit for each base of operations and fingerprinting of certain individuals within the organization. This site visit poses no cost to the supplier, and should not delay the enrollment process beyond the 45 to 60 day window. Fingerprints are required of all individuals with 5 percent or more ownership interest in the entity. Organizations would not be required to submit fingerprints from managing members, coaches, or other employees. The enrollment application fee a supplier pays to Medicare is the same regardless of screening level, therefore the only difference in cost to the supplier amounts to the cost of obtaining fingerprints of those with 5 percent or more direct or indirect ownership interest in the entity. We do PO 00000 Frm 00305 Fmt 4701 Sfmt 4700 80473 not believe this additional cost of high screening is cost prohibitive for enrollment, even for smaller community-based organizations. We understand the commenter’s concern that for entities that are corporately owned or traded, screening requirements and CMS’s enrollment applications may be difficult or may not be applicable given the different ownership structures. We will not change our requirement to collect fingerprints from all individuals with a direct or indirect ownership interest, though we recognize that not all suppliers under this requirement will have individual owners who meet this criterion. However, when an individual has 5 percent or more direct or indirect ownership in a prospective MDPP supplier, whether private or publically traded, submitting a set of fingerprints would be required for enrollment into Medicare. We refer those interested in learning more about the requirements associated with a high screening level to § 424.518. Given the nominal financial difference of obtaining fingerprints from 5 percent or more owners, we do not believe that application of the high screening level will be a barrier to organizations to enroll in Medicare as an MDPP supplier. Additionally, we expect that MDPP suppliers will revalidate at a moderate risk level, consistent with the revalidation policy of other high risk suppliers. We will address the screening level of MDPP suppliers seeking to revalidate in future rulemaking. Comment: Various commenters recommended that we clarify whether the MDPP supplier eligibility criteria would apply to existing providers and suppliers in Medicare. Specifically, commenters asked whether certified diabetes educators, pharmacies, pharmacists, physical therapists, registered dietitians, licensed clinical social workers, and licensed naturopathic physicians who graduated from accredited medical schools would have the ability to bill Medicare for MDPP services. Other commenters highlighted that certain types of medical professionals that are not currently eligible to enroll in Medicare, like RNs, have the capabilities to furnish MDPP services as a coach, and requested the ability to enroll in Medicare to furnish and bill for MDPP services. Some commenters noted that many existing health care providers are well suited to furnish MDPP services, but may lack familiarity with the CDC National DPP and the process to obtain CDC DPRP recognition. These commenters recommended that CMS provide education and outreach to these E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80474 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations providers to ensure that they have the opportunity to obtain CDC DPRP recognition in a timely manner and eligible to furnish MDPP services. Response: We appreciate interest from existing Medicare providers and suppliers in furnishing MDPP services. Any organization that obtains CDC DPRP recognition would be eligible to enroll in Medicare as an MDPP supplier. The CDC recognizes organizations, not individuals. As such, only organizations, not individuals, would be able to enroll as an MDPP supplier. Any claims submitted for MDPP services would therefore be billed by the MDPP supplier, and not by an individual or any other enrollment type a supplier may have. Although many individual clinicians could serve as MDPP coaches, we note that entities, not individuals, receive CDC DPRP recognition. Furthermore, we would like to reiterate that entities enrolled in Medicare for the sole purpose of furnishing MDPP services would be eligible to submit claims only for MDPP services. We agree that many health care entities may be well suited to furnish MDPP services but may lack familiarity with the CDC DPRP recognition process. We will further consider the recommendations to undertake targeted education and outreach efforts to build supplier capacity. Comment: Some commenters noted that rural health clinics (RHCs) and federally qualified health centers (FQHCs) serve beneficiaries who could benefit from MDPP services, and sought clarification and/or recommended that RHCs and FQHCs be eligible to furnish MDPP services. One of these commenters also recommended that we allow RHCs to bill for MDPP services using the UB–04 form so that RHCs would not have to remove the cost of furnishing MDPP services from their cost report, which they said would make the benefit too administratively difficult to implement. Response: RHC and FQHC services are defined in section 1861(aa) of the Act as services furnished by a physician, nurse practitioner, physician assistant, certified nurse midwife, clinical psychologist, or clinical social worker. Under certain conditions, an FQHC visit may be furnished by a qualified practitioner of outpatient DSMT and medical nutrition therapy (MNT) when the FQHC meets the relevant program requirements for provision of these services. RHC and FQHC visits are medically-necessary primary health services, and qualified preventive health services, that are VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 furnished face-to-face to a patient by a RHC or FQHC practitioner. RHCs and FQHCs can enroll as MDPP suppliers if they otherwise meet the enrollment eligibility criteria, but we clarify that MDPP is not a RHC/FQHC service. However, a clinic that chooses to furnish MDPP services could exclude all costs related to furnishing MDPP services from its cost report and instead submit claims for MDPP services under its separate MDPP supplier enrollment. RHCs and FQHCs must ensure that there is no commingling of RHC or FQHC resources in the cost report used to furnish MDPP services. We understand that some clinics believe this will be burdensome, but only RHC or FQHC services can be billed on a UB–04 form. Comment: Commenters generally supported the proposal that providers and suppliers with existing enrollment in Medicare only be required to inform us of their intent to furnish MDPP services. A few commenters explicitly stated that providers and suppliers with existing enrollment should not have to create a separate enrollment as an MDPP supplier to bill for MDPP services because the burden of doing so would unnecessarily discourage enrollment. In support of this assertion, commenters stated that providers and suppliers with existing enrollment face stringent regulations both from and outside of Medicare requirements, and therefore requiring an additional enrollment process for MDPP would only add redundancy, rather than support program integrity concerns. One commenter highlighted that under current CMS requirements, retail pharmacies must already undergo two enrollment processes and pay two application fees to serve dual roles as durable medical equipment suppliers and mass immunizers. The commenter stated that an additional enrollment process and fee would not further protect against fraud and abuse, but would simply add redundancy and inefficiency that could deter supplier uptake and limit beneficiary access. For providers and suppliers with existing enrollment in Medicare, some commenters noted that they should not have to be held to the CDC DPRP Standards, but instead meet other requirements, as noted above. Other commenters expressed support for specific health care provider types that are well suited to furnish MDPP services. A few commenters supported our alternative proposal that existing Medicare providers and suppliers separately enroll as MDPP suppliers and be separately screened to be eligible to bill for MDPP services. One commenter PO 00000 Frm 00306 Fmt 4701 Sfmt 4700 noted that consistency of procedures and guidelines among organizations furnishing MDPP services, regardless of whether they were new entrants to Medicare, would benefit the program to ensure the same requirements applied across all entities furnishing MDPP services. Response: We agree with commenters who support the alternative approach we proposed that suppliers and providers with existing Medicare enrollment enroll separately as an MDPP supplier. We believe existing providers and suppliers will benefit from a standardized procedure that all MDPP suppliers follow. Though requiring existing Medicare providers and suppliers to separately enroll as MDPP suppliers initially imposes an additional requirement, this is a standard procedure for current suppliers. Other types of Medicare providers, such as hospitals or clinics who wish to provide home health services, would similarly need to enroll as HHA suppliers and undergo screening requirements associated with HHAs. We also believe this requirement would ultimately protect existing Medicare providers from revocation action against their enrollment and ability to furnish services outside of MDPP. For example, should an existing provider furnishing MDPP services lose CDC DPRP recognition, the provider would be subject to revocation. If the provider were not enrolled separately as a MDPP supplier, the provider’s Medicare enrollment would be subject to revocation action, not just the billing privileges associated with MDPP services. As discussed in section III.J.7.d. of this final rule, many commenters agreed with the proposal that loss of CDC DPRP recognition should result in revocation only of MDPP billing authorities, and not necessarily affect the existing provider or supplier’s eligibility to furnish and bill for non-MDPP services. By requiring all prospective MDPP suppliers— regardless of whether they have existing enrollment in Medicare—to enroll as an MDPP supplier, CMS has the discretion to target any revocation action against the MDPP supplier enrollment alone, rather than affect the existing provider or supplier’s other enrollment. It is important to note that revocation removes a provider or supplier’s enrollment in Medicare, not just its billing privileges for a particular Medicare service. For example, if a hospital had an additional enrollment as an MDPP supplier and one of their coaches was fraudulently reporting weight loss that beneficiaries did not achieve, CMS would have the discretion E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations to revoke the hospital’s MDPP supplier enrollment, but could withhold revocation of the hospital’s Part A Medicare enrollment. Alternatively, if CMS pursued the original proposal and the hospital did not reenroll as an MDPP supplier, under the same scenario, the hospital’s entire enrollment could be revoked for up to three years, which could have deleterious effects on the provision of care well beyond MDPP. For this reason, we are adopting our alternative proposal. We acknowledge the concerns that requiring enrolled providers and suppliers to separately enroll as an MDPP suppler imposes a burden. However, we disagree that enrollment screening for the purposes of one supplier type would satisfy program integrity concerns for a different supplier type. Many program integrity checks specifically target the licensure and credentials of a particular supplier type that would not necessarily transfer to other suppliers. Similarly, we disagree with commenters who stated that the program integrity efforts and regulations on providers or suppliers with an existing, non-MDPP enrollment in Medicare would sufficiently address any program integrity related concerns with regards to MDPP services. MDPP services and the manner in which those services will be provided differ from other Medicare benefits and therefore require separate monitoring and regulation to ensure the program integrity. Final Decision: After consideration of the public comments we received, we are finalizing our proposal to permit organizations that meet the supplier enrollment eligibility criteria to enroll in Medicare as MDPP suppliers. We are modifying our proposal with respect to existing Medicare providers or suppliers and requiring them to adhere to the same enrollment requirements as MDPP suppliers if they wish to furnish and bill for MDPP services and otherwise meet the MDPP supplier enrollment eligibility criteria. We are finalizing the high screening level as proposed. We will continue to monitor enrollment efforts and program integrity, and should our policy merit adjustment, we may amend this decision in future rulemaking as necessary. We are finalizing that MDPP suppliers are obligated to comply with all statutes and regulations that establish generally applicable requirements for Medicare suppliers. These regulations include, but are not limited to, time limits for filing claims (§ 424.44), requirements to report and return overpayments VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 (§ 401.305), and procedures for suspending, offsetting or recouping Medicare payments in certain situations (§ 405.371). As explained in more detail in section III.J.7.c. of this final rule, we will not be able to begin supplier enrollment until enforcement activities are finalized during subsequent rulemaking in 2017, but we encourage DPP organizations to use this final rule to prepare for enrollment. This may include working towards CDC recognition, as detailed in III.J.7.b. of this final rule, obtaining NPIs, or obtaining claims processing software. The final policies for MDPP supplier enrollment are set forth in § 424.59. b. CDC DPRP Recognition CDC grants pending recognition to an organization upon its approval of the organization’s application and the organization’s agreement to comply with requirements for use of a CDCapproved curriculum and for duration and frequency of sessions. CDC also establishes an effective date for each approved organization which is the first day of the month following their approval date. Organization must submit data every 12 months from their effective date. CDC grants full recognition after an organization with pending recognition has consistently furnished sessions with a CDC-approved curriculum, met CDC performance standards, and met CDC reporting requirements. CDC makes the first determination for full recognition 24 months after their effective date. Organizations not meeting full recognition at that time are reassessed at 36 months. Organizations that do not achieve full recognition within 36 months after their effective date will lose any recognition and must wait 12 months before reapplying. In our proposal regarding eligibility of DPP organizations to enroll in Medicare, we proposed the use of an additional CDC recognition status: preliminary recognition. We proposed that DPP organizations must have either preliminary or full CDC DPRP recognition in order to be eligible to enroll in Medicare as MDPP suppliers. We proposed that DPP organizations can attain preliminary CDC DPRP recognition upon meeting CDC DPRP performance standards and reporting requirements for 12 months after applying for recognition, and full recognition upon demonstrating program effectiveness for 24–36 months after applying for CDC DPRP recognition. We proposed that if an organization loses its CDC DPRP recognition status at any point, for example for not meeting CDC standards PO 00000 Frm 00307 Fmt 4701 Sfmt 4700 80475 or failing to move from preliminary to full recognition within 36 months of their effective date, or withdraws from the CDC DPRP at any point, the organization would be subject to revocation of its Medicare billing privileges for MDPP services as provided by 42 CFR part 424, subpart P. Under the CDC DPRP Standards, an organization that loses its CDC DPRP recognition (and thus, under our proposal, would no longer be able to bill Medicare for MDPP services) must wait 12 months before reapplying for recognition. We proposed that DPP organizations would be eligible to reenroll in Medicare as an MDPP supplier if, after reapplying for CDC DPRP recognition, the organization again achieves preliminary recognition. The following is a summary of the comments we received and our responses. Comment: The majority of commenters supported requiring DPP organizations to obtain CDC DPRP recognition in order to be eligible for enrollment in Medicare as an MDPP supplier. Some commenters recommended we take into account the socioeconomic status of participants when considering CDC’s recognition, and work with CDC to account for the risk of inadvertently precluding suppliers serving vulnerable populations who have fewer resources to achieve healthy eating and fitness goals. Some commenters requested that CMS allow MDPP supplier eligibility to be based on alternative accreditations and standards focused on diabetes education. A few commenters noted that CDC DPRP recognition is difficult to attain because it relies on average weight loss of 5 percent across the population of participants an organization serves, and if organizations fall a few decimal points short of that threshold, they can lose their recognition. Some commenters expressed the concern that beneficiary access may be disrupted if a supplier falls short of CDC DPRP Standards, therefore losing recognition and Medicare eligibility. Furthermore, commenters were concerned with the timelines the CDC DPRP Standards require for reapplication. Tribal organizations collectively requested CDC DPRP recognition be automatically granted to providers of the Special Diabetes Program for Indians. Response: In response to comments regarding CDC recognition (socioeconomic status of participants, average weight loss requirement, timelines with reapplication) we note that CDC is responsible for developing standards related to CDC recognition, E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80476 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations and we are not. We are coordinating with CDC to promote alignment between the CDC DPRP and MDPP expanded model requirements, to the extent possible. We are not considering other accrediting bodies or at this time. We expect that the updated CDC DPRP Standards will be published for public comment in 2017 and go into effect in 2018. We welcome consultation with tribes and tribal organizations as required by the CMS Tribal Consultation Policy,27 and will address this and other concerns that have tribal implications, as appropriate, in future rulemaking. Comment: Several commenters expressed support for the proposal that organizations must obtain preliminary or full CDC DPRP recognition in order to become eligible to enroll in Medicare as an MDPP supplier. Other commenters recommended that we clarify the requirements for preliminary recognition and how preliminary recognition differs from the CDC DPRP Standards’ definition of pending recognition. The commenters noted that the CDC DPRP Standards currently do not have a preliminary recognition definition. A commenter recommended that CDC be the entity responsible for recognizing organizations with preliminary recognition, just as CDC is responsible for recognizing organizations with pending recognition and full recognition. Several commenters recommended that CMS clarify which performance standards and reporting requirements need to be met for 12 consecutive months to qualify for preliminary recognition. The commenters noted that they assume that an MDPP supplier would comply with the first year of CDC DPRP Standards for pending recognition status, starting at the effective date of the DPP organization’s pending recognition. The commenters also noted that this means submitting data at 12 months from the effective date, but not achieving any particular outcomes at 12 months because current CDC DPRP Standards do not consider outcomes for achieving recognition until 24 months from the effective date. Several commenters recommended that we clarify whether an organization must submit 6 months or one year of data to obtain preliminary recognition. The commenters expressed their support that an organization offer DPP services for at least a year before qualifying for 27 Centers for Medicare & Medicaid Services, ‘‘CMS Tribal Consultation Policy,’’ Centers for Medicare & Medicaid Services, 2015, https:// www.cms.gov/Outreach-and-Education/AmericanIndian-Alaska-Native/AIAN/Downloads/ CMSTribalConsultationPolicy2015.pdf. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 recognition as an MDPP supplier. A separate commenter suggested that CMS clarify that to obtain preliminary recognition, an organization must offer the CDC-approved curriculum within 6 months of the effective date of the organization’s CDC DPRP application and submit at least 6 months of participant data at 12 months posteffective date of the application. Several commenters recommended removing the requirement to submit one year’s worth of data before obtaining preliminary recognition. One commenter noted that given the work and time required for DPP organizations to start providing DPP services, it may be difficult to obtain 12 months of reporting data immediately after the effective date of the DPP organization’s pending recognition status. The commenter expressed concern that an organization that has met the standards and reporting requirements for 11 of the 12 months immediately following its application to participate in the DPRP should not have to reapply for preliminary recognition and start the 12-month process over again. Another commenter recommended that preliminary recognition performance standards focus on percent of weight loss achieved, as opposed to average weight loss, and maintenance of weight loss among participants. Some commenters recommended that we allow organizations that have either pending recognition or full recognition from CDC to enroll as MDPP suppliers. The commenters noted that organizations obtain pending recognition from CDC after they agree to curriculum, duration, and intensity requirements. One commenter noted that the additional status of preliminary recognition adds a complicated layer of bureaucracy to the existing CDC DPRP, adds little value, and will likely delay enrollment of organizations in Medicare as MDPP suppliers due to lack of defined requirements for preliminary recognition. Several commenters suggested that we allow participation of DPP organizations with pending recognition until CDC standards for preliminary recognition status are established. One commenter requested that we explain why we proposed an additional recognition status, whether we can create new CDC DPRP recognition standards, and if so, how the new recognition standards will be incorporated into the CDC DPRP Standards. One commenter recommended that only organizations with full CDC DPRP recognition may serve as MDPP suppliers in order to eliminate potential PO 00000 Frm 00308 Fmt 4701 Sfmt 4700 confusion caused by the preliminary recognition standard and preserve program integrity. The commenter suggested that we should only pay suppliers that have demonstrated their effectiveness as MDPP suppliers or their ability to establish and maintain the necessary infrastructure. Another commenter suggested that organizations with full recognition be paid at a higher rate than organizations with preliminary recognition. Several commenters recommended that CMS adopt a grandfathering policy where organizations with 12 months of data may obtain preliminary recognition. A few commenters noted that the creation of the preliminary recognition definition risks having few or no MDPP suppliers with preliminary recognition by MDPP’s scheduled effective date of January 1, 2018, thus delaying the implementation of MDPP. One commenter noted that the preliminary recognition status does not exist in CDC DPRP Standards, and that the preliminary recognition definition would be published in CDC DPRP Standards too late for MDPP suppliers to begin enrolling into Medicare in time to begin furnishing MDPP services on January 1, 2018. The commenter recommended that we require CDC to identify organizations with pending recognition that qualify for preliminary recognition no later than December 31, 2016 and require that CDC release interim guidance on standards or requirements for preliminary recognition no later than March or April 2017. The commenter notes that additional, minor clarifications may also be needed when the CDC issues updated CDC DPRP Standards in January 2018 to reflect early experience with the new preliminary recognition definition. One commenter believed it should be permitted to enroll as an MDPP supplier because it has one year of data, even though it lacks CDC DPRP recognition. Another commenter urged that we review its organization’s data before 2018, and if it meets the standards for MDPP suppliers in 2017, that CMS reimburse the organization in 2017. Response: We appreciate the support for our proposal to allow DPP organizations with full CDC recognition, as well as certain DPP organizations that do not yet have full CDC recognition, to enroll as MDPP suppliers. We received many comments that raised questions and concerns about preliminary CDC recognition status or offer suggestions about how preliminary CDC recognition status should be determined. Because the CDC has not adopted standards for preliminary recognition, however, we are not finalizing any of our proposals E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations with respect to preliminary recognition status at this time. Although we anticipate that CDC will address standards for preliminary recognition when it publishes updated DPRP Standards for public comment next year, because any such standards for CDC preliminary recognition would not take effect until 2018, it will not be possible to permit DPP organizations to enroll in Medicare based on achievement of CDC preliminary recognition before then. For this reason, we intend to use future rulemaking to propose interim standards for preliminary recognition, under CMS authority, that would bridge the gap until CDC preliminary recognition standards are established. We anticipate that our proposed interim preliminary recognition standards would be consistent with the principles described in the proposed rule. We intend to align our MDPP supplier enrollment policies with CDC recognition standards, as appropriate, as they are established. We will take the commenters’ comments on preliminary recognition into account as we develop our proposal for interim CMS recognition standards. We do not intend to delay implementation of the MDPP expansion. We proposed that certain DPP organizations that had not yet achieved full recognition could enroll in Medicare in acknowledgement that full recognition might take 36 months and require achievement of certain performance standards. We proposed this eligibility requirement for Medicare enrollment to allow an increased number of organizations that have demonstrated a capacity to provide DPP services to enroll in Medicare, thereby allowing access to MDPP services in a timely manner as of January 1, 2018. We continue to believe that it is appropriate to permit enrollment in Medicare prior to achievement of full CDC recognition in cases where there is demonstrated capacity to furnish DPP services, and as noted above, we intend to address this issue in future rulemaking. Therefore, we decline to permit DPP organizations that have only pending recognition to enroll in Medicare because such organizations may not have any demonstrated capacity to furnish DPP services. We are aware that most DPP organizations are currently in pending recognition status, and that CDC’s definition for pending recognition currently includes a 6-month grace period before organizations are required to start offering DPP sessions. We are also aware that the current definition of full recognition requires organizations to meet certain standards for average VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 weight loss and participation, and relative to those in pending status, few organizations have obtained full recognition. However, we believe it is important to ensure that prospective MDPP suppliers have demonstrated experience in actually furnishing DPP services, and therefore we do not believe it is appropriate to permit organizations to enroll in Medicare before they have submitted any performance data to CDC that allows CDC to assess their capacity to deliver DPP services. We recognize the timing and nature of our proposal has caused some confusion, particularly because we intend to use CDC recognition status as a Medicare enrollment standard. We also agree with commenters that in general CDC should be responsible for recognizing DPP organizations, consistent with its recognition standards. However, as noted above, we intend to propose in future rulemaking interim CMS recognition standards that would permit DPP organizations that are seeking full CDC recognition and have demonstrated capacity to furnish DPP services to enroll in Medicare prior to January 1, 2018. We are considering performance criteria that we could propose as part of any interim CMS standards that we would use to permit DPP organizations that have not yet achieved full CDC recognition to enroll as MDPP suppliers before the CDC standards are updated. For example, we are considering proposing that DPP organizations with pending CDC recognition would be required to meet a performance standard threshold of 60 percent participant attendance in at least 9 core sessions in months 1–6 and 60 percent participant attendance in at least 3 core maintenance sessions in months 7–12. In addition, we intend to consider options to ensure program integrity and mitigate fraud and abuse during the preliminary recognition stage. We encourage interested parties to submit comments on any updates to CDC’s DPRP Standards when CDC publishes them for public comment. Finally, in response to commenters, we do not intend to propose differential payments based on whether the supplier has full recognition. We also do not intend to make payments for MDPP services prior to January 1, 2018. We will also propose details on the payment structure in future rulemaking. Final Decision: We finalize our proposal that an entity must have full CDC DPRP recognition as a requirement to enroll in Medicare as an MDPP supplier. Due to timing issues with CDC standards updates, we are not finalizing any proposals for preliminary PO 00000 Frm 00309 Fmt 4701 Sfmt 4700 80477 recognition at this time. We intend to address this issue in future rulemaking. c. Coach Requirements We proposed to require personnel who would furnish MDPP services, referred to hereafter as ‘‘coaches,’’ to obtain a National Provider Identifier (NPI) to help ensure the coaches meet CMS program integrity standards. We also considered requiring that coaches enroll in the Medicare program in addition to obtaining an NPI, and we solicited comment on this approach. Another alternative policy we considered was to require DPP organizations to collect and submit information on the coaches who would furnish MDPP services, which could include identifying information such as first and last name and social security number (SSN). We proposed to require MDPP suppliers to submit the active and valid NPIs of all coaches who would furnish MDPP services on behalf of the MDPP supplier through a roster of coach identifying information. We proposed that if MDPP suppliers fail to provide active and valid NPIs of their coaches, or if the coaches fail to obtain or lose their active and valid NPIs, the MDPP supplier may be subject to compliance action or revocation of MDPP supplier status. The following is a summary of the comments we received and our responses. Comment: We received comments regarding coach enrollment into Medicare. Commenters overwhelmingly stated objections to coach enrollment, citing reasons including high turnover and the reality that many coaches work part time or as volunteers. Commenters also highlighted that since claims and payment are handled directly by the supplier, coaches have limited reasons to enroll. Other commenters noted that coaches lack medical licensure, indicating that only medical providers should enroll. And several commenters cited the burden that enrollment would impose on coaches, and that requiring this approach could limit coach participation and ultimately reduce beneficiary access to services. The majority of commenters indicated that organizations alone should enroll in Medicare as MDPP suppliers, though one commenter proposed that diabetes prevention coordinators, who oversee the coaches as outlined in the CDC DPRP Standards, should enroll. A few commenters recommended that coaches enroll, stating that this would ensure our ability to protect the integrity of the Medicare program and have direct oversight over coaches furnishing the benefit. Other commenters cited E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80478 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations consistent use of CMS processes such as enrollment for program integrity efforts rather than creating new processes. Several commenters highlighted the opportunity for coaches to be directly paid for the services furnished. Response: We agree with the commenters who stated that coaches should not enroll in Medicare and should not be submitting MDPP claims. Though we understand there may be program integrity advantages if coaches were to enroll, we do not believe the existing enrollment process is appropriate for coaches. Most notably, enrollment is for the purpose of permitting Medicare billing, and we have proposed that only MDPP suppliers, not coaches, would submit claims for MDPP services. We do not believe coaches should have the ability to submit claims for MDPP or be directly paid for the services furnished because CDC DPRP recognition is obtained at the organization level, not for the individual coach furnishing MDPP services. Additionally, we believe that the burden of enrolling and submitting claims, as well as the medical record retention requirements associated with claim submissions, would be too burdensome to place on individual coaches, and that suppliers are more appropriate and suitable to assume this responsibility. We did not propose enrolling diabetes prevention coordinators, but we believe the same rationale against requiring coaches to enroll would apply to these individuals as we did not propose that diabetes prevention coordinators would be able to bill for MDPP services. Comment: We received many comments regarding whether coaches should obtain NPIs, with commenters split on whether CMS should require only suppliers, or both suppliers and coaches, to obtain NPIs. A few commenters alternatively suggested that diabetes prevention coordinators, not coaches, would be more appropriately suited to obtain NPIs. Most commenters did not provide a reason for supporting the proposal that coaches obtain an NPI, but those that did stated that having coaches obtain an NPI would serve to validate community health workers’ role in health care. Many commenters expressed their support for coaches obtaining an NPI as an alternative to enrolling in Medicare. One commenter indicated that given that MDPP services will be additional preventive services, the processes that would apply to other additional preventive services should also apply, and coaches who furnish these services should therefore obtain NPIs. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Commenters who opposed the requirement for coaches to obtain NPIs largely expressed that only health care providers should obtain NPIs. Some commenters believed that MDPP coaches do not meet the definition of health care provider under 45 CFR 160.103, and therefore coaches should not be allowed to obtain an NPI. Other commenters questioned how coaches could obtain NPIs, particularly when registered nurses (RNs) and other credentialed professionals can neither obtain NPIs nor enroll as Medicare suppliers. Several commenters recommended that CMS extend those same proposals for coaches to RNs and other medical professionals who currently lack the ability to obtain an NPI. As an alternative to obtaining NPIs, a number of commenters proposed that coaches should have specialized training. Response: We did not propose any requirements for diabetes prevention coordinators, but we may consider this possibility for future rulemaking as appropriate. Given that coaches directly furnish MDPP services, we believe that for any process aiming to track and screen professionals working with an MDPP supplier, the coach will likely stand as the most appropriate individual to track and screen, as opposed to the coordinators who do not directly furnish MDPP services. To commenters who did not believe that coaches would be eligible for an NPI, we note that 45 CFR part 162, subpart D specifies that health care providers, as defined in 45 CFR 160.103, may obtain NPIs. Among other things, a health care provider under 45 CFR 160.103 is a person or organization who furnishes health care in the normal course of business. Because 45 CFR 160.103 specifies that health care includes preventive services, we believe MDPP coaches provide health care and are therefore health care providers under 45 CFR 160.103 and eligible to obtain NPIs. We disagree that requiring coaches to obtain NPIs would impose an undue burden on coaches, even those who work as coaches part-time or as volunteers. Obtaining an NPI takes approximately 20 minutes and can be done easily online. We will further consider the impact of coach requirements for rural and tribal areas that lack reliable access to the internet and will consider adjusting policies in future rulemaking as appropriate. Requests for CMS to address NPI issues and enrollment for other health care providers such as RNs are outside of the scope of this rulemaking for MDPP. Should RNs or other providers who currently lack an NPI decide to PO 00000 Frm 00310 Fmt 4701 Sfmt 4700 work as a coach, these individuals would be able to obtain an NPI on that basis for purposes of furnishing MDPP services. Given the relatively low burden that obtaining NPIs places on coaches and important considerations for monitoring, evaluation, and program integrity, we will require every coach furnishing MDPP services on behalf of an MDPP supplier to obtain an active and valid NPI that will be submitted to Medicare on the supplier’s updated roster of coaches. This roster of coach identifying information would be submitted alongside the MDPP supplier’s enrollment application to be used for vetting and program integrity purposes. However, we did not propose specific standards for how we would use roster information in connection with MDPP supplier enrollment. We intend to propose such standards in future rulemaking, and will begin enrollment of MDPP suppliers once appropriate standards are in place. Comment: We received general support from commenters for the proposal to track coaches using some form of identifiable information to help ensure the coaches meet CMS program integrity standards. Few commenters detailed in their response the type of information that should be collected. While some commenters preferred using coach names and NPIs for tracking purposes, slightly more commenters preferred using identifiable information such as social security numbers (SSNs). Response: We appreciate the support from commenters. Use of NPIs and SSNs would serve different purposes in vetting coaches against program integrity risks upon the supplier’s enrollment in Medicare, as well as evaluation and monitoring purposes for performance and continuing program integrity efforts. In existing areas of Medicare’s enrollment process where both NPIs and SSNs are used for individual providers who enroll into Medicare, SSNs serve the purposes of completing background checks, while NPIs serve an identifying and tracking purposes with regards to Medicare claims and actions. These two identifiers play distinct and important roles in ensuring the integrity of Medicare’s programs and the safety of the beneficiaries served. Given commenters’ openness to using both pieces of identifying information, we will finalize a requirement that MDPP suppliers submit the names, NPIs and SSNs of their coaches. Upon enrollment, MDPP suppliers must submit, and update within 30 days of any changes, a roster of coaches, including individuals’ first and last E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations name, SSN and NPI to CMS along with its enrollment application to help ensure the coaches meet CMS program integrity standards. Changes that must be reported to us include adding identifying information for any coach beginning to furnish MDPP services on behalf of the supplier or removing a coach who ceases furnishing MDPP services on behalf of the supplier. We intend to address how this coach information might affect MDPP supplier enrollment and be used in enforcement actions in future rulemaking as appropriate. As noted previously, enrollment of MDPP suppliers will not begin until such standards are in place. Comment: We received a number of comments on coach requirements under the MDPP expanded model. The majority of commenters stated that training should be required, some stipulating that specific trainers should be utilized. Within the discussion of training, some commenters stipulated that medical professionals should be exempt from any additional training imposed on coaches, while others stipulated that everyone—including medical professionals—should undergo training to become a coach. One commenter recommended that CMS create an audit process to ensure that training occurred. Several commenters urged us to consider creating a certification program for coaches. Commenters also referred to the CDC DPRP Standards for coach requirements and requested that CMS clarify whether formal lifestyle coaching is a requirement and specifically what constitutes the definition of trained coach to furnish the required curriculum. Other commenters asked whether we will require additional training sources or continuing education requirements above the CDC DPRP Standards in order to qualify as a coach. Many commenters supported specific practitioners to serve as coaches, such as Certified Diabetes Educators (CDEs). Other commenters recommended that coaches should have clinician oversight. Similarly, other commenters suggested that we require for coaches to have clinicians as affiliates who can serve as a medical resource. A few commenters stated that coaches should have some form of credentials, particularly given that participants may have medical questions about weight loss that extend beyond a CDC-approved curriculum, which credentialed professionals are better equipped to handle. A number of commenters specifically requested that we recognize the value that CDEs can have in the MDPP expanded model and specify the role that they play in the management of lifestyle changes. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 While we received many comments suggesting additional requirements for coaches, a number of commenters also urged against adding additional requirements on coaches beyond CDC DPRP Standards. Response: We do not, at this time, see any need to require additional training, certification, or clinician oversight or affiliation beyond the CDC DPRP Standards, particularly given that the initial DPP model test met the criteria for expansion without these requirements. Though we agree that CDEs, RNs, and other credentialed professions can be effective MDPP coaches, the DPP model test showed that trained, noncredentialed coaches can effectively deliver the program. Additionally, we do not believe that the literature supports this claim that coaches with credentials would result in better participant performance than noncredentialed individuals trained to be coaches.28 29 30 31 Therefore, we do not believe credentials are necessary at this time, but may evaluate and revisit this proposal as necessary. Therefore, any individuals—with or without credentials—can become a coach provided that they meet CDC DPRP Standards and work for a MDPP supplier. We will further consider commenters’ suggestions regarding mechanisms to ensure that coaches have received high quality training, whether we will require coach certification, the impact credentials may have on coaches, and the possibility of clinician affiliation or oversight as we monitor and evaluate the expanded model. Final Decision: We are finalizing the proposal that DPP organizations must enroll in Medicare to become MDPP suppliers, and that coaches will not enroll in Medicare for purposes of furnishing MDPP services. We are finalizing the proposal that coaches must obtain NPIs. We are requiring MDPP suppliers to submit the active 28 D Vojta et al., ‘‘A Coordinated National Model for Diabetes Prevention: Linking Health Systems to an Evidence-Based Community Program,’’ American Journal of Preventive Medicine 44, no. 4 Suppl 4 (2013): S301–S306. 29 Mohammed K. Ali et al., ‘‘How Effective were Lifestyle Interventions in Real-World Settings that were Modeled on the Diabetes Prevention Program?,’’ Health Affairs 31, no.1 (2012): 67–75. 30 L Ruggiero et al., ‘‘Community-Based Translation of the Diabetes Prevention Program’s Lifestyle Intervention in an Underserved Latino Population,’’ The Diabetes EDUCATOR 37, no. 4 (2011); 564–572. 31 JA Katula et al., ‘‘The Healthy Living Partnerships to Prevent Diabetes Study 2-Year Outcomes of a Randomized Controlled Trial,’’ American Journal of Preventive Medicine 44, no. 4S4 (2013): S324 –S332. PO 00000 Frm 00311 Fmt 4701 Sfmt 4700 80479 and valid NPIs of all affiliated coaches and to update CMS within 30 days of a coach beginning to or ceasing to furnish MDPP services. We finalize that this roster of coaches submitted will include the first and last name, SSN, and NPI. We intend to propose policies specific to enrollment standards and enforcement actions, as they relate to the roster, in future rulemaking. The final policies for coach requirements are set forth in § 424.59. d. Revocation of MDPP Supplier Enrollment We proposed that all MDPP suppliers would be required to comply with the requirements of 42 CFR part 424. If an MDPP supplier has its Medicare enrollment revoked or deactivated for reasons unrelated to its loss of CDC DPRP recognition, that MDPP supplier would lose its ability to bill Medicare for MDPP services but would not automatically lose its CDC DPRP recognition. We proposed that existing Medicare providers and suppliers who lose CDC DPRP recognition would lose their Medicare billing privileges with respect to MDPP services, but may continue to bill for other non-MDPP Medicare services for which they are eligible to bill. We proposed that MDPP suppliers that have their Medicare billing privileges revoked or that lose billing privileges for MDPP may appeal these decisions in accordance with the procedures specified in 42 CFR part 405, subpart H, 42 CFR part 424, and 42 CFR part 498. We proposed to add a new § 424.59 to our regulations to specify the suppliers who would be eligible for Medicare enrollment and billing for MDPP services. We solicited comment on these proposals. The following is a summary of the comments we received regarding these proposals and our responses. Comment: A few commenters agreed with the proposal that loss of CDC DPRP recognition should lead to loss of MDPP billing privileges. Some commenters specifically agreed that revocation should be limited to MDPP privileges. Commenters also stated that the ability to appeal a revocation decision was important. One commenter expressed concerns that losing Medicare billing privileges would affect MDPP suppliers less than medical professionals, presenting a potential vulnerability to fraud. For medical professionals, Medicare provides a key source of income and livelihood, whereas nontraditional Medicare providers who primarily deliver non-health care related services like those in a community center would not necessarily be as affected by a E:\FR\FM\15NOR2.SGM 15NOR2 80480 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 revocation than a health clinic. The commenter did not suggest an alternative approach that could make losing Medicare billing more impactful for these organizations. Response: We appreciate the support from commenters on our proposed revocation policies, including the right to appeal a revocation. Should we deny a prospective MDPP supplier’s enrollment, we expect that appeal rights set forth in 42 CFR part 424 would apply, however we will address any provisions related to Medicare enrollment denial appeal rights in future rulemaking. We agree with commenters that should a supplier lose CDC DPRP recognition, the supplier’s revocation would be only of the supplier’s MDPP enrollment. We disagree that revocation of MDPP enrollment would affect existing providers and suppliers less than new MDPP suppliers. In both cases, the supplier would lose its ability to bill for MDPP services. We reiterate that all MDPP suppliers—whether a new Medicare supplier or a currently enrolled provider and supplier—must comply with the requirements of 42 CFR part 424, subpart P, including, but not limited to, enrollment bars. CMS notes that we did not propose a policy regarding the effective date of the revocation, and will do so in future rulemaking. We retain the authority to revoke any Medicare enrollment— MDPP supplier or otherwise—if a supplier does not comply with Medicare requirements. Final Decision: We are finalizing our proposals that all MDPP suppliers must comply with the requirements of 42 CFR part 424, will have their MDPP supplier enrollment revoked upon loss of CDC DPRP recognition or noncompliance with Medicare requirements, and may appeal these decisions in accordance with the procedures specified in 42 CFR part 405, subpart H, 42 CFR part 424, and 42 CFR part 498. The final revocation and appeal policies are set forth in § 424.59. e. Virtual MDPP Services Currently, CDC-recognized DPP organizations deliver DPP services inperson or virtually via a telecommunications system or other remote technology. The majority of current DPP organizations furnish DPP services in-person, but an emerging body of literature 32 33 34 35 supports the 32 W Su et al., ‘‘Return on Investment for Digital Behavioral Counseling in Patients With Prediabetes and Cardiovascular Disease,’’ Preventive Chronic Disease 13, no. E13 (2016). 33 J Ma et al., ‘‘Translating the Diabetes Prevention Program Lifestyle Intervention for VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 effectiveness of virtual sessions furnished remotely. We proposed to allow MDPP suppliers to furnish MDPP services through remote technologies. As part of our evaluation of the MDPP expansion, to the extent feasible, we planned to evaluate the effectiveness of MDPP services, particularly in relation to virtual versus in-person services, and, using the evaluation data, modify or terminate this component of the expansion as appropriate. To permit such evaluation, we are considering specifying the nature of the virtual service and the site of the service in codes included on claims submitted for payment, as well as collecting information on the nature of the virtual service and the site of service at the beneficiary level from MDPP suppliers. We planned to monitor administrative claims for virtual services to identify any unusual and/or adverse utilization of the MDPP services. We solicited comment on specific monitoring activities or program integrity safeguards with respect to virtual services, in addition to the time period in which such enhanced monitoring activities should occur. We noted that MDPP services provided via a telecommunications system or other remote technology will not be part of current Medicare telehealth benefits and have no impact on how telehealth services are defined by Medicare. We recognize that the provision of MDPP services by such virtual methods may introduce additional risks for fraud and abuse, and we plan to address specific policies in future rulemaking to mitigate these risks. We thus solicited comment on whether there are quality or program integrity concerns regarding the use of virtual sessions, or whether they offer comparable or higher quality MDPP services when compared to in-person services. We solicited comment on strategies to strengthen program integrity and minimize the potential for fraud and abuse in virtual sessions. The following is a summary of the comments we received regarding these proposals and our responses. Comment: In response to our proposals for virtual MDPP services, we received many insightful and Weight Loss into Primary Care: a Randomized Trial,’’ JAMA Internal Medicine 173, no. 2 (2013): 113–121. 34 CS Sepah et al., ‘‘Translating the Diabetes Prevention Program into an Online Social Network: Validation Against CDC Standards,’’ The Diabetes Educator 40, no. 4 (2014): 435–443. 35 Y Fukuoka et al., ‘‘A Novel Diabetes Prevention Intervention Using a Mobile App: A Randomized Controlled Trial with Overweight Adults at Risk,’’ American Journal of Preventive Medicine [serial online] 49, no. 2 (2015): 223–237. PO 00000 Frm 00312 Fmt 4701 Sfmt 4700 informative public comments suggesting matters related to furnishing virtual services, various modes of furnishing virtual services, how effective these services are, and that the standards that apply to in-person sessions may not be applicable to virtual sessions. Commenters were overwhelmingly supportive of the proposal to allow virtual providers to participate, particularly to ensure adequate access to the benefit in underserved areas. Only one commenter noted that in-person services should be prioritized over virtual services. Commenters provided specific suggestions on how to mitigate fraud and abuse and evaluate these services by using site of service codes on claims, and requiring technology based methods for weight loss reporting (for example, digital scales) versus selfreported methods. Response: We appreciate the comments on the virtual furnishing of MDPP services. We noticed many differences between the way a virtual MDPP supplier and in-person supplier may operate, in addition to hybrid virtual and in-person programs. We do not have enough information to finalize this proposal at this time, but expect to continue gathering more information on the virtual delivery of DPP services. We appreciate the many insights and comments we received, particularly suggestions of strategies to maintain program integrity. We remain committed to including virtual providers and services in MDPP as soon as possible, but we intend to use future rulemaking to address detailed policies on virtual providers’ eligibility to enroll, furnish and bill for MDPP services. f. Information Technology (IT) Infrastructure and Capabilities We proposed that in order to receive payment, MDPP suppliers would be required to submit claims to Medicare using standard claims forms and procedures. Claims would be submitted in batches that contain beneficiary Protected Health Information (PHI) and Personally Identifiable Information (PII), including the Health Insurance Claim Number (HICN). Most Medicare claims are submitted electronically except in limited situations. We provide a free software package called PC–ACE Pro32 that creates a patient database and allows organizations to electronically submit claims to Medicare Part A and B. We understand there are several other electronic claims submissions software packages available in the market for purchase. We encouraged current and prospective DPP organizations to investigate adopting these systems to enhance the efficiency of claims E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations submission, and we sought comment on the capacity of DPP organizations to integrate these systems into their workflows. We indicated that we would provide guidance to MDPP suppliers regarding the Medicare claims submission standards. We proposed to require MDPP suppliers to maintain a crosswalk between the beneficiary identifiers they submit to CMS for billing purposes and the beneficiary identifiers they provide CDC for beneficiary level-clinical data. We proposed that MDPP suppliers provide this crosswalk to the CMS evaluator on a regular basis. We proposed that MDPP suppliers maintain records that contain detailed documentation of the services furnished to beneficiaries, including but not limited to the beneficiary’s eligibility status, sessions attended, the coach furnishing the session attended, the date and place of service of sessions attended, and weight. We proposed that MDPP suppliers maintain these records within a larger medical record, or within a medical record that an MDPP supplier establishes for the purposes of administering MDPP. Consistent with the requirement in § 424.516(f) we proposed that these records be retained for 7 years from the date of service and that MDPP suppliers would provide CMS or a Medicare contractor access to these records upon request. We proposed to require MDPP suppliers to accurately track payments and resolve any discrepancies between claims and the beneficiary record within their medical record. We also proposed that MDPP suppliers would be required to maintain and handle any beneficiary PII and PHI in compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), other applicable privacy laws, and CMS standards. We indicated that we would provide education and guidance to MDPP suppliers to mitigate the risk of data discrepancies and audits. We stated that we would address specific recordkeeping requirements and standards in future rulemaking as appropriate. The following is a summary of the comments we received and our responses. Comment: Several commenters recommended CMS clarify what the medical record should include, whether the medical record should be paper or electronic, and whether suppliers should retain records of any referrals and diagnostic tests demonstrating beneficiary eligibility or simply document that one was presented at the time of enrollment. Commenters requested guidance on whether the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 medical record would require proof of lab work or if documentation of the values would suffice. One commenter noted that while beneficiaries’ data should be held in an EHR, suppliers should be able to transfer this information in electronic, paper, or fax format to beneficiaries’ other providers. Though commenters generally agreed with the recordkeeping requirements, including the duration of recordkeeping, many of these same commenters and others noted the burden that recordkeeping requirements might impose on community-based organizations. These commenters urged us to consider the implications that a high cost, HIPAA-compliant recordkeeping system might impose on such organizations, as well as the subsequent strain it would place on beneficiary access should the requirement be cost prohibitive. Additionally, a number of commenters urged that when making IT-related policy decisions, that we consider the lack of internet and issues with electricity in rural and tribal areas. These commenters suggested clarifying the medical record requirement in such a way that would be economically feasible for community-based programs. Due to these concerns, a number of commenters suggested that we work with CDC or other entities to identify a low cost data and billing system. Other commenters went further to suggest that CMS work with CDC to streamline the two data reporting systems such that when coaches or suppliers input performance data on beneficiary sessions to CDC, the Medicare claim would automatically be generated. Others appreciated the reliance on existing claim forms and software and applauded CMS for not creating a new data submission system. A few commenters noted that given the cost burdens of adequate IT, data, and recordkeeping systems, many community-based programs are likely to use third party integrators. These commenters did not advocate for a specific role for these integrators. One commenter, however, requested that MDPP suppliers be permitted to partner with and use the IT system of a healthcare entity to maintain records and submit claims for Medicare payment. Lastly, one commenter suggested that MDPP suppliers be required to take HIPAA-compliant training due to concerns about nonmedical professionals housing HIPAAcompliant information. Response: We wish to clarify that for purposes of MDPP, the medical record would need to contain information PO 00000 Frm 00313 Fmt 4701 Sfmt 4700 80481 related to the MDPP services furnished to the beneficiary, in compliance with HIPAA and other applicable privacy laws, and CMS standards, such as documentation of the beneficiary’s eligibility, including blood test results, sessions attended, the coach furnishing the session(s) attended, the date and location of service(s), and weight. We understand various forms of documentation exist depending on the type of blood test administered, and we will provide additional details on what specific records are required to demonstrate eligibility in future guidance and/or future rulemaking as appropriate. In response to commenters’ questions on the format of these records, we encourage the use of electronic records, but do not require it for purposes of this expanded model. Further details on specific information that would qualify as auditable documentation of the supplier’s record will be provided in guidance and/or future rulemaking as appropriate. Although we require entities to maintain these records for the purposes of auditing, medical reviews, or other CMS requests, we do not intend to require that suppliers submit additional data, outside what is on the claim, to CMS for the purpose of payment. Although we understand it might be easier for suppliers to submit claims and performance data to one joint CMS–CDC data system, we believe that maintaining MDPP claims independent from CDC performance data would allow us to compare information submitted to CMS with those submitted to CDC to identify inconsistencies, as supported by certain commenters. Additionally, it is important to note that while all MDPP suppliers will be organizations that have CDC recognition, it is likely that not all organizations with CDC recognition will enroll in Medicare. Similarly, not all participants in the National DPP are Medicare beneficiaries. Thus, Medicare claims information will not be relevant to CDC’s assessment of performance data. For the aforementioned reasons, we do not agree with commenters that a joint CDC–CMS data system would be appropriate. We appreciate that these recordkeeping requirements can impose burdens on MDPP suppliers, particularly those who have not previously had to comply with these types of recordkeeping requirements. While MDPP suppliers are responsible for complying with these requirements, MDPP suppliers can decide which resources to utilize in order to do so, including the use of a third party administrator or other entity. E:\FR\FM\15NOR2.SGM 15NOR2 80482 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Comment: Several commenters noted the current proposed requirements for recordkeeping do not apply to the nature of sessions furnished virtually. One commenter proposed alternative record keeping requirements that were consistent with the proposal, but would allow flexibility for suppliers who furnish MDPP services through virtual technologies. Response: We are deferring all decisions regarding virtual providers to future rulemaking as discussed in section III.J.7.e. of this final rule. Comment: Numerous commenters agreed with the proposal that MDPP suppliers maintain a crosswalk between beneficiary identifiers submitted to CMS for billing and beneficiary identifiers submitted to CDC for beneficiary-level clinical data. A few commenters disagreed, stating CMS and CDC should not impose this requirement on suppliers and should instead coordinate directly to alleviate further reporting requirements for MDPP suppliers. Regarding monitoring and program integrity comments, we received general support for this approach to compare CMS claims with CDC performance data. Several commenters requested further clarity on the crosswalk, its format, whether or not CMS would provide a template, the frequency with which suppliers would be required to submit the same data to CMS, and the need for the crosswalk to CDC data given that CMS is requiring all suppliers to retain records for auditing purposes, medical reviews, or other requests. Response: We understand the desire to avoid undue burdens on MDPP suppliers. We intend for the crosswalk to alleviate the redundancy for suppliers submitting performance data to CMS that is already being sent to CDC. Since MDPP is an expanded model test, we are required to evaluate the effectiveness of the MDPP expansion, and this crosswalk will facilitate this evaluation. While we understand the recommendation to create the crosswalk directly with CDC, the CDC does not receive any personal identifying information (PII) on beneficiaries who participate in the National DPP that would enable CMS and CDC to directly create the beneficiary crosswalk. While we are requiring organizations to retain records for CMS-directed audits, a crosswalk between CMS and CDC data will enable CMS to conduct an evaluation on the effectiveness of MDPP, as well as provide any necessary documents during an audit, medical review, or other CMS request. The crosswalk therefore has a role both with program integrity purposes as well as for evaluating the expanded model’s effectiveness, as required of any Innovation Center model. We intend to provide guidance to suppliers on how to set up the crosswalk, and make any further adjustments or clarifications (for example, frequency of submissions) in future rulemaking, as appropriate. Final Decision: We are finalizing as proposed the documentation retention requirements and requirements for suppliers to provide documents in the case of an audit, medical review, or other CMS request. The final policies are set forth in § 424.59. 8. Policies for Future Rulemaking a. MDPP Reimbursement Structure We proposed to reimburse for MDPP services at the times and in the amounts set forth in the Table 41, with payment tied to the number of sessions attended and achievement of a minimum weight loss of 5 percent of baseline weight (body weight recorded during the beneficiary’s first core session). TABLE 41—MDPP EXPANSION PAYMENT MODEL Payment per beneficiary (non-cumulative) Core Sessions 1 Session attended ......................................................................................................................................................................... 4 Sessions attended ....................................................................................................................................................................... 9 Sessions attended ....................................................................................................................................................................... Achievement of minimum weight loss of 5% from baseline weight ............................................................................................... $25 $50 $100 $160 Achievement of advanced weight loss of 9% from baseline weight .............................................................................................. $25 (in addition to $160 above) Maximum Total for Core Sessions .......................................................................................................................................... $360 Core Maintenance Sessions (Maximum of 6 monthly sessions over 6 months in Year 1) 3 Core Maintenance Sessions attended (with maintenance of minimum required weight loss from baseline) ............................ 6 Core Maintenance Sessions attended (with maintenance of minimum required weight loss from baseline) ............................ $45 $45 Maximum Total for Maintenance Sessions ............................................................................................................................. $90 Maximum Total for First Year ........................................................................................................................................... $450 mstockstill on DSK3G9T082PROD with RULES2 Ongoing Maintenance Sessions After Year 1 (Minimum of 3 sessions attended per quarter/no maximum) 3 Ongoing Maintenance Sessions attended plus maintenance of minimum required weight loss from baseline ........................ 6 Ongoing Maintenance Sessions attended plus maintenance of minimum required weight loss from baseline ........................ 9 Ongoing Maintenance Sessions attended plus maintenance of minimum required weight loss from baseline ........................ 12 Ongoing Maintenance Sessions attended plus maintenance of minimum required weight loss from baseline ...................... Maximum Total After First Year .............................................................................................................................................. As proposed, Table 41 illustrates that payments would be heavily weighted VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 toward achievement of weight loss over the 12-month core benefit, and no PO 00000 Frm 00314 Fmt 4701 Sfmt 4700 $45 $45 $45 $45 $180 payments would be available after the first 6 months without achievement of E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 the minimum weight loss. In the payment structure we proposed, claims for payment would be submitted following the achievement of core session attendance, minimum weight loss, maintenance (both core and ongoing) session attendance, and maintenance of minimum weight loss. For example, MDPP suppliers would not be able to submit another claim after core session one until the beneficiary has completed four sessions, and maintenance sessions (both core and ongoing) would not qualify for payment unless minimum weight loss was achieved and maintained. Similar valuebased payments are being offered by commercial insurers and accepted by DPP organizations. We sought comment on this payment structure. Additionally, we sought comment on whether to update payment rates annually through an existing fee schedule, such as the PFS, or establish a new fee schedule for MDPP suppliers. We are deferring finalizing the proposed reimbursement structure to future rulemaking. In response to our solicitation, we received many comments. We intend to address these comments in future rulemaking. suppliers would be subject to audits and reviews performed by CMS program integrity and/or review or audit contractors in addition to programspecific audits. We sought comment on these approaches and others to mitigate these risks and strategies to ensure program integrity. In response to our solicitation, we received many comments. We intend to address these comments in future rulemaking. b. Program Integrity We recognize the potential for fraud and abuse by suppliers filing inaccurate claims and/or duplicative claims on the number of sessions attended or amount of weight loss achieved. We also recognize beneficiaries may move between MDPP suppliers, and we intend to address in future rulemaking as appropriate any requirements necessary to prevent duplication claims for MDPP services furnished by more than one MDPP supplier to the same beneficiary. We are also concerned about the potential for beneficiary inducement or coercion and the potential program risks posed by permitting a new type of organization to receive payment from Medicare for furnishing MDPP services. We also realize that there may be other risks to program integrity. We intend to develop policies to mitigate these risks and monitor the MDPP expansion, to ensure MDPP suppliers meet all applicable CMS program integrity and supplier enrollment standards, and will address them in future rulemaking, as necessary. We intend to develop system checks to identify when CMS may need to audit an MDPP supplier’s records. We are considering ways to cross reference the data DPP organizations are currently required to report to the CDC to identify potential discrepancies with data submitted to CMS. We sought comment on such approaches. Finally, MDPP d. Quality Monitoring and Reporting We solicited comment on the quality metrics that should be reported by MDPP suppliers in addition to the reporting elements required on Medicare claims submissions outlined above (attendance and weight loss) or by the CDC DPRP. We solicited comment specifically on what quality metrics should be considered for public reporting (not for payment) to guide beneficiary choice of MDPP suppliers. In response to our solicitation, we received many comments. We intend to address these comments in future rulemaking. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 c. Learning Activities The CDC provides technical assistance to DPP organizations with CDC DPRP recognition to improve performance. We solicited comment on what additional technical assistance would be needed for providers and other organizations in order to expand the MDPP model. In response to our solicitation, we received many insightful and informative public comments and will consider the input when developing our strategy for ensuring that organizations seeking to enroll in Medicare and furnish and bill for MDPP services have the information and guidance they need to do so. K. Medicare Shared Savings Program Under section 1899 of the Act, we established the Medicare Shared Savings Program (Shared Savings Program) to facilitate coordination and cooperation among providers to improve the quality of care for Medicare Fee-For-Service (FFS) beneficiaries and reduce the rate of growth in health care costs. Eligible groups of providers and suppliers, including physicians, hospitals, and other health care providers, may participate in the Shared Savings Program by forming or participating in an Accountable Care Organization (ACO). The final rule establishing the Shared Savings Program appeared in the November 2, 2011 Federal Register (Medicare Shared Savings Program: Accountable Care PO 00000 Frm 00315 Fmt 4701 Sfmt 4700 80483 Organizations Final Rule (76 FR 67802) (November 2011 final rule)). A subsequent major update to the program rules appeared in the June 9, 2015 Federal Register (Medicare Shared Savings Program; Accountable Care Organizations Final Rule (80 FR 32692) (June 2015 final rule)). A final rule addressing changes related to the program’s financial benchmark methodology appeared in the June 10, 2016 Federal Register (Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations—Revised Benchmark Rebasing Methodology, Facilitating Transition to Performance-Based Risk, and Administrative Finality of Financial Calculations (81 FR 37950) (June 2016 final rule)). As noted below, we have also made use of the annual PFS rules to address quality reporting and certain other issues. Additionally, on April 27, 2016, the Department of Health and Human Services (HHS) issued a proposed rule to implement key provisions of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and establish a new Quality Payment Program (QPP) (Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models (81 FR 28162) (QPP proposed rule)). On October 14, 2016, HHS issued a final rule to implement key provisions of the MACRA and establish a new QPP (QPP final rule with comment period). (The rule will appear in the November 4, 2016 Federal Register, and can be accessed at https://qpp.cms.gov/ education.) The QPP final rule with comment period establishes a new program under which Medicare will reward physicians for providing highquality care, instead of paying them only for the number of tests or procedures provided. The QPP final rule with comment period addresses issues related to APMs, such as Tracks 1, 2, and 3 of the Medicare Shared Savings Program, and issues related to reporting for purposes of MIPS by eligible clinicians (ECs) that are participating in APMs. Our intent in the CY 2017 PFS proposed rule was to propose further refinements to the Shared Savings Program rules, and we identified several policies that we proposed to update or revise. First, we discussed and proposed policies related to ACO quality reporting including proposed changes to the quality measures used to assess ACO quality performance, changes in the methodology used in our quality E:\FR\FM\15NOR2.SGM 15NOR2 80484 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 validation audits and the way in which the results of these audits may affect an ACO’s sharing rate, various issues related to alignment with policies proposed in the QPP proposed rule, and revisions related to the terminology used in quality assessment such as ‘‘quality performance standard’’ and ‘‘minimum attainment level.’’ We also proposed conforming changes to our regulatory text. Next, we addressed several issues unrelated to quality reporting and assessment. Specifically, we proposed to implement a process by which beneficiaries may voluntarily align with an ACO by designating an ACO professional as responsible for their overall care. We also proposed to introduce beneficiary protections related to use of the SNF 3-day rule waiver. Finally, we proposed to make technical changes and updates to certain rules related to merged and acquired TINs and the minimum savings rate (MSR) and minimum loss rate (MLR) that would be used during financial reconciliation for ACOs that fall below 5,000 assigned beneficiaries. 1. ACO Quality Reporting Section 1899(b)(3)(A) of the Act requires the Secretary to determine appropriate measures to assess the quality of care furnished by ACOs, such as measures of clinical processes and outcomes; patient, and, wherever practicable, caregiver experience of care; and utilization such as rates of hospital admission for ambulatory sensitive conditions. Section 1899(b)(3)(B) of the Act requires ACOs to submit data in a form and manner specified by the Secretary on measures that the Secretary determines necessary for ACOs to report to evaluate the quality of care furnished by ACOs. Section 1899(b)(3)(C) of the Act requires the Secretary to establish quality performance standards to assess the quality of care furnished by ACOs, and to seek to improve the quality of care furnished by ACOs over time by specifying higher standards, new measures, or both for the purposes of assessing the quality of care. Additionally, section 1899(b)(3)(D) of the Act gives the Secretary authority to incorporate reporting requirements and incentive payments related to the PQRS, EHR Incentive Program and other similar initiatives under section 1848 of the Act. Finally, section 1899(d)(1)(A) of the Act states that an ACO is eligible to receive payment for shared savings, if they are generated, only after meeting the quality performance standards established by the Secretary. In the November 2011 final rule and recent CY PFS final rules with comment period (77 FR 69301 through 69304; 78 VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 FR 74757 through 74764; 79 FR 67907 through 67931; and 80 FR 71263 through 712710), we have established the quality performance standard that ACOs must meet to be eligible to share in savings that are generated. Through these previous rulemakings, we have worked to improve the alignment of quality performance measures, submission methods, and incentives under the Shared Savings Program and PQRS. In the CY 2017 PFS proposed rule, we proposed several changes and other revisions to our policies related to the quality measures and the quality performance standard, including the following: • Changes to the measure set used in establishing the quality performance standard; • Changes to the methodology used to validate quality data submitted by the ACO along with penalties that may apply if the audit match rate is less than 90 percent; • Revisions to the use of the terms ‘‘quality performance standard’’ and ‘‘minimum attainment level’’ in the regulation text; • Revisions related to use of flat percentages to establish quality benchmarks; and • Alignment with policies proposed in the QPP proposed rule. a. Changes to the Quality Measure Set Used in Establishing the Quality Performance Standard (1) Background Section 1899(b)(3)(C) of the Act states that the Secretary shall establish quality performance standards to assess the quality of care furnished by ACOs and seek to improve the quality of care furnished by ACOs over time by specifying higher standards, new measures, or both. In the November 2011 final rule, we established a quality performance standard consisting of 33 measures across four domains, including patient experience of care, care coordination/patient safety, preventive health, and at-risk population. In subsequent PFS final rules with comment period, we have made a number of updates to the set of measures that make up the quality performance standard. The quality measure set currently includes 34 quality measures. Quality measures are submitted by the ACO through the CMS web interface, calculated by CMS from administrative and claims data, and collected via a patient experience of care survey based on the Clinician and Group Consumer Assessment of Healthcare Providers and PO 00000 Frm 00316 Fmt 4701 Sfmt 4700 Systems (CG–CAHPS) survey. The measures collected through the CMS web interface are also used to determine whether eligible professionals participating in an ACO avoid the PQRS and automatic Physician Value Modifier (VM) payment adjustments for 2015 and subsequent years. Currently, eligible professionals billing through the TIN of an ACO participant may avoid the downward PQRS payment adjustment when the ACO satisfactorily reports all of the ACO GPRO measures on their behalf using the CMS web interface. Beginning with the 2017 VM, ACO performance on the CMS web interface measures and all cause readmission measure will be used in calculating the quality component of the VM for groups and solo practitioners participating within an ACO (79 FR 67941 through 67947). In the CY 2017 PFS proposed rule, we explained that our principal goal and rationale for selecting quality measures for ACOs has been to identify measures of success in the delivery of high-quality health care at the individual and population levels with a focus on outcomes and a preference for NQFendorsed measures. We noted, however, that the statute does not limit us to using endorsed measures in the Shared Savings Program. As a result, we have also exercised our discretion to include certain measures that we believe to be high impact but that are not currently endorsed, including for example, ACO#11, which is currently titled Percent of PCPs Who Successfully Meet Meaningful Use Requirements. Further, we described our continuing work with the measures community to ensure that the specifications for the measures used under the Shared Savings Program are up-to-date and reduce reporting burden. Importantly, we noted that the Core Quality Measures Collaborative was formed in 2014, as a collaboration between CMS, providers, and other stakeholders, with the goal of aligning quality measures for reporting across public and private stakeholders in order to reduce provider reporting burden. On February 16, 2016, the Core Quality Measures Collaborative recommended a core quality measure set that aligns and simplifies quality reporting across multiple payers (https://www.cms.gov/Newsroom/ MediaReleaseDatabase/Press-releases/ 2016-Press-releases-items/2016-0216.html) and made specific recommendations for ACOs (https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/QualityMeasures/ Downloads/ACO-and-PCMH-PrimaryCare-Measures.pdf). We proposed to E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 integrate several recommendations made by the Core Quality Measures Collaborative into the CMS web interface as part of the QPP proposed rule (81 FR 28399). These recommendations were subsequently adopted in full in the QPP final rule with comment period. Groups that are eligible to report using the CMS web interface for purposes of reporting quality measures to CMS for various quality reporting initiatives such as PQRS and the Shared Savings Program are required to report on all measures included in the CMS web interface. In addition, for purposes of the QPP, we proposed and finalized a policy requiring that groups using the CMS web interface must report on all measures in the CMS web interface. (2) Proposals In efforts to continue to align with other CMS initiatives and reduce provider confusion and the burden of reporting, we proposed modifications to the quality measure set that an ACO is required to report. Specifically, to align the Shared Savings Program quality measure set with the measures recommended by the Core Quality Measures Collaborative and proposed for reporting through the CMS web interface under the QPP proposed rule, we proposed to add, and in some cases to replace, existing quality measures with the following: • ACO–12 Medication Reconciliation Post-Discharge (NQF #0097). This measure addresses adverse drug events (ADEs) through medication reconciliation, which is an important aspect of care coordination. According to HHS’ Agency for Healthcare Research and Quality (AHRQ), ADEs account for nearly 700,000 emergency department visits and 100,000 hospitalizations each year.36 The ACO–12 Medication Reconciliation measure was previously in the Shared Savings Program measure set, however, it was replaced with ACO–39, Documentation of Current Medications in the Medical Record (79 FR 67912 through 67914). The Core Quality Measures Collaborative, in coordination with providers and stakeholders, determined the original Medication Reconciliation measure would be more appropriate for alignment across quality reporting initiatives. Based on this recommendation, we proposed to require reporting of the measure through the CMS web interface in the QPP proposed rule (81 FR 28403). In an effort 36 ‘‘Medication Errors.’’ AHRQ. https:// psnet.ahrq.gov/primers/primer/23/medicationerrors. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 to align with the QPP proposals, we therefore proposed to replace the Documentation of Current Medications in the Medical Record measure (ACO– 39) by reintroducing Medication Reconciliation (ACO–12) in the Care Coordination/Patient Safety domain. We noted that in accordance with our policy for newly introduced measures, this measure would be pay for reporting for 2 years and proposed that it would phase into pay for performance in accordance with the schedule indicated in Table 36 of the proposed rule (81 FR 46421–46422). • ACO–44 Use of Imaging Studies for Low Back Pain (NQF #0052). Imaging utilization is an important area for quality measurement, because of the wide use of imaging services. This measure reports the percentage of patients with a primary diagnosis of low back pain that did not have an imaging study (for example, MRI, CT scan) within 28 days of the diagnosis. (A higher score indicates higher performance). The Use of Imaging Studies for Low Back Pain quality measure is specified for patients 18–50 years of age. We proposed adding this measure in the Care Coordination/ Patient Safety domain to address a gap in measures related to resource utilization and align with the ACO measures recommended by the Core Quality Measures Collaborative core measure set (https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/ QualityMeasures/Downloads/ACO-andPCMH-Primary-Care-Measures.pdf). We noted that the measure was also proposed in the QPP proposed rule for measuring the quality of care furnished by individual and specialty ECs (81 FR 28399 and 28460 Tables A and E). In the QPP final rule with comment period, we adopted the low back pain measure for EHR reporting. Under the Shared Savings Program, we proposed that this measure would be calculated using Medicare claims data without any additional provider reporting requirement. We noted that in accordance with our policy for newly introduced measures, this measure would be designated as pay for reporting in 2017 and 2018. We proposed to phase it into pay for performance in accordance with the schedule indicated in Table 36 of the proposed rule (81 FR 46421–46422). However, given the possible small case sizes due to the measure specifications, we specifically solicited comment on whether this measure should be phased in to pay for performance or whether it PO 00000 Frm 00317 Fmt 4701 Sfmt 4700 80485 should remain pay for reporting for all 3 performance years. As we stated in the CY 2017 PFS proposed rule, by aligning the Shared Savings Program measures with the Core Quality Measures Collaborative recommendations and proposals under the QPP proposed rule, we hope to reduce the burden of provider data collection and reporting of measures that do not align across public and private quality reporting initiatives. Therefore, we proposed to retire or replace the following measures in order to reduce provider reporting burden by reducing the number of measures that must be reported and because these measures do not align with the core measure set recommendations from the Core Quality Measures Collaborative and the measures that we proposed for reporting through the CMS web interface in the QPP proposed rule: • ACO–39 Documentation of Current Medications in the Medical Record. • ACO–21 Preventive Care and Screening: Screening for High Blood Pressure and Follow-up Documented. • ACO–31 Heart Failure (HF): BetaBlocker Therapy for Left Ventricular Systolic Dysfunction (LVSD). • ACO–33 Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy—for patients with CAD and Diabetes or Left Ventricular Systolic Dysfunction (LVEF<40%). In addition to our proposals above to modify the quality measure set to align with the Core Quality Measures Collaborative and the proposed modifications to the measures reported through the CMS web interface under the QPP proposed rule, we proposed a few additional modifications as follows: First, we proposed to retire the two AHRQ Ambulatory Sensitive Conditions Admission measures (ACO–9 and ACO– 10). Although ACO–9 and ACO–10 address admissions for patients with heart failure, chronic obstructive pulmonary disease (COPD), and asthma, we introduced two all-cause, unplanned admission measures for heart failure and multiple chronic conditions (ACO– 37 and ACO–38, respectively) in the 2015 PFS final rule (79 FR 67911– 67912). We believe ACO–37 and ACO– 38 report on a similar population with similar conditions as ACO–9 and ACO– 10. Therefore, in order to continue our efforts to reduce redundancies within the Shared Savings Program measure set, we proposed to remove ACO–9 and ACO–10 from the measure set. Second, although we proposed to remove ACO–9 and ACO–10, we stated that we continue to believe AHRQ’s Prevention Quality Indicator (PQI) E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80486 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations measures are important because they report on inpatient hospital admissions of patients with clinical conditions (such as dehydration, bacterial pneumonia, and urinary tract infections) that could potentially be prevented with high-quality outpatient care. We therefore proposed adding ACO–43 Ambulatory Sensitive Condition Acute Composite (AHRQ PQI #91) to the Care Coordination/Patient Safety domain. We noted that this measure is a composite measure, currently used in the Physician Value-Based Payment Modifier, which includes PQIs reporting on admissions related to dehydration, bacterial pneumonia, and urinary tract infections (PQIs #10, 11, and 12). We noted the measure would be riskadjusted for demographic variables and comorbidities. In accordance with our policy for newly introduced measures, we proposed that this measure would be pay for reporting for 2 years, and then phase into pay for performance in accordance with the schedule indicated in Table 36 of the proposed rule (81 FR 46421–46422). Comment: Commenters were generally supportive of the proposed changes to the Shared Savings Program quality measure set. Most commenters supported alignment of quality measures with Core Quality Measures Collaborative recommendations. Response: We appreciate the support for proposed changes to the Shared Savings Program quality measure set and for aligning with the recommendations of the Core Quality Measures Collaborative. The following is a summary of the comments we received on specific proposed changes to the quality measure set: Comment: Regarding our proposal to reinstate use of ACO–12 Medication Reconciliation and remove ACO–39 Documentation of Current Medications in the Medical Record, one commenter suggested that using ACO–12 Medication Reconciliation would be a better means to improve population health. One commenter expressed concern over reintroducing ACO–12 since it counts a readmission within 30 days as a new index discharge for the measure and suggested using NQF #0554 Medication Reconciliation PostDischarge instead. Response: We appreciate the comments submitted on our proposal to reinstate ACO–12 Medication Reconciliation, including the comment suggesting the measure would be a better means to improve population health. While one commenter suggested using NQF #0554 Medication Reconciliation Post-Discharge, as NQF VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 notes on its Web site, NQF #0554 measure is no longer endorsed, because the measure developer, NCQA, determined the measure is outdated and withdrew the measure from endorsement. Although readmissions could be counted as a new index discharge based on the measure specifications, it is important that providers coordinate care and engage in medication reconciliation following each hospital discharge, whether it be an initial admission or subsequent readmission. ACO–12 also maintains alignment with quality reporting under the QPP. Given that ACO–12 aligns with the QPP and is an NQF endorsed measure that is recommended by the Core Quality Measures Collaborative, we are finalizing our proposal to replace ACO–39 with ACO–12. In accordance with our policy for newly introduced measures, we are also finalizing our proposal that this measure will be pay for reporting for 2 years, and then phase into pay for performance in accordance with the schedule as proposed in Table 36 of the proposed rule (81 FR 46421– 46422). Comment: Several commenters specifically supported the removal of ACO–21 Screening for High Blood Pressure and Follow-up Documented, ACO–31 Beta-Blocker Therapy for LVSD, and ACO–33 ACE Inhibitor or ARB Therapy—for patients with CAD and Diabetes or Left Ventricular Systolic Dysfunction (LVEF<40%) in the interest of harmonization, even though the measures do include an important follow-up component. One commenter raised concerns about removing ACO– 21 because it has a follow-up component they believe is particularly important for women with heart disease. Response: We appreciate the commenter support we received for removing these measures. To the extent that commenters noted the importance of certain aspects of these measures, we acknowledge that these measures address important health issues. Many quality measures that are not part of the ACO quality measure set address various important health issues for patients. However, it is not feasible for us to include all measures that address important health issues in the quality measure set for the Shared Savings Program. Rather, we must choose measures based upon a consideration of the importance of the measures for the patient population served by ACOs, the reporting burden placed on ACOs and their participants, and the extent to which measures align with other quality reporting initiatives. Accordingly, we are finalizing our proposal to retire ACO–21, ACO–31, and ACO–33 in PO 00000 Frm 00318 Fmt 4701 Sfmt 4700 order to reduce provider reporting burden and align with the Core Quality Measures Collaborative recommended core set and the measures that will be reported for purposes of the QPP. Comment: Most commenters agreed that ACO–44 Use of Imaging Studies for Low Back Pain is an important quality measure and supported addition of this measure. However, concerns were raised regarding the measure specifications. Some commenters were concerned about the narrow age range of this measure and potentially small case sizes that could result from the age range being limited to adults aged 18– 50. These commenters made various suggestions for modification of our proposal such as using a broader age range or making the measure pay for reporting for all years. While some commenters appreciated that the use of claims data to calculate this measure would avoid unnecessary administrative burden on providers, one commenter was concerned about relying solely on claims data without incorporating clinical data from the medical record and suggested that the measure be pay for reporting until CMS has the capacity to incorporate robust clinical data. A few commenters opposed the addition of ACO–44, stating they believe it is inappropriate for a Medicare ACO’s patient population, given the measure specification’s limited age range. One commenter on ACO–44 asked whether plain film radiographs would be included as an imaging modality for the measure. Response: We agree with commenters that support the proposal to include ACO–44 Use of Imaging Studies for Low Back Pain because it addresses a clinically important gap in quality measurement and aligns with the recommendations made by the Core Quality Measures Collaborative. We also agree with commenters’ concerns regarding the narrow age range (18–50 years of age) under the measure specifications, which could result in small case sizes if limited to Medicare beneficiaries assigned to the ACO. With respect to the comment that raised a concern about relying solely on claims data to calculate the measure, we agree that additional clinical data could possibly enhance the measure. However, using additional clinical data would require additional reporting by the ACO. At this time, we do not believe it is appropriate to impose this additional reporting burden, and therefore, we will not be adopting the commenter’s suggestion. In response to the commenter that asked whether plain film radiographs would be included in the measure specifications, we note that E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the current NQF endorsed measure specifies the use of plain x-ray, MRI, and CT scan. Although we are finalizing our proposal to add this measure to the quality measure set, in light of the concerns raised regarding the age range and potential for small case sizes, we are modifying the proposed timeline for transitioning the measure to pay for performance. In accordance with our policy for newly introduced measures, this measure will be pay for reporting for 2 years. However, rather than phasing in the measure as pay for performance, we are finalizing a policy under which the measure will remain as pay for reporting for all the 3 performance years of an ACO’s agreement period. Comment: Some commenters supported the proposal to retire ACO– 9 because patients with COPD are already assessed under ACO–38 AllCause Unplanned Admissions for Patients with Multiple Chronic Conditions (MCC). In addition, commenters supported CMS’ proposal to retire ACO–10, because the quality measure set already includes an allcause admission measure for patients with Heart Failure (ACO–37). Some commenters urged CMS to retain ACO– 9 or consider other COPD-related measures for future reporting due to the prevalence of mortality-related COPD. A commenter suggested that the Core Quality Measures Collaborative consider COPD-related measures to include in their core measure set recommendations. Response: We appreciate the comments supporting our proposal to retire ACO–9 and ACO–10. We agree that COPD and heart failure affect a large volume of beneficiaries and are clinically important areas for quality measurement. However, we note that COPD and heart failure are among the chronic conditions addressed by the specifications for ACO–38 and ACO–37, respectively. Therefore the patient populations for the measures are similar, and we agree with commenters who noted that the measures are redundant. As a result, we are finalizing our proposal to remove ACO–9 and ACO–10 from the ACO quality measure set. We also appreciate the additional COPD measure recommendations and will consider them for future reporting. Comment: Most commenters supported the proposal to add ACO–43 Ambulatory Sensitive Condition Acute Composite to the measure set. Commenters also appreciated our proposal that the measure would be initially introduced as pay for reporting because it was not included in the Core Quality Measure Collaborative measure VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 set recommendations. One commenter suggested quarterly feedback support for this measure and other commenters suggested this measure be pay for reporting for all performance years in an ACO’s agreement period so ACOs can become more familiar with the measure for their own operations. Some commenters raised concerns with the use of the measure at the ACO-level when AHRQ developed the measure at the population level. Response: We appreciate commenters’ support for our proposal to add ACO– 43 to the ACO quality measure set. We are finalizing its addition to the ACO quality measure set because it addresses important clinical conditions that could potentially be prevented with coordinated, high-quality outpatient care. Although some commenters suggested maintaining the measure as pay for reporting all 3 years of an ACO’s agreement period, we believe ACOs will have sufficient opportunity to become familiar with the measure because, in accordance with the timeline for introducing new measures under § 425.502(a)(4), it will be pay for reporting for 2 years before transitioning to pay for performance under the phasein schedule indicated in Table 36 of the proposed rule (81 FR 46421–46422). At this time, we do not anticipate providing quarterly quality measure updates, because we only calculate the measure annually; however, we will continue to consider whether it would be feasible to do so. Further, we believe it is appropriate to use this measure at the ACO-level to assess ACO performance. ACOs are required to improve the quality and cost of the care of the fee-for-service patient population assigned to them. In order to be eligible for participation in the Shared Savings Program, the ACO must have at least 5,000 assigned beneficiaries. We therefore believe an ACO’s patient population is sufficiently large enough that it is appropriate to apply this measure at the ACO-level. Additionally, ACO–43 is used in and aligns with other CMS quality initiatives; it is currently reported for purposes of the Physician Value-Modifier and has been used for assessing physician performance and was finalized as an informational measure under the QPP final rule with comment period. We have an overarching belief in the importance of collecting information regarding the prevalence of preventable conditions and readmissions and providing this information to clinicians to assist them in developing targeted care improvement processes. To support this goal and to align with other CMS quality PO 00000 Frm 00319 Fmt 4701 Sfmt 4700 80487 initiatives, we believe it is appropriate to include ACO #43 in the ACO quality measure set. Comment: We received several additional comments regarding the quality measure set that were not directly related to our proposals. A few commenters suggested CMS risk adjust the claims-based quality measures to account for socioeconomic factors. Several commenters stated their support for retaining the Influenza and Pneumonia vaccination measures (ACO–14 and ACO–15). We also received quality measure suggestions for future consideration, such as additional immunization and transitions of care measures. Response: We appreciate the support for measures that are currently included in the quality measure set. We also thank commenters for their other recommendations regarding quality reporting under the Shared Savings Program. We will keep these suggestions and comments in mind for future consideration. Final Action: We appreciate the thoughtful comments submitted in response to our proposed changes to the quality measure set. We are finalizing the measure set changes (deletions, additions, and replacement) as proposed for the reasons noted in our responses above and to align with the Core Quality Measures Collaborative and the measures that were finalized in the QPP final rule with comment period. We note that in light of comments received on ACO–44 Use of Imaging Studies for Low Back Pain and its potential for low case sizes, we will add this measure as proposed but will retain it as pay for reporting in all 3 years of the ACO’s agreement period. All other measures will be phased in as proposed. Table 42 lists the Shared Savings Program quality measure set that will be used to assess quality performance starting with the 2017 performance year including the new measures adopted in this final rule. Each measure that is indicated as a new measure will be assessed as a pay for reporting measure for the 2017 and 2018 performance years. After that, the measure will be assessed based on the phase-in schedule noted in Table 42. As a result of these proposed measure changes, the four domains will include the following number of quality measures (See Table 43 for details.): • Patient/Caregiver Experience of Care–8 measures • Care Coordination/Patient Safety– 10 measures • Preventive Health–8 measures E:\FR\FM\15NOR2.SGM 15NOR2 80488 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations • At Risk Population–5 measures (3 individual measures and a 2-component diabetes composite measure) Table 43 provides a summary of the number of measures by domain and the total points and domain weights that will be used for scoring purposes under the changes to the quality measure set adopted in this final rule. TABLE 42—MEASURES FOR USE IN THE ESTABLISHING QUALITY PERFORMANCE STANDARD THAT ACOS MUST MEET FOR SHARED SAVINGS STARTING WITH THE 2017 PERFORMANCE YEAR Domain ACO measure # Measure title New measure NQF #/measure steward Method of data submission Pay for performance phase in R—reporting P—performance PY1 PY2 PY3 AIM: Better Care for Individuals Patient/Caregiver Experience .. ACO–1 ........... ACO–2 ........... ACO–3 ........... ACO–4 ........... ACO–5 ........... ACO–6 ........... ACO–7 ........... ACO–34 ......... Care Coordination/P Patient Safety. ACO–8 ........... ACO–35 ......... ACO–36 ......... ACO–37 ......... ACO–38 ......... ACO–43 ......... ACO–11 ......... ACO–12 ......... ACO–13 ......... ACO–44 ......... CAHPS: Getting Timely Care, Appointments, and Information. CAHPS: How Well Your Providers Communicate.37 CAHPS: Patients’ Rating of Provider.2 CAHPS: Access to Specialists ........................ NQF #0005 AHRQ. Survey ............ R P P ........................ NQF #0005 AHRQ. NQF #0005 AHRQ. NQF #N/A CMS/AHRQ. NQF #N/A CMS/AHRQ. NQF #N/A CMS/AHRQ. NQF #N/A CMS/AHRQ. NQF #N/A CMS/AHRQ. Adapted NQF #1789 CMS. Adapted NQF #2510 CMS. Survey ............ R P P Survey ............ R P P Survey ............ R P P Survey ............ R P P Survey ............ R P P Survey ............ R R R Survey ............ R P P Claims ............ R R P Claims ............ R R P ........................ ........................ CAHPS: Health Promotion and Education. CAHPS: Shared Decision Making. CAHPS: Health Status/Functional Status. CAHPS: Stewardship of Patient Resources. Risk-Standardized, All Condition Readmission. Skilled Nursing Facility 30-Day All-Cause Readmission Measure (SNFRM). All-Cause Unplanned Admissions for Patients with Diabetes. All-Cause Unplanned Admissions for Patients with Heart Failure. All-Cause Unplanned Admissions for Patients with Multiple Chronic Conditions. Ambulatory Sensitive Condition Acute Composite (AHRQ Prevention Quality Indicator (PQI) #91). Use of certified EHR technology. ........................ Medication Reconciliation PostDischarge. Falls: Screening for Future Fall Risk. Use of Imaging Studies for Low Back Pain. ........................ ........................ ........................ ........................ ........................ ........................ NQF#TBD CMS. Claims ............ R R P ........................ NQF#TBD CMS. Claims ............ R R P ........................ NQF#TBD CMS. Claims ............ R R P X AHRQ ............. Claims ............ R P P X NQF #N/A CMS. R P P X NQF #0097 CMS. NQF #0101 NCQA. NQF #0052 NCQA. As finalized under the QPP. CMS Web Interface. CMS Web Interface. Claims ............ R P P R P P R R R R P P R P P R P P ........................ X AIM: Better Health for Populations Preventive Health ..................... ACO–14 ......... ACO–19 ......... Preventive Care and Screening: Influenza Immunization. Pneumonia Vaccination Status for Older Adults. Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow Up. Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention. Preventive Care and Screening: Screening for Clinical Depression and Follow-up Plan. Colorectal Cancer Screening ... ACO–20 ......... Breast Cancer Screening ......... ........................ ACO–42 ......... Statin Therapy for the Prevention and Treatment of Cardiovascular Disease. ........................ ACO–15 ......... ACO–16 ......... ACO–17 ......... mstockstill on DSK3G9T082PROD with RULES2 ACO–18 ......... VerDate Sep<11>2014 17:27 Nov 12, 2016 Jkt 241001 PO 00000 Frm 00320 Fmt 4701 ........................ NQF #0041 AMA–PCPI. NQF #0043 NCQA. NQF #0421 CMS. CMS Web Interface. CMS Web Interface. CMS Web Interface. ........................ NQF #0028 AMA–PCPI. CMS Web Interface. R P P ........................ NQF #0418 CMS. CMS Web Interface. R P P ........................ NQF #0034 NCQA. NQF #2372 NCQA. NQF #N/A CMS. CMS Web Interface. CMS Web Interface. CMS Web Interface. R R P R R P R R R ........................ ........................ Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 80489 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 42—MEASURES FOR USE IN THE ESTABLISHING QUALITY PERFORMANCE STANDARD THAT ACOS MUST MEET FOR SHARED SAVINGS STARTING WITH THE 2017 PERFORMANCE YEAR—Continued ACO measure # Domain Measure title New measure NQF #/measure steward Method of data submission Pay for performance phase in R—reporting P—performance PY1 Clinical Care for At Risk Population—Depression. Clinical Care for At Risk Population—Diabetes. ACO–40 ......... Depression Remission at Twelve Months. Diabetes Composite (All or Nothing Scoring): ACO–27: Diabetes Mellitus: Hemoglobin A1c Poor Control. ACO–41: Diabetes: Eye Exam ACO–27 ......... ACO–41 ......... Clinical Care for At Risk Population—Hypertension. Clinical Care for At Risk Population—Ischemic Vascular Disease. ACO–28 ......... Hypertension (HTN): Controlling High Blood Pressure. Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic. ACO–30 ......... ........................ ........................ ........................ ........................ ........................ NQF #0710 MNCM. NQF #0059 NCQA (individual component). NQF #0055 NCQA (individual component). NQF #0018 NCQA. NQF #0068 NCQA. PY2 PY3 CMS Web Interface. CMS Web Interface. R R R R P P CMS Web Interface. R P P CMS Web Interface. CMS Web Interface. R P P R P P TABLE 43—NUMBER OF MEASURES AND TOTAL POINTS FOR EACH DOMAIN WITHIN THE QUALITY PERFORMANCE STANDARD STARTING WITH THE 2017 PERFORMANCE YEAR Number of individual measures Domain Patient/Caregiver Experience ......................... Care Coordination/Patient Safety ................... 8 10 Preventive Health ............................................ At-Risk Population .......................................... 8 5 Total in all Domains ................................. 31 mstockstill on DSK3G9T082PROD with RULES2 b. Improving the Process Used To Validate ACO Quality Data Reporting (1) Background In the November 2011 final rule, we finalized a proposal to retain the right to validate the data ACOs enter into the Web Interface (76 FR 67893 through 67894). This validation process, referred to as the Quality Measures Validation audit, was based on the process used in Phase I of the Physician Group Practice (PGP) demonstration. The policy was finalized at § 425.500(e). In this audit process, CMS selects a subset of Web Interface measures, and selects a random sample of 30 confirmed and completely reported beneficiaries for each measure in the subset. The ACO provides medical records to support the data reported in the Web Interface for those beneficiaries. A measure-specific audit performance rate is then calculated using a multi-phased audit process: • Phase 1: Eight randomly selected medical records for each audited measure are reviewed to determine if 37 The quality measure title has been updated to ‘‘Providers’’ and is not only referencing ‘‘Doctors.’’ VerDate Sep<11>2014 17:27 Nov 12, 2016 Jkt 241001 Total possible points Domain weight (percent) 8 individual survey module measures ........... 10 measures, including double-weighted EHR measure. 8 measures .................................................... 3 individual measures, plus a 2-component diabetes composite measure that is scored as one measure. 16 22 25 25 16 8 25 25 30 ................................................................... 62 100 Total measures for scoring purposes the medical record documentation supports what was reported (that is, a match). If all records reviewed support what was reported, the audit ends. If any records do not support what was reported (that is, a mismatch), the audit process continues in a second phase for any measure with a mismatch identified. • Phase 2: The remaining 22 medical records are reviewed for any measure that had a mismatch identified in Phase 1. If less than 90 percent of the medical records provided for a measure support what was reported, the audit process continues to Phase 3. • Phase 3: For each measure with a match rate less than 90 percent, CMS provides education to the ACO about how to correct reporting and the ACO is given an opportunity to resubmit the measure(s) in question. If at the conclusion of the third phase there is a discrepancy greater than 10 percent between the quality data reported and the medical records provided during the audit, the ACO will not be given credit for meeting the quality target for any measure(s) for which the mismatch rate exists. PO 00000 Frm 00321 Fmt 4701 Sfmt 4700 As we explained in the proposed rule, since publication of the initial program rules in 2011, we have gained experience in conducting audits and believe that certain modifications to our rules should be made in order to increase the statistical rigor of the audit methodology, streamline audit operations, and more closely align the Quality Measures Validation audit used in Shared Savings Program audits with other CMS quality program audits including those performed in the Physician Quality Reporting Program and the Hospital Inpatient and Outpatient Quality Reporting programs. We therefore proposed four improvements to our audit process that would address the number of records to be reviewed per measure, the number of audit phases, the calculation of an audit match rate and the consequences if the audit match rate falls below 90 percent. (2) Proposals First, we proposed to increase the number of records audited per measure to achieve a high level of confidence that the true audit match rate is within E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80490 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 5 percentage points of the calculated result. The November 2011 final rule indicated that CMS would review as few as 8 records (Phase 1 only) or as many as 30 records (Phase 1 and 2) per audited measure. With this phased methodology, the total number of records reviewed for each ACO varies (range of 40 to 150 records per audited ACO during the Performance Year 2014 audit). A sample size analysis found that the number of reviewed records needs to increase in order to provide the desired high level of confidence that the audited sample is representative of the ACO’s quality reporting performance. We noted that the precise number of records requested for review would necessarily vary, depending on the desired confidence level, the number of measures audited, and the expected match rate. Therefore, we did not propose a specific number of records that would be requested for purposes of ACO quality validation audits in the future. However, based on an analysis using the poorest expected match rate, the highest degree of confidence and an estimated number of measures to be audited, we explained we did not anticipate more than 50 records would be requested per audited measure. Second, we proposed to modify our regulations in order to conduct the quality validation audit in a single step rather than the current multi-phased process described at § 425.500(e)(2). We proposed to use a more streamlined approach in which all records selected for audit would be reviewed in a single step and some activities currently conducted in phase 3 would be removed from the audit process entirely while others would instead be addressed at the conclusion of the audit. During the proposed single step, we stated we would review all submitted medical records and calculate the match rate. We anticipated that the education we currently provide to ACOs and the opportunity for ACOs to explain the mismatches that occur in Phase 3 of the current process would continue, but would occur at the conclusion of the audit. We stated that under the proposal, there would not be an the opportunity for ACOs to correct and resubmit data for any measure with a >10 percent mismatch because we have learned through our experience with program operations that resubmission of CMS Web Interface measure data after the close of the CMS Web Interface is not feasible. Instead, we proposed that an ACO’s quality score would be affected by an audit failure as described below, without requiring re-opening of the CMS Web Interface. We stated we VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 believed that this single step process would allow us to maintain the desired level of confidence that the true audit match rate is within 5 percentage points of the calculated result and to complete the audit in a timely manner. Therefore, we proposed to remove the provision at § 425.500(e)(2) that requires 3 phases of medical record review. In so doing, we proposed to redesignate § 425.500(e)(3) as § 425.500(e)(2). Third, we proposed to revise the redesignated provision at § 425.500(e)(2) in order to provide for an assessment of the ACO’s overall audit match rate across all measures, instead of assessing the ACO’s audit mismatch rate at the measure level. Specifically, we proposed to calculate an overall audit match rate which would be derived by dividing the total number of audited records that match the information reported in the Web Interface by the total number of records audited. This would be a change from the current audit performance calculation methodology, which calculates a measure specific mismatch rate. We stated that we believe making this change would be necessary to minimize the number of records that must be requested in order to achieve the desired level of statistical certainty as described in the first proposal discussed in this section. Our analysis suggests that we would have to request a much larger number of records (approximately 200 per measure) from the ACO during a quality validation audit of individual measures to achieve a 90 percent confidence interval for each measure. In addition, combining all records to calculate an overall audit match rate is less subject to variability based on the specific subset of measures chosen for audit each year and better aligns with the methodology used by other CMS quality program audits. Fourth, we proposed to revise the redesignated provision at § 425.500(e)(2), to indicate that if an ACO fails the audit (that is, has an overall audit match rate of less than 90 percent), the ACO’s overall quality score would be adjusted proportional to its audit performance. Currently, our regulation at § 425.500(e)(3) states that if, at the conclusion of the audit process there is a discrepancy greater than 10 percent between the quality data reported and the medical records provided, the ACO will not be given credit for meeting the quality target for any measures for which this mismatch rate exists. In light of our proposed modifications to the quality validation audit process above in which we proposed to assess and validate the ACO’s performance overall rather than PO 00000 Frm 00322 Fmt 4701 Sfmt 4700 the ACO’s performance on each measure, we explained that we believe a modification to this requirement would be necessary to reflect an overall adjustment. Therefore, we proposed to modify the provision at newly redesignated § 425.500(e)(2) to state that if an ACO fails the audit (that is, has an audit match rate of less than 90 percent), the ACO’s overall quality score will be adjusted proportional to the ACO’s audit performance. The auditadjusted quality score would be calculated by multiplying the ACO’s overall quality score by the ACO’s audit match rate. For example, if an ACO’s quality score is 75 percent and the ACO’s audit match rate is 80 percent, the ACO’s audit-adjusted quality score would be 60 percent. The audit-adjusted quality score would be the quality score that is used to determine the percentage of any earned savings that the ACO may share or the percentage of any losses for which the ACO is accountable. Finally, we proposed to add a new requirement at § 425.500(e)(3) that in addition to the adjustment to the ACO’s overall quality score, any ACO that has an audit match rate of less than 90 percent, may be required to submit a corrective action plan (CAP) under § 425.216 for CMS approval. In the CAP, the ACO may be required to explain the cause of its audit performance and how it plans to improve the accuracy of its quality reporting in the future. In addition, we explained that CMS maintains the right, as described in § 425.500(f), to terminate or impose other sanctions on any ACO that does not report quality data accurately, completely or timely. We invited comment on the proposed improvements to the process used to validate ACO quality data reporting. The following is a summary of the comments we received regarding the proposed improvements to the process used to validate ACO quality data reporting. Comment: Most commenters supported our proposals to improve and better streamline the process for validating the accuracy of data reported through the CMS web interface and to use audit results to adjust the ACO’s overall quality performance score. Few commenters opposed the proposed changes to the audit because they like the current process that includes multiple phases of review and is focused on performance on specific measures. Some commenters raised general concerns regarding the administrative burden for ACOs and providers and suppliers who are selected for the audit and must submit records for review. A couple of E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations commenters recommended delaying implementation of the new process until a single web interface measures information document is available or to allow ACOs additional time to adjust to the proposed changes to the process for conducting the quality validation audits. Response: We agree with commenters on the importance of validating the accuracy of data reported through the web interface. The accuracy of the reported data is important because it is used by us to conduct certain activities, such as determining shared savings and shared losses. The data is also made available to the public, and we understand that ACOs and ACO providers/suppliers may use it to make business decisions while beneficiaries may rely on it to determine whether to work care from practitioners participating in an ACO. We believe the proposed streamlined approach to quality validation audits will minimize administrative burden associated with the audit for both ACOs and CMS because it reduces the multiple phases of documentation submission contemplated under the existing process to a single phase of supporting documentation submission. Additionally, we appreciate stakeholder input on our operational documents, such as the suggestion to create a single guidance document that addresses the specifications for and requirements of web interface measures reporting. Currently, educational materials about web interface measures are found in several documents. In response to earlier requests for the creation of a single document, we have been working closely with our colleagues who are responsible for the CMS web interface to develop educational documents that would streamline the information available to all web interface reporters, including ACOs. We intend to continue to work to improve these communications and materials to assist ACOs in their preparation for quality measures submission. However, we believe that information currently available to ACOs, in addition to the support we provide through our help desks, webinars, and other methods of communication as noted below, is sufficient to ensure ACOs’ understanding of and compliance with quality measure submission requirements. We therefore will not delay implementation of the new streamlined audit process and will use it beginning in spring 2017 to validate data received from ACOs for the 2016 performance year. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Comment: Some commenters requested more information on the number of measures that would be selected for the audit or suggested that ACOs have an opportunity to correct and resubmit data during the audit process. Some commenters suggested CMS include an appeal process, because of the audit’s potential impact on an ACO’s overall quality score and on the calculation of shared savings. A few commenters pointed out there is a difference between ACOs selected for audit due to data anomalies and those that are selected randomly and that these groups should be treated differently. One commenter noted that innocent mistakes can be made by those uploading data to CMS systems and that rather than penalizing the ACO there should be an opportunity for the ACO to correct such mistakes. Additionally, while some commenters agreed with the 90 percent match rate, others recommended using a lower confidence interval. Response: To streamline the process, we proposed to have a single process with a single audit step, regardless of the reason an ACO is selected for the audit. The proposals were intended to streamline the audit process, provide audit feedback to ACOs and validate the accuracy of quality data in a timely manner that, in turn, permits timely feedback and allows accurate information to be used in the reconciliation of the ACO’s performance for the prior year. Incorporating an appeals process would severely delay ACO reconciliation, and therefore, we do not agree that such a process should be included. Additionally, we believe that establishing an appeals process would be inconsistent with the statutory preclusion on administrative and judicial review of the assessment of the quality of care furnished by the ACO under section 1899(g) of the Act. Nevertheless, we are sympathetic to comments noting that simple mistakes can be made when reporting quality that, if given the opportunity to be rectified, would not reflect poorly on the actual quality of the care delivered by the ACO. We note, however, that the CMS web interface provides a number of reports that ACOs can access and use to check their data entry in the CMS Web Interface to assist ACOs in monitoring the accuracy of the quality data they submit. These reports can help ACOs to identify and correct errors in their data submission during the timeframe the CMS Web Interface is open for quality data submission. Even so, we believe there may be instances following an audit when CMS may need PO 00000 Frm 00323 Fmt 4701 Sfmt 4700 80491 to employ some discretion related to the adjustment of an ACO’s overall quality score. For example, an ACO may have experienced an error when reporting measures electronically (for example, an error in mapping the extensible markup language (XML) specifications) that affects all beneficiaries reported on for a quality measure. In this instance, a mapping error could be out of the control of the ACO that, based on an audit, demonstrated that it had otherwise fulfilled our quality reporting requirements. In the absence of flexibility not to apply an adjustment to the ACO’s overall quality score, such an ACO may be unfairly penalized. Therefore, we are modifying our proposed policy. Specifically, we are finalizing a policy under which CMS will adjust an ACO’s overall performance score to reflect audit findings when the ACO has an audit mismatch rate of greater than 10 percent. However, we will retain discretion not to apply this adjustment to the ACO’s score in certain unusual circumstances where it would be inappropriate to apply the adjustment. We note that we do not intend to employ this discretion to avoid adjusting an ACO’s overall performance score in instances when the ACO cannot produce adequate validation of the data submitted or did not interpret the measure specifications correctly. For example, if we determine that the ACO has not produced medical record information sufficient to validate the data the ACO submitted to the web interface, we would not exercise our discretion not to apply the adjustment to the ACO’s overall performance score based on results of the audit. We believe it is reasonable to: (1) Hold ACOs accountable for the accuracy of the data submitted according to information they validate from medical record reviews; and (2) require ACOs to produce proof of such accuracy in the event of an audit. Also, if we determine that the ACO did not interpret the measure specifications correctly, we would apply the adjustment to the ACO’s overall performance based on audit results because ACOs are provided numerous opportunities to receive assistance from CMS before and during the quality measure submission process. For example, ACOs may access measure specification documents that are available on our Web site, contact the dedicated help desk, and attend webinars that we hold to educate ACOs about measure specifications and reporting requirements. Therefore, we believe that this modification of our proposal addresses stakeholder E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80492 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations concerns while permitting us to perform timely quality validation audits that hold ACOs accountable not only for the quality of the care they provide but also for the accuracy of their quality reporting. Final Action: For the reasons discussed above, we are finalizing our proposed changes to the audit process with modification. Specifically, we are finalizing a policy under which we will audit enough medical records to achieve a 90 percent confidence interval; conduct the audit in a single phase; and calculate an overall audit performance rate. We are modifying our regulations in order to reflect the new process of conducting the quality validation audit in a single step by removing the provision at § 425.500(e)(2) that requires 3 phases of medical record review. In so doing, we are redesignating § 425.500(e)(3) as § 425.500(e)(2). We are also revising the newly redesignated provision at § 425.500(e)(2) in order to provide for an assessment of the ACO’s overall audit match rate across all measures, instead of assessing the ACO’s audit mismatch rate at the measure level. For the reasons noted in our responses to comments above, we are modifying our proposed policy in order to give CMS discretion, in certain unusual circumstances, not to adjust the ACO’s overall quality score when the ACO has an audit mismatch rate of greater than 10 percent. Specifically, we are revising the redesignated provision at § 425.500(e)(2), to indicate that if an ACO has an overall audit match rate of less than 90 percent, absent unusual circumstances, CMS will adjust the ACO’s overall quality score proportional to its audit performance. Thus, CMS will retain discretion to avoid making the adjustment if circumstances warrant. Finally, we are finalizing our proposal to add a new requirement at § 425.500(e)(3) that an ACO that has an audit match rate of less than 90 percent may be required to submit a corrective action plan (CAP) under § 425.216 for CMS approval. In the CAP, the ACO would be required to explain the reasons for the low audit match rate and how it plans to improve the accuracy of its quality reporting in the future. In addition, we maintain the right, as described in § 425.500(f), to terminate or impose other sanctions on any ACO that does not report quality data accurately, completely or timely. We will apply these policies to the quality validation audits beginning in 2017 with the quality validation audits of quality reporting for the 2016 performance year. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 c. Technical Changes Related to Quality Reporting Requirements In this section of the CY 2017 PFS proposed rule, we proposed several technical changes to the quality performance standard that an ACO must meet to be eligible to share in savings, as established in the November 2011 final rule. Part of the determination of whether an ACO has met the quality reporting standard in each year is dependent on the ACO meeting the minimum attainment level for certain measures. We discussed how the ‘‘minimum attainment’’ requirement has been implemented to date and proposed a modification that we believe is more consistent with our policies for assessing an ACO’s performance over time. Finally, we proposed to move references to compliance actions from § 425.502(d)(2)(ii) to a more appropriate provision at § 425.316(c). First, we proposed to make technical revisions to ensure stakeholder understanding of the definition of the quality performance standard. The quality performance standard is established under Subpart F for each performance year (§ 425.502(a)). For the first performance year of an ACO’s first agreement period, the quality performance standard is defined as complete and accurate reporting of all quality measures. For each subsequent performance year, quality measures phase in to pay for performance, and although the ACO must continue to report all measures completely and accurately, the ACO will also be assessed on performance based on the quality performance benchmark and minimum attainment level of certain measures that are designated as pay for performance. The quality performance standard that applies to an ACO’s final year in its first agreement period also applies to each year of an ACO’s subsequent agreement period (§ 425.502(a)(3)) (79 FR 67925 through 67926). ACOs must meet or exceed the minimum quality performance standard in a given performance year to be eligible to receive payments for shared savings (§ 425.100(b)). Conversely, failure to meet the quality performance standard in a given performance year makes ACOs ineligible to share in savings, even if generated, and such ACOs may be subject to compliance actions. In the proposed rule, we explained that our intent in the November 2011 final rule was to establish a single quality performance standard that would apply for each performance year in which an ACO participates in the program. Because the quality PO 00000 Frm 00324 Fmt 4701 Sfmt 4700 performance standard changes, depending on the performance year, the ACO may be subject to multiple quality performance standards over the course of its 3-year agreement period. We stated that we recognize that some of the language used in subsequent revisions to our regulations may have generated some confusion related to this issue. We clarified that while there are certain standards that must be met for each measure or in each domain, there is one overall quality performance standard that must be met in each performance year by an ACO. Therefore, we proposed to make conforming changes to the regulations text to remove references to the quality performance standard in contexts where it does not appear to apply to the overall quality performance standard (particularly §§ 425.316(c)(2), 425.502(a)(4), and 425.502(d)(1)). We proposed to retain certain references to multiple quality performance standards, such as the reference at § 425.100(b), because we believe the use of the plural is appropriate in certain contexts as the quality performance standard varies depending on the performance year in question. Second, we addressed the concept of the minimum attainment level and its use in determining whether an ACO has met the quality performance standard. As noted above, beginning in the second year of an ACO’s first agreement period, the quality performance standard is met by complete and accurate reporting on all measures, but also includes meeting the minimum attainment level on ‘‘certain’’ measures. As provided at § 425.502(b)(1), we designate a performance benchmark and minimum attainment level for each measure. Pursuant to § 425.502(b)(3), the minimum attainment level is set at 30 percent or the 30th percentile of the performance benchmark. In § 425.502(c)(1) through (c)(2), we state that performance below the minimum attainment level for a measure will receive zero points for that measure and performance equal to or greater than the minimum attainment level for a measure will receive points on a sliding scale based on the level of performance. Finally, § 425.502(d) outlines quality performance requirements for the four domains, stating that the ACO must report all measures in a domain and must score above the minimum attainment level determined by CMS on 70 percent of the measures in each domain. If the ACO fails to achieve the minimum attainment level on at least 70 percent of the measures in a domain, CMS will take compliance action. Additionally, the ACO must achieve the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations minimum attainment level for at least one measure in each of the four domains to be eligible to share in savings. In guidance, we have interpreted the quality performance requirements for domains to apply only to pay for performance measures because minimum attainment applies only to ‘‘certain’’ measures according to the definition of the quality performance standard in § 425.502(a)(3), and we have interpreted the reference to ‘‘certain’’ measures in § 425.502(a)(2) to mean pay for performance measures. In the proposed rule, we explained that, as a result of this interpretation, we believe an inconsistency in the application of the policy goals outlined in our November 2011 final rule has arisen. In particular, we believe certain current policies are inconsistent with our goal of holding ACOs to higher quality reporting standards over time. Specifically, because measures are phased-in from pay for reporting to pay for performance over the course of an ACO’s first 3-year agreement period, there are no pay for performance measures during PY1 and fewer pay for performance measures in each domain in PY2 compared to PY3. Thus, under our current interpretation of the rules, it is not possible to take compliance actions against an ACO in its first performance year for failure to achieve the minimum attainment level on at least 70 percent of the measures in a domain because there are no pay for performance measures on which to assess performance on a domain. Additionally, because there are fewer pay for performance measures in PY2 than in PY3, and because of our policy of designating new measures as pay for reporting, it is more likely that a compliance action would be taken against an ACO due to failure to meet the minimum attainment level on 70 percent of the pay for performance measures in a domain in PY2 than in PY3. We explained that, as a result of this experience, we now believe it would be more consistent with our policy goals to take all measures into account when determining whether a compliance action should be taken against an ACO based on its quality performance in one or more domains. Therefore, we proposed to take all measures into account when determining ACO performance at the domain level for purposes of compliance actions. Additionally, we stated that we believe compliance actions should be addressed at § 425.316 rather than in the quality reporting section, and therefore, we proposed to move the provisions governing the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 specific performance levels at which a compliance action would be triggered from § 425.502 to § 425.316. The following is a summary of the comments we received regarding the proposed technical changes related to the quality performance standard and minimum attainment level. Comment: We received few comments on the proposed technical changes. Most commenters generally supported these proposals. However, some commenters expressed concerns about including pay for reporting measures in our assessment of whether the ACO could meet the minimum attainment level on 70 percent of measures within a domain. For example, one commenter seemed to believe that we had proposed that an ACO must meet the 30th percent or percentile threshold for all measures, including pay for reporting measures. One commenter expressed concerns about whether an ACO would be able to meet the pay for performance minimum attainment level on newly introduced measures, and therefore, recommended not including pay for reporting measures in our assessment of whether an ACO has met the minimum attainment level on 70 percent of measures in a domain. Commenters also requested that these technical changes be disseminated to all ACOs. Response: We thank commenters for their support of our proposed policies and wish to clarify several points for those who expressed concerns regarding the proposed changes. First, we emphasize that we proposed to continue to define the ‘‘minimum attainment level’’ for pay for performance measures at the level of the 30th percent or 30th percentile. We also wish to clarify that we proposed to define the ‘‘minimum attainment level’’ for pay for reporting measures at the level of complete and accurate reporting. In other words, the minimum requirement for attainment on a particular measure is different depending on whether the measure is designated as pay for reporting or pay for performance. Because newly introduced measures are pay for reporting for the first 2 years, the minimum attainment standard level for new measures would be pay for reporting. Second, including all measures in the domain (rather than including only the pay for performance measures) in our assessment of whether the ACO has met the minimum attainment level on 70 percent of the measures in the domain has an end result of insulating many ACOs that would otherwise be subject to a warning letter or CAP. Some domains have very few pay for performance measures and poor performance on just one of those PO 00000 Frm 00325 Fmt 4701 Sfmt 4700 80493 measures increases the likelihood that the ACO will receive a warning letter or CAP. It was not our intent to subject an ACO to compliance action based on its poor performance on just one measure in a domain. Therefore, including pay for reporting measures in this assessment limits the issuance of warning letters and CAPs to only those ACOs that have grossly underperformed in a domain by failing to meet the minimum attainment level on at least 70 percent of the measures in a domain, including measures that are designated as pay for reporting. Therefore, we are finalizing this policy as proposed. We intend to include these changes in the ‘‘Medicare Shared Savings Program Quality Measurement Methodology and Resources’’ document posted on the Shared Savings Program Portal where it will be available to all ACOs. Final Action: We are finalizing the technical changes related to the use of the term ‘‘quality performance standard’’ and the application of the ‘‘minimum attainment level’’ to determine whether an ACO has met the quality performance standard for a performance year as proposed for the reasons discussed above and in the proposed rule. Specifically, we are making the following modifications to our regulations: • Revise introductory text at § 425.502(a) to clarify that the quality performance standard is the overall standard the ACO must meet to qualify to share in savings. • Replace the word ‘‘certain’’ in § 425.502(a)(2) and (3) with ‘‘all,’’ so that the term ‘‘minimum attainment level’’ clearly applies to both pay for reporting and pay for performance measures. • At § 425.502(a)(4), make modifications to remove the reference to the quality performance standard each time it appears to avoid causing confusion between the standards for individual measures and the overall quality performance standard. • At § 425.502(b)(3), define ‘‘minimum attainment level’’ for both pay for reporting and pay for performance measures. We will set the minimum attainment level for pay for performance measures at the 30th percent or 30th percentile of the quality performance benchmark and for pay for reporting measures at the level of complete and accurate reporting. • At § 425.502(c)(2), revise the regulation text to specify that only pay for performance measures are assessed on a sliding scale. • At § 425.502(c)(5), add a provision to specify that pay for reporting measures earn the maximum number of E:\FR\FM\15NOR2.SGM 15NOR2 80494 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 points for a measure when the minimum attainment level is met. • Modify § 425.502(d) to refer generally to compliance actions that may be taken for failure to meet quality requirements, including low quality performance. We are also modifying § 425.316(c)(1) and (c)(2) to address the specific levels of quality performance at which compliance action will be triggered and to reference the single quality performance standard that an ACO must meet in order to remain eligible to participate in the Shared Savings Program. d. Technical Change to Application of Flat Percentages for Quality Benchmarks As explained in greater detail in the CY 2017 PFS proposed rule, we previously finalized a methodology to spread clustered measures when setting quality benchmarks to promote a clinically meaningful assessment of ACO quality. Specifically, we finalized a policy that CMS would set quality benchmarks using flat percentages for a clustered measure when the national FFS data results in the 60th percentile for the measure are equal to or greater than 80.00 percent. We noted that the methodology would not apply to measures whose performance rates are calculated as ratios, for example, measures such as the two ACO Ambulatory Sensitive Conditions Admissions and the All Condition Readmission measures. We subsequently finalized a policy to address ‘‘topped out’’ measures by setting benchmarks using flat percentages when the 90th percentile is equal to or greater than 95 percent. Although similar to the ‘‘cluster’’ policy finalized earlier, we included measures whose performance rates are calculated as ratios. We believed this policy was appropriate because measures calculated and reported as ratios may become topped out and we wanted to treat all topped out measures consistently. Since these policies were adopted, we have determined that converting measures calculated and reported as ratios into benchmarks expressed as percentiles and percentages creates confusion in the interpretation of quality results and may yield results that are contrary to the intended purpose of using flat percentages. As a result, we proposed to no longer apply the flat percentage policy to performance measures calculated as ratios. In addition, we proposed two technical changes to address typographical errors in § 425.502(a)(1), which contains a duplicative reference VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 to CMS, and in § 425.502(b)(2)(ii), which contains an extra ‘‘t’’ at the end of ‘‘percent.’’ The following is a summary of the comments we received regarding the proposed technical change to the application of flat percentages for quality benchmarks. Comment: We received three comments on this proposal. All were supportive of the proposed technical change. One commenter requested that CMS clarify which measures are calculated as percentages versus ratios. Response: We thank the commenters for their support of this proposed technical change. When we release the quality measure benchmarks for the 2017 performance year as part of our operational documents and guidance, we will indicate which measures are calculated as ratios, and therefore, exempt from our policies with respect to the use of flat percentages. Final Action: We are finalizing our proposed technical change to the use of flat percentages to set quality performance benchmarks. Specifically, we will no longer use flat percentages to set the quality performance benchmark for quality performance measures calculated as ratios. Such measures will be clearly identified in operational documents posted on our Web site. In addition, we are finalizing the two technical changes to address typographical errors in § 425.502(a)(1), which contains a duplicative reference to CMS, and in § 425.502(b)(2)(ii), which contains an extra ‘‘t’’ at the end of ‘‘percent.’’ e. Incorporation of Other Reporting Requirements Related to the PQRS The Affordable Care Act gives the Secretary authority to incorporate reporting requirements and incentive payments from certain Medicare programs into the Shared Savings Program, and to use alternative criteria to determine if payments are warranted. Specifically, section 1899(b)(3)(D) of the Act affords the Secretary discretion to incorporate reporting requirements and incentive payments related to the physician quality reporting initiative (PQRI), under section 1848 of the Act, including such requirements and such payments related to electronic prescribing, electronic health records, and other similar initiatives under section 1848, and permits the Secretary to use alternative criteria than would otherwise apply under section 1848 of the Act for determining whether to make such payments. Under this authority, in the November 2011 final rule establishing the Shared Savings Program, we incorporated certain PO 00000 Frm 00326 Fmt 4701 Sfmt 4700 reporting requirements and payment rules related to the PQRS into the Shared Savings Program at § 425.504 for ‘‘eligible professionals’’ (EPs) who bill under the TIN of an ACO participant within an ACO. Thus, the Shared Savings Program rules provide that EPs who bill under the TIN of an ACO participant within an ACO may only participate under their ACO participant TIN as a group practice under PQRS under the Shared Savings Program for purposes of qualifying for a PQRS incentive (prior to 2015) or avoiding the payment adjustment (starting in 2015). In other words, the current regulations prohibit ACO participant TINs and the EPs billing through those TINs from participating in PQRS outside of the Shared Savings Program such that these entities may not independently report for purposes of PQRS apart from the ACO. An ACO, reporting on behalf of its EPs for purposes of PQRS, is required to satisfactorily submit through the CMS web interface all of the ACO GPRO measures that are part of the Shared Savings Program quality performance standard. Under § 425.504(c), for 2016 and subsequent years, if an ACO fails to satisfactorily report all of the ACO GPRO measures through the CMS web interface each EP who bills under the TIN of an ACO participant within the ACO will receive a downward adjustment, as described in § 414.90(e) for that year. In the 2017 PFS proposed rule, we noted that the current regulations do not provide any mechanism for these EPs to report separately or otherwise avoid the downward payment adjustment if the ACO fails to satisfactorily report on their behalf. We also summarized the reasons discussed in the November 2011 final rule for not allowing EPs who bill under the TIN of an ACO participant to report outside their ACO for purposes of PQRS. Since publication of the November 2011 final rule, we have gained experience with these policies and program operations, and now believe there may be limited instances in which it would be appropriate to use data that is reported by these EPs outside their ACO for purposes of PQRS. Therefore, we proposed a change in policy in order to be able to accept and use data that is separately reported outside the ACO by EPs billing through the TIN of an ACO participant within an ACO for purposes of PQRS under limited circumstances for the final 2 years of PQRS before it sunsets and is replaced by the Quality Payment Program (QPP). We stated that we continue to believe that in most cases it is appropriate to assess EPs that E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations bill through the TIN of an ACO participant under the PQRS as a group practice because as noted in the November 2011 final rule, the Shared Savings Program is concerned with measuring the quality of care furnished to an assigned population of FFS beneficiaries by the ACO, as a whole, and not that of individual ACO providers/suppliers. We explained that we believe this framework promotes clinical integration among the ACO providers/suppliers, which is an important aspect of the Shared Savings Program. In addition, it is consistent with the requirement under § 425.108(d) that each ACO provider/supplier must demonstrate a meaningful commitment to the mission of the ACO to ensure its likely success. Because an ACO cannot be successful in the Shared Savings Program without satisfying the quality reporting requirements, we believe a meaningful commitment by ACO providers/suppliers to the mission of the ACO includes assisting with and engaging in annual quality reporting through the ACO. Further, ACO reporting reduces burden for those in small or solo practices, and places a focus on population health by encouraging care coordination by ACO providers/suppliers to improve the health of the broader patient population for which they are responsible. Finally, we believe that such group reporting is consistent with group reporting under various other CMS initiatives, and therefore, we stated that we did not intend to remove the requirement that ACOs report on behalf of the EPs who bill under the TIN of an ACO participant. As a corollary, we stated our intent to continue to use ACO data preferentially for purposes of assessing or determining an EP’s quality performance for purposes of programs such as PQRS or, by extension, the VM. However, we went on to explain in the proposed rule that we believe that when an ACO does not satisfactorily report for purposes of PQRS, it may be appropriate to accept and use data that is reported outside the ACO. In order to be able to accept and use data reported outside the ACO for purposes of PQRS, we noted that we must modify the provision at § 425.504 prohibiting EPs that bill under the TIN of an ACO participant in an ACO from reporting separately for purposes of PQRS. We therefore proposed to modify § 425.504 to lift the prohibition on separate reporting for purposes of the 2017 and 2018 PQRS payment adjustment. We explained that we believe this change to our program rules was necessary for several reasons. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 First, we stated that we believe it is necessary to protect EPs that participate in ACOs that fail to satisfactorily report all of the ACO GPRO measures. Although 98 percent of ACOs successfully complete required quality reporting annually, there have been a few instances where an ACO has failed to report all of the required measures, for example, where an ACO has terminated its participation in the Shared Savings Program and did not quality report on behalf of the EPs that bill under the TIN of an ACO participant at the end of the performance year as required under our close-out procedures. In other instances, some ACOs continued to participate in the Shared Savings Program but failed to complete quality reporting in a timely manner. In these instances, the lack of complete quality reporting by the ACO translated into a failure for the EPs within the ACO to receive a PQRS incentive (or to avoid the PQRS downward adjustment) for that year. Second, PQRS has transitioned away from providing incentive payments to applying only downward payment adjustments to payments under the Medicare Physician Fee Schedule, making it even more important for EPs to ensure they comply with the reporting requirements for PQRS. Under the current rules, EPs who bill under the TIN of an ACO participant within an ACO must ultimately rely on the ACO to report on their behalf. These EPs are only able to encourage and facilitate ACO reporting, but lack the ability to ensure that the ACO satisfactorily reports in order to prevent application of the payment adjustment. The proposed change to allow EPs to report separately would provide them a mechanism over which they have direct control to ensure satisfactory reporting occurs. Additionally, we noted that because there are no more payment incentives under the PQRS, there is no longer any concern that an EP may inadvertently receive duplicative PQRS incentive payments from CMS. We address the specific issues and policies related to the use of data reported by EPs apart from an ACO for purposes of avoiding the PQRS payment adjustment for payment years 2017 and 2018 in section III.H. of this final rule. Third, under the VM, groups and solo practitioners that bill under the TIN of an ACO participant are evaluated under a quality tiering methodology and could qualify for an upward payment adjustment if the ACO satisfactorily reports on their behalf. However, if the ACO does not satisfactorily report quality data as required under § 425.504 then groups and solo practitioners that PO 00000 Frm 00327 Fmt 4701 Sfmt 4700 80495 bill under the TIN of an ACO participant fall into Category 2 for the VM and are subject to a downward payment adjustment. Our proposed and final policies for how quality data reported by EPs billing under the TINs of ACO participants that is reported apart from the ACO will be used for purposes of avoiding the VM downward payment adjustment for 2017 and 2018 are discussed in section III.L.3.b of this final rule. For the reasons noted above, we stated that we believed it would be appropriate to retain the provisions under § 425.504 that require the ACO to report all of the ACO GPRO measures to satisfactorily report on behalf of the EPs who bill under the TIN of an ACO participant for purposes of the PQRS payment adjustment; however, we proposed to modify the provisions that prohibit EPs that bill under the TIN of an ACO participant from reporting apart from the ACO. Specifically, we proposed to add a redesignated and revised paragraph at § 425.504(d) to address the requirement that the ACO report on behalf of the eligible professionals who bill under the TIN of an ACO participant for purposes of the 2017 and 2018 PQRS payment adjustment. Under this revised provision the prohibition on separate quality reporting for purposes of the PQRS payment adjustment for 2017 and 2018 would be removed. We also proposed to make a technical change to § 425.504 to move existing § 425.504(d) to § 425.504(c)(5) because the intent of this provision was to parallel the language of § 425.504(b)(6) for purposes of the payment adjustment for 2016 and subsequent years. We reiterated our intent that data reported by an ACO would continue to be preferentially used for purposes of other CMS initiatives that rely on such data, including the PQRS and the VM. If an EP who bills under the TIN of an ACO participant chooses to report apart from the ACO, the EP’s data may be used for purposes of PQRS and VM only when complete ACO reported data is not available. Additionally, we noted that under the Shared Savings Program, only the quality data reported by the ACO as required under § 425.500 would be used to assess the ACO’s performance under the Shared Savings Program. In other words, quality data submitted separately from the ACO would not be considered under the Shared Savings Program. We requested comments on this proposal. The following is a summary of the comments we received regarding our proposed changes to the reporting requirements under the Shared Savings Program related to PQRS. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80496 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Comment: Commenters supported the proposal to allow EPs to report apart from the ACO to meet PQRS reporting requirements and to avoid the PQRS adjustment. Additionally, commenters supported maintaining this policy as CMS transitions to the Quality Payment Program (QPP). Several commenters raised issues related to PQRS proposals discussed in section III.H related to reporting requirements and timing, and suggested alternatives to allow EPs who bill under the TIN of an ACO participant to avoid the PQRS downward payment adjustment when their ACO fails to report. For example, several commenters were concerned about the effort and expense that would be incurred by EPs to report apart from their ACO without first knowing if the ACO had satisfactorily reported. A few commenters recommended that EPs be held harmless and not incur a downward payment adjustment under PQRS or the VM if their ACO failed to report. Response: We appreciate commenters’ support for our proposal to modify program rules to permit EPs to report quality apart from an ACO. Additional comments having to do with EP reporting for purposes of PQRS and the VM are addressed in sections III.H and III.L.3.b of this final rule, respectively. Comments related to timing and submission of quality data apart from the ACO for purposes of the QPP have been shared with the appropriate staff. Final Action: We are finalizing our proposal to allow EPs that bill under the TIN of an ACO participant to report for purposes of PQRS apart from the ACO. For the reasons noted above, we are also finalizing our proposal to add a redesignated and revised paragraph at § 425.504(d) to address the requirement that the ACO report on behalf of the eligible professionals who bill under the TIN of an ACO participant for purposes of the 2017 and 2018 PQRS payment adjustment. We are also finalizing our proposal to make a technical change to § 425.504 to move existing § 425.504(d) to § 425.504(c)(5) because the intent of this provision was to parallel the language of § 425.504(b)(6) for purposes of the payment adjustment for 2016 and subsequent years. Details regarding the requirements for reporting quality data apart from the ACO and the use of such quality data for purposes of PQRS and the VM are addressed in sections III.H. and III.L.3.b. of this final rule, respectively. We reiterate, however, that these revisions to our regulations in order to allow quality data to be submitted apart from the ACO and for such quality data to be used under other programs (such as PQRS or the VM) VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 does not alter or impact our assessment of an ACO’s quality under the Shared Savings Program. Only quality data reported by the ACO as required under § 425.500 will be used to assess the ACO’s performance under the Shared Savings Program. f. Alignment With the Quality Payment Program (QPP) 1. Background and Introduction to the Quality Payment Program The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114–10, enacted April 16, 2015), amended title XVIII of the Act to repeal the Medicare sustainable growth rate (SGR) and strengthen Medicare access by improving physician payments and making other improvements. The statute established the Merit-Based Incentive Payment System (MIPS), a new program for certain Medicare-participating practitioners. MIPS consolidates components of three existing programs, the PQRS, the Physician Value Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program for EPs. The statute also established incentives for participation in certain alternative payment models (APMs). On April 27, 2016, the Department of Health and Human Services (HHS) issued a proposed rule to implement key provisions of the MACRA and establish a new Quality Payment Program (QPP) (Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models (81 FR 28162 through 28586) (the QPP proposed rule)). On October 19, 2016, HHS issued the final rule with comment period establishing the Quality Payment Program (QPP final rule with comment period). (The rule will publish in the November 4, 2016 Federal Register and can be accessed at https://qpp.cms.gov/ education.) The Quality Payment Program (QPP) replaces a patchwork system of Medicare reporting programs with a flexible system that allows practitioners to choose from two paths that link quality to payments: The Merit-Based Incentive Payment System (MIPS) and the APM incentive participation in Advanced Alternative Payment Models (APMs). MIPS and the APM incentive will impact practitioner payments beginning in payment year 2019 based on 2017 reporting. MIPS is a new program that combines parts of the Physician Quality Reporting System (PQRS), Value Modifier (VM) and Medicare Electronic Health Record PO 00000 Frm 00328 Fmt 4701 Sfmt 4700 (EHR) Incentive Program into a single program in which eligible clinicians (ECs) will be measured over 4 categories which include quality, resource use, clinical practice improvement, and advancing care information. The rulemaking implementing the QPP specifically addresses ECs that participate in APMs and Advanced APMs, such as the Shared Savings Program. Specifically, for ECs participating in APMs, the QPP final rule with comment period: • Establishes criteria for reporting under each of the 4 categories. For example, the QPP final rule with comment period establishes a policy for the quality performance category to use quality information submitted by the ACO through the CMS Web interface to assess each EC billing under the TIN of an ACO participant. To assess performance in the category of advancing care information performance category for ECs billing under the TIN of an ACO participant, we will aggregate EC-reported data to calculate an ACO score which will be applied to each participating EC. Under the QPP final rule with comment period, this reporting by ECs will be accomplished by each ACO participant TIN reporting on the advancing care information as specified in § 414.1375(b). We note that under the QPP final rule with comment period, ECs for whom a sufficient percentage of payments for covered professional services, or a sufficient percentage of patients, are attributable to services furnished through an Advanced APM for a year will be qualifying APM participants (QPs) for the year. In addition to earning a 5 percent APM Incentive Payment, QPs are exempt from the MIPS reporting requirements and payment adjustment for the year. • Defines an Advanced APM as one that meets several criteria including requiring participants to use certified EHR technology (CEHRT). Under the QPP final rule with comment period, only Tracks 2 and 3 of the Shared Savings Program have the potential to meet all criteria necessary for designation as an Advanced APM. In order for Tracks 2 and 3 of the Shared Savings Program to meet the CEHRT requirement for Advanced APMs, the Shared Savings Program must hold ACOs accountable for their participating eligible clinicians’ use of CEHRT by applying a penalty or reward based on the degree of use of CEHRT (such as the percentage of EPs that are using CEHRT or the care coordination or other activities performed using CEHRT). In the 2017 PFS proposed rule, we reviewed the Shared Savings Program E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 rules and identified several modifications to program rules that we believed needed to be made in order to support and align with the QPP. These modifications included the following: • Revisions to §§ 425.504 and 425.506 to sunset Shared Savings Program alignment with PQRS and the EHR Incentive Program starting with quality reporting period 2017 (corresponding to payment year 2019). • Addition of new paragraph § 425.506(e) and section § 425.508 to align with the proposed Quality Payment Program, including rules addressing annual assessment of the use of CEHRT by ECs participating in ACOs and for ACO reporting of certain quality measures to satisfy the quality performance category on behalf of the eligible clinicians who bill under the TIN of an ACO participant. • Modifications to the EHR measure title and specifications necessary to align with the proposed QPP criteria for determining Advanced APM status, including scoring requirements for the limited circumstances when the measure is designated as pay for reporting. 2. Proposals Related to Sunsetting PQRS and EHR Incentive Program Alignment and Alignment With APM Reporting Requirements Under the Quality Payment Program The Shared Savings Program has established rules at §§ 425.504 and 425.506 incorporating reporting requirements related to PQRS and the EHR Incentive Program. The current provision at § 425.504(c), addresses the PQRS payment adjustment for 2016 and subsequent years. Under current Shared Savings Program rules, EPs who bill under the TIN of an ACO participant within an ACO may only participate under their ACO participant TIN as a group practice under the PQRS Group Practice Reporting Option for purposes of the PQRS payment adjustment under the Shared Savings Program. ACOs must submit all of the ACO GPRO measures to satisfactorily report on behalf of their eligible professionals for purposes of the PQRS payment adjustment. If an ACO does not satisfactorily report, each EP participating in the ACO receives a payment adjustment under PQRS. As discussed in this final rule, we are finalizing a policy that will allow EPs who bill under the TIN of an ACO participant within an ACO to report separately from their ACO for purposes of the PQRS payment adjustment for 2017 and 2018. At § 425.506, we address alignment with the EHR Incentive Program. Specifically, at § 425.506(a), we state VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 that ACOs, ACO participants, and ACO providers/suppliers are encouraged to develop a robust EHR infrastructure, which aligns with our eligibility criteria under § 425.112 that require ACOs to define care coordination processes, which may include the use of enabling technologies such as CEHRT. At § 425.506(b) and (c) we state that the quality measure regarding EHR adoption is measured based on a sliding scale and that it is weighted twice that of any other measure for scoring purposes and determining compliance with quality performance requirements for domains. To align with the EHR incentive program we state in § 425.506(d), that EPs participating in an ACO under the Shared Savings Program satisfy the CQM reporting component of meaningful use for the Medicare EHR Incentive Program when the EP extracts data necessary for the ACO to satisfy the quality reporting requirements under the Shared Savings Program from CEHRT and when the ACO reports the ACO GPRO measures through a CMS Web interface. EPs are responsible for meeting the rest of the EHR incentive program requirements apart from the ACO. As noted above, the VM, PQRS and the EHR incentive programs are sunsetting and the last quality reporting period under these programs will be 2016, which will impact payments in 2018. Quality reporting under the QPP, as proposed and subsequently finalized, will begin in 2017 for payment year 2019. In order to align with the policies proposed in the QPP proposed rule (and that were subsequently finalized in the QPP final rule with comment period), we proposed to amend §§ 425.504 and 425.506 to indicate that these reporting requirements would apply to ACOs and their EPs through the 2016 performance year. Specifically, at § 425.504(c) we proposed to remove the phrase ‘‘for 2016 and subsequent performance years’’ each time it appears and add in its place the phrase ‘‘for 2016.’’ As discussed above, we proposed and are finalizing a technical change to redesignate paragraph (d) as paragraph (c)(5) and then to add new paragraph (d) to address the PQRS alignment rules for the 2017 and 2018 PQRS payment adjustment. Similarly, at § 425.506, we proposed to revise paragraph (d) to indicate that the last reporting year for the EHR Incentive Program is 2016. In addition, in the CY 2017 PFS proposed rule, we proposed to require ACOs, on behalf of the ECs who bill under the TIN of an ACO participant, to report quality measures through the CMS Web interface in order to satisfy the QPP quality performance category. PO 00000 Frm 00329 Fmt 4701 Sfmt 4700 80497 Currently, ACOs are required under § 425.504 to report certain quality measures on behalf of the EPs who bill under the TIN of an ACO participant for purposes of PQRS. Under the policy proposed in the QPP proposed and subsequently adopted in the QPP final rule with comment period, the quality data submitted to the CMS Web interface by ACOs will satisfy the quality performance category for ECs participating in the ACO. Therefore, in order to align with the QPP, we proposed to add a new paragraph at § 425.508(a) that parallels the current requirement at § 425.504 for reporting on behalf of EPs who bill under the TIN of an ACO participant for purposes of PQRS. Specifically, we proposed to require that ACOs, on behalf of ECs who bill under the TIN of an ACO participant, must submit all the ACO CMS Web interface measures required by the Shared Savings Program using a CMS Web interface, to meet reporting requirements for the quality performance category under MIPS. Because we proposed to maintain flexibility for EPs to report quality performance category data separately from the ACO for purposes of PQRS, we did not propose to include a provision that would restrict an EC from reporting outside the ACO for purposes of the QPP. While the intent of these proposals was to permit flexibility in reporting quality data, we reiterated that no quality data reported apart from the ACO would be considered for purposes of assessing the quality performance of the ACO under the Shared Savings Program. The following is a summary of the comments we received regarding our proposals to sunset PQRS and EHR Incentive Program alignment and to align with the reporting requirements under the QPP. Comment: Commenters were supportive of our efforts to align Shared Savings Program ACO quality reporting with the MIPS quality performance category. In addition, commenters supported the proposal to allow ECs to report outside of the ACO for purposes of the QPP, in the event that the ACO fails to satisfactorily report. Response: We appreciate commenters’ support for our proposals to align ACO quality reporting with the sunsetting of PQRS and the EHR Incentive Program and the new reporting requirements under the QPP. Final Action: We are finalizing our proposal to sunset PQRS and EHR Incentive Program alignment and to align with the reporting requirements under the QPP. Specifically, we will amend §§ 425.504 and 425.506 to E:\FR\FM\15NOR2.SGM 15NOR2 80498 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 indicate that the PQRS and EHR Incentive Program reporting requirements apply to ACOs and their EPs through the 2016 performance year. To align with the reporting requirements under the QPP, we are finalizing our proposal to add a new provision at § 425.508 that parallels the current requirement at § 425.504 that ACOs report on behalf of EPs who bill under the TIN of an ACO participant for purposes of PQRS. Specifically, we are finalizing our proposal to require that ACOs, on behalf of ECs who bill under the TIN of an ACO participant, must submit all the CMS Web interface measures required by the Shared Savings Program using a CMS Web interface, to meet reporting requirements for the quality performance category under the QPP. As discussed elsewhere in this final rule, we are also finalizing a policy to maintain flexibility for EPs to report quality data separately from the ACO for purposes of PQRS and the VM, and therefore, are not including a provision that would restrict an EC from reporting outside the ACO for purposes of the QPP. While the intent of this policy is to permit flexibility in reporting quality data for purposes of the QPP, we reiterate that no quality data reported apart from the ACO will be considered for purposes of assessing the quality performance of the ACO under the Shared Savings Program. 3. Proposals Related to Alignment With the Quality Payment Program (QPP) In the QPP proposed rule (81 FR 28296) and in the subsequent QPP final rule with comment period, we outlined and defined the criteria for Advanced APMs, APMs through which ECs would have the opportunity to become Qualified Participants (QPs) as specified in section 1833(z)(3)(C) and (D) of the Act. First, under MACRA, for an APM to be considered an Advanced APM, it must meet three requirements: (1) Require participants to use certified EHR technology; (2) provide payment for covered professional services based on quality measures comparable to those used in the quality performance category of MIPS; and (3) either be a Medical Home Model expanded under section 1115A(c) of the Act or require the participants to bear more than a nominal amount of risk for monetary losses. In the rulemaking implementing the QPP, we established criteria for each of these requirements. As proposed and subsequently finalized, under the QPP, significant distinctions between the design of different tracks or options within an APM mean that certain tracks or options could meet the Advanced VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 APM criteria while other tracks or options may not. Under the approach discussed in the QPP proposed rule and as subsequently adopted in the QPP final rule with comment period, while all Tracks of the Shared Savings Program would meet the criterion to provide for payment based on quality measures comparable to those used in the quality performance category of MIPS, only Tracks 2 and 3 meet the proposed financial risk standard to bear more than a nominal amount of risk for monetary losses. In the rulemaking to establish the QPP, we adopted an alternative criterion that would allow all three tracks of the Shared Savings Program to satisfy the EHR criterion if ACOs are held accountable for their ECs’ use of CEHRT. In the QPP final rule with comment period, we adopted a definition of CEHRT at § 414.1305 for purposes of MIPS and the APM incentive. We noted that section 1833(z)(3)(D)(i)(I) of the statute does not specify how the APM must require participants to use CEHRT in order to be an Advanced APM. For this reason, we stated that we believed it was reasonable to use discretion when determining the details of how APMs might meet this criterion. For purposes of the APM incentive under the QPP, we proposed and subsequently finalized a policy that an Advanced APM must require at least 50 percent of ECs who are enrolled in Medicare (or each hospital if hospitals are the APM participants) to use the certified health IT functions outlined in the definition of CEHRT to document and communicate clinical care with patients and other health care professionals. However, although the Shared Savings Program requires ACOs to encourage and promote the use of enabling technologies (such as EHRs) to coordinate care for assigned beneficiaries, the Shared Savings Program does not require a specific level of CEHRT use for participation in the program. Instead, the Shared Savings Program, as noted above, includes an assessment of EHR use as part of the quality performance standard which directly impacts the amount of shared savings/shared losses generated by the ACO. Therefore, in the rulemaking to establish the QPP, we proposed and subsequently finalized an alternative criterion available only to the Shared Savings Program. Specifically, we proposed and subsequently finalized an alternative criterion that would allow the Shared Savings Program to satisfy the EHR criterion to be an Advanced APM if it holds APM Entities PO 00000 Frm 00330 Fmt 4701 Sfmt 4700 accountable for their ECs’ use of CEHRT by applying a financial penalty or reward based on the degree of CEHRT use (such as the percentage of ECs that use CEHRT or the engagement in care coordination or other activities using CEHRT). In the rulemaking for the QPP, we noted that the current EHR quality measure at ACO #11 assesses the degree to which certain ECs in the ACO successfully meet the requirements of the EHR Incentive Program, and we stated that ‘‘[s]uccessful reporting of the measure for a performance year gives the ACO points toward its overall quality score, which in turn affects the amount of shared savings or shared losses an ACO could earn or be liable for, respectively.’’ Finally, we stated that we believed the alternative criterion meets the statutory requirement because the alternative criterion builds on established Shared Savings Program rules and incentives that directly tie the level of CEHRT use to the ACO’s financial reward which in turn has the effect of directly incentivizing everincreasing levels of CEHRT use among participating clinicians. In the CY 2017 PFS proposed rule, we proposed several modifications to our program rules in order to align with the policies proposed for the QPP. First, we proposed to modify the title and specifications of the EHR quality measure (ACO #11). This measure is currently titled Percent of PCPs Who Successfully Meet Meaningful Use Requirements. Under the current Shared Savings Program rules, ACOs must report on and are held accountable for certain measures that make up the quality reporting standard. One of these measures, ACO #11, assesses the degree of CEHRT use by primary care physicians participating in the ACO and performance on this measure is weighted twice that of any other measure for scoring purposes. To calculate this measure, CMS collects information submitted by PCPs through the EHR Incentive Program and determines the rate of CEHRT use by PCPs participating in the ACO. Specifically, as explained in our guidance [https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/sharedsavingsprogram/ Downloads/2015-ACO11-Percent-PCPSuccessfully-Meeting-Meaningful-UseRequirement.pdf ], the denominator is based on all PCPs who are participating in the ACO in the reporting year under the Shared Savings Program and the numerator for the measure is based on the PCPs included in the denominator who successfully qualify to participate in either the Medicare or Medicaid EHR Incentive Program in the year indicated. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Results of this measure are used in determining the ACO’s overall quality score which in turn determines the ACO’s final sharing/loss rate and the amount of shared savings earned (or shared losses owed) by the ACO. In the QPP proposed rule, we proposed that ECs participating in an ACO would satisfy the Advancing Care Information performance category under the MIPS by reporting meaningful use of EHRs apart from the ACO (81 FR 28247, Table 15). We subsequently finalized this policy in the QPP final rule with comment period. Similar to the process currently used under the Shared Savings Program to determine what practitioners have met criteria for meaningful use for the ACO #11 measure, we will access EC-reported data under the Advancing Clinical Information performance category to assess the ACO’s overall use of CEHRT. Because the current EHR measure at ACO–11 only assesses the degree of use of CEHRT by primary care physicians participating in the ACO, in the CY 2017 PFS proposed rule we proposed to modify the EHR measure to align with the policy proposed for the QPP. Specifically, we proposed to change the specifications of the EHR measure in order to assess the ACO on the degree of CEHRT use by all providers and suppliers designated as ECs under the QPP that are participating in the ACO, rather than narrowly focusing on the degree of use of CEHRT of only the primary care physicians participating in the ACO. We stated that we believed this modification to the specifications for ACO #11 would better align with the QPP and ensure a subset of ACOs in the Shared Savings Program could qualify to be Advanced APM entities by participating in an Advanced APM. We also proposed to modify the title of the measure to remove the reference to PCPs. We stated that we believed the modification in the specifications of ACO #11 would be extensive and ECs would also have to gain familiarity with the reporting requirements under the QPP. We therefore proposed that this measure would be considered a newly introduced measure and set at the level of complete and accurate reporting for the first 2 reporting periods for which reporting of the measure is required according to our rules at § 425.502(a)(4). Thus, the measure would be pay for reporting for the 2017 and 2018 performance years. We further proposed to define requirements specific to this measure for the limited circumstances in which it is designated as pay for reporting. Specifically, we proposed to include the requirement at VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 § 425.506(e)(1) that during years in which ACO #11 is designated as a pay for reporting measure, in order for us to determine that the ACO has met requirements for complete and accurate reporting, at least one EC, as that term is defined for purposes of the QPP, participating in the ACO must meet the reporting requirements under the Advancing Clinical Information performance category under the QPP. We stated that we believed this proposal would safeguard the ability of Tracks 2 and 3 to fully meet all criteria for designation as Advanced APMs by ensuring the letter and spirit of the statutory criteria are met, even in the limited circumstances when ACO #11 is designated as pay for reporting under the Shared Savings Program. Beginning in the 2019 performance year, we proposed that ACO #11 would be assessed according to the phase-in schedule indicated in Table 36 of the proposed rule (81 FR 46421–46422) which is consistent with the current phase-in schedule for the measure. We further proposed to add § 425.506(e)(2) reiterating our current requirement at § 425.506(b) that during pay for performance years, the quality measure regarding EHR adoption is measured based on a sliding scale. We stated that we did not intend our proposal to use this measure to assess the degree of CEHRT use by ECs participating in the ACO for purposes of meeting the CERHT criterion for Advanced APMs under the QPP to change the way we treat the measure under pay for performance now. Similar to the current method used by the Shared Savings Program to calculate the EHR measure, we stated that the data would continue to be derived using EC reported EHR data that is required and collected for purposes of MIPS. Additionally, we stated that we intended for the measure to remain double weighted. We proposed to retain the existing EHR measure requirements at § 425.506(a)– (c) and to modify § 425.506(d) to sunset the current EHR reporting requirement as discussed in the prior section. We also stated that we did not believe that any additional modifications or exceptions to current Shared Savings Program rules (other than the ones proposed, specifically, that the measure specifications and title of ACO #11 be modified to include all ECs and not just PCPs, and the proposal for how an ACO would demonstrate complete and accurate reporting) must be made in order to be consistent with the spirit and intent of the statute and the Advanced APM criteria, as proposed in the QPP proposed rule. Rather, we PO 00000 Frm 00331 Fmt 4701 Sfmt 4700 80499 stated that we believe the existing Shared Savings Program rules are sufficient to permit Tracks 2 and 3 to meet the criteria to be designated as Advanced APMs because the EHR quality measure will always be used to impact the amount of shared savings or losses of an ACO, regardless of whether it is designated as pay for performance or pay for reporting. We noted that the EHR measure has an especially significant impact on the overall quality scoring for an ACO because it is doubleweighted compared to any other measure. In spite of this, we indicated that we were considering additional options regarding the treatment of the EHR measure under the Shared Savings Program in order to further enhance the importance of this measure and its impact on an ACO’s quality performance score and to improve alignment with the intent of the policies proposed in the QPP proposed rule. Specifically, we were considering whether to finalize a policy that would require the EHR measure to be pay for performance in all performance years, including the first year of an ACO’s first agreement period. Additionally, we were considering whether to finalize a policy that would require the EHR measure to remain pay for performance, even when a new EHR measure is introduced or there are significant modifications to the specifications for the measure. We noted that such modifications may require additional changes or alternative approaches to certain current Shared Savings Program rules related to quality benchmarking and scoring. We anticipated that if such modifications were made, they would only apply to the EHR measure and would not impact current scoring and benchmarking rules for other quality measures that make up the quality performance standard. We solicited comment on how best to conform to the intent and spirit of the QPP requirements to ensure that clinicians have assurance they are participating in an Advanced APM. We specifically solicited comment on our proposals and the alternatives considered. Furthermore, we noted that the CMS Web interface measures, including those proposed in the QPP proposed rule, are consistent across CMS reporting programs. We stated that we do not believe it is beneficial to propose CMS Web interface measures for ACO quality reporting separately. Therefore, to avoid confusion and duplicative rulemaking, we proposed that any future changes to the CMS Web interface measures would be proposed and finalized through rulemaking for the QPP, and that such E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80500 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations changes would be applicable to ACO quality reporting under the Shared Savings Program. The following is a summary of the comments we received regarding our proposals to align with QPP. Comment: Many commenters were supportive of our proposed changes to the title and specifications of the EHR measure (ACO–11) to align with the QPP. In contrast, several commenters opposed the proposed modifications to the measure or made additional suggestions. For example, some commenters requested that CMS keep the current version of the measure that assesses PCPs (not all ECs). Another commenter suggested that CMS assess ACOs using two EHR measures. This commenter recommended keeping the current version of the measure focused on primary care physicians as pay for performance while adding the modified version of the measure, which would be assessed under pay for reporting for 2 years like all new measures, before transitioning to pay for performance. In contrast, one commenter suggested that the EHR measure be removed from the ACO measure set entirely. Another commenter suggested that the proposed modifications to the measure specifications should apply only to ACOs participating in Shared Savings Program tracks that could meet the criteria for designation as Advanced APMs under the QPP. Response: We are finalizing the proposal to modify the EHR measures (ACO–11) to align with the Advanced APM criteria under the QPP. We appreciate commenters’ support for these changes. We believe the modification to ACO–11 to require reporting by all ECs better aligns with the QPP and will ensure that a subset of ACOs participating in the Shared Savings Program are able to qualify to be designated as Advanced APM entities by participaing in an Advanced APM. Accordingly, ACO participants in ACOs under all tracks of the Shared Savings Program must report data on the Advancing Care Information performance category on behalf of all ECs billing through the TIN of the ACO participant according to the MIPS requirements as specified at § 414.1375(b) in order to report for purposes of ACO #11. We note that under the QPP final rule with comment period, eligible clinicians who become QPs by participating in Advanced APMs will be exempt from reporting in the advancing care information performance category for purposes of MIPS. However, under § 425.500(c), ACOs must submit data on ACO quality performance measures VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 according to the method of submission established by CMS. Thus, in the QPP final rule with comment period, we established a policy that all eligible clinicians participating in ACOs under all tracks of the Shared Savings Program must report for purposes of the advancing care information performance category according to the MIPS requirements found at § 414.1375(b) regardless of whether they are excluded from MIPS for the year by virtue of their participation in an Advanced APM, in order for the Shared Savings Program to assess the ACO’s performance on ACO– 11, as required by the Advanced APM CEHRT use criterion. We appreciate the suggestion that the old measure (based on percent of primary care physician use of CEHRT) be retained in addition to establishing a new EHR measure that assesses EC use of CEHRT. We decline to retain the old measure at this time because the nature of the data being submitted to us is changing and primary care physicians are included in the new measure as a subset of the ECs participating in the ACO. Although we decline to hold ACOs accountable for both measures of CEHRT use at this time, we will continue to consider whether in the future it would be useful to calculate the percent of primary care physicians using CEHRT and share this information with ACOs. Comment: Many commenters supported the proposal to treat ACO–11 as a new measure and set it at the level of pay for reporting for the first 2 years of its use, consistent with our existing approach to implementing new measures. Other commenters disagreed with the proposal to transition the measure to pay for performance according to the phase-in schedule indicated in Table 36 of the proposed rule (81 FR 46421–46422) and requested that it remain pay for reporting for all 3 years of an ACO’s agreement period. One commenter encouraged CMS to set new benchmarks for the new EHR measure. Response: We recognize that reporting use of CEHRT under the QPP’s Advancing Care Information performance category according to MIPS requirements will be new for many ECs and that it will take some time for ACOs and their ECs to gain some familiarity with the new reporting requirements for ACO–11. For this reason, we proposed and are finalizing a policy to treat ACO– 11 as a newly introduced measure and to hold the ACO accountable for pay for reporting only for the first 2 years after the revised measure is introduced. However, to stress the importance of care coordination and support the use of PO 00000 Frm 00332 Fmt 4701 Sfmt 4700 CEHRT, we intend to phase in the measure to pay for performance according to the schedule outlined in Table 36 of the proposed rule (81 FR 46421–46422) and as indicated in Table 42 of this final rule. Consistent with our established policies for setting quality performance benchmarks for new measures, a new benchmark for this measure will be set based on the data gathered during the two pay for reporting years after the measure is introduced. Comment: One commenter expressed concerns over including ECs in the EHR measure who are excluded from MIPS and thus have the option of not reporting under the Advancing Care Information performance category (for example, low volume providers and QPs). They recommended ECs excluded from MIPS be excluded from the denominator of ACO–11. Response: As noted above, in the QPP final rule with comment period, we established a requirement at § 414.1370(g)(4)) that each ACO participant TIN participating in a Shared Savings Program ACO (regardless of Track) must submit data on the advancing care information performance category as specified in MIPS as finalized at § 414.1375(b). Additionally, it is necessary for ACO participant TINs to submit such data to meet the requirements under MIPS and for the calculation of the final score under the APM scoring methodology. All ECs participating in Track 1 ACOs will be subject to MIPS as will ECs participating in ACOs under Tracks 2 and 3 that do not qualify as QPs. We plan to align closely with the QPP when developing our operational guidance and the measure specifications to ensure a clear understanding of the data submission requirements for ACO participant TINs under MIPS. Comment: We received one comment supporting our proposal that future changes to the measures an ACO is required to report through the CMS Web Interface be finalized through rulemaking for the QPP in order to maintain alignment with QPP. Response: We appreciate the support for our proposal. We believe a single rulemaking process for adding and removing Web interface quality measures will be less confusing for stakeholders and streamline alignment of ACO and MIPS APM reporting. Therefore, we are finalizing our proposal that future revisions to the Web interface quality measures will be adopted through rulemaking for the QPP to avoid confusion or duplicative rulemaking. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Comment: Many commenters submitted questions or comments related to MIPS scoring of the advancing care information performance category and also requested further clarification regarding the CEHRT criteria for Advanced APMs. Response: These comments are out of the scope of the CY 2017 PFS proposed rule. However, we have shared these comments with our colleagues who have responsibility for the QPP. We also note that the QPP final rule with comment period responds to comments received on the QPP proposed rule and further describes the CEHRT criteria for Advanced APMs. Final Action: We are finalizing our policies regarding alignment with the QPP as proposed. Specifically, we are modifying the title and specifications of the EHR quality measure (ACO#11) to align with the QPP. We are changing the specifications of the EHR measure in order to assess the ACO on the degree of CEHRT use by all providers and suppliers that are participating in the ACO and that are designed as ECs under the QPP rather than narrowly focusing on the degree of CEHRT use by the primary care physicians participating in the ACO. Additionally, as noted above, although certain eligible clinicians are exempt from reporting under MIPS, we will require all ACO participant TINs, regardless of track, to submit data for the advancing care information performance category. Because the specifications for this measure are changing, we are finalizing our proposal to consider it a newly introduced measure and to set it at the level of complete and accurate reporting for the first 2 reporting periods for which reporting of the measures is required consistent with our existing rule at § 425.502(a)(4). Specifically the measure will be pay for reporting for all ACOs for the 2017 and 2018 performance years. We are also finalizing our proposal to include a requirement at § 425.506(e)(1) that during years in which ACO #11 is designated as a pay for reporting measure, in order for us to determine that an ACO has met requirements for complete and accurate reporting, at least one EC participating in the ACO must meet the reporting requirements under the Advancing Clinical Information performance category under the QPP. Beginning in the 2019 performance year, ACO #11 will be assessed according to the phase-in schedule noted in Table 42. We are finalizing our proposal to add § 425.506(e)(2) reiterating our current requirement at § 425.506(b) that during pay for performance years, assessment VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 of EHR adoption will be measured based on a sliding scale. Finally, we are finalizing a policy that any future changes to the CMS Web interface measures will be adopted through rulemaking for the QPP, and that such changes will be applicable to ACO quality reporting under the Shared Savings Program. 4. Incorporating Beneficiary Preference Into ACO Assignment a. Background Under section 1899(c) of the Act, beneficiaries are required to be assigned to an ACO participating in the Shared Savings Program based on the beneficiary’s utilization of primary care services rendered by physicians participating in the ACO. Medicare FFS beneficiaries do not enroll in the Shared Savings Program, and they retain the right to seek Medicare-covered services from any Medicare-enrolled provider or supplier of their choosing. No exclusions or restrictions based on health conditions or similar factors are applied in the assignment of Medicare FFS beneficiaries. Thus, a beneficiary’s choice to receive primary care services furnished by physicians and certain non-physician practitioners that are ACO professionals in the ACO, determines the beneficiary’s assignment to an ACO under the Shared Savings Program. As discussed in detail in the November 2011 Medicare Shared Savings Program final rule (76 FR 67851 through 67870), we finalized a claimsbased hybrid approach (called preliminary prospective assignment with retrospective reconciliation) for assigning beneficiaries to an ACO. Under this approach, beneficiaries are preliminarily assigned to an ACO at the beginning of a performance year to help the ACO refine its care coordination activities, but final beneficiary assignment is determined at the end of each performance year based on where beneficiaries chose to receive a plurality of their primary care services during the performance year. We adopted this policy because we believe that the methodology balances beneficiary freedom to choose healthcare providers under FFS Medicare with the ACO’s desire to have information about the FFS beneficiaries that are likely to be assigned at the end of the performance year. We believe this methodology accomplishes an appropriate balance because ACOs have the greatest opportunities to impact the quality and cost of the care of beneficiaries that choose to receive care from providers and suppliers participating in the ACO during the course of the year. PO 00000 Frm 00333 Fmt 4701 Sfmt 4700 80501 A beneficiary is eligible for assignment to an ACO under § 425.402 if the beneficiary had a primary care service with a physician who is an ACO professional, and thus, is eligible for assignment to the ACO under the statutory requirement to base assignment on utilization of primary care services furnished by physicians who are ACO professionals in the ACO. The beneficiary is then assigned to the ACO if the allowed charges for primary care services furnished to the beneficiary by all primary care physicians who are ACO professionals and non-physician ACO professionals in the ACO are greater than the allowed charges for such services provided by primary care physicians, nurse practitioners, physician assistants, and clinical nurse specialists who are ACO professionals in another ACO or not affiliated with any ACO and are identified by a Medicare-enrolled TIN. The second step of the assignment process considers the remainder of beneficiaries who have received at least one primary care service from an ACO physician with a specialty designation specified in § 425.402(c), but have received no services from a primary care physician, nurse practitioner, physician assistant, or clinical nurse specialist either inside or outside the ACO. These beneficiaries are assigned to the ACO if the allowed charges for primary care services furnished by physicians who are ACO professionals in the ACO with one of the specialty designations specified in § 425.402(c) are greater than the allowed charges for primary care services furnished by physicians with such specialty designations in another ACO or who are not affiliated with any ACO and are identified by a Medicareenrolled TIN. The ‘‘two step’’ assignment process simultaneously maintains the requirement to focus on primary care services in beneficiary assignment, while recognizing the necessary and appropriate role of specialists and non-physician practitioners in providing primary care services, such as in areas with primary care physician shortages. We revised this two-step claims based methodology in the June 2015 Final Rule as discussed in detail in that final rule (80 FR 32743 through 32758) and finalized a policy that would exclude services provided by certain physician specialties from step 2 of the assignment process. Additionally, in the June 2015 final rule, and in response to stakeholders’ suggestions, we implemented an option for ACOs to participate in a new twosided performance-based risk track, Track 3. Under Track 3, beneficiaries are E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80502 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations prospectively assigned to the ACO at the beginning of the performance year using the same two-step methodology, based on the most recent 12 months for which data are available, which reflects where beneficiaries have chosen to receive primary care services during that period. The ACO is held accountable for beneficiaries that are prospectively assigned to it for the performance year. Under limited circumstances, a beneficiary may be excluded from the prospective assignment list, for example, if the beneficiary enrolls in Medicare Advantage or no longer lives in the United States or U.S. territories and possessions, based on the most recent available data in our beneficiary records at the end of the performance year. A beneficiary is not excluded from the ACO’s prospective assignment list at the time of reconciliation because the beneficiary chose to receive most or all of his or her primary care during the performance year from providers and suppliers outside the ACO. Additionally, no beneficiaries are added to the ACO’s prospective assignment list at the time of reconciliation because a beneficiary chose to receive a plurality of his or her primary care during the performance year from ACO professionals participating in the ACO. Offering this alternative approach to beneficiary assignment responds to stakeholders who expressed a desire for a prospective assignment approach. These stakeholders believe prospective assignment will provide more certainty about the beneficiaries for whom the ACO will be held accountable during the performance year, thus enabling ACOs to redesign their patient care processes to more efficiently and effectively improve care for specific FFS beneficiaries rather than for all FFS beneficiaries. We note, however, that such certainty is limited because prospectively aligned beneficiaries who meet the exclusion criteria specified in § 425.401(b) during the performance year will not be aligned to the ACO at the end of the year; and further, as noted, beneficiaries remain free under FFS Medicare to choose the healthcare providers from whom they receive services. Because of uncertainty inherent in FFS Medicare where there is no beneficiary lock-in or enrollment, both patient advocacy groups and ACOs have expressed interest in and support for enhancing claims-based assignment of beneficiaries to ACOs by taking into account beneficiary attestation regarding the healthcare provider that they consider to be responsible for coordinating their overall care. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Stakeholders believe that incorporating this information and giving beneficiaries the opportunity to voluntarily ‘‘align’’ with the ACO in which their primary healthcare provider participates will improve the patient centeredness of the assignment methodology, and possibly reduce year-to-year ‘‘churn’’ in beneficiary assignment lists. The Center for Medicare & Medicaid Innovation (Innovation Center) began conducting a test of beneficiary attestation (which was referred to as voluntary alignment, a term that we will also use in the context of the Shared Savings Program) in the Pioneer ACO Model (see https://innovation.cms.gov/ initiatives/Pioneer-aco-model/) for the 2015 performance year. In the Pioneer ACO Model, for a Pioneer ACO to participate in voluntary alignment for performance year four (Pioneer ACO contract year 2015), the Pioneer ACO was required to submit an application to CMS in the summer of performance year three (Pioneer ACO contract year 2014) in which the ACO explained its plan for contacting beneficiaries. ACOs that were approved to participate in voluntary alignment were limited to contacting only those beneficiaries who appeared on the ACO’s then current (Pioneer ACO contract year 2014) and prior year’s (Pioneer ACO contract year 2013) prospective assignment lists. The ACOs sent letters to beneficiaries during a specified period asking the beneficiaries to confirm whether a listed Pioneer Provider/Supplier was their ‘‘main doctor.’’ The Innovation Center imposed certain safeguards on the participating ACOs to protect against actions that could improperly influence a beneficiary’s decision to complete the voluntary alignment form. The ACOs collected responses and turned them in to CMS in fall 2014, before the start of the 2015 performance year. Beneficiaries who confirmed a care relationship with the Pioneer Provider/ Supplier listed on the form, and met all other eligibility criteria for alignment, were prospectively aligned to the Pioneer ACO for the upcoming performance year, regardless of whether or not the practitioners participating in the Pioneer ACO rendered the plurality of the beneficiary’s primary care services during the alignment period. We refer to the procedures used under the Pioneer ACO Model as ‘‘the manual process.’’ Beneficiary and ACO participation in and experience with voluntary alignment under the Pioneer ACO Model to date has been mixed. Initially, beneficiaries often seemed confused about the implications of attesting to a care relationship with a Pioneer PO 00000 Frm 00334 Fmt 4701 Sfmt 4700 Provider/Supplier, based on the letters they received from Pioneer ACOs. Beneficiaries, for example, were often unfamiliar with the name of the Pioneer ACO. Although most Pioneer ACOs initially expressed high interest in beneficiary attestation, only half participated. Those that did not participate cited cost/benefit concerns. To address concerns expressed by ACOs and beneficiaries, the beneficiary attestation process was updated for the Pioneer ACO Model for PY 2016, with letters sent to beneficiaries during the summer of 2015. The new beneficiary attestation process includes updated language in the letters to beneficiaries and the attestation form to reduce beneficiary confusion. The letters now include plainer language, refer to a specific healthcare provider (in addition to the ACO), and Pioneer Providers/ Suppliers are permitted to discuss beneficiary attestation with beneficiaries and respond to questions. Other significant changes to the process are discussed in the proposed rule (81 FR 46432). We would note that for performance year five (Pioneer ACO contract year 2016), CMS changed the criteria to allow beneficiaries to voluntarily align into the performance year five aligned population if, among other requirements, the beneficiary had at least one paid claim for a Qualified E/M service, as defined in section 2.4 of Appendix C of the Pioneer ACO Agreement, furnished by a Pioneer Provider/Supplier on or after January 1, 2013. Based on some initial feedback, beneficiaries appear to be wary of the implications of designating a ‘‘main doctor’’ but are much more amenable to this type of information request when it comes from their physician or other practitioner, rather than from an ACO. However, information is not yet available on the impact or results of the modifications made to the beneficiary attestation process in the Pioneer ACO Model. The Next Generation ACO Model, which started operation on January 1, 2016, includes a beneficiary attestation policy similar to the updated manual process used under the Pioneer ACO Model. In order for a Medicare FFS beneficiary to be eligible to voluntarily align with a Next Generation ACO for performance year two (Next Generation ACO contract year 2017), the beneficiary must have had at least one paid claim for a qualified evaluation and management service on or after January 1, 2014, with an entity that was a Next Generation Participant during performance year one, among other requirements. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 To date, the Innovation Center has done limited analyses of the updated voluntary alignment process for effects on beneficiary engagement. Early experience indicates that for the participating ACOs, the number of prospectively assigned beneficiaries per ACO increased by 0.2 to 2.7 percent relative to the number of beneficiaries who would have otherwise been assigned. However, there is not yet enough information to determine whether beneficiary attestation under the manual process has had an impact on increasing certainty that a beneficiary will continue to choose to receive primary care or other services from practitioners participating in an ACO. We note that a similar manual process for sending letters to beneficiaries to provide them notice of their opportunity to opt out of claims data sharing was removed from the Shared Savings Program in the June 2015 final rule (see 80 FR 32743). This data sharing opt out process was removed because it was resource intensive and cumbersome for ACOs and CMS, and was confusing for beneficiaries. Instead, based on stakeholder comments, we finalized a process to provide beneficiaries the opportunity to decline claims data sharing directly by contacting the Medicare program (through 1–800– MEDICARE) rather than through the ACO. This more direct process started at the end of 2015 and so far appears to be working well, as it has not generated the number of complaints and concerns raised by the initial manual process. b. Proposals In the CY 2017 PFS proposed rule, we proposed to incorporate beneficiary attestation into the assignment of beneficiaries to ACOs participating in the Shared Savings Program, to supplement and enhance the current claims-based algorithm driven methodology as described in more detail in this section of the final rule. We indicated that we believed that it would be appropriate to implement, at a minimum, a voluntary alignment process under the Shared Savings Program that would be similar to the updated manual process we have implemented under the Pioneer ACO Model and that is used under the Next Generation ACO Model. Supplementing the current claims-based assignment process with a voluntary alignment process that incorporates beneficiary attestation about their ‘‘main doctor’’ could help ACOs to increase patient engagement, improve care management and health outcomes, and lower expenditures for beneficiaries, while VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 also helping to assure that beneficiaries are assigned to ACOs based on their relationship with providers that they believe to be truly responsible for their overall care. However, based on the valuable knowledge and experience we have gained through these Innovation Center models, we also expressed our concern that the manual voluntary alignment process used for the Pioneer ACO Model and that is used under the Next Generation ACO Model is resource intensive for both ACOs and CMS. Because of the limitations of the manual process, we proposed to implement an automated approach under which we could determine which healthcare provider a FFS beneficiary believes is responsible for coordinating their overall care (their ‘‘main doctor’’) using information that is collected in an automated and standardized way directly from beneficiaries (through a system established by us, such as MyMedicare.Gov), rather than requiring individual ACOs, ACO participants, or ACO professionals to directly obtain this information from beneficiaries annually and then communicate these beneficiary attestations to CMS. We proposed to make such an automated mechanism available for beneficiaries to voluntarily align with the provider or supplier that they believe is responsible for coordinating their overall care starting early in 2017, making it possible for us to use beneficiary attestations for assigning beneficiaries to ACOs in all three tracks for the 2018 performance year. We indicated that voluntary alignment data would be accessed and incorporated in the beneficiary assignment process each time we run the assignment algorithm. Under the automated approach, beneficiaries would be able to change their attestation about their ‘‘main doctor’’ at any time; however, we noted there may be a lag in using the information to update an ACO’s assignment list depending on the timing of the beneficiary’s updated designation and the track under which the ACO is participating. For example, as described in more detail in the CY 2017 PFS proposed rule, we proposed for Track 3 to incorporate the beneficiary’s designation annually prior to the start of the performance year at the time beneficiaries are prospectively assigned for that performance year. Further, we proposed to incorporate voluntary alignment for ACOs in Tracks 1 and 2 on a quarterly basis. We stated that we believe this policy would be appropriate because it aligns with the current timing for updates to Track 1 and 2 ACO assignment lists. We also proposed that if a beneficiary PO 00000 Frm 00335 Fmt 4701 Sfmt 4700 80503 voluntarily aligns with a provider or supplier whose services would be considered in assignment but who is not participating in an ACO as an ACO professional, the beneficiary would not be eligible for alignment to an ACO, even if the beneficiary would have otherwise been assigned to an ACO under our claims-based approach. We further proposed that, if an automated voluntary alignment process is not operationally ready for implementation by spring 2017, we would implement a manual voluntary alignment process for Track 3 ACOs only that builds upon experience previously gained under the Pioneer ACO Model. We explained our view that it would be appropriate to initially limit the manual process to ACOs participating in the Shared Savings Program under Track 3 because the process and timing for sending letters to beneficiaries regarding voluntary alignment under the manual process was developed specifically for prospective alignment under the Pioneer and Next Generation ACO Models and for a limited number of ACOs. We indicated that we believe implementing such a manual process for the hundreds of ACOs in Track 1 and Track 2 whose beneficiaries are preliminarily prospectively assigned with retrospective reconciliation would result in operational challenges for ACOs and CMS and could have unintended consequences that could be confusing or harmful to beneficiaries. We therefore proposed that if an automated process is not available to allow beneficiaries to designate their primary healthcare provider in time for the information to be considered for beneficiary assignment for PY 2018, we would implement an alternative manual voluntary alignment process (similar to the updated process used under the Pioneer ACO Model and described in more detail in the CY 2017 PFS proposed rule) to allow beneficiaries to align with Track 3 ACOs for the 2018 performance year and until such time as an automated process is available. Regardless of process (manual or automatic), we proposed to begin to incorporate beneficiary attestation into the assignment methodology for the Shared Savings Program, effective for assignment for the 2018 performance year. In brief, under the proposal, an eligible beneficiary would be assigned to an ACO based on the existing claimsbased assignment process unless the beneficiary has designated a primary care physician as defined at § 425.20, a physician with a specialty designation included at paragraph (c) of § 425.402, or a nurse practitioner, physician E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80504 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations assistant, or clinical nurse specialist as being responsible for their overall care. If an eligible beneficiary has made such a designation then the voluntary alignment would override the claimsbased assignment process if certain additional conditions are met. We proposed to revise the regulation governing the assignment methodology to add a new paragraph (e) to § 425.402 to address the voluntary alignment process. Further, we proposed to prohibit ACOs, ACO participants, ACO providers/suppliers, ACO professionals, and other individuals or entities performing functions or services related to ACO activities from directly or indirectly committing any act or omission, or adopting any policy that coerces or otherwise influences a Medicare beneficiary’s decision to designate or not designate an ACO professional as responsible for coordinating their overall care. We stated that to maintain flexibility for ACOs, ACO participants, ACO providers/suppliers, ACO professionals, beneficiaries, and CMS, we would intend to provide further operational details regarding the voluntary alignment process and the applicable implementation timelines through subregulatory guidance and other outreach activities. We solicited comments on this proposal, on the effective date, and on any other related issues that we should consider for the final rule to address issues related to voluntary alignment under the Shared Savings Program. In particular, we solicited comment on a variety of topics such as whether voluntary alignment is an appropriate mechanism for assigning beneficiaries retrospectively to an ACO, whether ACOs should be permitted to opt into or out of voluntary alignment, and whether we should exclude a beneficiary from an ACO’s prospective assignment list for a performance year if later during the performance year the beneficiary voluntarily aligns with a healthcare provider that is not an ACO professional in the ACO. We also solicited input on how concerns about ACO avoidance of at risk beneficiaries might be addressed. We also noted that under the proposed automated voluntary alignment process, a beneficiary’s designation of a healthcare provider as responsible for coordinating their overall care would stay in effect until the beneficiary chose to make a subsequent change. We indicated that under the proposal we would rely on appropriate information shared with beneficiaries at the point of care to ensure the beneficiary’s designation is kept up to date. We solicited comment VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 on this issue and our proposal under the automated system to continue to use a beneficiary’s designation of the healthcare provider responsible for coordinating their overall care until it is changed. We also welcomed suggestions regarding the operational process, implementation timelines, and related issues regarding the process for beneficiaries to voluntarily align with an ACO, including how to strengthen ACOs’ beneficiary engagement activities. We noted that although we proposed to establish a process under which beneficiaries may designate their ‘‘main doctor’’ who they consider responsible for coordinating their overall care, in establishing the operational processes for allowing beneficiaries to designate their ‘‘main doctor’’ we may not explicitly use the phrase ‘‘responsible for coordinating overall care’’ which we included in the proposed provision at § 425.402(e). Instead, we indicated that we may consider using other terminology based on focus group testing and/or other feedback from beneficiary representatives. We welcomed comments on what terminology would be preferable to ensure beneficiaries understand the significance of designating a provider or supplier as responsible for coordinating their overall care. We indicated we would consider such suggestions further as we develop program guidance and outreach activities for beneficiaries and ACOs. The following is a summary of the comments we received regarding voluntary alignment under the Shared Savings Program. Comment: Commenters supported the incorporation of voluntary alignment into the Shared Savings Program, citing the potential for patient engagement and a more stable beneficiary population. Commenters indicated that voluntary alignment is appropriate for ACOs that have either retrospective or prospective assignment. One commenter indicated that providing beneficiaries with the opportunity to align voluntarily with an ACO would balance the important considerations of beneficiaries’ freedom to choose their providers with ACOs’ interest in reducing patient turnover or ‘‘churn,’’ thus providing a more defined and stable beneficiary population. The commenter suggested this would allow ACOs to better target their efforts to manage and coordinate care for beneficiaries for whose care they will ultimately be held accountable. Another commenter suggested there are many times where for a particular year the current claims-based assignment algorithm may not be an PO 00000 Frm 00336 Fmt 4701 Sfmt 4700 accurate reflection of the beneficiary’s wishes and normal care pattern. Examples provided by this commenter of when the current algorithm could lead to inappropriate attribution were in cases where a beneficiary is dealing with an acute illness or condition requiring specialized evaluation and management services, is experiencing an extended time away from a primary residence, is a low health care utilizer where a single service plays a big role in determining the plurality of primary care services, or is switching primary care physicians when entering a skilled nursing facility (SNF). Commenters indicated that allowing beneficiaries to attest to the provider they believe is managing their care may also help increase beneficiary engagement in that care. A number of commenters expressed support for the proposal to exclude from alignment to an ACO any beneficiaries who voluntarily align with a healthcare provider who is not an ACO professional, as that respects the beneficiary’s preference. Response: We agree with stakeholders that supplementing the current assignment process with a voluntary alignment process that incorporates beneficiary attestation could help ACOs to increase patient engagement, improve care management and health outcomes, and lower expenditures for beneficiaries. Incorporating beneficiary attestation into the beneficiary assignment process could further strengthen the current claims-based, two-step assignment process. Supplementing the claims-based assignment algorithm with beneficiary attestations could further assure that beneficiaries are assigned to ACOs based on their relationship with providers and suppliers that they believe to be truly responsible for their overall care. Therefore, we plan to begin to incorporate beneficiary attestation into the assignment methodology for the Shared Savings Program, effective for assignment for the 2018 performance year. Based on comments, we will incorporate beneficiary attestation as proposed, with certain modifications as discussed in this section. Comment: Many of the commenters who supported voluntary alignment strongly urged CMS to prioritize development and timely implementation of an automated voluntary alignment process for attestation that minimizes the burden for beneficiaries and ACOs, and that would be accessible to ACOs in all three tracks beginning with performance year 2018. Some commenters further noted that the process should be automated from the beginning even if it were to E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations result in a delay in implementation. Commenters indicated that using an automated approach for voluntary alignment would be less burdensome for both ACOs and CMS, and would allow for more robust participation by ACOs and beneficiaries. Otherwise, the commenters believe that differences in how beneficiary attestation is handled for the three tracks would cause unnecessary confusion for beneficiaries. These commenters indicated that the manual voluntary alignment approach used under the Pioneer and Next Generation ACO Models has been very cumbersome and confusing, and therefore, has been pursued by only about one-half of eligible ACOs because of cost/benefit concerns. One commenter expressed concern that a manual process would increase the likelihood of errors. Response: We agree with the commenters who urge us to prioritize development and implementation of an automated voluntary alignment process for all three ACO tracks rather than to develop concurrently a manual process limited to Track 3 ACOs that would be implemented only in the event that an automated system for all three Tracks is not available. We also agree the process should be automated from the beginning even if it were to result in a delay in implementation because a manual process might increase the likelihood of errors, and an automated approach would be more efficient for ACOs and their ACO participants, ACO providers/ suppliers, and ACO professionals, as well as for beneficiaries and CMS. Based on valuable experience gained through development and testing of beneficiary attestation processes through the Pioneer ACO Model, the manual process developed thus far appears to be resource intensive for both ACOs and CMS and may not significantly impact beneficiary assignment to ACOs. Comment: Some commenters raised concerns regarding the potential burden of a voluntary alignment process (whether manual or automated) and suggested that further testing be done prior to implementation. For example, one commenter suggested testing voluntary alignment under Track 1 on a small scale to assess whether it impacts ACO performance and beneficiary health. Another commenter suggested that voluntary alignment should not be implemented unless there is a tested automated process. One commenter supported the testing of both of the manual and automated models to determine which approach presents lower burden for providers, CMS, and, most importantly, Medicare beneficiaries. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Response: We believe that the development and testing of manual beneficiary attestation processes through the Pioneer ACO Model has been very valuable, and, along with the very helpful public comments received in response to our proposals, provides a good foundation for development and implementation of an automated process. Other than our intent to determine appropriate terminology through focus groups and to perform other systems quality assurance testing and the like, we do not believe additional testing of the automated process is needed because it will incorporate the same or similar policies as the manual process that has already undergone testing in Innovation Center models. Therefore, we will prioritize the development of procedures to implement voluntary alignment using an automated process with the intent of incorporating beneficiary attestations into the claims-based assignment algorithm beginning with the 2018 performance year. We do not intend to develop a manual beneficiary attestation process under the Shared Savings Program. Comment: A few commenters suggested that ACOs be permitted to opt in or out of the use of beneficiary designations in assignment. In contrast, some other commenters disagreed that ACOs should be given this option in order to ensure all beneficiaries have the opportunity to be aligned with the ACO in which the provider or supplier that the beneficiary considers responsible for their overall care participates. Response: We agree with the commenters who suggested it would be inappropriate to permit ACOs to opt into or out of voluntary alignment under an automated voluntary alignment approach. We agree that, to the extent feasible, all beneficiaries would benefit by being provided with the option of designating a healthcare provider responsible for their overall care. Comment: One commenter supported voluntary alignment, but urged that beneficiary designations only be considered, and used to override otherwise applicable assignment rules, for beneficiaries who have been assigned to an ACO under the claimsbased assignment algorithm. Response: We disagree. We believe that assignment to ACOs and beneficiary engagement under the Shared Savings Program would be better enhanced by taking into account all beneficiary attestations and not just the beneficiary attestations for those who would have otherwise been assigned to an ACO under the claims-based assignment algorithm. PO 00000 Frm 00337 Fmt 4701 Sfmt 4700 80505 Comment: Some commenters expressed support for a quarterly process to incorporate voluntary alignment for Track 1 and 2 ACOs, and for keeping beneficiaries who are prospectively assigned to a Track 3 ACO but designate a provider or supplier outside of the ACO as responsible for their overall care assigned to the ACO until the end of the benchmark or performance year. A few other commenters supported the proposal to incorporate the beneficiary attestations annually for Track 3 ACOs at the time beneficiaries are prospectively assigned for a performance year, but for Track 1 and 2 ACOs, the commenters recommended changes to the proposal to incorporate voluntary alignment on a quarterly basis. For Track 1 and 2 ACOs, the commenter suggested that only beneficiary attestations made in the previous year or the during the first 3 months of the performance year should be effective for that performance year; voluntary alignments made later in the performance year would not go into effect until the next performance year. The commenter indicated this timing would allow ACOs to identify new voluntarily aligned beneficiaries on the quarterly reports beginning with the first or second quarter reports, thus enabling the ACO to identify and focus efforts on these beneficiaries. The commenter indicated this would enable ACOs to be able to better target care for beneficiaries likely to be retrospectively assigned to the ACO in order to make a meaningful difference for the performance year. Another commenter supported keeping a beneficiary who has voluntarily aligned with a Track 1 or Track 2 ACO assigned to that ACO for the entire performance year, even if the beneficiary later designates a provider or supplier outside the ACO as responsible for their overall care in the middle of the performance year, because it would avoid adding confusion in the administration of the program. Similarly, another commenter suggested that variations in the policies regarding voluntary alignment by track could lead to confusion for ACOs and difficulty in tracking the effect of voluntary alignment on assignment, and therefore, recommended that, for all three tracks, voluntary alignment should be based simply on the most current choice of primary care physician at the end of the performance year. Another commenter expressed concerns that voluntary alignment under a retrospective assignment methodology (Tracks 1 and 2) could increase adverse incentives for ACOs to selectively encourage some beneficiaries E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80506 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations to stay aligned to the ACO and others to leave it. For example, the commenter suggested that a beneficiary having a hip replacement in the next few months might be inappropriately encouraged to voluntarily align with a healthcare provider outside the ACO to avoid having the high cost of a hip replacement included in the ACO’s expenditures. Response: We proposed to incorporate voluntary alignment for ACOs in Tracks 1 and 2 on a quarterly basis because this approach aligns with the current timing for updates to the assignment lists for ACOs in Tracks 1 and 2. However, following further consideration and based on our review of the comments on this issue, we now agree with the commenters who indicated that incorporating beneficiary attestation less frequently under Tracks 1 and 2 could help ACOs to better focus their efforts to target care for beneficiaries likely to be assigned to the ACO and make a meaningful difference for the performance year. Further, we believe that incorporating beneficiary attestations annually, prior to the beginning of a performance year, for all three tracks, rather than incorporating beneficiary attestations quarterly for Tracks 1 and 2, could be less confusing for ACOs and beneficiaries. This timeline aligns with other annual beneficiary election/designation processes such as Medicare’s annual enrollment period which would simplify our education and outreach efforts. This approach might also at least partially address the commenter’s concern that voluntary alignment under Tracks 1 and 2 could increase possible adverse incentives for ACOs to encourage some beneficiaries to stay aligned to the ACO and others to leave it. We believe such adverse incentives under voluntary alignment for Tracks 1 and 2 would be reduced if we were to incorporate beneficiary attestation annually, as we proposed for Track 3 ACOs. Accordingly, we are modifying our proposed policy in order to take beneficiary attestations into account and to voluntarily align beneficiaries annually and prospectively to ACOs participating in all tracks at the beginning of each performance year, provided the beneficiary is eligible for assignment to the ACO. Although we assign beneficiaries to ACOs under Tracks 1 and 2 using a preliminary prospective with retrospective reconciliation approach for purposes of the claims-based assignment methodology, when incorporating beneficiary voluntary alignment information, we would assign VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 beneficiaries that have attested to a care relationship with an ACO provider/ supplier to the ACO at the beginning of each performance year and these beneficiaries would ‘‘stick’’ on the assignment list for the full performance year for ACOs under all tracks. In other words, beneficiaries who voluntarily align to an ACO participating in Track 1 or Track 2 would be prospectively assigned to that ACO for the entire performance year even if they would not be retrospectively assigned to the ACO under the claims-based assignment methodology or later align with another provider or supplier outside the ACO during the performance year (we note that in such cases, the change in designation would be taken into account at the beginning of the next performance year). In brief, if a beneficiary designates an ACO professional that they believe is responsible for coordinating their overall care as their ‘‘main doctor’’, the beneficiary will be assigned to the ACO in which that ACO professional is participating, as long as the ACO professional’s specialty is used in assignment and the beneficiary has received at least one primary care service from a physician in that ACO and does not meet the criteria for exclusion. If these criteria are met, the beneficiary’s selection of his or her ‘‘main doctor’’ and, ultimately, assignment to the ACO would take precedence over any assignment to an ACO based on claims. For example, if a beneficiary selects a physician in ACO 1 as his or her main doctor, the beneficiary’s designation would take precedence over claims-based assignment, as long as the physician’s specialty is used in assignment and the beneficiary received a primary care service from a physician in ACO 1. This will be the case even if the beneficiary would have otherwise been assigned to ACO 2 through claims-based assignment. However, if a beneficiary designates a physician or practitioner in an ACO and the conditions for assignment are not met, then the claims-based assignment methodology will be used to determine the beneficiary’s assignment. For example, if a beneficiary designates a physician in ACO 1, he or she could not be assigned to ACO 1 based on the attestation if he or she did not receive at least one primary care service from a physician in ACO 1. Similarly, if a beneficiary designates an ACO professional in ACO 1 whose services are not used in assignment, the claimsbased assignment methodology would be used to determine whether the beneficiary will be assigned to ACO 1, PO 00000 Frm 00338 Fmt 4701 Sfmt 4700 another ACO, or to no ACE. Relatedly, if a beneficiary designates a practitioner with a specialty used in assignment and the practitioner is not affiliated with an ACO, then the beneficiary will not be eligible for assignment to an ACO, even if the beneficiary would have otherwise been assigned to an ACO through claims-based assignment. Finally, we also clarify that consistent with § 425.400(a)(1), the assignment methodology described under § 425.402 also applies to benchmarking years. Accordingly, when determining beneficiary assignment for a benchmark year, we will incorporate beneficiary designations that were in place during the assignment window for the benchmarking year. Comment: One commenter supported aligning beneficiaries that choose a ‘‘main doctor’’ indefinitely until the beneficiary changes his or her designation, drawing an analogy with the way beneficiaries who select an MA Plan continue under that MA Plan until the beneficiary chooses otherwise. Another commenter expressed concern that this policy could result in an ACO being inappropriately held responsible for the costs of a beneficiary’s care even in cases where the ACO no longer has a relationship with the beneficiary and has not furnished services to that beneficiary for years. The commenter recommended that voluntary alignment override the existing assignment methodology only when a beneficiary has at least one qualified primary care service during the previous or current performance year with an ACO professional that would be considered under Step 1 or Step 2 of the Shared Savings Program assignment methodology (based on the existing services used for Shared Savings Program assignment). Another commenter recommended that if the beneficiary does not update their selection annually, reverting to the claims-based alignment should be the default because that will be updated regularly as beneficiaries express their preference through their healthcare provider visits. Response: We continue to believe that it would be appropriate, under an automated voluntary alignment process, for a beneficiary’s designation of a healthcare provider as being responsible for coordinating their overall care to stay in effect until the beneficiary voluntarily changes his or her designation. We intend to remind beneficiaries to make a selection and update it annually; however, we believe it would be burdensome to require beneficiaries make this designation each year. We also agree that it would be E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations inappropriate for an ACO to be held responsible for the costs of a beneficiary’s care in cases where the ACO no longer has a relationship with the beneficiary and has not furnished services to that beneficiary for years. However, we believe the voluntary alignment policy directly addresses this concern because, under the proposal, beneficiaries that have voluntarily aligned with an ACO by designating an ACO professional whose services are used in assignment as responsible for coordinating their overall care would be added to the ACO’s list of assigned beneficiaries for a performance year or benchmark year only if certain conditions are met. One of these required conditions is that a beneficiary must have had at least one primary care service with a physician who is an ACO professional in the ACO and who is a primary care physician as defined under § 425.20 or who has one of the primary specialty designations included in § 425.402(c). In this final rule, we are amending the proposed regulations text at § 425.402(e)(2)(i) to clarify that in order for a beneficiary to be eligible for assignment under voluntary alignment this service must have been received during the ‘‘assignment window’’ for the applicable benchmark or performance year as defined at § 425.20. This requirement will ensure that a beneficiary cannot remain aligned to an ACO for an extended period if the beneficiary’s designation is outdated and the beneficiary is no longer receiving services from any ACO providers/suppliers in the ACO. Comment: Several commenters raised specific concerns over the use of certain phrases such as ‘‘main doctor’’ and recommended testing such terminology with beneficiaries through focus groups or other methods. For example, some commenters believe the term ‘‘main doctor’’ is too ambiguous. Other commenters requested that CMS revise physician-centric language such as ‘‘main doctor’’ to avoid miscommunication given that certain non-physician practitioners are also included in the assignment process. A commenter suggested that CMS should also work with other payers to align terms. Response: We appreciate receiving the helpful comments regarding what terminology would be preferable to ensure beneficiaries understand the significance of designating a provider or supplier as responsible for coordinating their overall care. We will consider these suggestions further as we implement voluntary alignment and develop program guidance and outreach activities for beneficiaries and ACOs. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 We note that the terms used in the Innovation Center models have undergone beneficiary focus group testing. However, we may conduct further beneficiary focus group testing if necessary to ensure the terms used are appropriate and understandable to beneficiaries. Comment: One commenter recommended EHR-compatible transfer of information about beneficiary attestations. Response: We are not entirely certain what the commenter had in mind, but we believe it is a request that we consider building in a method to electronically alert a practitioner that the beneficiary has designated him or her as their ‘‘main doctor. We agree that such a feedback loop could be desirable to encourage and enhance the relationship beneficiaries have with their practitioners. In the future we may consider such possibilities but at this time we plan to prioritize development and implementation of an automated voluntary alignment process within MyMedicare.gov, as discussed in this section. Comment: Several commenters requested more detail regarding the process and timing for beneficiaries to designate their ‘‘main doctor’’ and how ACOs would be educated about the voluntary alignment process and applicable program requirements. Response: We will notify beneficiaries of this opportunity and encourage them to designate their ‘‘main doctor’’ or primary healthcare provider responsible for coordinating their overall care and explain how to do this through beneficiary outreach materials such as through the Medicare & You Handbook (see https://www.medicare.gov/ medicare-and-you/medicare-andyou.html), the required Shared Savings Program notifications under § 425.312, and/or other beneficiary outreach activities or materials. We intend to issue, either directly or indirectly through template language (for example, template language that would be incorporated into the ACO’s required written notifications under § 425.312), written communications to beneficiaries detailing the automated process for voluntary alignment. The designation must be made in the form and manner and by a deadline determined by CMS. Additionally, as noted above, in the proposed rule we stated that to maintain flexibility for ACOs, ACO participants, ACO providers/suppliers, ACO professionals, beneficiaries, and CMS, we would intend to provide further operational details regarding the voluntary alignment process and the applicable implementation timelines PO 00000 Frm 00339 Fmt 4701 Sfmt 4700 80507 through subregulatory guidance and other outreach activities. We anticipate ensuring ACO and practitioner understanding and compliance with program rules using typical methods, for example, through guidance, programmatic webinars, newsletter articles, email notifications, and communications with the ACO’s designated CMS coordinator. We intend to monitor beneficiary use of the voluntary alignment process and the ACO’s compliance with program rules. Comment: One commenter expressed concerns about using MyMedicare.gov or 1–800–Medicare as the only avenue to collect beneficiary attestations, questioning how frequently beneficiaries are actively engaging with Medicare through these vehicles. The commenter also recommended that the designation of a ‘‘main doctor’’ should be independent of the ‘‘favorites’’ indication in MyMedicare.gov, suggesting that being designated as a ‘‘favorite’’ is not a good indicator of being a ‘‘main doctor’’. Response: The operational process for beneficiaries to voluntarily align with an ACO by designating a ‘‘main doctor’’ or primary healthcare provider responsible for coordinating their overall care will be incorporated into existing processes to the extent feasible. As we indicated in the proposed rule, examples by which such a process could be automated include using MyMedicare.gov, 1–800–Medicare, or Physician Compare. We anticipate that for the first year of the automated process, we will enable beneficiaries to voluntarily align with an ACO by designating a ‘‘main doctor’’ or primary healthcare provider responsible for coordinating their overall care through MyMedicare.gov. Beneficiaries or their representatives that call 1–800– Medicare during the early implementation of the automated voluntary alignment process in order to designate a ‘‘main doctor’’ or primary healthcare provider will be provided with information about how to make the designation in MyMedicare.gov. Subsequently, we plan to consider expanding the use of 1–800–Medicare as a way for beneficiaries to make a designation and in order to provide additional avenues or technical assistance to support beneficiaries in making a designation. As we and our stakeholders gain experience with the automated process, we intend to continue to refine and build upon the automated process. More information will be forthcoming as we gather additional input from beneficiaries, ACOs, and other stakeholders. We agree that designating ‘‘favorite’’ providers is E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80508 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations not the same as designating a ‘‘main doctor’’ and that these two things should be independent. Comment: A few commenters suggested beneficiaries also be offered the opportunity to attest in person, during a visit to an ACO provider/ supplier, if that is their preference. Response: We are not providing an option for beneficiaries to attest in person during a visit with an ACO provider/supplier or other healthcare provider because we are concerned that such an option would lead to additional program complexity and could defeat the purpose of having an automated process that is designed to relieve stakeholder burden experienced when such designations are made manually made at the point of care. However, as noted above in this section, we plan to provide written educational material and template language that ACOs and healthcare providers can use at the point of care to inform and educate beneficiaries about the ability to designate a healthcare provider in MyMedicare.gov as responsible for the beneficiary’s overall care. Comment: Other commenters questioned whether seniors would keep their ‘‘main doctor’’ attestation up to date given their varied and often unpredictable care needs, and therefore, asked that CMS explicitly allow physicians and other appropriately qualified individuals involved with patient care to assist beneficiaries in keeping their ‘‘main doctor’’ attestation up to date. Response: We believe it is important to promote engagement and discussion between beneficiaries and their healthcare providers. ACOs, ACO participants, ACO providers/suppliers, and ACO professionals may provide a beneficiary with accurate descriptive information about the potential patient care benefits of designating an ACO professional as responsible for the beneficiary’s overall care. However, we do not intend for the voluntary alignment process to be used as a mechanism for ACOs (or their ACO participants, ACO providers/suppliers, ACO professionals or other individuals or entities performing functions or services on behalf of the ACO) to target beneficiaries for whose treatment the ACO might expect to earn shared savings, or to avoid those for whose treatment the ACO might be less likely to generate shared savings. Comment: One commenter recommended that rather than asking beneficiaries to designate a specific doctor, that they be asked to designate the ACO they generally identify as where they receive health services VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 because this approach better aligns with ACO-level accountability and avoids some of the confusion over ‘‘main doctor.’’ Another commenter suggested beneficiaries should be provided information about the process for opting-out of alignment with an ACO. Response: Our experience with the Pioneer ACO Model indicates that beneficiaries are less likely to identify with an ACO as compared to an individual healthcare provider; that is, when given the option, beneficiaries are more likely to align with their practitioner, not with an organization. Accordingly, we continue to believe it is appropriate under an automated system for beneficiaries to be given the option to voluntarily align with an individual healthcare provider rather than to an ACO with which the beneficiary may not be familiar. For the same reason, we do not believe it is necessary or appropriate to give beneficiaries the option of ‘‘opting out’’ of assignment to an ACO. The intent of the voluntary alignment process is to seek to improve beneficiary engagement with a selected practitioner that he/she designates as being responsible for his/her overall care, regardless of whether the practitioner is participating in an ACO. Comment: One commenter recommended information be provided to an ACO as soon as the attestation is updated within the CMS designated system when one of its assigned beneficiaries designates a new ‘‘main doctor.’’ The commenter believed this notification would allow ACOs time to make any updates to their management of their ‘‘participation programs’’ and properly manage their patient populations, and it would give them guidance on how to set up for their next performance year. Response: We are considering possible ways of notifying ACOs that a beneficiary has designated one of their ACO providers/suppliers as their ‘‘main doctor;’’ however, we note that the under the modified policy we are adopting in this final rule, ACOs in all tracks will have advanced notice when a beneficiary is assigned to them based on the voluntary alignment methodology because such beneficiaries will be prospectively assigned to the ACO for that performance year and will appear on the ACO’s assignment list at the beginning of the performance year. Comment: A commenter suggested CMS should provide beneficiaries with a list of providers that they have seen recently (based on claims) to simplify their selection and help them accurately select their ‘‘main doctor.’’ The commenter believed this approach would mitigate the risk of beneficiaries PO 00000 Frm 00340 Fmt 4701 Sfmt 4700 accidentally selecting doctors with similar names, for example. Response: We agree this information could be useful for beneficiaries. This is a feature that already exists in MyMedicare.gov where beneficiaries can access their claims information which includes information such as the name of the practitioner that submitted the claim. We note this information can be used currently to build the beneficiary’s ‘‘favorites’’ list. Similarly, the beneficiary could use the information to assist in making their ‘‘main doctor’’ designation. Comment: A commenter suggested an alternative approach for assigning beneficiaries to ACOs using claims submitted by providers and suppliers using only the codes for initial Medicare visits, annual wellness visits, chronic care management, and advanced care planning; the commenter believed this alternative approach would be less cumbersome for CMS to administer and a simpler and more streamlined approach for beneficiaries and the primary care physician. Response: We will continue to consider suggestions that might further improve the beneficiary assignment methodology. However, we are giving priority to supplementing the current claims-based assignment process with a voluntary alignment process that incorporates beneficiary attestation about their ‘‘main doctor’’ which we believe will more directly help ACOs to increase patient engagement, improve care management and health outcomes, and lower expenditures for beneficiaries. The process may also be advantageous for beneficiaries by improving engagement between the beneficiary and the practitioner they believe is primarily responsible for their overall care. Comment: A commenter suggested CMS provide incentives for beneficiaries who designate an ACO professional within the ACO. Response: We are unclear as to what incentives this commenter was suggesting but we would note that we do not believe we have authority under the Shared Savings Program to provide incentives for beneficiaries who designate an ACO professional within the ACO as their ‘‘main doctor.’’ Further, the ACO, ACO participants, ACO providers/suppliers, ACO professionals, and other individuals and entities performing functions and services related to ACO activities are prohibited from providing or offering gifts or other remuneration to Medicare beneficiaries as inducements to influence a Medicare beneficiary’s decision to designate or not designate an E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations ACO professional as responsible for coordinating their overall care. Comment: We received several comments supporting the proposals to prohibit ACOs from directly or indirectly influencing a Medicare beneficiary’s decision to designate or not designate an ACO professional as responsible for coordinating their overall care. The commenters indicated this could help ensure that ACOs do not ‘‘cherry-pick’’ the healthiest patients or ‘‘lemon-drop’’ patients with certain complex, costly diseases. Some commenters also urged CMS to put in place mechanisms to monitor the impact of voluntary alignment on the composition of ACOs’ assigned beneficiary populations, especially with regard to any changes in the prevalence of patients with certain complex, costly diseases within a specific ACO. Response: We intend to monitor the implementation of voluntary alignment. As noted above in this section, we emphasize that we do not intend for the voluntary alignment process to be used as a mechanism for ACOs (or their ACO participants, ACO providers/suppliers, ACO professionals or other individuals or entities performing functions or services on behalf of the ACO) to target beneficiaries for whose treatment the ACO might expect to earn shared savings, or to avoid those for whose treatment the ACO might be less likely to generate shared savings. However, we believe it is important to promote engagement and discussion between beneficiaries and their healthcare providers. Therefore ACOs, ACO participants, ACO providers/suppliers, and ACO professionals are not prohibited from providing a beneficiary with accurate descriptive information about the potential patient care benefits of designating an ACO professional as responsible for the beneficiary’s overall care. Final Action: We are finalizing our proposal to incorporate beneficiary preference into ACO assignment as proposed with two modifications as noted above. In addition, we are making a minor editorial revision to paragraph (b) of § 425.402 in order to more clearly identify beneficiaries assigned by the claims-based assignment methodology. • We no longer intend to develop a manual voluntary alignment process as an alternative for ACOs participating in Track 3 in the event an automated process is not ready for performance year 2018, and instead will focus on developing and implementing an automated voluntary alignment process with the intent of incorporating beneficiary designations into the current claims-based assignment algorithm VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 beginning with the 2018 performance year. If an automated system is not available during the assignment window for the 2018 performance year, then voluntary alignment would not be used for performance year 2018. • We are modifying our proposed policy to incorporate new or revised beneficiary attestations and align such beneficiaries to ACOs in Tracks 1 and 2 on a quarterly basis and instead will incorporate these updates and align such beneficiaries prospectively for all tracks at the beginning of each performance and benchmark year, provided the beneficiary is eligible for assignment to the ACO in which their designated ‘‘main doctor’’ is participating. • We are modifying § 425.402, paragraph (b), by removing the phrase ‘‘beneficiaries to an ACO:’’ and adding in its place the phrase ‘‘beneficiaries to an ACO based on available claims information.’’ This revision is necessary to ensure understanding that the procedure described under paragraph (b) is based on claims data, not on other data that may be available (such as voluntary alignment data). We are also revising the regulations governing the assignment methodology to amend § 425.402(b) and add a new paragraph (e) to § 425.402. Beginning in performance year 2018, if a system is available to allow beneficiaries to designate a provider or supplier as responsible for coordinating their overall care and for CMS to process the designation electronically, beneficiaries that have voluntarily aligned with an ACO by designating an ACO professional whose services are used in assignment as responsible for coordinating their overall care will be added to the ACO’s list of assigned beneficiaries, for a benchmark or performance year under the following conditions: • The beneficiary must have had at least one primary care service during the assignment window as defined under § 425.20 with a physician who is an ACO professional in the ACO and who is a primary care physician as defined under § 425.20 of this subpart or who has one of the primary specialty designations included in § 425.402(c). • The beneficiary must meet the assignment eligibility criteria established in § 425.401(a), and must not be excluded by the criteria at § 425.401(b). Such exclusion criteria shall apply to all tracks for purposes of alignment based on beneficiary designation information. • The beneficiary must have designated an ACO professional who is a primary care physician as defined at PO 00000 Frm 00341 Fmt 4701 Sfmt 4700 80509 § 425.20 of this part, a physician with a specialty designation included at § 425.402(c) of this subpart, or a nurse practitioner, physician assistant, or clinical nurse specialist as responsible for their overall care. • The designation must be made in the form and manner and by a deadline determined by CMS. In contrast, if a beneficiary designates a provider or supplier outside the ACO, who is a primary care physician as defined at § 425.20 of this part, a physician with a specialty designation included at § 425.402(c), or a nurse practitioner, physician assistant, or clinical nurse specialist, as responsible for coordinating their overall care, the beneficiary will not be added to the ACO’s list of assigned beneficiaries for a performance year or benchmark year, even if the beneficiary would otherwise be included in the ACO’s assigned beneficiary population under the assignment methodology in § 425.402(b). Further, we are finalizing our proposal that the ACO and its ACO participants, ACO providers/suppliers, ACO professionals, and other individuals or entities performing functions or services related to ACO activities are prohibited from providing or offering gifts or other remuneration to Medicare beneficiaries as inducements to influence a Medicare beneficiary’s decision to designate or not designate an ACO professional under § 425.402(e). The ACO, ACO participants, ACO providers/suppliers, ACO professionals, and other individuals or entities performing functions or services related to ACO activities must not directly or indirectly, commit any act or omission, nor adopt any policy that coerces or otherwise influences a Medicare beneficiary’s decision to designate or not designate an ACO professional as responsible for coordinating their overall care, including but not limited to the following: • Offering anything of value to the Medicare beneficiary as an inducement to influence the Medicare beneficiary’s decision to designate or not to designate an ACO professional as responsible for coordinating their overall care. Any items or services provided in violation of this prohibition will not be considered to have a reasonable connection to the medical care of the beneficiary, as required under § 425.304(a)(2). • Withholding or threatening to withhold medical services or limiting or threatening to limit access to care. We will provide further operational details regarding the voluntary alignment process and the applicable E:\FR\FM\15NOR2.SGM 15NOR2 80510 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations implementation timelines through subregulatory guidance and other outreach activities. mstockstill on DSK3G9T082PROD with RULES2 3. SNF 3-Day Rule Waiver Beneficiary Protections a. Background The Medicare SNF benefit is for beneficiaries who require a short-term intensive stay in a SNF, requiring skilled nursing, or skilled rehabilitation care, or both. Under section 1861(i) of the Act, beneficiaries must have a prior inpatient hospital stay of no fewer than 3 consecutive days in order to be eligible for Medicare coverage of inpatient SNF care. In the June 2015 final rule (80 FR 32804 through 32806), we provided ACOs participating in Track 3 with additional flexibility to attempt to increase quality and decrease costs by allowing these ACOs to apply for a waiver of the SNF 3-day rule for their prospectively assigned beneficiaries when they are admitted to certain ‘‘SNF affiliates,’’ that is, SNFs with whom the ACO has executed SNF affiliate agreements. (See § 425.612(a)(1)). Waivers are effective upon CMS notification of approval for the waiver or the start date of the ACO’s participation agreement, whichever is later. (See § 425.612(c)). We stated in the June 2015 final rule that the SNF 3-day rule waiver would be effective for services furnished on or after January 1, 2017. Program requirements for this waiver are codified at § 425.612. These requirements are primarily based on criteria previously developed under the Pioneer ACO Model. Specifically, under § 425.612(a)(1), we waive the requirement in section 1861(i) of the Act for a 3-day inpatient hospital stay prior to a Medicare covered post-hospital extended care service for eligible beneficiaries prospectively assigned to ACOs participating in Track 3 that have been approved to implement the waiver that receive otherwise covered posthospital extended care services furnished by an eligible SNF that has entered into a written agreement to partner with the ACO for purposes of this waiver. All other provisions of the statute and regulations regarding Medicare Part A post-hospital extended care services continue to apply. We believe that clarity regarding whether a waiver applies to SNF services furnished to a particular beneficiary is important to help ensure compliance with the conditions of the waiver and also improve our ability to monitor waivers for misuse. Therefore, in the June 2015 final rule, we limited the waiver to ACOs in Track 3 because under the prospective assignment VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 methodology used in Track 3, beneficiaries are assigned in advance to the ACO for the entire performance year (unless they meet any of the exclusion criteria under § 425.401(b) during the performance year), so it will be clearer to a Track 3 ACO whether the waiver applies to SNF services furnished to a particular beneficiary than it would be to an ACO in Track 1 or 2, where beneficiaries are assigned using a preliminary prospective assignment methodology with retrospective reconciliation (80 FR 32804). An ACO’s use of the SNF 3-day rule waiver will be associated with a distinct and easily identifiable event, specifically, admission of a prospectively assigned beneficiary to a previously identified SNF affiliate without prior inpatient hospitalization or after an inpatient hospitalization of fewer than 3 days. Based on our experiences under the Pioneer ACO Model, and in response to comments, we established certain requirements under § 425.612 for ACOs, ACO providers/suppliers, SNF affiliates, and beneficiaries with respect to the SNF 3-day rule waiver under the Shared Savings Program. All ACOs electing to participate in Track 3 will be offered the opportunity to apply for a waiver of the SNF 3-day rule for their prospectively assigned beneficiaries at the time of their initial application to participate in Track 3 of the program and annually thereafter while participating in Track 3. We began accepting the first SNF 3-day rule waiver applications from Track 3 ACOs this past summer. To be eligible to receive covered services under the SNF 3-day rule waiver, a beneficiary must be prospectively assigned to the ACO for the performance year in which he or she is admitted to the SNF affiliate, may not reside in a SNF or other long-term care setting, must be medically stable and have an identified skilled nursing or rehabilitation need that cannot be provided as an outpatient, and must meet the other requirements set forth at § 425.612(a)(1)(ii). For a SNF to be eligible to partner with ACOs for purposes of the waiver, the SNF must have an overall quality rating of 3 or more stars under the CMS 5 Star Quality Rating System, and must sign a written agreement with the ACO, which we refer to as the ‘‘SNF affiliate agreement,’’ that includes elements determined by CMS, including: A clear indication of the effective dates of the SNF affiliate agreement; agreement to comply with Shared Savings Program rules, including but not limited to those specified in the participation agreement between the ACO and CMS; agreement to validate beneficiary eligibility to PO 00000 Frm 00342 Fmt 4701 Sfmt 4700 receive covered SNF services under the waiver prior to admission; remedial processes and penalties for noncompliance with the terms of the waiver, and other requirements set forth at § 425.612(a)(1)(iii). The SNF affiliate agreement must include these elements to ensure that the SNF affiliate understands its responsibilities related to implementation of the SNF 3-day rule waiver. We indicated in the June 2015 final rule that the SNF 3-day rule waiver would be effective no earlier than January 1, 2017; thereafter, the waiver will be effective upon CMS notification to the ACO of approval for the waiver or the start date of the ACO’s participation agreement, whichever is later, and will not extend beyond the term of the ACO’s participation agreement. We also indicated in the June 2015 final rule that we established the timeline for implementation of the SNF 3-day rule waiver to allow for development of additional subregulatory guidance, including necessary education and outreach for ACOs, ACO participants, ACO providers/suppliers, and SNF affiliates. We noted that we would continue to evaluate the waiver of the SNF 3-day rule, including further lessons learned from Innovation Center models in which a waiver of the SNF 3-day rule is being tested. We indicated that in the event we determined that additional safeguards or protections for beneficiaries or other changes were necessary, such as to incorporate additional protections for beneficiaries into the ACO’s participation agreement or SNF affiliate agreements, we would propose the necessary changes through future rulemaking. In considering additional beneficiary protections that may be necessary to ensure proper use of the SNF 3-day rule waiver under the Shared Savings Program, we note that there are existing, well established payment and coverage policies for SNF services based on sections 1861(i), 1862(a)(1), and 1879 of the Act that include protections for beneficiaries from liability for certain non-covered SNF charges. These existing payment and coverage policies for SNF services continue to apply to SNF services furnished to beneficiaries assigned to ACOs participating in the Shared Savings Program, including services furnished pursuant to the SNF 3-day rule waiver. (For example, see the Medicare Claims Processing Manual, Chapter 30—Financial Liability Protections, section 70, available at https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/ E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 Downloads/clm104c30.pdf; Medicare Coverage of Skilled Nursing Facility Care beneficiary booklet, Section 6: Your Rights & Protections, available at https://www.medicare.gov/Pubs/pdf/ 10153.pdf; and Medicare Benefit Policy Manual, Chapter 8—Coverage of Extended Care (SNF) Services Under Hospital Insurance available at https:// www.cms.gov/Regulations-andGuidance/Guidance/Manuals/ downloads/bp102c08.pdf). In general, CMS requires that the SNF inform a beneficiary in writing about services and fees before the beneficiary is admitted to the SNF (§ 483.10(b)(6)); the beneficiary cannot be charged by the SNF for items or services that were not requested (§ 483.10(c)(8)(iii)(A)); a beneficiary cannot be required to request extra services as a condition of continued stay (§ 483.10(c)(8)(iii)(B)); and the SNF must inform a beneficiary that requests an item or service for which a charge will be made that there will be a charge for the item or service and what the charge will be (§ 483.10(c)(8)(iii)(C)). (See also section 6 of Medicare Coverage of Skilled Nursing Facility Care at https:// www.medicare.gov/Pubs/pdf/ 10153.pdf.) b. Proposals Since publication of the June 2015 final rule, we have continued to learn from implementation and refinement of the SNF 3-day rule waiver in the Pioneer ACO Model (see https:// innovation.cms.gov/initiatives/Pioneeraco-model/) and the Next Generation ACO Model (see https:// innovation.cms.gov/initiatives/NextGeneration-ACO-Model). Based on these experiences, we indicated in the proposed rule that we believe there are situations where it would be appropriate to require additional beneficiary financial protections under the SNF 3-day rule waiver for the Shared Savings Program. Specifically, we are concerned about potential beneficiary financial liability for noncovered Part A SNF services that might be directly related to use of the SNF 3day rule waiver under the Shared Savings Program. First, one example of a scenario under which a beneficiary may be at financial risk relates to the quarterly exclusions from a Track 3 ACO’s prospective assignment list. For example, assume a beneficiary was prospectively assigned to a Track 3 ACO that has been approved for the SNF 3-day rule waiver (a waiver-approved ACO), but during the first quarter of the year, the beneficiary’s Part B coverage terminated and the beneficiary is therefore no VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 longer eligible to be assigned to the ACO. As a result, the beneficiary would be excluded from the ACO’s prospective assignment list because the beneficiary meets one or more of the exclusion criteria specified at § 425.401(b). That is, although SNF services are covered under Part A, not Part B, the beneficiary would be dropped from the ACO’s prospective assignment list if during the performance year the beneficiary is no longer enrolled in Part B and thus no longer eligible to be assigned to the ACO. We are concerned about some very limited situations, such as when a beneficiary’s Part B coverage terminates during a quarter when the beneficiary is also receiving SNF services. The beneficiary may be admitted to a SNF without a prior 3-day inpatient hospital stay after his or her Part B coverage ended, but before the beneficiary appears on a quarterly exclusion list. It is not operationally feasible for CMS to notify the ACO and for the ACO, in turn, to notify its SNF affiliates, ACO participants, and ACO providers/ suppliers immediately of the beneficiary’s exclusion. The lag in communication may then cause the SNF affiliate to unknowingly admit a beneficiary who no longer qualifies for the waiver without a prior 3-day inpatient hospital stay. Absent specific beneficiary protections, we are concerned that the beneficiary could be charged for such non-covered SNF services. We do not believe it would be appropriate for CMS to hold the beneficiary or the SNF affiliate financially liable for such services. We believe we should allow for a reasonable amount of time for CMS to communicate beneficiary exclusions to an ACO and for the ACO to communicate the exclusions to its SNF affiliates, ACO participants, and ACO providers/suppliers. Typically there would be no way for the SNF affiliate to verify in real-time that a beneficiary continues to be prospectively assigned to the ACO; the SNF affiliate must rely upon the assignment list and quarterly exclusion lists provided by CMS to the ACO and communicated by the ACO to its SNF affiliates, ACO participants, and ACO providers/suppliers. Further, the beneficiary does not receive a notification regarding his or her eligibility for the SNF 3-day rule waiver prior to receiving SNF services under the waiver, so beneficiaries are not able to check their own eligibility. To address delays in communicating beneficiary exclusions from the prospective assignment list, the Pioneer ACO Model and Next Generation ACO Model provide for a 90-day grace period PO 00000 Frm 00343 Fmt 4701 Sfmt 4700 80511 that functionally acts as an extension of beneficiary eligibility for the SNF 3-day rule waiver and permits some additional time for the ACO to receive quarterly exclusions lists from CMS and communicate beneficiary exclusions to its SNF affiliates. In the proposed rule, we stated that we believe it would be appropriate, in order to protect beneficiaries from potential financial liability related to the SNF 3-day rule waiver under the Shared Savings Program, to establish a similar 90-day grace period in the case of a beneficiary who was prospectively assigned to a waiver-approved ACO at the beginning of the performance year but is later excluded from assignment to the ACO. Therefore, we explained that we believe it is necessary for purposes of carrying out the Shared Savings Program to allow formerly assigned beneficiaries to receive covered SNF services under the SNF 3-day rule waiver when the beneficiary is admitted to a SNF affiliate within a 90-day grace period following the date that CMS delivers the quarterly beneficiary exclusion list to an ACO. The equitable and efficient implementation of the SNF 3-day rule waiver is necessary to further support ACOs’ efforts to increase quality and decrease costs under two-sided performance-based risk arrangements. (See 80 FR 32804 for a detailed discussion of the rationale for establishing the SNF 3-day rule waiver.) Based upon the experience in the Pioneer ACO Model, we believe it is not possible to adopt such a waiver without providing some protection for certain beneficiaries who were prospectively assigned to the ACO at the start of the year, but are subsequently excluded from assignment. Accordingly, we proposed to modify the waiver to include a 90-day grace period to allow sufficient time for CMS to notify the ACO of any beneficiary exclusions, and for the ACO then to inform its SNF affiliates, ACO participants, and ACO providers/suppliers of those exclusions. More specifically, we proposed to modify the waiver under § 425.612(a)(1) to include a 90-day grace period that would permit payment for SNF services provided to beneficiaries who were initially on the ACO’s prospective assignment list for a performance year but were subsequently excluded during the performance year. CMS would make payments for SNF services furnished to such a beneficiary under the terms of the SNF 3-day rule waiver if the following conditions are met: • The beneficiary was prospectively assigned to a waiver-approved ACO at the beginning of the performance year E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80512 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations but was excluded in the most recent quarterly exclusion list. • The SNF affiliate services are furnished to a beneficiary admitted to the SNF affiliate within 90 days following the date that we deliver the quarterly exclusion list to the ACO. • We would have otherwise made payment to the SNF affiliate for the services under the SNF 3-day rule waiver, but for the beneficiary’s exclusion from the waiver-approved ACO’s prospective assignment list. We further noted that we anticipate that there would be very few instances where it would be appropriate for SNF services to qualify for payment under this 90-day grace period. This is because this waiver only allows for payment for claims that meet all applicable requirements except the requirement for a prior 3-day inpatient hospital stay. For example, assume that a beneficiary who had been assigned to a waiver-approved ACO was admitted to a SNF without a prior 3-day inpatient hospital stay after his or her enrollment in an MA Plan, but before the beneficiary appears on a quarterly exclusion list. In this case, these SNF services would not be covered under FFS because the waiver does not expand coverage to include services furnished to Medicare beneficiaries enrolled in MA Plans. Both beneficiaries and healthcare providers are expected to know that the beneficiary is covered under an MA plan and not FFS Medicare. Second, we are concerned that there could be other more likely scenarios where a beneficiary could be charged for non-covered SNF services that were a result of an ACO’s or SNF’s inappropriate use of the SNF 3-day rule waiver. Specifically, we are concerned that a beneficiary could be charged for non-covered SNF services if a SNF affiliate were to admit a FFS beneficiary who is not prospectively assigned to the waiver-approved ACO, and payment for SNF services is denied for lack of a qualifying inpatient hospital stay. We believe this situation could occur as a result of a breakdown in one or more of processes the ACO and SNF affiliate are required to have in place to implement the waiver. For example, the SNF affiliate and the admitting ACO provider/supplier may not verify that the beneficiary appears on the ACO’s prospective assignment list prior to admission, as required under the SNF 3day rule waiver (§ 425.612(a)(1)(iii)(B)(4)) and the terms of the SNF’s affiliate agreement with the ACO. In this scenario, Medicare would deny payment of the SNF claim under existing FFS rules because the beneficiary did not have a qualifying VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 inpatient hospital stay. We are concerned that, once the claim is rejected, the beneficiary may not be protected from financial liability, and thus could be charged by the SNF affiliate for these non-covered SNF services that were a result of an inappropriate attempt to use the waiver, potentially subjecting the beneficiary to significant financial liability. However, in this scenario, a SNF with a relationship to the ACO submitted the claim that was rejected for lack of a qualifying inpatient hospital stay, but that otherwise would have been paid by Medicare. In this circumstance, we proposed to assume the SNF’s intent was to rely upon the SNF 3-day rule waiver, but the waiver requirements were not met. We believe it is reasonable to assume the SNF’s intent was to use the SNF 3-day rule waiver because, as a SNF affiliate, the SNF should be well aware of the ability to use the SNF 3-day rule waiver and, by submitting the claim, demonstrated an expectation that CMS would pay for SNF services that would otherwise have been rejected for lack of a 3-day inpatient hospital stay. We believe that in this scenario, the rejection of the claim under the SNF 3-day rule waiver could easily have been avoided if the ACO, the admitting ACO provider/ supplier, and the SNF affiliate had confirmed that the requirements for use of the SNF 3-day rule waiver were satisfied. Because each of these entities is in a better position to know the requirements of the waiver and ensure that they are met than the beneficiary is, we believe that the ACO and/or the SNF affiliate should be accountable for such rejections and the SNF affiliate should be prevented from attempting to charge the beneficiary for the non-covered SNF stay. To address situations similar to this scenario where the beneficiary may be subject to financial liability due to an eligible SNF submitting a claim that is not paid only as a result of the lack of a qualifying inpatient hospital stay, the Next Generation ACO Model generally places the financial responsibility on the SNF, where the SNF knew or reasonably could be expected to have known that payment would not be made for the non-covered SNF services. In such cases, CMS makes no payment for the services and the SNF may not charge the beneficiary for the services and must return any monies collected from the beneficiary. Additionally, under the Next Generation ACO Model, the ACO must indemnify and hold the beneficiary harmless for payment for the services. We believe it is appropriate to PO 00000 Frm 00344 Fmt 4701 Sfmt 4700 propose to adopt a similar policy under the Shared Savings Program because, under § 425.612(a)(1)(iii)(B), to be a SNF affiliate, a SNF must agree to validate the eligibility of a beneficiary to receive covered SNF services in accordance with the waiver prior to admission to the SNF, and otherwise comply with the requirements and conditions of the Shared Savings Program. SNF affiliates are required to be familiar with the SNF 3-day rule and the terms and conditions of the SNF 3-day rule waiver for the Shared Savings Program, and should know to verify that a FFS Medicare beneficiary who is a candidate for admission has completed a qualifying hospital stay or that the admission meets the criteria under a waiver of the SNF 3-day rule that is properly in place. Additionally, ACOs and their SNF affiliates are required to develop plans that will govern communication and beneficiary evaluation and admission prior to use of the SNF 3-day rule waiver. In these circumstances, we believe it is reasonable that the ultimate responsibility and liability for a noncovered SNF admission should rest with the admitting SNF affiliate. Therefore, to protect FFS beneficiaries from being charged in certain circumstances for non-covered SNF services related to the waiver of the SNF 3-day rule under the Shared Savings Program, potentially subjecting such beneficiaries to significant financial liability, we proposed to add certain beneficiary protection requirements in § 425.612(a)(1). These requirements would apply to SNF services furnished by a SNF affiliate that would otherwise have been covered except for the lack of a qualifying hospital stay preceding the admission to the SNF affiliate. Specifically, we proposed that we would make no payment to the SNF, and the SNF may not charge the beneficiary for the non-covered SNF services, in the event that a SNF that is a SNF affiliate of a Track 3 ACO that has been approved for the SNF 3-day rule waiver admits a FFS beneficiary who was never prospectively assigned to the waiver-approved ACO (or was assigned but later excluded and the 90 day grace period has lapsed), and the claim is rejected only for lack of a qualifying inpatient hospital stay. In this situation, we proposed that we would apply the following rules: • We would make no payment to the SNF affiliate for such services. • The SNF affiliate must not charge the beneficiary for the expenses incurred for such services, and the SNF affiliate must return to the beneficiary any monies collected for such services. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations • The ACO may be required to submit a corrective action plan to CMS for approval as specified at § 425.216(b) addressing what actions the ACO will take to ensure that the SNF 3-day rule waiver is not misused in the future. If after being given an opportunity to act upon the corrective action plan the ACO fails to come into compliance, approval to use the waiver will be terminated in accordance with § 425.612(d). We noted that in accordance with our existing program rules at §§ 425.216 and 425.218, CMS retains the authority to take corrective action, including terminating an ACO for non-compliance with program rules. A misuse of a waiver under § 425.612 would constitute non-compliance with program rules. Accordingly, we proposed to codify at new provision at § 425.612(d)(4) providing that misuse of a waiver under § 425.612 may result in CMS taking remedial action against the ACO under §§ 425.216 and 425.218, up to and including termination of the ACO from the Shared Savings Program. We proposed that if the SNF submitting the claim is a SNF affiliate of a waiver-approved ACO, and the only reason for the rejection of the claim is lack of a qualifying inpatient hospital stay, then CMS would assume the SNF intended to rely upon the SNF 3-day rule waiver. We would not assume the SNF intended to rely upon the SNF 3day rule waiver if the SNF is not a SNF affiliate of a waiver-approved ACO because the waiver is not available to SNFs more broadly. We explained that we believe intended reliance on the waiver is an important factor in determining whether the proposed additional beneficiary protections should apply. Outside the context of an intent to rely on the SNF 3-day rule waiver, we do not believe it would be necessary to include additional beneficiary protections under the Shared Savings Program because there is no reason for either the beneficiary or the SNF to expect that different coverage rules would apply to SNF services. In these other situations, the beneficiary protections generally applicable under traditional FFS Medicare, noted earlier in this section, continue to apply. We solicited comments on these proposals. We noted that under our proposed beneficiary protection provision, a SNF affiliate would be prohibited from charging a beneficiary for non-covered SNF services even in cases where the beneficiary explicitly requested or agreed to being admitted to the SNF in the absence of a qualifying 3-day hospital stay if all other requirements for coverage are met. We VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 therefore specifically solicited comment on whether it is reasonable to hold SNFs that are SNF affiliates responsible for all claims that are rejected solely as a result of lack of a qualifying inpatient hospital stay. We also solicited comment on whether the ACO rather than or in addition to the SNF affiliate, should be held liable for such claims and under what circumstances. We also solicited comment on our proposal to modify the waiver under § 425.612(a)(1) to include a 90-day grace period for beneficiaries prospectively assigned to a waiverapproved ACO at the start of the performance year but later excluded. We solicited comment on the proposed length of the grace period, and in particular whether the grace period should be less than 90 days, given our expectation that ACOs will share the quarterly beneficiary exclusion lists with their SNF affiliates, ACO participants, and ACO providers/ suppliers in a timely manner. Finally, we solicited comment on any other related issues that we should consider in connection with these proposals to protect beneficiaries from significant financial liability for non-covered SNF services related to the waiver of the SNF 3-day rule under the Shared Savings Program. The following is a summary of the comments we received on these proposals. Comment: Commenters, in general, supported the proposed enhanced beneficiary protections under the SNF 3-day rule waiver that are largely consistent with the beneficiary protections in place under the Next Generation ACO Model. Commenters agreed that it would be appropriate to hold beneficiaries harmless for noncovered SNF services if a SNF affiliate admitted a beneficiary who was not qualified for the waiver without a qualifying inpatient stay. Commenters also generally agreed that a 90-day grace period from the date that CMS delivers the quarterly beneficiary exclusion list to ACOs is a reasonable period to allow ACOs to incorporate beneficiary exclusions into their processes, including communicating the updated beneficiary information to ACO participants, ACO providers/suppliers, and SNF affiliates. Although most commenters supported the proposals without additional elaboration, a few commenters expressed other specific concerns or made additional suggestions which are addressed in this section. Response: We appreciate commenters’ support for our proposal to incorporate enhanced beneficiary protections under the SNF 3-day rule waiver that are largely consistent with the beneficiary PO 00000 Frm 00345 Fmt 4701 Sfmt 4700 80513 protections in place under the Next Generation ACO Model. Comment: A commenter recommended that the first grace period of the calendar year be extended to accommodate a very large exclusion file that is distributed in July. This commenter further noted that the July exclusion file often includes a change in file format or other criteria for files transmitted to ACOs, such that it requires significant time to work through the data file transmission and loading process. Response: We are a somewhat unclear about the concerns regarding the exclusion file referenced in this comment and believe they may perhaps relate to an EHR measure exclusion file that is unrelated to the quarterly beneficiary exclusion process. Regardless, we believe a 90-day grace period is more than sufficient time for the appropriate communications to occur regarding exclusions from the prospective assignment list. Under the rules governing the SNF 3-day rule waiver, the ACO must have a communication plan, a beneficiary evaluation and admission plan, and a care management plan in place prior to our approval of the ACO for use of the waiver. The requirement that an ACO have these plans in place should help to mitigate concerns regarding the length of the grace period by ensuring that the ACO has established procedures in place to govern communications between the ACO, its SNF affiliates, ACO participants, and ACO providers/ suppliers regarding beneficiary eligibility and admissions under the terms of the waiver. Thus, we continue to believe that a 90-day grace period is a sufficient time period for an ACO to process the quarterly exclusion list and transmit any beneficiary exclusions to its ACO participants, ACO providers/ suppliers, and SNF affiliates. Comment: Some commenters supported our proposal that no payments would be made to SNF affiliates for SNF services furnished without a qualifying inpatient hospital stay to beneficiaries who are not assigned to the ACO or who are not in the 90-day grace period. These commenters agreed that the financial responsibility for SNF stays that do not meet the waiver criteria should lie with the SNF because, in accordance with our rules for use of the waiver by SNF affiliates, SNF affiliates are responsible for confirming a beneficiary’s eligibility to receive services under the waiver prior to admission. Some commenters disagreed with this aspect of the proposal, suggesting that ACOs should be responsible for at least some the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80514 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations liability. One commenter indicated that, SNF affiliates should not be accountable for identifying waiver-eligible beneficiaries and suggested that CMS ‘‘require hospitals to share the list of waiver-eligible Track 3-enrolled beneficiaries with all of their ACOs and partner SNFs.’’ This commenter also requested that CMS explore additional policies that would give SNF affiliates independent access to beneficiary waiver eligibility information that they could access prior to admission to verify if a beneficiary meets the eligibility requirements for the waiver. To illustrate possibilities, the commenter suggested that CMS could: (1) Make it a requirement for SNF affiliate agreements that the ACO provide all SNF affiliates with timely, accurate lists of waiver-eligible beneficiaries; or (2) CMS could integrate information regarding eligibility for the SNF 3-day rule waiver into the Common Working File so that SNFs may independently verify a beneficiary’s eligibility under the waiver. Response: After reviewing the comments, we continue to believe the proposed policy, which is based on beneficiary protections under the Next Generation ACO Model, is also appropriate under the Shared Savings Program. Under § 425.612(a)(1)(iii)(B), in order to be a SNF affiliate, a SNF must agree to validate the eligibility of a beneficiary to receive covered SNF services in accordance with the waiver prior to admission to the SNF, and otherwise comply with the requirements and conditions of the Shared Savings Program. As a result, we do not believe it is unreasonable to hold the SNF affiliate financially responsible if it admits a beneficiary that is neither prospectively assigned to a Track 3 ACO nor in a 90-day grace period without a qualifying inpatient hospital stay. We also believe it is reasonable to hold the SNF affiliate fully responsible under these circumstances because a SNF affiliate is obligated under the terms and conditions of the SNF 3-day rule waiver to validate the beneficiary’s eligibility for use of the waiver prior to admission. Further, we do not believe that it is necessary to include the suggested additional requirements for SNF affiliate agreements. The current requirements provide SNFs with the flexibility to address, in their SNF affiliate agreements with Track 3 ACOs, any concerns they may have about the processes used by ACOs to communicate which beneficiaries are eligible to receive covered SNF services under the waiver. ACOs must create and implement a communication plan between the ACO VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 and all of its SNF affiliates as required at § 425.612(a)(1)(i)(A)(1). In accordance with our SNF waiver guidance on the CMS Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/sharedsavingsprogram/ Downloads/SNF-Waiver-Guidance.pdf, the communication plan should include detailed communication processes including for example, identifying and designating person(s) at the ACO with whom SNF affiliates will communicate and coordinate admissions, and explaining how the ACO will respond to questions and complaints related to the ACO’s use of the SNF 3-day waiver from SNF affiliates, ACO participants, ACO providers/suppliers, beneficiaries, acute care hospitals, and other stakeholders. ACOs are also required to establish a beneficiary evaluation and admission plan for beneficiaries admitted to a SNF affiliate under the SNF 3-day rule waiver that is approved by the ACO medical director and the healthcare professional responsible for the ACO’s quality improvement and assurance processes under § 425.112. Further, as part of their waiver application, ACOs are required to describe how they plan to evaluate and periodically update their plan (see section 6 of the guidance at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ sharedsavingsprogram/Downloads/SNFWaiver-Guidance.pdf). It is also recommended in the guidance that the beneficiary evaluation and admission plan include detailed requirements including, for example, a protocol for an ACO provider/supplier who is a physician to evaluate and approve admissions to a SNF affiliate pursuant to the waiver and consistent with the beneficiary eligibility requirements described at § 425.612(a)(1)(ii) and a protocol for educating and training SNF affiliates regarding waiver requirements and the ACO’s communications plan, beneficiary evaluation and admission plan, and care management plan for purposes of the SNF 3-Day Waiver. We believe these requirements adequately address the commenter’s concerns about SNF affiliates’ ability to verify beneficiaries’ eligibility to receive covered SNF services under the SNF 3day rule waiver. However, as we develop operational procedures and guidance documents, we will further consider whether it would be feasible to develop a mechanism that could permit SNF affiliates to verify, though a source other than the ACO, a beneficiary’s eligibility to receive SNF services under the waiver. Comment: A few commenters suggested that ACOs should not be required to submit a corrective action PO 00000 Frm 00346 Fmt 4701 Sfmt 4700 plan in cases where the SNF affiliate, not the ACO, is responsible for inappropriate use of the waiver, as such corrective action plans could be resource intensive for ACOs. Response: We continue to believe that in some circumstances it could be appropriate for an ACO to be required to submit a corrective action plan, including in some cases where a SNF affiliate may be responsible for inappropriate use of the SNF 3-day rule waiver. The possibility of compliance action provides an incentive for ACOs to work together with their SNF affiliates to ensure that the SNF 3-day rule waiver is used appropriately, and reflects the requirement that ACOs must enter into agreements with their SNF affiliates that contain detailed requirements providing for the proper use of the waiver. We are finalizing the proposal that in cases where a SNF affiliate of a Track 3 ACO has misused the SNF 3-day rule waiver, the ACO may be required to submit a corrective action plan to CMS for approval as specified at § 425.216(b) addressing what actions the ACO will take to ensure that the SNF 3-day rule waiver is not misused in the future. We are also finalizing the proposal to codify a new provision at § 425.612(d)(4) providing that misuse of a waiver under § 425.612 may result in CMS taking remedial action against the ACO under §§ 425.216 and 425.218, up to and including termination of the ACO from the Shared Savings Program. Comment: One commenter suggested that CMS should also modify the existing financial protections in the Medicare Claims Processing Manual Chapter 30—Financial Protections at section 70.2.2.2 to address the SNF 3day rule waiver rules. Response: We will further consider whether revisions are necessary to the Medicare Claims Processing Manual and/or other guidance documents related to SNF discharges and billing. Final Action: We are finalizing the SNF 3-day rule waiver beneficiary protections described in this section as proposed. Specifically, we are modifying the SNF 3-day rule waiver under § 425.612(a)(1) to include a 90day grace period that will permit payment for SNF services provided to beneficiaries without a qualifying inpatient stay who were initially on the ACO’s prospective assignment list for a performance year but were subsequently excluded during the performance year, if such services would otherwise be covered under the SNF 3-day rule waiver. In addition, in the event that a SNF that is a SNF affiliate of a Track 3 ACO that has been approved for the E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations SNF 3-day rule waiver admits a FFS beneficiary who was never prospectively assigned to the ACO (or was assigned but later excluded and the 90-day grace period has lapsed), and the claim is rejected only for lack of a qualifying inpatient hospital stay, we will make no payment to the SNF, and the SNF may not charge the beneficiary for the non-covered SNF services. In this circumstance, the SNF affiliate will be prohibited from charging a beneficiary for non-covered SNF services even in cases where the beneficiary explicitly requested or agreed to being admitted to the SNF in the absence of a qualifying 3-day hospital stay, if all other requirements for coverage are met. We are also adding a provision at § 425.612(d)(4) providing that misuse of a waiver under § 425.612 may result in CMS taking remedial action against the ACO under §§ 425.216 and 425.218, up to and including termination of the ACO from the Shared Savings Program. We strongly believe it is important to ensure that beneficiaries have appropriate financial protections, including financial protection against misuse of the waiver prior to approving any SNF 3-day rule waiver applications from Track 3 ACOs. We also recognize that ACOs and their SNF affiliates could be reluctant to enter into a SNF affiliate agreement without there being clarity as to their potential responsibility for noncovered SNF services related to the waiver. For these reasons, we are also developing a process for Track 3 ACOs that have already applied for the SNF 3day rule waiver for the 2017 performance year to confirm that they and their SNF affiliates agree to comply with all requirements related to the SNF 3-day rule waiver, including the new requirements we are adopting in this rulemaking. ACOs and SNF affiliates that do not agree to comply with all requirements will be ineligible to offer services under the SNF 3-day rule waiver. We note that this confirmation process may delay approval of ACOs’ applications for the SNF 3-day rule waiver for the 2017 performance year; however, we do not anticipate approval will be delayed beyond the first quarter of 2017. mstockstill on DSK3G9T082PROD with RULES2 4. Technical Changes a. Financial Reconciliation for ACOs That Fall Below 5,000 Assigned Beneficiaries Section 1899(b)(2)(D) of the Act includes a requirement that a participating ACO must have a minimum of 5,000 Medicare FFS beneficiaries assigned to it. Currently, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the regulations at § 425.110(b) indicate that if at any time during the performance year, an ACO’s assigned population falls below 5,000, the ACO may be subject to the actions described in §§ 425.216 and 425.218; the regulations further indicate at § 425.110(b)(1) that while under a CAP, the ACO remains eligible for shared savings and losses and the MSR and MLR (if applicable) is set at a level consistent with the number of assigned beneficiaries. We have applied this rule in the past to perform financial reconciliation for ACOs that fell below 5,000 assigned beneficiaries. In these cases, the ACO was subject to a CAP and financial reconciliation was based on a variable MSR/MLR that was determined by the number of assigned beneficiaries. For example, we have calculated the ACO’s MSR based on an expanded sliding scale that includes a range of 3,000 to 4,999 assigned beneficiaries with a corresponding MSR range of 5.0 to 3.9 percent. However, ACOs under risk-based tracks are not limited to financial reconciliation under a variable MSR/ MLR that is based on the number of assigned beneficiaries. In the June 2015 final rule (see 80 FR 32769–32771, and 32779–32780), we finalized a policy that provides ACOs under two-sided performance-based risk tracks with an opportunity to choose among several options for establishing their MSR/MLR. In addition to being able to choose a symmetrical MSR/MLR that varies based on the ACO’s number of assigned beneficiaries, ACOs under two-sided performance-based risk tracks can also choose from a menu of non-variable MSR/MLR options (either a 0 percent MSR/MLR or a symmetrical MSR/MLR in a 0.5 percent increment between 0.5 through 2.0 percent). We stated in the CY 2017 PFS proposed rule that we believe it is important to clarify the policy regarding situations where an ACO under a twosided performance-based risk track has chosen a non-variable MSR/MLR at the start of the agreement period but has fallen below 5,000 assigned beneficiaries at the time of financial reconciliation. As discussed in detail in the June 2015 final rule, we continue to believe that ACOs under two-sided performance-based risk tracks are best positioned to determine the level of risk that they are prepared to accept. Therefore, we proposed to update the regulations at § 425.110(b)(1) to be consistent with the regulatory changes in the June 2015 final rule that permit ACOs under a two-sided performancebased risk track (Track 2 and Track 3) to choose their own MSR/MLR from a PO 00000 Frm 00347 Fmt 4701 Sfmt 4700 80515 menu of options. Specifically, we proposed to update the regulations at § 425.110(b)(1) to indicate that in the event an ACO falls below 5,000 assigned beneficiaries at the time of financial reconciliation, the ACO participating under a two-sided risk track will be eligible to share in savings (or losses) and the MSR/MLR will be set at a level consistent with the choice of MSR/MLR that the ACO made at the start of the agreement period. If the Track 2 or Track 3 ACO selected a symmetrical MSR/MLR option based on a fixed percentage (for example, zero percent or a percentage between 0.5 and 2 percent) regardless of ACO size, then the current methodology for use of a variable MSR/ MLR based on the ACO’s number of assigned beneficiaries would not apply. For example, if at the beginning of the agreement period the ACO chose a 1.0 percent MSR/MLR and the ACO’s assigned population falls below 5,000, the MSR/MLR will remain 1.0 percent for purposes of financial reconciliation while the ACO is under a CAP. Further, as we noted in earlier rulemaking, if the ACO has elected a variable MSR/MLR, the methodology for calculating the variable MSR/MLR under a two-sided model is consistent with the methodology for calculating the variable MSR that is required under the under the one-sided model (Track 1) (see 80 FR 32769 through 32771; 32779 through 32780). Under the one-sided shared savings model (Track 1), we have accounted for circumstances where an ACO’s number of assigned beneficiaries falls below 5,000, by expanding the variable MSR range based on input from the CMS Office of the Actuary (OACT). Thus, in the case where a Track 2 or Track 3 ACO selects a variable MSR/ MLR based on its number of assigned beneficiaries, and the ACO’s number of assigned beneficiaries falls below 5,000, we proposed to continue to use an approach for determining the MSR/MLR range consistent with the approach for calculating the MSR range under the one-sided model. The following is a summary of the comments we received on these proposals. Comment: Commenters supported this proposal. One commenter suggested, without providing a justification, that in the event an ACO’s assigned beneficiary population falls below 5,000, the MSR be capped at 3.9 percent in cases where the MSR/MLR varies based on the number of beneficiaries. The commenter did not expressly make a similar recommendation for capping the MLR. Response: We appreciate the support for this proposal. For ACOs with a E:\FR\FM\15NOR2.SGM 15NOR2 80516 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 variable MSR and MLR (if applicable), the MSR and MLR (if applicable) will be set at a level consistent with the number of assigned beneficiaries. For ACOs with a fixed MSR/MLR, the MSR/MLR will remain fixed at the level consistent with the ACO’s choice of MSR and MLR that the ACO made at the start of the agreement period. In addition, we disagree that it would be appropriate to cap the MSR (but not the MLR) at 3.9 percent in cases where the MSR/MLR varies based on the number of beneficiaries in the event the ACO falls below 5,000 assigned beneficiaries beneficiaries. Section 1899(d)(1)(B)(i) of the Act specifies that the Secretary shall determine the appropriate percent by which an ACO’s expenditures must be lower than its benchmark in order for the ACO to be eligible to share in savings to account for normal variation in expenditures under Title XVIII. Consistent with the statute, this percentage must be based upon the number of Medicare fee-for-service beneficiaries assigned to the ACO. As explained in the November 2011 final rule, we believe that the most appropriate policy concerning determination of the ‘‘appropriate percent’’ for the MSR would achieve a balance between the advantages of making incentives and rewards available to successful ACOs and prudent stewardship of the Medicare Trust Funds (76 FR 67927). Capping the MSR for Track 1 ACOs would not be consistent with the statute and our established policy for computing the MSR for Track 1 ACOs. Capping only the MSR but not the MLR for Track 2 or 3 ACOs would create an asymmetry that would make it easier for the ACO to share in savings but not in losses. To the extent that the commenter was recommending capping both the MSR and MLR for ACOs in Tracks 2 and 3 that choose a variable MSR/MLR, we believe this could be an approach worthy of consideration in future rulemaking because the approach would equalize the risk for the ACO and CMS. Final Action: We are finalizing this policy and the revisions to § 425.110(b)(1) as proposed, but are making a minor editorial revision to paragraph (b)(1)(ii) in order to eliminate a redundant reference. b. Requirements for Merged or Acquired TINs ACOs frequently request that we take into account the claims billed by the TINs of practices that have been acquired by sale or merger for the purpose of meeting the minimum assigned beneficiary threshold, VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 establishing a more accurate financial benchmark, and determining the prospective or preliminary prospective assignment list for the upcoming performance year. In response to these inquiries, we initially developed subregulatory guidance that allowed claims billed under the TIN of a merged or acquired entity to be considered in certain circumstances. In that guidance we indicated that the merged or acquired entity’s TIN may no longer be used to bill Medicare. In the June 2015 final rule, we codified the policies outlined in this guidance allowing for consideration of claims billed under merged or acquired entities’ TINs for purposes of beneficiary assignment and establishing the ACO’s benchmark, provided certain requirements were met (§§ 425.204(g), 425.118(a)(2)). However, the regulation at § 425.204(g) indicates that an ACO may request that CMS consider, for purposes of beneficiary assignment and establishing the ACO’s benchmark under § 425.602, claims billed by ‘‘Medicare-enrolled’’ entities’ TINs that have been acquired through sale or merger by an ACO participant. Because the regulation at § 425.204(g) refers to such merged or acquired TINs as ‘‘Medicare-enrolled,’’ we have received inquiries from ACOs regarding whether such merged or acquired TINs must continue to be Medicare-enrolled after the merger or acquisition has been completed and the TINs are no longer used to bill Medicare. We stated in the CY 2017 PFS proposed rule that it was not our intent to establish such a requirement. We stated we do not believe there would be a program purpose to require the TIN of a merged or acquired entity to maintain Medicare enrollment if it is no longer used to bill Medicare. Therefore, to address this issue, we proposed a technical change to § 425.204(g) to clarify that the merged/acquired TIN is not required to remain Medicare enrolled after it has been merged or acquired and is no longer used to bill Medicare. The following is a summary of the comments we received on these proposals. Comment: The few comments received on this issue supported the proposal. Response: We appreciate the support for this proposal. Final Action: We are finalizing the technical change to § 425.204(g) as proposed. PO 00000 Frm 00348 Fmt 4701 Sfmt 4700 L. Value-Based Payment Modifier and Physician Feedback Program 1. Overview Section 1848(p) of the Act requires that we establish a value-based payment modifier (VM) and apply it to specific physicians and groups of physicians the Secretary determines appropriate starting January 1, 2015, and to all physicians and groups of physicians by January 1, 2017. On or after January 1, 2017, section 1848(p)(7) of the Act provides the Secretary discretion to apply the VM to eligible professionals (EPs) as defined in section 1848(k)(3)(B) of the Act. Section 1848(p)(4)(C) of the Act requires the VM to be budget neutral. The VM and Physician Feedback program continue CMS’ initiative to recognize and reward clinicians based on the quality and cost of care provided to their patients, increase the transparency of health care quality information and to assist clinicians and beneficiaries in improving medical decision-making and health care delivery. As stated in the CY 2016 PFS final rule with comment period (80 FR 71277), the MACRA was enacted on April 16, 2015. Under section 1848(p)(4)(B)(iii) of the Act, as amended by section 101(b)(3) of MACRA, the VM shall not be applied to payments for items and services furnished on or after January 1, 2019. Section 1848(q) of the Act, as added by section 101(c) of MACRA, establishes the Merit-based Incentive Payment System (MIPS) that shall apply to payments for items and services furnished on or after January 1, 2019. 2. Overview of Existing Policies for the VM In the CY 2013 PFS final rule with comment period, we discussed the goals of the VM and also established that specific principles should govern the implementation of the VM (77 FR 69307). We refer readers to that rule for a detailed discussion. In the CY 2013 PFS final rule with comment period (77 FR 69310), we finalized policies to phase-in the VM by applying it beginning January 1, 2015, to Medicare PFS payments to physicians in groups of 100 or more EPs. A summary of the existing policies that we finalized for the CY 2015 VM can be found in the CY 2014 PFS proposed rule (78 FR 43486 through 43488). Subsequently, in the CY 2014 PFS final rule with comment period (78 FR 74765 through 74787), we finalized policies to continue the phasein of the VM by applying it starting January 1, 2016, to payments under the Medicare PFS for physicians in groups of 10 or more EPs. Then, in the CY 2015 E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations PFS final rule with comment period (79 FR 67931 through 67966), we finalized policies to complete the phase-in of the VM by applying it starting January 1, 2017, to payments under the Medicare PFS for physicians in groups of 2 or more EPs and to physician solo practitioners. In the CY 2016 PFS final rule with comment period (80 FR 71277 through 71279), we finalized that in the CY 2018 payment adjustment period, the VM will apply to nonphysician EPs who are physician assistants (PAs), nurse practitioners (NPs), clinical nurse specialists (CNSs), and certified registered nurse anesthetists (CRNAs) in groups with 2 or more EPs and to PAs, NPs, CNSs, and CRNAs who are solo practitioners. 3. Provisions of This Final Rule As a general summary, we proposed to update the VM informal review policies and establish how the quality and cost composites under the VM would be affected for the CY 2017 and CY 2018 payment adjustment periods in the event that unanticipated program issues arise. mstockstill on DSK3G9T082PROD with RULES2 a. Expansion of the Informal Inquiry Process To Allow Corrections for the VM Section 1848(p)(10) of the Act provides that there shall be no administrative or judicial review under section 1869 of the Act, section 1878 of the Act, or otherwise of the following: • The establishment of the VM. • The evaluation of the quality of care composite, including the establishment of appropriate measures of the quality of care. • The evaluation of the cost composite, including the establishment of appropriate measures of costs. • The dates of implementation of the VM. • The specification of the initial performance period and any other performance period. • The application of the VM. • The determination of costs. These statutory requirements regarding limitations of review are reflected in § 414.1280. We previously indicated in the CY 2013 PFS final rule with comment period (77 FR 69326) that we believed an informal review VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 mechanism is appropriate for groups of physicians to review and to identify any possible errors prior to application of the VM, and we established an informal inquiry process at § 414.1285. In the CY 2016 PFS final rule with comment period (80 FR 71294 through 71295), for the CY 2017 and CY 2018 payment adjustment periods, we finalized a deadline of 60 days that would start after the release of the QRURs for the applicable performance period for a group or solo practitioner to request a correction of a perceived error related to the VM calculation. We also finalized the continuation of the process for accepting requests from groups and solo practitioners to correct certain errors made by CMS or a third-party vendor (for example, PQRS-qualified registry). We stated we would continue the approach of the initial corrections process to classify a TIN as ‘‘average quality’’ in the event we determine a third-party vendor error or CMS made an error in the calculation of the quality composite and the infrastructure was not available to allow for recomputation of the quality measure data. Additionally, we finalized that we would reclassify a TIN as Category 1 when PQRS determines on informal review that at least 50 percent of the TIN’s EPs meet the criteria to avoid the PQRS downward payment adjustment for the relevant payment adjustment year. If the group was initially classified as Category 2, then we would not expect to have data for calculating their quality composite, in which case they would be classified as ‘‘average quality’’; however, if the data is available in a timely manner, then we would recalculate the quality composite. As we noted in the CY 2017 PFS proposed rule (81 FR 46443 through 46444), as a result of issues that we became aware of prior to and during the CY 2016 VM informal review process, we learned that re-running QRURs and recalculating the quality composite is not always practical or possible, given the diversity and magnitude of the errors, timing of when we become aware of an error, and practical considerations in needing to compute a final VM upward payment adjustment factor after the performance period has ended, PO 00000 Frm 00349 Fmt 4701 Sfmt 4700 80517 based on the aggregate amount of downward payment adjustments. Furthermore, this approach can create uncertainty for groups and solo practitioners about their final VM payment adjustment making it difficult for them to plan and make forecasts. Due to the volume and complexities of the informal review issues, the inconsistency of available PQRS data to calculate a TIN’s quality composite, the case-by-case nature of the informal review process, and the condensed timeline to calculate an accurate VM upward payment adjustment factor, we expressed our belief that we needed to update the VM informal review policies and establish in rulemaking how the quality and cost composites under the VM would be affected if unanticipated issues were to arise (for example, the program issues described in the CY 2017 PFS proposed rule), errors made by a third-party such as a vendor, or errors in our calculation of the quality and/or cost composites). We noted that the intent of these proposals is not to provide relief for EPs and groups who fail to report under PQRS, but rather to provide a mechanism for addressing unexpected issues such as the data integrity issues discussed in the proposed rule. We further noted that limiting the potential movement of TINs between VM quality tiers based on informal review may result in a more accurate adjustment factor calculation and provide greater predictability for the CMS’ Office of the Actuary (OACT) in making assumptions around the adjustment factor including assumptions around the impact of outstanding informal reviews at the time of the calculations. We expressed our belief that our proposals would help groups and solo practitioners to better predict the outcome of their final VM adjustment and reduce uncertainty as we continue to improve our systems. We requested comment on all four of the scenarios we proposed. We provide a combined summary of comments received on the four scenarios later in this section of this final rule, following the individual descriptions of the scenarios proposed. Table 44 summarizes our proposals. E:\FR\FM\15NOR2.SGM 15NOR2 80518 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 44—QUALITY AND COST COMPOSITE STATUS FOR TINS DUE TO INFORMAL REVIEW DECISIONS AND WIDESPREAD QUALITY AND COST DATA ISSUES Scenario 1: TINS moving from Category 2 to Category 1 as a result of PQRS or VM informal review process Scenario 2: Non-GPRO Category 1 TINs with additional EPs avoiding PQRS payment adjustment as a result of PQRS informal review process Initial composite Quality ................ Cost .................... Revised composite Initial composite Average ........... Average ........... Average ........... Low .................. Average ........... Average ........... Low .................. Average ........... High ................. Low .................. Average ........... High ................. Average ........... Average ........... High ................. Low .................. Average ........... High ................. mstockstill on DSK3G9T082PROD with RULES2 Scenario 1: TINs Moving From Category 2 to Category 1 as a Result of PQRS or VM Informal Review Process As finalized in the CY 2016 PFS final rule with comment period, for the CY 2017 VM, Category 1 will include those groups that meet the criteria to avoid the CY 2017 PQRS payment adjustment as a group practice participating in the PQRS Group Practice Reporting Option (GPRO) in CY 2015 and groups that have at least 50 percent of the group’s EPs meet the criteria to avoid the CY 2017 PQRS payment adjustment as individuals (80 FR 71280). Category 1 also includes those solo practitioners that meet the criteria to avoid the CY 2017 PQRS payment adjustment as individuals. Category 2 will include groups and solo practitioners that are subject to the CY 2017 VM and do not fall within Category 1 (79 FR 67939). We finalized a similar two-category approach for the CY 2018 VM based on participation in the PQRS by groups and solo practitioners in 2016 (80 FR 71280 through 71281). In the CY 2017 PFS proposed rule, we proposed that, if a TIN were initially classified as Category 2, and subsequently, through the PQRS or VM informal review process, it was reclassified as Category 1, then we would classify the TIN’s quality composite as ‘‘average quality,’’ instead of attempting to calculate the quality composite (81 FR 46444). We also proposed to calculate the TIN’s cost composite using the quality-tiering methodology. If the TIN were classified as ‘‘high cost’’ based on its performance on the cost measures, then we proposed to reclassify the TIN’s cost composite as ‘‘average cost.’’ If the TIN were classified as ‘‘average cost’’ or ‘‘low cost’’, then we proposed that the TIN would retain the calculated cost tier designation. We noted that in the CY 2016 PFS final rule with comment period (80 FR 71280), we finalized a policy for the CY 2017 and 2018 VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Revised composite Recalculated composite N/A .................. N/A .................. N/A .................. Low .................. Average ........... High ................. Average ........... Average ........... Average ........... Low .................. Average ........... Average ........... Low .................. Average ........... High ................. Low .................. Average ........... High ................. payment adjustment periods that when determining whether a group would be included in Category 1, we would consider whether the 50 percent threshold had been met, regardless of whether the group registered to participate in the PQRS GPRO for the relevant performance period. We expressed our belief that this policy would allow groups that register for a PQRS GPRO, but fail as a group to meet the criteria to avoid the PQRS payment adjustment an additional opportunity for the quality data reported by individual EPs in the group to be taken into account for the purposes of applying the VM. We noted that consequently, because of this policy we anticipate that the number of TINs who could fall into Scenario 1 would be minimal; however, we believe it is necessary to have a policy in place, in the event that CMS determines on informal review that Category 2 TINs had been negatively impacted by a third-party vendor error or CMS made an error in the calculation of the quality composite. We proposed to apply these policies for the CY 2017 VM and CY 2018 VM. Calculating a quality composite for a TIN that was initially classified as Category 2, then reclassified as Category 1 during the informal review process would be operationally complex, given a number of factors: The timeline for determining and applying the VM adjustments for all TINs subject to the VM; the volume of informal reviews; the need to calculate the VM upward payment adjustment factor as close to the beginning of the payment adjustment period as possible; and uncertainty about the availability of the PQRS quality data. Therefore, classifying the quality composite as ‘‘average quality’’ would offer a predictable decision for all informal reviews where a TIN changes classification from Category 2 to Category 1. PO 00000 Frm 00350 Fmt 4701 Scenario 4: Category 1 TINs with widespread claims data issues Initial composite Revised composite N/A .................. N/A .................. N/A .................. Low .................. Average ........... High ................. Scenario 3: Category 1 TINs with widespread quality data issues Sfmt 4700 Revised composite Average. Average. High. Low. Average. Average. Our proposal to calculate the cost composite and assign ‘‘average cost’’ if the cost composite was initially classified as ‘‘high cost’’ would alleviate concerns from stakeholders that a TIN may receive a downward VM payment adjustment under the quality-tiering methodology as a result of being classified as average quality and high cost. Under our proposal discussed above, for TINs in Scenario 1, we would not consider a TIN’s actual performance on the quality measures or calculate a quality composite score; rather, we would classify the TIN’s quality composite as average quality for the reasons stated above. In this scenario, we do not believe that we should retain a TIN’s ‘‘high cost’’ designation when the TIN’s actual cost performance is not being compared to the TIN’s actual quality performance, as it is possible the TIN might have scored high quality if actual performance had been considered. We believe that these proposals would help groups and solo practitioners who receive a favorable determination on informal review to better predict the outcome of their final VM adjustment and reduce uncertainty about the impact of the informal review. Additionally, it is important to note that groups or solo practitioners who submit an informal review request would not automatically be covered by the policy proposed for Scenario 1. In the CY 2017 PFS proposed rule, we stated that we would verify on informal review that the group or solo practitioner did submit complete and accurate data and did meet the criteria to avoid the PQRS payment adjustment to be included in Category 1. Scenario 2: Non-GPRO Category 1 TINs With Additional EPs Avoiding PQRS Payment Adjustment as a Result of PQRS Informal Review Process As finalized in the CY 2016 PFS final rule with comment period, for the CY 2017 VM, Category 1 will include groups that have at least 50 percent of E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the group’s EPs meet the criteria to avoid the CY 2017 PQRS payment adjustment as individuals (80 FR 71280). A similar policy was finalized for the CY 2018 VM (80 FR 71280). In the CY 2017 PFS proposed rule (81 FR 46455), we proposed that, if a TIN were classified as Category 1 for the CY 2017 VM by having at least 50 percent of the group’s EPs meet the criteria to avoid the CY 2017 PQRS payment adjustment as individuals, and subsequently, through the PQRS informal review process, it is determined that additional EPs that are in the TIN also meet the criteria to avoid the CY 2017 PQRS payment adjustment as individuals, then the following policies would be used to determine the TIN’s quality and cost composites: • If the TIN’s quality composite is initially classified as ‘‘low quality’’, then we proposed to reclassify the TIN’s quality composite as ‘‘average quality.’’ If the TIN’s quality composite is initially classified as ‘‘average quality’’ or ‘‘high quality’’, then we proposed that the TIN would retain that quality tier designation. • We would maintain the cost composite that was initially calculated. We proposed to apply these policies for the CY 2017 VM and CY 2018 VM. Under these policies, we would not recalculate the TIN’s quality composite to include the additional EPs that were determined to have met the criteria to avoid the PQRS payment adjustment as individuals through the PQRS informal review process. As discussed under Scenario 1, recalculating the quality composite is operationally complex, and we may not have PQRS data for the additional EPs, because they were initially determined not to have met the criteria to avoid the PQRS payment adjustment. In addition, we seek to avoid a situation where by recalculating the quality composite, a TIN may be subject to a lower quality tier designation because a few EPs in the TIN independently pursued PQRS informal reviews. As stated above, we proposed to reclassify a TIN’s quality composite as average quality if it is initially classified as ‘‘low quality’’ in order to avoid a situation where we do not have the PQRS quality data for those few EPs whose quality performance could have bumped the TIN up from a low quality designation as the EPs did not meet the criteria to avoid the PQRS payment adjustment during the initial determination. Additionally, it is important to note that TINs whose EPs submit an informal review request would not automatically be covered by the policy proposed for Scenario 2. We stated in the CY 2017 PFS proposed rule VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 that we would verify on informal review that an EP did submit complete and accurate data and did meet the criteria to avoid the PQRS payment adjustment as an individual in order for the TIN to be included in Category 1. Scenario 3: Category 1 TINs With Widespread Quality Data Issues In cases where there is a systematic issue with any of a Category 1 TIN’s quality data that renders it unusable for calculating a TIN’s quality composite, we proposed to classify the TIN’s quality composite as average quality. For this proposal, we consider widespread quality data issues, as issues that impact multiple TINs and we are unable to determine the accuracy of the data submitted via these TINs (for example, the EHR and QCDR issues for the CY 2014 performance period as described in the CY 2017 PFS proposed rule (81 FR 46455). This proposal would offer a predictable designation for all TINs under this scenario. We also proposed to calculate the TIN’s cost composite using the qualitytiering methodology. If the TIN were classified as ‘‘high cost’’ based on its performance on the cost measures, then we proposed to reclassify the TIN’s cost composite as ‘‘average cost.’’ If the TIN were classified as ‘‘average cost’’ or ‘‘low cost’’, then we proposed that the TIN would retain the calculated cost tier designation. We proposed to apply these policies for the CY 2017 VM and CY 2018 VM. As discussed under Scenario 1, our proposal to calculate the cost composite and assign ‘‘average cost’’ if the cost composite is initially classified as ‘‘high cost’’ would alleviate concerns from stakeholders that a TIN may receive a downward VM payment adjustment under the quality-tiering methodology as a result of being classified as average quality and high cost. Similarly, for TINs in Scenario 3, we would not consider a TIN’s actual performance on the quality measures or calculate a quality composite score; rather, we would classify the TIN’s quality composite as average quality for the reasons stated above. In this scenario, we do not believe that we should retain a TIN’s high cost designation when the TIN’s actual cost performance is not being compared to the TIN’s actual quality performance, as it is possible the TIN might have scored high quality if actual performance had been considered. We would continue to show and designate these groups as high cost in their annual QRURs so they have the opportunity to understand and improve their performance, but under our proposal, we would classify their cost PO 00000 Frm 00351 Fmt 4701 Sfmt 4700 80519 composite as average cost for purposes of determining their VM adjustment. In the CY 2017 PFS proposed rule, we noted that we expect quality data issues to be significantly limited moving forward, due to newly-added front-end edits. Additionally, we noted that TINs are ultimately responsible for the data that are submitted by their third-party vendors and that we expect that TINs are holding their vendors accountable for accurate reporting. We noted that, while we understand that data submission requirements are evolving and that both vendors and CMS are developing capabilities for reporting and assessing performance, we are considering further policies to promote complete and accurate reporting by registries and other third-party entities that submit data on behalf of groups and EPs. Scenario 4: Category 1 TINs With Widespread Claims Data Issues If we determine after the release of the Quality and Resource Use Reports (QRURs) that there is a widespread claims data issue that impacts the calculation of the quality and/or cost composites for Category 1 TINs, we propose to recalculate the quality and cost composites for affected TINs. For this proposal, we consider widespread claims data issues, as issues that impact multiple TINs and require the recalculation of the quality and/or cost composites (for example, the incomplete claims identification and specialty adjustment issues described in the CY 2017 PFS proposed rule (81 FR 46446) After recalculating the composites, if the TIN’s quality composite is classified as low quality, then we proposed to reclassify the quality composite as average quality, and if the TIN’s cost composite is classified as high cost, we proposed to reclassify the cost composite as average cost. If the TIN is classified as average quality, high quality, average cost or low cost, then we proposed that the TIN would retain the calculated quality or cost tier designation. We made the proposals because, after a claims data issue is identified, it would take approximately 6 weeks to recalculate the composites and notify groups and solo practitioners about their recalculated VM. Given that the VM informal review period lasts for 60 days after the release of the QRURs and the timing of when we become aware of an error, we would likely not be able to notify groups and solo practitioners about their recalculated VM before the end of the informal review period. Further, we expressed our belief that the proposed policies are necessary to provide certainty for E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80520 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations groups and solo practitioners about their final VM payment adjustment and due to the condensed timeline to calculate an accurate VM upward payment adjustment factor. We proposed to apply these policies for the CY 2017 VM and CY 2018 VM. The following is a summary of the comments we received regarding these proposals. Comment: Many commenters supported our proposals to modify a TIN’s quality and cost composites based on informal review determination or widespread quality and cost data issues, agreeing that assigning ‘‘average quality’’ would not unfairly penalize those that fall into these scenarios. Many of these commenters urged CMS to continue efforts to address data integrity and calculation issues. A few commenters agreed that limiting the potential movement between the VM quality tiers based on informal review would result in a more predictable adjustment factor calculation. Some of these commenters noted that assignment of an ‘‘average quality’’ designation does not recognize the significant resources invested by physicians and other eligible professionals in reporting quality data, particularly through agency-preferred electronic methods. One commenter suggested CMS could shorten the informal review timeframe or eliminate mid-year reports, in order to allow more resources for recalculation of the quality composite. Several commenters were not supportive of our proposals, stating that CMS should instead correct the underlying issues necessitating such scenarios, with several expressing added concern that the MIPS program will be even more complex. One commenter stated that the proposed changes to the informal review process would hold practices accountable for performance without a mechanism in place to ensure the accuracy of the data, thus reclassifying a solo practitioner or group practice’s performance based on an incomplete understanding of their performance. Another commenter believes it is important to hold solo practitioners and group practices harmless from penalties resulting from errors made by external parties. However, they expressed concerns that solo practitioners and group practices have no opportunity to resubmit their data allowing their quality composite scores to be recalculated to reflect all the available data. They suggest that this would deprive them of upward adjustments to payments because measures were reported or calculated inaccurately through no fault of their own. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Response: We thank the commenters for their feedback and support of our policies. We acknowledge commenters’ concerns about the complexity of the underlying data and their suggestions that we correct the underlying issues, rather than establish policies to address these scenarios through the informal review process. We note that scenarios three and four were proposed to address unforeseen issues with reported quality data or CMS claims data, respectively. Additionally, we note that as discussed in this final rule, we expect quality data issues to be significantly limited moving forward. We have worked to resolve PQRS program and receiving system data issues impacting the VM by reprioritizing scheduled deliverables and implementing enhancements to improve 2016 submissions. While some issues may still need to be handled through the informal review process, enhanced reporting functionality, with the removal of constraints around ACO reporting outside of a group, will be supported by both the program and the receiving system. In 2017, the MIPS receiving systems will provide further enhanced real-time feedback to submitters in a more rapid and accurate manner to identify errors earlier and will further accept the most accurate data submitted. We are finalizing the policies for Scenarios 1, 2, 3 and 4 as proposed. Additionally we note that under Scenarios 1 and 3, consistent with the policy adopted in the CY 2013 PFS final rule with comment period (77 FR 69325), for groups of physicians or solo practitioners classified as average quality/low cost as a result of informal review, we would apply an additional upward payment adjustment of +1.0x to those that care for high-risk beneficiaries (as evidenced by the average HCC risk score of the attributed beneficiary population). We note further that, under Scenarios 2 and 4, for groups of physicians or solo practitioners classified as high quality/low cost, high quality/average cost, or average quality/ low cost as a result of informal review, we would apply an additional upward payment adjustment of +1.0x to those that care for high-risk beneficiaries (as evidenced by the average HCC risk score of the attributed beneficiary population). We would apply this additional upward +1.0x adjustment, because the results of informal review under the policy being finalized here, would qualify these solo practitioners and groups for the additional upward adjustment, based on the policy previously finalized at 77 FR 69325. PO 00000 Frm 00352 Fmt 4701 Sfmt 4700 b. Application of the VM to Participant TINs in Shared Savings Program ACOs That Do Not Complete Quality Reporting In the CY 2015 PFS final rule with comment period (79 FR 67946), for groups and solo practitioners, as identified by their TIN, that participate in a Shared Savings Program ACO, we finalized the same policy that is generally applicable to groups and solo practitioners that fail to satisfactorily report or participate under PQRS and thus fall in Category 2 and are subject to an automatic downward adjustment under the VM in CY 2017. We stated that, consistent with the application of the VM to other groups and solo practitioners that report under PQRS, if the ACO does not successfully report quality data as required by the Shared Savings Program under § 425.504, all groups and solo practitioners participating in the ACO will fall in Category 2 for the VM, and therefore, will be subject to a downward payment adjustment. We finalized this policy for the 2017 payment adjustment period for the VM. In the CY 2016 PFS proposed rule (80 FR 41899), we proposed to continue this policy in the CY 2018 payment adjustment period for all groups and solo practitioners subject to the VM that participate in a Shared Savings Program ACO and finalized our proposal in the CY 2016 PFS final rule with comment period (80 FR 71285). As discussed in sections III.H. and III.K.1.e. of this final rule, we proposed to remove the prohibition on EPs who are part of a group or solo practitioner that participates in a Shared Savings Program ACO, for purposes of PQRS reporting for the CY 2017 and CY 2018 payment adjustments, to report outside the ACO. As a result of this proposed policy, the EPs in groups and those who are solo practitioners would be allowed to report to the PQRS as a group (using one of the group registry, QCDR, or EHR reporting options) or individually (using the registry, QCDR, or EHR reporting option) outside of the ACO. This section addresses how we proposed to use the PQRS data reported by EPs outside of the ACO for the CY 2018 VM when the ACO does not successfully report quality data on behalf of their EPs for purposes of PQRS as required by the Shared Savings Program under § 425.504. For the CY 2018 payment adjustment period, if a Shared Savings Program ACO does not successfully report quality data on behalf of their EPs for purposes of PQRS as required by the Shared Savings Program under § 425.504, then we proposed to use the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations data reported to the PQRS by the EPs under the participant TIN (as a group (using one of the group registry, QCDR, or EHR reporting options) or as individuals (using the registry, QCDR, or EHR reporting option)) outside of the ACO to determine whether the TIN would fall in Category 1 or Category 2 under the VM. We proposed to apply the two-category approach finalized for the CY 2018 VM (80 FR 71280) based on participation in the PQRS by groups and solo practitioners to determine whether groups and solo practitioners that participate in a Shared Savings Program ACO, but report to the PQRS outside of the ACO, would fall in Category 1 or Category 2 under the VM. We noted that the proposed policy was consistent with our policy for groups and solo practitioners who are subject to the VM and do not participate in the Shared Savings Program, and we believe it would further encourage quality reporting by EPs in the event the ACO does not successfully report quality data as required by the Shared Savings Program under § 425.504. For example, if groups that participate in a Shared Savings Program ACO in 2016 report quality data to the PQRS outside of the ACO and meet the criteria to avoid PQRS payment adjustment for CY 2018 as a group using one of the group registry, QCDR, or EHR reporting options or have at least 50 percent of the group’s EPs meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals using the registry, QCDR, or EHR reporting option by reporting quality data to PQRS outside of the ACO, then they would be included in Category 1 for the CY 2018 VM. If solo practitioners that participate in a Shared Savings Program ACO in 2016 report quality data to the PQRS outside of the ACO and meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals using the registry, QCDR, or EHR reporting option, then they would also be included in Category 1. Category 2 would include those groups and solo practitioners subject to the CY 2018 VM that participate in a Shared Savings Program ACO and do not fall within Category 1. As finalized for the CY 2018 payment adjustment period (80 FR 71285), all groups and solo practitioners that participate in a Shared Savings Program ACO and fall in Category 2 will be subject to an automatic downward payment adjustment under the VM. In the CY 2017 PFS proposed rule, we proposed that, for groups and solo practitioners that participate in a Shared Savings Program ACO that did not VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 successfully report quality data as required by the Shared Savings Program under § 425.504 and are in Category 1 as a result of reporting quality data to the PQRS outside of the ACO, we would classify their quality composite for the VM for the CY 2018 payment adjustment period as ‘‘average quality (81 FR 46447).’’ As finalized in the CY 2015 PFS final rule with comment period (79 FR 67943), the cost composite for groups and solo practitioners that participate in a Shared Savings Program ACO will be classified as ‘‘average cost.’’ Because we would not have the ACO’s quality data for these groups and solo practitioners, we expressed our belief that it would be appropriate to use the quality data they reported to the PQRS outside the ACO to determine whether they avoided the PQRS payment adjustment and whether they would be in Category 1 or 2 for purposes of the VM, but not to calculate a quality composite using the qualitytiering methodology. As we stated previously, we continue to believe that it is appropriate to calculate a quality composite for groups and solo practitioners participating in the Shared Savings Program based on the ACO’s quality data (79 FR 67944). We noted that the proposal was not intended to encourage groups and solo practitioners that participate in a Shared Savings Program ACO to report to the PQRS outside the ACO, but in the event the ACO does not successfully report quality data on behalf of their EPs for purposes of PQRS, to provide them with a safeguard that would allow them to avoid the PQRS payment adjustment and the automatic downward adjustment under the VM. We encourage groups and solo practitioners to continue to report through the ACO in order to promote clinical and financial integration within the ACO and for the Medicare beneficiaries they treat. For groups and solo practitioners that participate in a Shared Savings Program ACO that successfully reports quality data on behalf of their EPs for purposes of PQRS as required by the Shared Savings Program under § 425.504, we will calculate their VM for the CY 2018 payment adjustment period according to the policies established in the CY 2015 PFS final rule with comment period (79 FR 67941 to 67947 and 79 FR 67956 to 67957) and CY 2016 PFS final rule with comment period (80 FR 71283 to 71286 and 80 FR 71294). We solicited comment on these proposals and also proposed corresponding revisions to § 414.1210(b)(2). PO 00000 Frm 00353 Fmt 4701 Sfmt 4700 80521 As discussed in section III.H. of this final rule, to allow affected EPs that participate in an ACO to report separately for the CY 2017 PQRS payment adjustment, we proposed a secondary PQRS reporting period for EPs that were in an ACO that did not successfully report quality data on behalf of the EPs in the group and those who are solo practitioners. Specifically, we proposed that affected individual EPs or groups, who report under an ACO, may separately report outside the ACO either as individual EPs (using the registry, QCDR, or EHR reporting option) or using one of the group registry, QCDR, or EHR reporting options (note these EPs and groups would not need to register for one of these group reporting options, but rather could mark the data as group-level data in their submission) during a secondary PQRS reporting period for the CY 2017 PQRS payment adjustment if they were a participant in an ACO that did not successfully report quality data on their behalf during the established reporting period for the CY 2017 PQRS payment adjustment. We proposed the secondary PQRS reporting period for the CY 2017 PQRS payment adjustment would coincide with the reporting period for the CY 2018 PQRS payment adjustment (that is, January 1, 2016 through December 31, 2016). This section addresses how we proposed to use, for purposes of the CY 2017 VM, the PQRS data reported by the EPs in the group and those who are solo practitioners outside of the ACO using the secondary PQRS reporting period when the ACO did not successfully report quality data on behalf of their EPs for purposes of PQRS as required by the Shared Savings Program under § 425.504 for the CY 2017 PQRS payment adjustment. For the CY 2017 payment adjustment period, if a Shared Savings Program ACO did not successfully report quality data on behalf of their EPs for purposes of PQRS as required by the Shared Savings Program under § 425.504 for the CY 2017 PQRS payment adjustment, then we propose to use the data reported to the PQRS by the EPs (as a group using one of the group registry, QCDR, or EHR reporting options or as individuals using the registry, QCDR, or EHR reporting option) under the participant TIN) outside of the ACO during the secondary PQRS reporting period to determine whether the TIN would fall in Category 1 or Category 2 under the VM. We proposed to apply the twocategory approach finalized for the CY 2017 VM (79 FR 67938 to 67939 and as revised in 80 FR 71280 to 71281) based E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80522 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations on participation in the PQRS by groups and solo practitioners to determine whether groups and solo practitioners that participate in a Shared Savings Program ACO, but report to the PQRS outside of the ACO, would fall in Category 1 or Category 2 under the VM. As discussed in section III.H. of this final rule, we proposed to assess the individual EP or group’s 2016 data submitted outside the ACO and during the secondary PQRS reporting period against the reporting requirements for the CY 2018 PQRS payment adjustment. Therefore, we proposed that groups that meet the criteria to avoid PQRS payment adjustment for CY 2018 as a group practice participating in the PQRS GPRO (using one of the group registry, QCDR, or EHR reporting options) or have at least 50 percent of the group’s EPs meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals (using the registry, QCDR, or EHR reporting option), based on data submitted outside the ACO and during the secondary PQRS reporting period, would be included in Category 1 for the CY 2017 VM. We also proposed that solo practitioners that meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals using the registry, QCDR, or EHR reporting option, based on data submitted outside the ACO and during the secondary PQRS reporting period, would be included in Category 1 for the CY 2017 VM. Category 2 would include those groups and solo practitioners subject to the CY 2017 VM that participate in a Shared Savings Program ACO and do not fall within Category 1. As finalized for the CY 2017 payment adjustment period (79 FR 67946), all groups and solo practitioners that participate in a Shared Savings Program ACO and fall in Category 2 will be subject to an automatic downward payment adjustment under the VM. For groups and solo practitioners that participate in a Shared Savings Program ACO that did not successfully report quality data as required by the Shared Savings Program under § 425.504 and are in Category 1 as a result of reporting quality data to the PQRS outside of the ACO using the secondary PQRS reporting period, we propose to classify their quality composite for the VM for the CY 2017 payment adjustment period as ‘‘average quality’’ for the same reasons described above for the CY 2018 payment adjustment period. As finalized in the CY 2015 PFS final rule with comment period (79 FR 67943), the cost composite for groups and solo practitioners that participate in a Shared VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Savings Program ACO will be classified as ‘‘average cost.’’ If EPs who are part of a group or are solo practitioners who participated in a Shared Savings Program ACO in 2015 that did not successfully report quality data on their behalf decide to use the secondary PQRS reporting period, it is important to note that such groups and solo practitioners should expect to be initially classified as Category 2 and receive an automatic downward adjustment under the VM for items and services furnished in CY 2017 until CMS is able to determine whether the group or solo practitioner met the criteria to avoid the PQRS payment adjustment as described above. First, we would need to process the data submitted for 2016. Second, we would need to determine whether or not the group or solo practitioner would be classified as Category 1 or Category 2 for the CY 2017 VM and notify the group or solo practitioner if there is a change in the VM status. Third, we would need to update the group or solo practitioner’s status so that they will stop receiving an automatic downward adjustment under the VM for items and services furnished in CY 2017 and reprocess all claims that were previously paid. Since groups and solo practitioners taking advantage of this secondary reporting period for the 2017 VM will have missed the deadline for submitting an informal review request for the 2017 VM, we proposed the informal review submission periods for these groups and solo practitioners would occur during the 60 days following the release of the QRURs for the 2018 VM. We requested comment on these proposals. We also proposed corresponding revisions to § 414.1210(b)(2). The following is a summary of the comments we received regarding these proposals. Comment: Commenters supported our proposals to use the PQRS data reported by EPs outside of the ACO for the CY 2017 and CY 2018 VM when the ACO does not successfully report quality data on behalf of its EPs for purposes of PQRS as required by the Shared Savings Program under § 425.504. Several commenters requested that CMS consider holding these EPs harmless from VM adjustments for both the 2017 and 2018 payment adjustment years. Commenters stated EPs would not know if the ACO failed to report for PQRS until close to the end of the reporting period which would not allow sufficient time for them to report separately. In addition, commenters stated EPs are not in direct control of decisions made by PO 00000 Frm 00354 Fmt 4701 Sfmt 4700 the ACO, and therefore, should not be penalized if the ACO does not successfully report quality data. One commenter also stated that if the EPs had been aware of the option earlier in the 2016 reporting period, it would be a more viable proposal. Response: As discussed in sections III.H. and III.K.1.e. of this final rule, we are finalizing our proposals to remove the prohibition on EPs who are part of a group or solo practitioner that participates in a Shared Savings Program ACO, for purposes of PQRS reporting for the CY 2017 and CY 2018 payment adjustments, to report outside the ACO. As discussed in section III.H. of this final rule, to allow affected EPs that participate in an ACO to report separately for the CY 2017 PQRS payment adjustment, we are finalizing our proposal to create a secondary PQRS reporting period for EPs that were in an ACO that did not successfully report quality data on behalf of the EPs in the group and those who are solo practitioners. Specifically, in section III.H. of this final rule, we are finalizing that affected individual EPs or groups, who report under an ACO, may separately report outside the ACO either as individual EPs (using the registry, QCDR, or EHR reporting option) or using one of the group registry, QCDR, or EHR reporting options (note these EPs and groups would not need to register for one of these group reporting options, but rather mark the data as group data in their submission) during a secondary PQRS reporting period for the CY 2017 PQRS payment adjustment if they were a participant in an ACO that did not successfully report quality data on their behalf during the established reporting period for the CY 2017 PQRS payment adjustment. We are also finalizing in section III.H. of this final rule that the secondary PQRS reporting period for the CY 2017 PQRS payment adjustment would coincide with the reporting period for the CY 2018 PQRS payment adjustment (that is, January 1, 2016, through December 31, 2016). We appreciate the commenters’ support of our proposal to use the PQRS data reported by EPs outside of the ACO for the CY 2017 and CY 2018 VM when the ACO does not successfully report quality data on behalf of its EPs and are finalizing the policies as proposed. We plan to communicate with the ACOs (and their participant TINs) that did not successfully report quality data on behalf of their EPs for purposes of PQRS for the CY 2017 PQRS payment adjustment to inform them about the reporting during the secondary PQRS reporting period. We encourage EPs to E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations communicate with their ACO and report quality data in the event the ACO does not successfully report quality data as required by the Shared Savings Program under § 425.504 for the CY 2018 PQRS payment adjustment. For the CY 2018 payment adjustment period, we are finalizing that, if a Shared Savings Program ACO does not successfully report quality data on behalf of their EPs for purposes of PQRS as required by the Shared Savings Program under § 425.504, then we will use the data reported to the PQRS by the EPs under the participant TIN (as a group (using one of the group registry, QCDR, or EHR reporting options) or as individuals (using the registry, QCDR, or EHR reporting option) outside of the ACO to determine whether the TIN would fall in Category 1 or Category 2 under the VM. We are also finalizing that we will apply the two-category approach finalized for the CY 2018 VM (80 FR 71280) based on participation in the PQRS by groups and solo practitioners to determine whether groups and solo practitioners that participate in a Shared Savings Program ACO, but report to the PQRS outside of the ACO, would fall in Category 1 or Category 2 under the VM. Thus, if groups that participate in a Shared Savings Program ACO in 2016 report quality data to the PQRS outside of the ACO and meet the criteria to avoid PQRS payment adjustment for CY 2018 as a group using one of the group registry, QCDR, or EHR reporting options or have at least 50 percent of the group’s EPs meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals using the registry, QCDR, or EHR reporting option by reporting quality data to PQRS outside of the ACO, then they will be included in Category 1 for the CY 2018 VM. If solo practitioners that participate in a Shared Savings Program ACO in 2016 report quality data to the PQRS outside of the ACO and meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals using the registry, QCDR, or EHR reporting option, then they will also be included in Category 1. Category 2 will include those groups and solo practitioners subject to the CY 2018 VM that participate in a Shared Savings Program ACO and do not fall within Category 1. For the CY 2017 payment adjustment period, we are finalizing that, if a Shared Savings Program ACO did not successfully report quality data on behalf of their EPs for purposes of PQRS as required by the Shared Savings Program under § 425.504 for the CY 2017 PQRS payment adjustment, then we will use the data reported to the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PQRS by the EPs under the participant TIN (as a group using one of the group registry, QCDR, or EHR reporting options or as individuals using the registry, QCDR, or EHR reporting option) outside of the ACO during the secondary PQRS reporting period to determine whether the TIN would fall in Category 1 or Category 2 under the VM. We are also finalizing that we will apply the two-category approach finalized for the CY 2017 VM (79 FR 67938 to 67939 and as revised in 80 FR 71280 to 71281) based on participation in the PQRS by groups and solo practitioners to determine whether groups and solo practitioners that participate in a Shared Savings Program ACO, but report to the PQRS outside of the ACO, would fall in Category 1 or Category 2 under the VM. In section III.H. of this final rule, we finalized that we will assess the individual EP or group’s 2016 data submitted outside the ACO and during the secondary PQRS reporting period against the reporting requirements for the CY 2018 PQRS payment adjustment. Therefore, we are also finalizing that groups that meet the criteria to avoid PQRS payment adjustment for CY 2018 as a group practice participating in the PQRS GPRO (using one of the group registry, QCDR, or EHR reporting options) or have at least 50 percent of the group’s EPs meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals (using the registry, QCDR, or EHR reporting option), based on data submitted outside the ACO and during the secondary PQRS reporting period, will be included in Category 1 for the CY 2017 VM. We are also finalizing that solo practitioners that meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals using the registry, QCDR, or EHR reporting option, based on data submitted outside the ACO and during the secondary PQRS reporting period, will be included in Category 1 for the CY 2017 VM. Category 2 will include those groups and solo practitioners subject to the CY 2017 VM that participate in a Shared Savings Program ACO and do not fall within Category 1. Comment: Several commenters supported our proposal to classify the quality composite of TINs that report outside of the ACO as ‘‘average quality’’ for the CY 2017 VM so that these EPs are protected from downward adjustments under quality-tiering; however, few commenters stated that it would be appropriate to apply the quality-tiering methodology for the 2018 VM payment adjustment when TINs in the Shared Savings Program report PO 00000 Frm 00355 Fmt 4701 Sfmt 4700 80523 separately from the ACO. One commenter stated that, for the 2018 VM, in cases where measures are submitted by both the EP and the ACO, the best performance be counted and the EP should be eligible for a payment adjustment based on performance; and in cases where the EP opts to report through an ACO, but the ACO fails to report, the EP should receive a neutral payment adjustment. One commenter supported our proposal to classify the quality composite of TINs that report outside of the ACO as ‘‘average quality’’ for the CY 2018 VM. Response: As we stated previously, we continue to believe that it is appropriate to calculate a quality composite for groups and solo practitioners participating in the Shared Savings Program based on the ACO’s quality data (79 FR 67944). Our proposed policies were not intended to encourage groups and solo practitioners that participate in a Shared Savings Program ACO to report to the PQRS outside the ACO, but in the event the ACO does not successfully report quality data on behalf of their EPs for purposes of PQRS, to provide them with a safeguard that would allow them to avoid the PQRS payment adjustment and the automatic downward adjustment under the VM. We encourage groups and solo practitioners to continue to report through the ACO in order to promote clinical and financial integration within the ACO and for the Medicare beneficiaries they treat. Therefore, we are finalizing as proposed that, for groups and solo practitioners that participate in a Shared Savings Program ACO that did not successfully report quality data as required by the Shared Savings Program under § 425.504 and are in Category 1 as a result of reporting quality data to the PQRS outside of the ACO, we will classify their quality composite for the VM for the CY 2018 payment adjustment period as ‘‘average quality.’’ We are also finalizing that for groups and solo practitioners that participate in a Shared Savings Program ACO that did not successfully report quality data as required by the Shared Savings Program under § 425.504 and are in Category 1 as a result of reporting quality data to the PQRS outside of the ACO using the secondary PQRS reporting period, we will classify their quality composite for the VM for the CY 2017 payment adjustment period as ‘‘average quality’’. As finalized in the CY 2015 PFS final rule with comment period (79 FR 67943), the cost composite for groups and solo practitioners that participate in a Shared Savings Program ACO will be E:\FR\FM\15NOR2.SGM 15NOR2 80524 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations classified as ‘‘average cost.’’ We are also finalizing the corresponding revisions to § 414.1210(b)(2). Since groups and solo practitioners taking advantage of the secondary PQRS reporting period for the CY 2017 PQRS payment adjustment will have missed the deadline for submitting an informal review request for the 2017 VM, we proposed the informal review submission periods for these groups and solo practitioners would occur during the 60 days following the release of the QRURs for the 2018 VM. We did not receive any comments on this proposal and are finalizing this policy as proposed. M. Physician Self-referral Updates 1. Unit-based Compensation in Arrangements for the Rental of Office Space or Equipment a. The Physician Self-referral Statute and Regulations (2) Regulatory History mstockstill on DSK3G9T082PROD with RULES2 (1) Section 1877 of the Act Section 6204 of the Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101– 239) (OBRA 1989), enacted on December 19, 1989, added section 1877 to the Act. Section 1877 of the Act, also known as the physician self-referral law: (1) Prohibits a physician from making referrals for certain designated health services (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership or compensation), unless an exception applies; and (2) prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third party payer) for those referred services. The statute establishes a number of specific exceptions, and grants the Secretary the authority to create regulatory exceptions for financial relationships that pose no risk of program or patient abuse. Additionally, the statute mandates refunding any amount collected under a bill for an item or service furnished under a prohibited referral. Finally, the statute imposes reporting requirements and provides for sanctions, including civil monetary penalty provisions. Section 1877 of the Act became effective on January 1, 1992. Section 4207(e) of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101–508) (OBRA 1990), enacted on November 5, 1990, amended certain provisions of section 1877 of the Act to clarify definitions and reporting requirements relating to physician ownership and referrals and to provide an additional exception to the prohibition. Several subsequent laws further changed section 1877 of the Act. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Section 13562 of the Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103– 66) (OBRA 1993), enacted on August 10, 1993, expanded the referral prohibition to cover certain other ‘‘designated health services’’ in addition to clinical laboratory services, modified some of the existing statutory exceptions, and added new exceptions. Section 152 of the Social Security Act Amendments of 1994 (SSA 1994) (Pub. L. 103–432), enacted on October 31, 1994, amended the list of designated health services, changed the reporting requirements at section 1877(f) of the Act, and modified some of the effective dates established by OBRA 1993. Some provisions relating to referrals for clinical laboratory services were effective retroactively to January 1, 1992, while other provisions became effective on January 1, 1995. (a) General Background The following discussion provides a chronology of our more significant and comprehensive rulemakings; it is not an exhaustive list of all rulemakings related to the physician self-referral law. Following the passage of section 1877 of the Act, we proposed rulemakings in 1992 (related only to referrals for clinical laboratory services) (57 FR 8588) (the 1992 proposed rule) and 1998 (addressing referrals for all DHS) (63 FR 1659) (the 1998 proposed rule). We finalized the proposals from the 1992 proposed rule in 1995 (60 FR 41914) (the 1995 final rule), and issued final rules following the 1998 proposed rule in three stages. The first final rulemaking (Phase I) was published in the January 4, 2001 Federal Register (66 FR 856) as a final rule with comment period. The second final rulemaking (Phase II) was published in the March 26, 2004 Federal Register (69 FR 16054) as an interim final rule with comment period. Due to a printing error, a portion of the Phase II preamble was omitted from the March 26, 2004 Federal Register publication. That portion of the preamble, which addressed reporting requirements and sanctions, was published on April 6, 2004 (69 FR 17933). The third final rulemaking (Phase III) was published in the September 5, 2007 Federal Register (72 FR 51012) as a final rule. In addition to Phase I, Phase II, and Phase III, we issued final regulations on August 19, 2008 in the ‘‘Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates’’ final rule with comment period (73 FR 48434) (the FY 2009 IPPS final rule). That rulemaking made various revisions to PO 00000 Frm 00356 Fmt 4701 Sfmt 4700 the physician self-referral regulations, including provisions that prohibited certain per unit-of-service (often referred to as ‘‘per-click’’) and percentage-based compensation formulas for determining the rental charges for office space and equipment lease arrangements. We issued additional final regulations after passage of the Affordable Care Act. In the CY 2011 PFS final rule with comment period (75 FR 73170), we codified a disclosure requirement established by the Affordable Care Act for the in-office ancillary services exception. We also issued regulations in the CY 2011 OPPS final rule with comment period (75 FR 71800), the CY 2012 OPPS final rule with comment period (76 FR 74122), and the CY 2015 OPPS final rule with comment period (79 FR 66770) that established or revised certain regulatory provisions concerning physician-owned hospitals to codify and interpret the Affordable Care Act’s revisions to section 1877 of the Act. Finally, in the CY 2016 PFS final rule (80 FR 70886), we issued regulations to accommodate delivery and payment system reform, reduce burden, and to facilitate compliance. In that rulemaking, we established two new exceptions, clarified certain provisions of the physician self-referral law, updated regulations to reflect changes in terminology, and revised definitions related to physician-owned hospitals. One of the new exceptions, the exception for timeshare arrangements at § 411.357(y), includes a prohibition on certain per unit-ofservice compensation formulas. (b) Unit-based Compensation We have addressed the issue of unitbased compensation in several rulemakings. Sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act provide that, for an arrangement for the rental of office space or equipment to satisfy the relevant exceptions to the physician self-referral law, the rental charges over the term of the lease must be set in advance, be consistent with fair market value, and not be determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties. Interpreting this ‘‘volume or value’’ standard in the 1998 proposed rule, we proposed that compensation could be based on units of service (for example, ‘‘per-use’’ equipment rentals) provided that the units of service did not include services provided to patients who were referred by the physician receiving the payment. For example, a physician who owned a lithotripter could rent it to a hospital on a per-procedure basis, E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations except for lithotripsies for patients referred by the physician owner. Instead, payments for the use of the lithotripter for those patients would have to use a methodology that did not vary with referrals. (63 FR 1714; see also 66 FR 876). We further proposed that arrangements in which a physician rents equipment to an entity that furnishes a designated health service, such as a hospital that rents an MRI machine, with the physician receiving rental payments on a ‘‘per-use’’ or ‘‘per-click’’ basis (that is, a rental payment is generated each time the machine is used) do not prohibit the physician from otherwise referring to the entity, provided that these kinds of arrangements are typical and comply with the fair market value and other standards that are included under the rental exception. However, because a physician’s compensation under this exception cannot reflect the volume or value of the physician’s own referrals, we proposed that the rental payments may not reflect ‘‘per-use’’ or ‘‘per-click’’ payments for patients who are referred for the service by the physician lessor (63 FR 1714). After reviewing the public comments in response to the 1998 proposed rule, we finalized in Phase I significant revisions with respect to the scope of the volume or value standard. We revised our interpretation of the ‘‘volume or value’’ standard for purposes of section 1877 of the Act to permit, among other things, payments based on a unit of service, provided that the unit-based payment is fair market value and does not vary over time (66 FR 876 through 879). Importantly, we permitted unit-based compensation formulas, even when the physician receiving the payment has generated the payment through a DHS referral. To reach this position, we noted that page 814 of the House Conference Committee report (H. Rep. No. 213, 103rd Cong., 1st Sess. (1993)) stated, with respect to the statutory exceptions for the rental of office space and equipment in sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act, that the conferees ‘‘intend[ed] that rental charges for [office] space and equipment leases may be based on daily, monthly, or other time-based rates, or rates based on units of service furnished, so long as the amount of the time-based or units of service rates does not fluctuate during the contract period based on the volume or value of referrals between the parties to the lease or arrangement.’’ (66 FR 876). However, we stated our unequivocal belief that arrangements in which the lessor is compensated each time that the lessor VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 refers a patient to the lessee for a service performed in the leased office space or using the leased equipment have an obvious potential for abuse and could incent overutilization (66 FR 878). We indicated that we would continue to monitor financial arrangements in the health care industry and would revisit particular regulatory decisions if we determine that there has been abuse or overutilization (66 FR 860). In the CY 2008 PFS proposed rule (72 FR 38122), we stated that arrangements between a physician lessor and an entity lessee under which the physician lessor receives unit-of-service payments are inherently susceptible to abuse because the physician lessor has an incentive to profit from referring a higher volume of patients to the lessee. We proposed that space and equipment leases may not include per-click payments to a physician lessor for services rendered by an entity lessee to patients who are referred by a physician lessor to the entity (72 FR 38183). We also solicited comments on the question of whether we should prevent per-click payments in situations in which the physician is the lessee and a DHS entity is the lessor. The CY 2008 PFS proposed rule also included eight other significant proposed revisions to the physician selfreferral regulations. Due to the large number of physician self-referral proposals, the significance of the provisions both individually and in concert with each other, and the volume of public comments received in response to the CY 2008 PFS proposed rule, we declined to finalize our proposals, including our proposal to prohibit certain per unit-of-service compensation formulas in arrangements for the rental of office space and equipment, in the CY 2008 PFS final rule (72 FR 66222). After consideration of the public comments and our independent research, we finalized regulations prohibiting certain per-unit of service compensation formulas for determining office space and equipment rental charges in the FY 2009 IPPS final rule (73 FR 48434). Specifically, we revised § 411.357(a)(4) and (b)(4) to prohibit rental charges for the rental of office space or equipment that are determined using a formula based on per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. In doing so, we relied on our authority in section 1877(e)(1)(A)(vi) and (B)(vi) of the Act, which permits the secretary to impose by regulation other requirements needed to protect against program or patient abuse. We also revised the exceptions at §§ 411.357(l) PO 00000 Frm 00357 Fmt 4701 Sfmt 4700 80525 and (p) for fair market value compensation and indirect compensation arrangements, respectively, to include similar limitations on the formula for determining office space and equipment rental charges, as applicable. We did so using our authority at section 1877(b)(4) of the Act, as those exceptions were established using that authority (See 73 FR 48713 through 48721). We determined it necessary to limit the type of per-click compensation formulas available for arrangements for the rental of office space and equipment because we believe that arrangements under which a lessor receives unit-of-service payments are inherently susceptible to abuse. Specifically, we believe that the lessor has an incentive to profit from referring a higher volume of patients to the lessee and from referring patients to the lessee that might otherwise go elsewhere for services. b. Development of This Rulemaking (1) Council for Urological Interests v. Burwell On June 12, 2015, the D.C. Circuit (the Court) issued an opinion in Council for Urological Interests v. Burwell, 790 F.3d 212 (D.C. Cir. 2015), that addressed the prohibition on per-click rental charges for the lease of equipment found at § 411.357(b)(4)(ii)(B). In its ruling, the Court agreed with CMS that section 1877(e)(1)(B)(vi) of the Act provides the Secretary the authority to prohibit perclick leasing arrangements. The Court concluded that— The text of the statute does not unambiguously preclude the Secretary from using her authority to add a requirement that bans per-click leases. To the contrary, the statutory text of the exception clearly provides the Secretary with the discretion to impose any additional requirements that she deems necessary ‘‘to protect against program or patient abuse.’’ (Council for Urological Interests, 790 F.3d at 219.) The Court further concluded that the relevant language in the House Conference Report merely interpreted section 1877(e)(1)(B)(iv) of the Act, and thus did not preclude CMS from imposing additional requirements under section 1877(e)(1)(B)(vi) of the Act. It stated that the legislative history ‘‘simply indicates that, as written, the rental-charge clause [in section 1877(e)(1)(B)(iv) of the Act] does not preclude per-click leases’’ and stated further that ‘‘[n]othing in the legislative history suggests a limit on [the Secretary’s] authority’’ to prohibit perclick leases under section 1877(e)(1)(B)(vi) of the Act (Id. at 222.). The Court also concluded, however, that CMS’s discussion of the House E:\FR\FM\15NOR2.SGM 15NOR2 80526 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Conference Report in the FY 2009 IPPS final rule contained an unreasonable interpretation of the conferees’ statements concerning sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act, and it remanded the case to the agency to permit a fuller consideration of the legislative history. This rulemaking addresses that decision. (2) The FY 2009 IPPS Final Rule As discussed above, in the FY 2009 IPPS final rule, we revised the exceptions for the rental of office space and equipment to include in each a requirement that the rental charges for the office space or equipment are not determined using a formula based on per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. We explained that our decision to add this requirement was ultimately based on our authority under section 1877(e)(1)(B)(vi) of the Act to promulgate ‘‘other requirements’’ needed to protect against program or patient abuse. However, we also discussed certain legislative history contained in the House Conference Report addressing sections 1877(e)(1)(A)(iv) and 1877(e)(1)(B)(iv) of the Act, which establish requirements that rental charges over the term of a lease for office space or rental equipment be set in advance, be consistent with fair market value, and not be determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties. With respect to those statutory conditions, the language in the House Conference Report states that— mstockstill on DSK3G9T082PROD with RULES2 The conferees intend that charges for space and equipment leases may be based on daily, monthly, or other time-based rates, or rates based on units of service furnished, so long as the amount of time-based or units of service rates does not fluctuate during the contract period based on the volume or value of referrals between the parties to the lease or arrangement. (H.R. Rep. No. 103–213, at 814 (1993).) In the FY 2009 IPPS final rule, we noted that CMS had previously concluded that this language indicated that Congress intended to permit leases that included per-click payments, even for patients referred by the physician lessor (66 FR 940), but stated that the language could also be interpreted as excluding from the office space and equipment lease exceptions those lease arrangements that include per-click payments for services provided to patients referred from one party to the other (73 FR 48716). Specifically, we stated that, where the total amount of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 rent (that is, the rental charges) over the term of the lease is directly affected by the number of patients referred by one party to the other, those rental charges can arguably be said to ‘‘take into account’’ or ‘‘fluctuate during the contract period based on’’ the volume or value of referrals between the parties. The Court found this revised interpretation to be an unreasonable reading of the language of the House Conference Report. The Court remanded § 411.357(b)(4)(ii)(B) to the Secretary for further proceedings consistent with its opinion, and directed that the Secretary should consider whether a ban on perclick equipment leases is consistent with the House Conference Report. c. The CY 2017 PFS Proposed Rule: Re-proposal of Limitation on the Types of Per-unit of Service Compensation Formulas for Determining Office Space and Equipment Rental Charges In the CY 2017 PFS proposed rule, we proposed certain requirements for arrangements involving the rental of office space or equipment. Specifically, using the same language in existing § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B), we proposed to include at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) a requirement that rental charges for the lease of office space or equipment are not determined using a formula based on per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. We used the authority granted to the Secretary in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to re-propose this requirement in the exceptions at § 411.357(a) and (b) for the rental of office space and equipment, respectively. We used the authority granted to the Secretary in section 1877(b)(4) of the Act to repropose this requirement in the exceptions at § 411.357(l) and (p) for fair market value compensation and indirect compensation arrangements, respectively. For the reasons set forth below, we are finalizing without modification at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) a requirement that rental charges for the lease of office space or equipment are not determined using a formula based on per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. We emphasize that we did not propose and are not finalizing an absolute prohibition on rental charges based on units of service furnished. In general, per-unit of service rental charges for the rental of office space or equipment are permissible. We PO 00000 Frm 00358 Fmt 4701 Sfmt 4700 proposed to limit, and in this final rule are finalizing a limit on, the general rule by prohibiting per-unit of service rental charges where the lessor generates the payment from the lessee through a referral to the lessee for a service to be provided in the rented office space or using the rented equipment. Thus, under this final rule, per-unit of service rental charges for the rental of office space or equipment are permissible, but only in those instances where the referral for the service to be provided in the rented office space or using the rented equipment did not come from the lessor. (1) Authority In accordance with the Court’s opinion in Council for Urological Interests, in the proposed rule, we set forth the Secretary’s authority to include in the exceptions applicable to office space and equipment leases a requirement that rental charges are not determined using a formula based on per-unit of service rental charges that reflect services provided to patients referred by the lessor to the lessee. Our determination followed the Court’s reasoning, excerpted below, in rejecting the Council for Urological Interests’ assertion that the Secretary lacked the authority to impose a ban on ‘‘per-click’’ equipment—and by correlation—office space leases. We also described why limiting the types of per-click rental charges that would not violate the physician self-referral law’s referral and claims submission prohibitions is consistent with the language of the House Conference Report. As the Court stated, the physician self-referral law gives the Secretary power to add requirements as needed to protect against program or patient abuse, even if Congress did not anticipate such abuses at the time of enactment of the statute. Specifically, although Congress may not have originally included a ban on per-click rental charges in office space and equipment lease arrangements, it ‘‘empowered the Secretary to make her own assessment of the needs of the Medicare program and regulate accordingly.’’ (Council for Urological Interests, 790 F.3d at 220.) The statute explicitly permits the Secretary to impose additional conditions on arrangements for the rental of office space or equipment, and nowhere expressly states that per-click rates must always be permitted. Thus, as the Court confirmed, the Secretary’s regulation limiting the use of per-click compensation formulas ‘‘can properly be classified as an ‘other’ requirement expressly permitted by sections E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 1877(e)(1)(A)(vi) and (B)(vi) of the Act.’’ (Id.) The Secretary’s authority to impose requirements regarding the type of compensation formulas upon which office space and equipment rental charges may be based is not constrained by the House Conference Report. In the proposed rule, we acknowledged that the language in the House Conference Report states Congress’ intent at the time of enactment of the physician selfreferral law that sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act not be interpreted as prohibiting charges for the rental of office space or equipment that are based on units of service furnished. We did not purport to interpret this language as implying anything other than the conferees’ understanding—at the time of enactment of the statute—that the statute as written did not prohibit rental charges based on units of service rates. But Congress also gave the Secretary the authority in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose by regulation other requirements as needed to protect against program or patient abuse. Nowhere in the House Conference Report did Congress express an intent to limit the authority granted to the Secretary in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act (as enacted). In fact, the House Conference Report was completely silent regarding sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act, leaving the express words of the statute to speak for themselves. As the Court noted— The conference report . . . states only that rental charges ‘‘may’’ be based on units of service. The language is not obligatory. Instead, it simply indicates that, as written, the rental-charge clause [(section 1877(e)(1)(B)(iv) of the Act)] does not preclude per-click leases. But, as we have already explained, there is more to the statute than this clause, and to qualify for the exception, a rental agreement must comply with all six clauses, not merely the rentalcharge clause alone. The final clause [(section 1877(e)(1)(B)(vi) of the Act)] gives the Secretary the authority to add further requirements. Nothing in the legislative history suggests a limit on this authority. We conclude that the statute does not unambiguously forbid the Secretary from banning per-click leases as she evaluates the needs of the Medicare system and its patients. (790 F.3d at 221–22 (footnote omitted).) Moreover, as the Court further noted, a statement that unit of service-based rental charges are not precluded by sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act as they are written is not equivalent to a statement that the Secretary must continue to permit such VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 charges as she reevaluates, in light of experience, the operation of the statute and the need to protect the Medicare program and its beneficiaries against abuse. (Id. at 222 n.7; see also id. at 222 n.6 (‘‘Congress has expressly delegated to the Secretary the authority to promulgate additional requirements, as she has done here, and the legislative history does not clearly impose a constraint on that power.’’).) In the proposed rule, we discussed the Secretary’s broad authority under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose conditions on arrangements for the rental of office space or equipment in order to protect against program or patient abuse. That authority is not limited by the express words of the statute as it is in other provisions of section 1877 of the Act. In agreement, the Court in Council for Urological Interests explained— . . . Congress knew how to limit the Secretary’s authority to impose additional requirements to the various exceptions [to the physician self-referral law]. In [section 1877(e)(2) of the Act], Congress excludes bona fide employment relationships from the definition of compensation arrangements. This provision states that the employment relationship must comply with various requirements, including that the pay not be determined ‘‘in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician.’’ This employment exception also allows the Secretary to impose ‘‘other requirements,’’ just as the equipment rental exception. But the statute then goes on to say that the listed requirements ‘‘shall not prohibit the payment of remuneration in the form of a productivity bonus based on services performed personally by the physician.’’ This language shows that Congress knew how to cabin the Secretary’s authority to impose ‘‘other’’ requirements and that it knew how to further clarify what it meant by compensation that does not take into account the volume of business generated between parties. That Congress employed neither of these tools with reference to the [exception for the rental of office space or equipment] again supports reading the statute as giving the Secretary broad discretion as she regulates in this area. (790 F.3d at 221 (citations omitted).) The Secretary’s authority to limit the use of per-unit of service rental charges in arrangements for the rental of office space or equipment is particularly clear when the exceptions for the rental of office space and equipment are compared to other provisions in section 1877 of the Act. According to the Court in Council for Urological Interests— [T]he statute elsewhere expressly permits charging per-click fees in other contexts, showing that Congress knew how to authorize such payment terms when it wanted to. In [section 1877(e)(7)(A) of the PO 00000 Frm 00359 Fmt 4701 Sfmt 4700 80527 Act], Congress created an exception to the [physician self-referral law] that allows the continuation of certain group practice arrangements with a hospital. . . . The provision states that ‘‘[a]n arrangement between a hospital and a group under which designated health services are provided by the group but are billed by the hospital’’ is excepted from the ban on referrals if, among other things, ‘‘the compensation paid over the term of the agreement is consistent with fair market value and the compensation per unit of services is fixed in advance and is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties.’’ Comparing this provision to the [exceptions for the rental of office space and equipment] shows that Congress knew how to permit per-click payments explicitly, suggesting that the omission in this particular context was deliberate. . . . In other words, Congress’s decision not to include similar language in the [exceptions for the rental of office space and equipment] supports our conclusion that the statute is silent regarding the permissibility of per-click leases for equipment rentals. (790 F.3d at 220–21 (citations omitted).) In the proposed rule, we stated in summary that, as we similarly stated in the FY 2009 IPPS final rule (73 FR 48716), the physician self-referral statute responds to the context of the times in which it was enacted (by addressing known risks of overutilization and, in particular, by creating exceptions for common business arrangements), and also incorporates sufficient flexibility to adapt to changing circumstances and developments in the health care industry. For example, in section 1877(b)(4) of the Act, Congress authorized the Secretary to protect additional beneficial arrangements by promulgating new regulatory exceptions. In addition, Congress included the means to address evolving fraud risks by inserting into many of the exceptions—and notably, for our purposes, in the lease exceptions— specific authority for the Secretary to add conditions as needed to protect against abuse. This design reflects a recognition that a fraud and abuse law with sweeping coverage over most of the health care industry could not achieve its purpose over the long term if it were frozen in time. In short, the statute evidences Congress’ foresight in anticipating that the nature of fraud and abuse—and of beneficial industry arrangements—might change over time. (73 FR 48716 (citations omitted).) As we did in 2007 when we first proposed to impose additional requirements for rental charges in arrangements for the rental of office space and equipment, and in 2008 when we finalized regulations incorporating E:\FR\FM\15NOR2.SGM 15NOR2 80528 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 such additional requirements, we relied in making our proposal on the Secretary’s clear authority in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose such other requirements needed to protect against program or patient abuse. With respect to our proposal to include the same requirements at § 411.357(l) and (p), we determined that the revisions to § 411.357(l) and (p) are necessary to meet the standard set forth in section 1877(b)(4) of the Act, which authorizes the Secretary to establish exceptions to the statute’s referral and billing prohibitions only where the excepted financial relationships do not pose a risk of program or patient abuse. (2) Rationale for Proposal As we discussed in prior rulemakings, including the 1998 proposed rule, we stated in the proposed rule that a number of studies prior to the enactment of the physician self-referral law found that physicians who had financial relationships with entities to which they referred patients ordered more services than physicians without such financial relationships (63 FR 1661). We noted that studies conducted since that time, including recent studies by GAO, indicate that financial selfinterest continues to affect physicians’ medical decision making. In the FY 2009 IPPS final rule, we discussed in detail our rationale for finalizing the limitation on per-unit of service rental charges in arrangements for the rental of office space or equipment. We noted primary concerns regarding the potential for overutilization, patient steering and other anti-competitive effects, and reduction in quality of care and patient outcomes, as well as concerns regarding the potential for increased costs to the Medicare program. For the reasons set forth in the FY 2009 IPPS final rule, some of which we restated in the proposed rule, we stated our belief that, in order to protect against program or patient abuse, it is necessary to impose additional requirements on arrangements for the rental of office space or equipment. Specifically, we stated that we believe that it is necessary to prohibit rental charges that are determined using a formula based on per-unit of service rental charges to the extent that such charges reflect services provided to patients referred by the lessor to the lessee of the office space or equipment. In the CY 2017 PFS proposed rule, we noted that commenters responding to our proposal in the CY 2008 PFS proposed rule to impose additional requirements for office space and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 equipment lease arrangements provided compelling information regarding potential program or patient abuse. We were persuaded in 2008 to finalize requirements limiting per-unit of service rental charges in the exceptions applicable to the rental of office space or equipment, and stated our continued belief that these requirements continue to be necessary, due to our concerns that ‘‘per-click’’ lease arrangements in which the lessor makes referrals to the lessee that generate payments to the lessor— • Create an incentive for overutilization of imaging services (as described by MedPAC in its comments to our proposal in the CY 2008 PFS proposed rule), as well as other services, including therapeutic services; • Create an incentive for physicians to narrow their choice of treatment options to those for which they will realize a profit, even where the best course of action may be no treatment; • Influence physicians to refer to the lessee instead of referring to another entity that utilizes the same or different (and perhaps more efficacious) technology to treat the patient’s condition; • Result in physicians steering patients to equipment they own, even if it means having the patient travel to a non-convenient site for services using the leased equipment; and • Increase costs to the Medicare program when referring physicians pressure hospitals to use their leasing company despite not being the low cost provider. We noted that, in the CY 2016 PFS final rule, we expressed our continued concern that, when physicians have a financial incentive to refer a patient to a particular entity, this incentive can affect utilization, patient choice, and competition. Physicians can overutilize by ordering items and services for patients that, absent a profit motive, they would not have ordered. A patient’s choice is diminished when physicians steer patients to less convenient, lower quality, or more expensive providers of health care, just because the physicians are sharing profits with, or receiving remuneration from, the providers. And lastly, where referrals are controlled by those sharing profits or receiving remuneration, the medical marketplace suffers if new competitors cannot win business with superior quality, service, or price (80 FR 41926). We stated that, in establishing the exception at § 411.357(y) for timeshare arrangements, we determined it necessary to exclude from the exception any timeshare arrangements that incorporate compensation formulas based on: (1) A percentage of the PO 00000 Frm 00360 Fmt 4701 Sfmt 4700 revenue raised, earned, billed, collected, or otherwise attributable to the services provided while using the timeshare; or (2) per-unit of service fees, to the extent that such fees reflect services provided to patients referred by the party granting permission to use the timeshare to the party to which the permission is granted. We explained our belief that timeshare arrangements based on percentage compensation or per-unit of service compensation formulas present a risk of program or patient abuse because they may incentivize overutilization and patient steering. We noted in the CY 2016 PFS final rule, by way of example, that a per-patient compensation formula could incent the timeshare grantor to refer patients (potentially for unnecessary consultations or services) to the party using the timeshare because the grantor will receive a payment each time the premises, equipment, personnel, items, supplies, or services are used (80 FR 71331 through 71332). Similarly, we believe that arrangements utilizing rental charges for the rental of office space or equipment that are determined using a formula that rewards the lessor for each service the lessor refers to the lessee are susceptible to this and other abuse. Finally, we noted in the CY 2017 PFS proposed rule that we are not alone in our concern regarding overutilization and steering of beneficiaries resulting from arrangements in which a physician’s referral may provide future remuneration back to the physician. In two notable advisory opinions, OIG expressed its concern with per-unit of service compensation arrangements. Specifically, in Advisory Opinion 03– 08, OIG stated that ‘‘‘[p]er patient,’ ‘per click,’ ‘per order,’ and similar payment arrangements with parties in a position, directly or indirectly, to refer or recommend an item or service payable by a federal health care program are disfavored under the anti-kickback statute. The principal concern is that such arrangements promote overutilization . . . .’’ In Advisory Opinion 10–23, OIG noted that the arrangement that was the subject of the opinion ‘‘involves a ‘per-click’ fee structure, which is inherently reflective of the volume or value of services ordered and provided . . . .’’ The following is a summary of the comments we received regarding our reproposal. Comment: The majority of commenters that addressed the reproposed regulations at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) supported the restriction on per-unit of service (or per- E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations click) compensation formulas for determining the rental charges for office space and equipment lease arrangements. Many of these commenters offered general support, while others noted appreciation for our continued monitoring of financial relationships in the health care industry, particularly with respect to per-click compensation arrangements and the ‘‘misuses of physician-owned office space.’’ One commenter commended us for continuing to recognize the ‘‘perverse incentives created by compensation arrangements between physicians and other providers that are based on volume.’’ Another commenter specifically agreed that overutilization and abuse can occur under these types of arrangements and agreed with our re-proposal to limit them. One commenter commended us for keeping the integrity of the Medicare program in mind by re-proposing the per-click restrictions. This commenter and another noted that improper financial relationships risk wasting funds and could limit access to more appropriate treatment options. A third commenter encouraged us to ‘‘keep in place the relevant restriction on per-unit arrangements when payments are made to referral sources.’’ Another commenter acknowledged that a careful balance must be established between permitting physicians to lease office space or equipment to ensure access to patient care and avoiding potential risks of abuse of the Medicare program, and stated its appreciation that the restrictions we proposed on the formula for rental charges are reasonable and preserve the ability of physicians to lease office space and equipment from other physicians. Response: We continue to believe, and agree with the commenters, that arrangements for the rental of office space or equipment utilizing rental charges that are determined using a formula that rewards the lessor for each service the lessor refers to the lessee are susceptible to abuse. As discussed in the CY 2017 PFS proposed rule, such abuse includes the potential for overutilization, patient steering and stifling patient choice, and the reduction in quality of care and patient outcomes, as well as the potential for increased costs to the Medicare program (81 FR 46452). For the reasons explained in detail in the proposed rule and elsewhere in this final rule, we believe that, in order to protect against program or patient abuse, it is necessary to impose additional requirements on arrangements for the rental of office space or equipment. Specifically, we VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 believe that it is necessary to prohibit rental charges that are determined using a formula based on per-unit of service rental charges to the extent that such charges reflect services provided to patients referred by the lessor to the lessee of the office space or equipment. Therefore, using our using our authority at section 1877(e)(1)(A)(vi) and (B)(vi) of the Act, we are finalizing without modification the regulations reproposed at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B). Comment: One commenter welcomed what it referred to as a ‘‘clarification’’ that the restriction on per-unit of service compensation formulas applies only in instances where the referral that results in the payment for the use of the equipment comes from the lessor. Response: The regulations at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) prohibit perunit of service rental charges only to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. We discussed this limitation in the FY 2009 IPPS final rule, stating that the regulations do not prohibit per-click rental payments to physician lessors for services rendered to patients who were not referred to the lessee by the physician lessors, because such arrangements do not carry with them risk under the physician selfreferral statute (73 FR 48719). We again discussed the provision in the CY 2017 PFS proposed rule, stating that per-unit of service rental charges for the rental of office space or equipment are permissible, but only in those instances where the referral for the service to be provided in the rented office space or using the rented equipment does not come from the lessor (81 FR 46450). The re-proposed language at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) is identical to the regulatory provisions finalized in the FY 2009 IPPS final rule. Comment: We received one comment opposing our proposal to prohibit perunit of service (‘‘per-click’’) rental charges where the lessor generates the payment from the lessee through a referral to the lessee for a service to be provided in the rented office space or using the rented equipment. The commenter asserted that, in its opinion, our re-proposal of the limitation on perclick rental charges does not comply with the Court’s decision in Council for Urological Interests v. Burwell. The commenter asserted that, as a result, our re-proposal of the limitation on perclick rental charges is arbitrary and capricious. The commenter premised its objection to our proposal in two ways. First, the PO 00000 Frm 00361 Fmt 4701 Sfmt 4700 80529 commenter asserted that we lacked the authority to re-propose the regulations because our determination to prohibit certain per-click rental charges cannot be reconciled with the House Conference Report. The commenter asserted that we did ‘‘not even try to reconcile a ban on per-click [compensation formulas] with the [House] Conference Report.’’ At the same time, the commenter asserted that the Court rejected our explanation that, given the authority granted to the Secretary under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act, the House Conference Report does not constrain her authority to impose requirements regarding the type of compensation formulas upon which office space and equipment rental charges may be based. Second, the commenter rejected our justification for re-proposing the prohibition on certain per-click compensation formulas for determining rental charges in arrangements for the rental of office space and equipment. Specifically, the commenter claimed that we cited no ‘‘industry developments’’ since the enactment of the physician self-referral law or since our Phase I regulations that ‘‘now warrant a prohibition on per-click [rental charge formulas]’’; criticized our reliance on ‘‘concerns’’ and ‘‘belief[s]’’ informing our judgment that per-click rental charge arrangements create incentives for abuse and overutilization; and asserted that ‘‘only empirical data or evidence’’ can support a Secretarial determination under the physician selfreferral law that additional conditions are needed to protect against program or patient abuse. The commenter acknowledged that the GAO studies and other studies, as well as an OIG advisory opinion, referenced in the CY 2017 PFS proposed rule ‘‘stand . . . for the general proposition that physician financial interests can affect the utilization of medical tests and procedures.’’ Nonetheless, the commenter asserted that the reproposed regulations must be based on ‘‘recent’’ developments or ‘‘recent’’ studies showing abuse in per-click lease arrangements in order to stand. Response: We disagree with the commenter. The Secretary’s authority for the regulations re-proposed (and finalized here) at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B), which include a requirement that the rental charges for the lease of office space or equipment are not determined using a formula based on per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80530 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations lessee, is found in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act, which we detail below. The Court in Council for Urological Interests v. Burwell expressly confirmed this authority. See 790 F.3d at 219–22. We specifically disagree with—and address below—the commenter’s assertions that we lack the authority for this rulemaking because: (1) Our regulations cannot be reconciled with the House Conference Report; and (2) only recent empirical data or evidence can support a Secretarial determination under the physician self-referral law that additional conditions in the exceptions for the rental of office space and equipment are needed to protect against program or patient abuse. We first address the commenter’s assertion that a ban on per-click rental charges in arrangements for the lease of office space or equipment cannot be reconciled with the House Conference Report. The commenter is incorrect. In Council for Urological Interests, the Court itself explicitly reconciled such a ban with respect to per-click equipment leases, stating that the legislative history ‘‘simply indicates that, as written, the rental-charge clause [in section 1877(e)(1)(B)(iv) of the Act] does not preclude per-click leases’’ and emphasized that ‘‘[n]othing in the legislative history suggests a limit on [the Secretary’s] authority’’ to prohibit per-click leases under section 1877(e)(1)(B)(vi) of the Act (790 F.3d at 222.). Here, in finalizing the re-proposed regulations at § 411.357(a)(5)(ii)(B) and (b)(4)(ii)(B), we are relying on the Secretary’s authority under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose such other requirements needed to protect against program or patient abuse. Thus, the House Conference Report can be reconciled with a ban on per-click rental charges in arrangements for the lease of office space or equipment. We next address the commenter’s assertion that our CY 2017 PFS rulemaking ‘‘did not even try to reconcile a ban on per-click [compensation formulas] with the [House] Conference Report.’’ The Court’s directive to the Secretary was to ‘‘consider—with more care than she exercised [in the FY 2009 IPPS final rule]—whether a per-click ban on equipment leases is consistent with the 1993 Conference Report.’’ (Id. at 224.) The commenter implied that our explanation in the proposed rule as to why the Secretary’s authority to impose requirements regarding the type of compensation formulas upon which office space and equipment rental charges may be based is not constrained VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 by the House Conference Report should be disregarded on the theory that the Court rejected this explanation in Council for Urological Interests. As noted above, the Court did not reject this argument; rather, the Court set out in detail why the Secretary’s authority to impose such regulatory restrictions is not constrained by the House Conference Report. (Id. at 222.) In the CY 2017 PFS proposed rule (81 FR 46452) and again in this final rule, we have complied with the Court’s directive and set forth our analysis why a per-click ban on office space and equipment leases is consistent with the House Conference Report. In accordance with the Court’s opinion in Council for Urological Interests and in support of this final rule, we set forth below the Secretary’s authority to include in the exceptions applicable to office space and equipment leases a requirement that rental charges are not determined using a formula based on per-unit of service rental charges that reflect services provided to patients referred by the lessor to the lessee. Our determination follows the Court’s reasoning, which we excerpt below, in rejecting the Council for Urological Interests’ assertion that the Secretary lacks the authority to impose a ban on certain ‘‘per-click’’ equipment—and by correlation—office space leases. We also further describe why limiting the types of per-click rental charges that would not violate the physician self-referral law’s referral and claims submission prohibitions is consistent with the language of the House Conference Report. As the Court stated, the physician self-referral law gives the Secretary power to add requirements as needed to protect against program or patient abuse, even if Congress did not anticipate such abuses at the time of enactment of the statute. Specifically, although Congress may not have originally included a ban on per-click rental charges in office space and equipment lease arrangements, it ‘‘empowered the Secretary to make her own assessment of the needs of the Medicare program and regulate accordingly.’’ (Council for Urological Interests, 790 F.3d at 220.) The statute explicitly permits the Secretary to impose additional conditions on arrangements for the rental of office space or equipment, and nowhere expressly states that per-click rates must always be permitted. As the Court confirmed, the Secretary’s regulation ‘‘can properly be classified as an ‘other’ requirement expressly permitted by sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act.’’ (Id.) PO 00000 Frm 00362 Fmt 4701 Sfmt 4700 The Secretary’s authority to impose requirements regarding the type of compensation formulas upon which office space and equipment rental charges may be based is not constrained by the House Conference Report. Clause (iv) in each of the statutory exceptions for the rental of office space and equipment (sections 1877(e)(1)(A) and (B) of the Act) provide that a physician may only make use of either exception if the rental charges over the term of the lease are set in advance, are consistent with fair market value, and are not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties. In the 1998 proposed rule, we proposed to interpret the ‘‘volume or value’’ standard, which is common in many of the exceptions to the physician self-referral law and included in the exceptions for the rental of office space and equipment at sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act, respectively, as permitting only those per-click compensation formulas where the units of service did not include services provided to patients who were referred by the physician receiving the payment (63 FR 1714). In our Phase I interim final rule with comment period, we stated that, after reviewing the comments on our proposed interpretation of the ‘‘volume or value’’ standard, we were substantially revising the regulation with respect to the scope of that standard (66 FR 876). Most importantly, under our revised interpretation of the ‘‘volume or value’’ standard, we would permit time-based or unit-based compensation formulas, even when the physician receiving the rental payment generated the payment through a DHS referral. We noted that we reviewed the legislative history with respect to the exceptions for office space and equipment lease arrangements and concluded that Congress intended that sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act not be interpreted to prohibit time-based or unit-of-service-based compensation formulas, so long as the payment per unit is fair market value at inception and does not subsequently change during the lease term in any manner that takes into account DHS referrals. The passage in the House Conference Report relevant to sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act reads in full— The conferees intend that charges for space and equipment leases may be based on daily, monthly, or other time-based rates, or rates based on units of service furnished, so long as the amount of the time-based or units of service rates does not fluctuate during the E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations contract period based on the volume or value of referrals between the parties to the lease agreement. (H.R. Rep. No. 103–213, at 814 (1993)). mstockstill on DSK3G9T082PROD with RULES2 In the CY 2017 PFS proposed rule, we again acknowledged that the language in the House Conference Report states Congress’ intent at the time of enactment of the physician self-referral law that sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act (the clauses that contain the ‘‘volume or value’’ standard in the exceptions for the rental of office space and equipment, respectively) not be interpreted as prohibiting charges for the rental of office space or equipment that are based on units of service furnished (81 FR 46451). Even so, the House Conference Report in no way limits any other provision, including clause (vi) of the exceptions for the rental of office space and equipment. As in the proposed rule, we do not purport here to interpret this language as implying anything other than the conferees’ understanding—at the time of enactment of the statute—that the statute as written did not prohibit rental charges based on unit-of-service rates. But Congress also gave the Secretary the authority in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose by regulation other requirements as needed to protect against program or patient abuse, which could only happen after the enactment of the statute. Nowhere in the House Conference Report did Congress express an intent to limit the authority granted to the Secretary in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act (as enacted). In fact, the House Conference Report was completely silent regarding sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act, leaving the express words of the statute to speak for themselves. As the Court noted— The conference report . . . states only that rental charges ‘‘may’’ be based on units of service. The language is not obligatory. Instead, it simply indicates that, as written, the rental-charge clause [(section 1877(e)(1)(B)(iv) of the Act)] does not preclude per-click leases. But, as we have already explained, there is more to the statute than this clause, and to qualify for the exception, a rental agreement must comply with all six clauses, not merely the rentalcharge clause alone. The final clause [(section 1877(e)(1)(B)(vi) of the Act)] gives the Secretary the authority to add further requirements. Nothing in the legislative history suggests a limit on this authority. We conclude that the statute does not unambiguously forbid the Secretary from banning per-click leases as she evaluates the needs of the Medicare system and its patients. (790 F.3d at 221–22 (footnote omitted).) VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 Moreover, as the Court further noted, a statement that unit of service-based rental charges are not precluded by sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act as they are written is not equivalent to a statement that the Secretary must continue to permit such charges as she reevaluates, in light of experience, the operation of the statute and the need to protect the Medicare program and its beneficiaries against abuse. (Id. at 222 n.7; see also id. at 222 n.6 (‘‘Congress has expressly delegated to the Secretary the authority to promulgate additional requirements, as she has done here, and the legislative history does not clearly impose a constraint on that power.’’).) The Secretary has broad authority under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose conditions on arrangements for the rental of office space or equipment in order to protect against program or patient abuse. That authority is not limited by the express words of the statute as it is in other provisions of section 1877 of the Act. In agreement, the Court in Council for Urological Interests explained— . . . Congress knew how to limit the Secretary’s authority to impose additional requirements to the various exceptions [to the physician self-referral law]. In [section 1877(e)(2) of the Act], Congress excludes bona fide employment relationships from the definition of compensation arrangements. This provision states that the employment relationship must comply with various requirements, including that the pay not be determined ‘‘in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician.’’ This employment exception also allows the Secretary to impose ‘‘other requirements,’’ just as the equipment rental exception. But the statute then goes on to say that the listed requirements ‘‘shall not prohibit the payment of remuneration in the form of a productivity bonus based on services performed personally by the physician.’’ This language shows that Congress knew how to cabin the Secretary’s authority to impose ‘‘other’’ requirements and that it knew how to further clarify what it meant by compensation that does not take into account the volume of business generated between parties. That Congress employed neither of these tools with reference to the [exceptions for the rental of office space or equipment] again supports reading the statute as giving the Secretary broad discretion as she regulates in this area. (790 F.3d at 221 (citations omitted).) The Secretary’s authority to limit the use of per-unit of service rental charges in arrangements for the rental of office space or equipment is particularly clear when the exceptions for the rental of office space and equipment are compared to other provisions in section PO 00000 Frm 00363 Fmt 4701 Sfmt 4700 80531 1877 of the Act. According to the Court in Council for Urological Interests— [T]he statute elsewhere expressly permits charging per-click fees in other contexts, showing that Congress knew how to authorize such payment terms when it wanted to. In [section 1877(e)(7)(A) of the Act], Congress created an exception to the [physician self-referral law] that allows the continuation of certain group practice arrangements with a hospital. . . . The provision states that ‘‘[a]n arrangement between a hospital and a group under which designated health services are provided by the group but are billed by the hospital’’ is excepted from the ban on referrals if, among other things, ‘‘the compensation paid over the term of the agreement is consistent with fair market value and the compensation per unit of services is fixed in advance and is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties.’’ Comparing this provision to the [exceptions for the rental of office space and equipment] shows that Congress knew how to permit per-click payments explicitly, suggesting that the omission in this particular context was deliberate. . . . In other words, Congress’s decision not to include similar language in the [exceptions for the rental of office space and equipment] supports our conclusion that the statute is silent regarding the permissibility of per-click leases for equipment rentals. (790 F.3d at 220–21 (citations omitted).) In summary, as we stated in the FY 2009 IPPS final rule (73 FR 48716), the physician self-referral statute responds to the context of the times in which it was enacted (by addressing known risks of overutilization and, in particular, by creating exceptions for common business arrangements), and also incorporates sufficient flexibility to adapt to changing circumstances and developments in the health care industry. For example, in section 1877(b)(4) of the Act, Congress authorized the Secretary to protect additional beneficial arrangements by promulgating new regulatory exceptions. In addition, Congress included the means to address other fraud risks by inserting into many of the exceptions—and notably, for our purposes, in the lease exceptions— specific authority for the Secretary to add conditions as needed to protect against abuse. This design reflects a recognition that a fraud and abuse law with sweeping coverage over most of the health care industry could not achieve its purpose over the long term if it were frozen in time (73 FR 48716). It also demonstrates Congress’ respect for regulatory expertise of the Secretary. The Secretary administers and oversees numerous federal health care programs, including Medicare and Medicaid, and interacts with numerous participants in E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80532 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the health care industry. Aware of the Secretary’s expertise in this area, Congress expressly allowed the Secretary to impose further restrictions upon compensation arrangements that the Secretary, in her judgment, finds to present risks of overutilization and abuse. (Accord, e.g., Council for Urological Interests, 790 F.3d at 220 (‘‘While Congress may not have originally intended the ban of per-click leases, it empowered the Secretary to make her own assessment of the needs of the Medicare program and regulate accordingly.’’).) As we did in 2007 when we first proposed to impose additional requirements for rental charges in arrangements for the rental of office space and equipment, and in 2008 when we finalized regulations incorporating such additional requirements, we are relying in this final rule on the Secretary’s clear authority in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to finalize such other requirements needed to protect against program or patient abuse. With respect to our determination to include the same requirements at §§ 411.357(l) and (p), we have determined that the revisions to §§ 411.357(l) and (p) that we are finalizing here are necessary to meet the standard set forth in section 1877(b)(4) of the Act, which authorizes the Secretary to establish exceptions to the statute’s referral and billing prohibitions only where the excepted financial relationships do not pose a risk of program or patient abuse. We intend and believe that the reasoning set forth in this final rule fully addresses the basis for the D.C. Circuit’s conclusion that the prior regulation of per-click compensation arrangements contained in the FY 2009 IPPS final rule was arbitrary and capricious. In Council for Urological Interests, the Court remanded the rule because it disagreed with our statement in the FY 2009 IPPS final rule that ‘‘both the statutory language [of section 1877(e)(1)(A)(iv) and (B)(iv)] and the Conference Report’’ could ‘‘reasonably be interpreted to exclude’’ the relevant per-click payments even without reliance on the Secretary’s separate authority under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act (73 FR 48716). The Court concluded that this statement undermined the reasonableness of the regulation as a whole because the agency had ‘‘treate[d] the Conference Report as a key interpretive roadblock,’’ and thus may have relied on an erroneous interpretation as a basis for the regulation. (Council for Urological Interests, 790 F.3d at 224.) By contrast, in re-proposing and now finalizing this VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 rule here, we rely exclusively on the Secretary’s authority under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose such other requirements as needed to protect against program or patient abuse. We do not rely on the interpretation that the Court in Council for Urological Interests found to be arbitrary and capricious, and we note that the House Conference Report does not present any ‘‘interpretive roadblock’’ to invoking our authority under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act. We next address the commenter’s assertion that only recent empirical data or evidence can support a Secretarial determination under the physician selfreferral law that additional conditions in the exceptions for the rental of office space and equipment are needed to protect against program or patient abuse, and that the agency may not rely on its concerns and beliefs when issuing regulations. As a preliminary matter, section 1877 of the Act does not require the agency to ‘‘clear a specific evidentiary hurdle prior to imposing additional restrictions for lease exceptions.’’ (Council for Urological Interests v. Sebelius, 946 F. Supp. 2d 91, 110 n.15 (D.D.C. 2013), aff’d in part, rev’d in part sub nom. Council of Urological Interests v. Burwell, 790 F.3d 212 (D.C. Cir. 2015)). Specifically, the provisions upon which we rely for finalizing the re-proposed regulations, sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act, impose no such precondition on the Secretary’s ability to regulate, and it is reasonable to infer that ‘‘[i]f Congress had wanted the Secretary to meet a specific evidentiary burden of proof, it would have said so.’’ Id. Moreover, the Administrative Procedure Act itself does not impose any ‘‘general obligation on agencies to produce empirical evidence.’’ (Stilwell v. Office of Thrift Supervision, 569 F.3d 514, 519 (D.C. Cir. 2009).) An agency’s reasoned assessment of the potential for abuse inherent in a particular business arrangement—particularly in circumstances where, as here, that assessment is corroborated by numerous comments in the rulemaking—justifies the issuance of a prophylactic rule. (Stilwell, 569 F.3d at 519 (‘‘[A]gencies can, of course, adopt prophylactic rules to prevent potential problems before they arise. An agency need not suffer the flood before building the levee.’’); see also Ethyl Corp. v. Envtl. Prot. Agency, 541 F.2d 1, 25 (D.C. Cir. 1976) (‘‘Awaiting certainty will often allow for only reactive, not preventive, regulation.’’).) As we discussed in prior rulemakings, including the 1998 proposed rule, a PO 00000 Frm 00364 Fmt 4701 Sfmt 4700 number of studies prior to the enactment of the physician self-referral law found that physicians who had financial relationships with entities to which they referred patients ordered more services than physicians without such financial relationships (63 FR 1661). Studies conducted since that time, including recent studies by GAO, indicate that financial self-interest continues to affect physicians’ medical decision making. We note that the commenter agreed that, as a general matter, ‘‘physician financial interests can affect the utilization of medical tests and procedures.’’ Nonetheless, the regulations finalized in this rulemaking at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) are based not merely on general propositions regarding financial self-interest, but on input from stakeholders and public comments to proposed rulemaking, as well as our own conclusions and those of our law enforcement partners regarding the risks of per-click compensation arrangements. Contrary to the commenter’s contention that we cited ‘‘no industry developments since the [physician self-referral] law was enacted—or since the 2001 [Phase I] regulations,’’ we stated in the CY 2017 PFS proposed rule and repeat here that commenters responding to our proposal in the CY 2008 PFS proposed rule to impose additional requirements for office space and equipment lease arrangements provided compelling information regarding potential program or patient abuse. In addition, commenters responding to our proposal in the CY 2017 PFS proposed rule supported the continuation of the perclick bans finalized in the FY 2009 IPPS final rule. We note that, even in the absence of the information upon which we relied in the FY 2009 IPPS final rule and in this final rule (all of which was developed after the publication of the Phase I interim final rule with comment period), the commenter is incorrect that we are now prohibited from determining that additional conditions on certain per-click compensation formulas are needed to protect against program or patient abuse. It is axiomatic that ‘‘agencies are entitled to alter their policies ‘with or without a change in circumstances,’ so long as they satisfactorily explain why they have done so.’’ (Nat’l Audubon Soc’y v. Hester, 801 F.2d 405, 408 (D.C. Cir. 1986) (per curiam) (quoting State Farm, 463 U.S. at 57).) In the FY 2009 IPPS final rule and the CY 2017 PFS proposed rule, we discussed in detail our rationale for the limitation on per-unit of service rental E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations charges in arrangements for the rental of office space or equipment. We explained that under a per-unit of service rental arrangement, the more referrals that a physician lessor makes, the more revenue he or she earns. (73 FR 48715 and 48718; 81 FR 46452– 46453). We noted primary concerns regarding the potential for overutilization, patient steering, and reduction in quality of care and patient outcomes, as well as concerns regarding the potential for increased costs to the Medicare program. In summarizing the comments to our proposals in the CY 2008 PFS proposed rule and explaining our rationale for finalizing those proposals, we stated in the FY 2009 IPPS final rule that numerous commenters—including physicians, physician groups, and others— specifically agreed that these risks were raised by per-click leasing arrangements. For example, we noted that one commenter, a radiation oncologist, said that some leasing arrangements are abusive and provide incentives to physicians to narrow their choice of treatment options to those for which they will realize a profit (73 FR 48714). We further noted that another commenter, an association of radiologists, stated that it strongly supports banning use-of-service based leases because such leases fuel an incentive to order unnecessary examinations. (Id.) Other commenters expressed similar concerns. We also emphasized in the FY 2009 IPPS final rule that, even with respect to referrals for therapeutic (as opposed to diagnostic) services, the risks of overutilization and abuse may be substantial (73 FR 48718). Regardless of the use for the equipment at issue, there remains the potential for a physician lessor, in order to protect his or her investment or gain additional profits, to refer patients to the lessee of that equipment. (Id.) As an example of overutilized therapeutic treatments, we noted that a large hospital system had settled a case involving several of their physicians who were accused of performing unnecessary cardiac surgeries. In that case, federal officials alleged that the physicians had entered into a scheme to cause patients to undergo unneeded, invasive cardiac procedures such as artery bypass and heart valve replacement surgeries in order to generate additional revenue. We noted that the hospital system agreed to pay $54 million to settle the federal case. (Id.) For the reasons set forth in the FY 2009 IPPS final rule and the CY 2017 PFS proposed rule, some of which are VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 restated below, we continue to believe that, in order to protect against program or patient abuse, it is necessary to impose additional requirements on arrangements for the rental of office space or equipment. Specifically, we believe that it is necessary to prohibit rental charges that are determined using a formula based on per-unit of service rental charges to the extent that such charges reflect services provided to patients referred by the lessor to the lessee of the office space or equipment. We were persuaded to finalize in the FY 2009 IPPS final rule requirements limiting per-unit of service rental charges in the exceptions applicable to the rental of office space or equipment, and agree with the commenters to the CY 2017 PFS proposed rule that these requirements continue to be necessary, due to our concerns that ‘‘per-click’’ lease arrangements in which the lessor makes referrals to the lessee that generate payments to the lessor— • Create an incentive for overutilization of imaging services (as described by MedPAC in its comments to our proposal in the CY 2008 PFS proposed rule), as well as other services, including therapeutic services; • Create an incentive for physicians to narrow their choice of treatment options to those for which they will realize a profit, even where the best course of action may be no treatment; • Influence physicians to refer to the lessee instead of referring to another entity that utilizes the same or different (and perhaps more efficacious) technology to treat the patient’s condition; • Result in physicians steering patients to equipment they own, even if it means having the patient travel to a non-convenient site for services using the leased equipment; and • Increase costs to the Medicare program when referring physicians pressure hospitals to use their leasing company despite not being the low cost provider. (See 73 FR 48715–48718). We note also that, in the CY 2016 PFS final rule, we expressed our continued concern that, when physicians have a financial incentive to refer a patient to a particular entity, this incentive can affect utilization, patient choice, and competition. Physicians can overutilize by ordering items and services for patients that, absent a profit motive, they would not have ordered. A patient’s choice is diminished when physicians steer patients to less convenient, lower quality, or more expensive providers of health care, just because the physicians are sharing profits with, or receiving remuneration from, the providers. And lastly, where PO 00000 Frm 00365 Fmt 4701 Sfmt 4700 80533 referrals are controlled by those sharing profits or receiving remuneration, the medical marketplace suffers if new competitors cannot win business with superior quality, service, or price (80 FR 41926). In that rule, in establishing the exception at § 411.357(y) for timeshare arrangements, we determined it necessary to exclude from the exception any timeshare arrangements that incorporate compensation formulas based on: (1) A percentage of the revenue raised, earned, billed, collected, or otherwise attributable to the services provided while using the timeshare; or (2) per-unit of service fees, to the extent that such fees reflect services provided to patients referred by the party granting permission to use the timeshare to the party to which the permission is granted. We explained our belief that timeshare arrangements based on percentage compensation or per-unit of service compensation formulas present a risk of program or patient abuse because they may incentivize overutilization and patient steering. We noted, by way of example, that a perpatient compensation formula could incent the timeshare grantor to refer patients (potentially for unnecessary consultations or services) to the party using the timeshare because the grantor will receive a payment each time the premises, equipment, personnel, items, supplies, or services are used (80 FR 71331 through 71332). Similarly, we believe that arrangements utilizing rental charges for the rental of office space or equipment that are determined using a formula that rewards the lessor for each service the lessor refers to the lessee are susceptible to this and other abuse. Simply put, per-click lease arrangements create an incentive for overutilization because the physician knows that the more referrals he or she makes to the lessee, the more revenue that that physician will earn. For all of these reasons, and because we believe that there is a continued need to protect the program and its beneficiaries against the potential abuses of per-click office space and equipment leases, we are finalizing without modification the re-proposed regulations at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B), which include a requirement that the rental charges for the lease of office space or equipment are not determined using a formula based on per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. Comment: Although not commenting specifically on our actual proposals, two commenters suggested that we analyze E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80534 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the physician self-referral law regulations and any revisions to the regulations to consider the impact on stakeholders’ work to develop beneficial arrangements that advance health care payment and delivery reforms. Response: We note that the restrictions on per-unit of service compensation formulas have been in place since October 1, 2009. Although we are cognizant of the impact of the physician self-referral law on health care payment and delivery reform efforts, we must balance concerns about impeding such efforts against protecting the Medicare program and its beneficiaries. For the reasons stated in the FY 2009 IPPS final rule, the CY 2017 PFS proposed rule, and in this final rule, we believe these restrictions are necessary to protect the Medicare program and its beneficiaries against abuse. Comment: Two commenters requested that we confirm that FAQ 9780 regarding lithotripsy services provided ‘‘under arrangements’’ to a hospital by a physician-owned lithotripsy vendor remains CMS policy despite our reproposal of the regulations at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B). One of the commenters indicated it would oppose re-proposed § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) if the intent of the re-proposed regulations is to reverse the policy set forth in FAQ 9780. This commenter requested that, if we are indeed reversing the policy set forth in FAQ 9780, we do so by proposing regulatory language and offering the opportunity for public comment. Response: The policy established in FAQ 9780 remains our policy regarding lithotripsy service arrangements between physician-owned lithotripsy vendors and hospitals. FAQ 9780 is available on the CMS Web site at https://questions.cms.gov/ faq.php?id=5005&faqId=9780 and states that, provided that a lithotripsy vendor is actually furnishing a service (or a package of services) to the hospital, and not merely leasing equipment over which the hospital would have dominion and control, the hospital may compensate the lithotripsy vendor using a per-unit or percentage-based compensation formula, as long as all of the requirements of a relevant exception are satisfied. Comment: Many commenters requested that we revise our regulations in ways other than as re-proposed in the CY 2017 PFS proposed rule. These comments suggested variously that we ‘‘modernize’’ the definitions and exceptions in the regulations to (1) keep VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 pace with the rapidly evolving provider landscape and efforts to integrate medical professionals into accountable networks of integrated providers or (2) permit hospitals to subsidize the startup costs needed to meet the objectives of value-based purchasing, MIPS, and participation in alternative payment models; modify the in-office ancillary services exception at § 411.355(b) to exclude certain designated health services from the coverage of the exception; revise the definition of ‘‘entity’’ and our policy regarding services furnished ‘‘under arrangements’’ to an entity furnishing designated health services; revise the requirements for ‘‘group practices’’ to remove the requirement at § 411.352(g) prohibiting compensation to group practice physicians that takes into account the volume or value of referrals; and establish exceptions to or grant waivers of the physician self-referral law’s referral and billing prohibitions similar to those for ACOs participating in the MSSP and certain CMMI models that would enable physicians to participate in alternative payment modes and earn incentives through MIPS. Response: Although we appreciate the commenters’ thoughtful consideration of the impact of the physician selfreferral law on physicians and entities furnishing designated health services, our proposals in the CY 2017 PFS proposed rule relate only to the perclick compensation formula restrictions at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) and our advisory opinion regulations at § 411.372. Therefore, the suggested revisions are outside the scope of this rulemaking. After considering the comments, for the reasons set forth above and in the CY 2017 proposed rule (81 FR 46448), we are finalizing without modification our proposal to include at § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) a requirement that the rental charges for the lease of office space or equipment are not determined using a formula based on per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. 2. Technical Correction: Advisory Opinions Relating to Physician Referrals, Procedure for Submitting a Request We proposed to revise § 411.372(a) by making a minor technical correction to change the instructions for submitting a request for an advisory opinion relating to physician referrals. We noted that the PO 00000 Frm 00366 Fmt 4701 Sfmt 4700 current language in this subsection directs a requesting party to submit its request to a physical address that is out of date. In an effort to expedite the receipt and processing of these requests, and to account for any future changes, we proposed to revise paragraph (a) to state that a party or parties must submit a request for an advisory opinion to CMS according to the instructions specified on the CMS Web site. We noted that, at the time of the proposed rule, the correct address for such advisory opinion requests was: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Office of Financial Management, Division of Premium Billing and Collections, Mail Stop C3– 09–27, Attention: Advisory Opinions, 7500 Security Boulevard, Baltimore, MD 21244–1850. However, we noted that this address is subject to change, per this technical correction, and that parties seeking to submit a request for an advisory opinion relating to physician referrals would need to refer to the instructions on the CMS Web site. We received no comments regarding this technical correction and are finalizing it without modification. N. Physician Self-Referral Law: Annual Update to the List of CPT/HCPCS Codes 1. General Section 1877 of the Act prohibits a physician from referring a Medicare beneficiary for certain designated health services (DHS) to an entity with which the physician (or a member of the physician’s immediate family) has a financial relationship, unless an exception applies. Section 1877 of the Act also prohibits the DHS entity from submitting claims to Medicare or billing the beneficiary or any other entity for Medicare DHS that are furnished as a result of a prohibited referral. Section 1877(h)(6) of the Act and § 411.351 of our regulations specify that the following services are DHS: • Clinical laboratory services. • Physical therapy services. • Occupational therapy services. • Outpatient speech-language pathology services. • Radiology services. • Radiation therapy services and supplies. • Durable medical equipment and supplies. • Parenteral and enteral nutrients, equipment, and supplies. • Prosthetics, orthotics, and prosthetic devices and supplies. • Home health services. • Outpatient prescription drugs. • Inpatient and outpatient hospital services. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 2. Annual Update to the Code List a. Background In § 411.351, we specify that the entire scope of four DHS categories is defined in a list of CPT/HCPCS codes (the Code List), which is updated annually to account for changes in the most recent CPT and HCPCS Level II publications. The DHS categories defined and updated in this manner are: • Clinical laboratory services. • Physical therapy, occupational therapy, and outpatient speech-language pathology services. • Radiology and certain other imaging services. • Radiation therapy services and supplies. The Code List also identifies those items and services that may qualify for either of the following two exceptions to the physician self-referral prohibition: • EPO and other dialysis-related drugs furnished in or by an ESRD facility (§ 411.355(g)). • Preventive screening tests, immunizations, or vaccines (§ 411.355(h)). The definition of DHS at § 411.351 excludes services for which payment is made by Medicare as part of a composite rate (unless the services are specifically identified as DHS and are themselves payable through a composite rate, such as home health and inpatient and outpatient hospital services). Effective January 1, 2011, EPO and dialysis-related drugs furnished in or by an ESRD facility (except drugs for which there are no injectable equivalents or other forms of administration), have been reimbursed under a composite rate known as the ESRD prospective payment system (ESRD PPS) (75 FR 49030). Accordingly, EPO and any dialysis-related drugs that are paid for under ESRD PPS are not DHS and are not listed among the drugs that could qualify for the exception at § 411.355(g) for EPO and other dialysis-related drugs furnished by an ESRD facility. Drugs for which there are no injectable equivalents or other forms of administration were scheduled to be paid under ESRD PPS beginning January 1, 2014 (75 FR 49044). However, there have been several delays of the implementation of payment of these drugs under ESRD PPS. Most recently, on December 19, 2014, section 204 of the Achieving a Better Life Experience Act of 2014 (ABLE) (Pub. L. 113–295) was enacted and delayed the inclusion of these drugs under the ESRD PPS until 2025. Until that time, such drugs furnished in or by an ESRD facility are not paid as part of a composite rate and thus, are DHS. For purposes of the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 exception at § 411.355(g), only those drugs that are required for the efficacy of dialysis may be identified on the List of CPT/HCPCS Codes as eligible for the exception. As we have explained previously in the CY 2010 PFS final rule with comment period (75 FR 73583), we do not believe any of these drugs are required for the efficacy of dialysis. Therefore, we have not included any such drugs on the list of drugs that can qualify for the exception. The Code List was last updated in Tables 50 and 51 of the CY 2016 PFS final rule with comment period (80 FR 71342). b. Response to Comments c. Revisions Effective for CY 2017 The updated, comprehensive Code List effective January 1, 2017, is available on our Web site at https:// www.cms.gov/Medicare/Fraud-andAbuse/PhysicianSelfReferral/List_of_ Codes.html. Additions and deletions to the Code List conform it to the most recent publications of CPT and HCPCS Level II and to changes in Medicare coverage policy and payment status. Tables 45 and 46 identify the additions and deletions, respectively, to the comprehensive Code List that become effective January 1, 2017. Tables 45 and 46 also identify the additions and deletions to the list of codes used to identify the items and services that may qualify for the exception in § 411.355(g) (regarding dialysis-related outpatient prescription drugs furnished in or by an ESRD facility) and in § 411.355(h) (regarding preventive screening tests, immunizations, and vaccines). Frm 00367 Fmt 4701 Sfmt 4700 TABLE 45—ADDITIONS TO THE PHYSICIAN SELF-REFERRAL LIST OF CPT 1/ HCPCS CODES Clinical Laboratory Services 0008M Onc breast risk score Physical Therapy, Occupational Therapy, and Outpatient Speech–Language Pathology Services 97161 97162 97163 97164 97165 97166 97167 97168 Pt eval low complex 20 min Pt eval mod complex 30 min Pt eval high complex 45 min Pt re-eval est plan care Ot eval low complex 30 min Ot eval mod complex 45 min Ot eval high complex 60 min Ot re-eval est plan care Radiology and Certain Other Imaging Services We received one public comment relating to the Code List that became effective January 1, 2016. Comment: One commenter asked that the screening breast tomosynthesis code 77063 be added to the list of ‘‘Preventive Screening Tests, Immunizations and Vaccines’’ to which the physician self-referral law does not apply. The commenter indicated that adding this code is necessary to conform with various CMS policy statements and noted that the other screening mammography services codes payable by Medicare are on this list. Response: We agree and have added code 77063 to the list of ‘‘Preventive Screening Tests, Immunizations and Vaccines’’ to which the physician selfreferral law does not apply. PO 00000 80535 0422T 76706 77065 77066 77067 A9515 A9587 A9588 A9597 A9598 C9461 C9744 Q9982 Q9983 Tactile breast img uni/bi Us abdl aorta screen aaa Dx mammo incl cad uni Dx mammo incl cad bi Scr mammo bi incl cad Choline c–11 Gallium Ga–68 Fluciclovine F–18 Pet, dx, for tumor id, noc Pet dx for non-tumor id, noc Choline C 11, diagnostic Abd us w/contrast Flutemetamol f18 diagnostic Florbetaben f18 diagnostic Radiation Therapy Services and Supplies {No additions} Drugs Used by Patients Undergoing Dialysis {No additions} Preventive Screening Tests, Immunizations and Vaccines 77063 77067 90674 90687 G0499 Breast tomosynthesis bi Scr mammo bi incl cad CCIIV4 vac no prsv 0.5 ml im IIV4 vacc splt 0.25 ml im HepB screen high risk indiv 1 CPT codes and descriptions only are copyright 2016 AMA. All rights are reserved and applicable FARS/DFARS clauses apply. TABLE 46—DELETIONS FROM THE PHYSICIAN SELF-REFERRAL LIST OF CPT 1/ HCPCS CODES Clinical Laboratory Services {No deletions} Physical Therapy, Occupational Therapy, and Outpatient Speech–Language Pathology Services 97001 97002 97003 97004 Pt evaluation Pt re-evaluation Ot evaluation Ot re-evaluation Radiology and Certain Other Imaging Services 77051 77052 77055 77056 77057 A9544 E:\FR\FM\15NOR2.SGM Computer dx mammogram add-on Comp screen mammogram add-on Mammogram one breast Mammogram both breasts Mammogram screening I131 tositumomab, dx 15NOR2 80536 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations IV. Collection of Information TABLE 46—DELETIONS FROM THE PHYSICIAN SELF-REFERRAL LIST OF Requirements CPT 1/ HCPCS CODES—Continued Under the Paperwork Reduction Act C9458 C9459 Florbetaben f18 Flutemetamol f18 Radiation Therapy Services and Supplies 0019T Extracorp shock wv tx ms nos A9545 I131 tositumomab, rx Drugs Used by Patients Undergoing Dialysis {No deletions} Preventive Screening Tests, Immunizations and Vaccines 77052 77057 Comp screen mammogram add-on Mammogram screening 1 CPT codes and descriptions only are copyright 2016 AMA. All rights are reserved and applicable FARS/DFARS clauses apply. of 1995 (PRA) (44 U.S.C. Chapter 35), we are required to publish a 30-day notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. To fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the PRA requires that we solicit comment on the following issues: • The need for the information collection and its usefulness in carrying out the proper functions of our agency. • The accuracy of our burden estimates. • The quality, utility, and clarity of the information to be collected. • Our effort to minimize the information collection burden on the affected public, including the use of automated collection techniques. In the CY 2017 PFS proposed rule (81 FR 46456–46457) we solicited public comment on each of the section 3506(c)(2)(A)-required issues for the following information collection requirements. PRA-related comments were received as indicated below under section IV.B.2. A. Wage Estimates To derive average costs, we used data from the U.S. Bureau of Labor Statistics’ May 2015 National Occupational Employment and Wage Estimates for all salary estimates. In this regard, Table 47 presents the mean hourly wage, the cost of fringe benefits (calculated at 100 percent of salary), and the adjusted hourly wage. TABLE 47—NATIONAL OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES Occupation code Occupation title Compliance Officer .......................................................................................... Epidemiologist .................................................................................................. Medical Scientist .............................................................................................. Medical Secretary ............................................................................................ Non-Physician Practitioner (Health Diagnosing and Treating Practitioners) ... Office and Administrative Support Operations ................................................ Physicians and Surgeons ................................................................................ Physicians and Surgeons, All Other ................................................................ Statistician ........................................................................................................ As indicated, we are adjusting our employee hourly wage estimates by a factor of 100 percent. This is necessarily a rough adjustment, both because fringe benefits and overhead costs vary significantly from employer to employer, and because methods of estimating these costs vary widely from study to study. Nonetheless, there is no practical alternative and we believe that doubling the hourly wage to estimate total cost is a reasonably accurate estimation method. B. Information Collection Requirements (ICRs) and Burden Estimates mstockstill on DSK3G9T082PROD with RULES2 1. ICRs Regarding the Physician Quality Reporting System (PQRS) (§ 414.90) For individual EPs or group practices, who choose to separately report quality measures during the secondary PQRS reporting period for the 2017 PQRS payment adjustment, who bill under the TIN of an ACO participant if the ACO failed to report on behalf of such EPs or group practices during the previously established reporting period for the 2017 PQRS payment adjustment, we do VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 13–1041 19–1040 19–1042 43–6013 29–1000 43–0000 29–1060 29–1069 15–2041 not believe the individual EP or group practice incurs any additional burden. The associated reporting burden which is currently approved by OMB under control number 0938–1059 (CMS– 10276) explains that the PQRS annual burden estimate was calculated separately for (1) individual eligible professionals and group practices using the claims (for eligible professionals only), (2) qualified registry and QCDR, (3) EHR-based reporting mechanisms, and (4) group practices using the GPRO. We estimated that ALL 1.25 million eligible professionals will participate in the PQRS in 2016 for purposes of meeting the criteria for satisfactory reporting (or, in lieu of satisfactory reporting, satisfactory participation in a QCDR) for the 2018 PQRS payment adjustment. This is a high estimate according to the 2014 PQRS Reporting Experience and Trends Report which found approximately 822,000 EPs participated in PQRS in 2014. Therefore, the additional EPs who choose to report separately from the ACOs have already been accounted for PO 00000 Frm 00368 Fmt 4701 Sfmt 4700 Mean hourly wage ($/hr) 33.26 36.97 45.06 16.50 46.65 17.47 97.33 95.05 40.60 Fringe benefit ($/hr) 33.26 36.97 45.06 16.50 46.65 17.47 97.33 95.05 40.60 Adjusted hourly wage ($/hr) 66.52 73.94 90.12 33.00 93.90 34.94 194.66 190.10 81.20 in the PQRS burden. We estimate there were approximately 1,947 EPs that are part of the 218 participant TINs that are under the 8 ACOs that failed to successfully report their 2015 quality data. There is no change in the reporting mechanisms or reporting criteria for PQRS. It is important to note that if the ACO fails to report on behalf of an EP or group practice and the EP or group practice does not utilize this secondary reporting period they may be subject to a downward adjustment. We did not receive any comments pertaining to our position that the proposed rule would not set out any additional requirements or burden. Consequently, we are restating our position without change. 2. ICRs Regarding Appropriate Use Criteria for Advanced Diagnostic Imaging Services (§ 414.94) Consistent with section 1834(q) of the Act (as amended by section 218(b) of the PAMA), we have established specific requirements for clinical decision support mechanisms (CDSMs) that can be qualified CDSMs under § 414.94 as E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations part of the Medicare appropriate use criteria (AUC) program. CDSMs that believe they meet the requirements to be qualified CDSMs (for the purpose of this section) may apply to CMS to be specified as a qualified CDSM. Applications must be submitted electronically and demonstrate how the CDSM meets the requirements under § 414.94(g)(1). Specifically, applications must demonstrate how the CDSM: (1) Makes available specified applicable AUC and its related supporting documentation; (2) identifies the appropriate use criterion consulted if the CDSM makes available more than one criterion relevant to a consultation for a patient’s specific clinical scenario; (3) makes available, at a minimum, specified applicable AUC that reasonably address common and important clinical scenarios within all priority clinical areas identified in § 414.94(e)(5); (4) is able to incorporate specified applicable AUC from more than one qualified PLE; (5) determines, for each consultation, the extent to which the applicable imaging service is consistent with a specified applicable AUC; (6) generates and provides a certification or documentation at the time of order each time an ordering professional consults a qualified CDSM that includes a unique consultation identifier that documents: Which qualified CDSM was consulted, the name and national provider identifier (NPI) of the ordering professional that consulted the CDSM, whether the service ordered would adhere to specified applicable AUC, whether the service ordered would not adhere to specified applicable AUC, or whether the specified applicable AUC consulted was not applicable to the service ordered; (7) updates AUC content within 12 months from the date the qualified PLE updates AUC; (8) has a protocol in place to expeditiously remove AUC determined by the qualified PLE to be potentially dangerous to patients and/or harmful if followed; (9) makes available specified applicable AUC that reasonably address common and important clinical scenarios within any new priority clinical area for consultation through the qualified CDSM within 12 months of the priority clinical area being finalized by CMS; (10) meets privacy and security standards under applicable provisions of law; (11) provides the ordering professional aggregate feedback regarding their consultations with specified applicable AUC in the form of an electronic report on at least an annual basis; (12) maintains electronic storage of clinical, administrative, and VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 demographic information of each unique consultation for a minimum of 6 years; (13) complies with modification(s) to any requirements under § 414.94(g)(1) made through rulemaking within 12 months of the effective date of the modification; and (14) notifies ordering professionals upon de-qualification. To be specified as a qualified CDSM by CMS, applicants must document adherence to the requirements in their application for CMS review and use the application process identified in § 414.94(g)(2) which includes: (1) Applications submitted by CDSMs documenting adherence to each requirement outlined in § 414.94(g)(1) must be received annually by January 1 except for the first round of applications following publication of the CY 2017 PFS Final Rule which will be due by March 1, 2017; (2) CDSMs with applications that document adherence to all requirements under § 414.94(g)(1) may receive full qualification and CDSMs with applications that cannot document adherence to each requirement must document how and when each requirement is reasonably expected to be met and may receive preliminary qualification; (3) the preliminary qualification period begins June 30, 2017 and ends when CMS implements sections 1834(q)(4)(A) and 1834(q)(4)(B) of the Act; (4) CDSMs with preliminary qualification that fail to meet all requirements by the end of the preliminary qualification period will not be automatically converted to qualified status; (5) all qualified CDSMs specified by CMS in each year will be included on the list of specified qualified CDSMs posted to the CMS Web site by June 30 of that year; (6) qualified CDSMs are specified by CMS as such for a period of 5 years; and (7) qualified CDSMs are required to reapply during the 5th year after they are specified by CMS to maintain their status as qualified CDSMs and the applications must be received by CMS by January 1 of the 5th year after the most recent approval date. If a qualified CDSM is found to be non-adherent to the requirements identified above, CMS may terminate its qualified status or may consider this information during re-qualification. The one-time burden associated with the requirements under § 414.94(g)(2) is the time and effort it will take each of the approximately 30 CDSM developers (as estimated by CMS, the Office of the National Coordinator (ONC), and the Agency for Healthcare Research and Quality (AHRQ)) that have interests in incorporating AUC consultation into their mechanisms’ functionality to PO 00000 Frm 00369 Fmt 4701 Sfmt 4700 80537 compile, review and submit documentation demonstrating adherence to the CDSM requirements. We anticipate 30 respondents based on the number of existing CDSMs that have expressed an interest in incorporating AUC for advanced diagnostic imaging, as well as our estimation of the number of CDSM developers that may be interested in incorporating AUC for advanced diagnostic imaging in the future as their mechanisms develop and evolve. Each respondent will voluntarily compile, review and submit documentation that demonstrates their adherence to the CDSM requirements listed above. We estimate it will take 10 hours at $68.18/hr for a business operations specialist to compile, prepare and submit the required information, 2.5 hours at $86.72/hr for a computer system analyst to review and approve the submission, 2.5 hours at $135.58/hr for a computer and information systems manager to review and approve the submission, and 5 hours at $131.02/hr for a lawyer to review and approve the submission. In this regard, we estimate 20 hours per submission at a cost of $1,892.65. In aggregate, we estimate 600 hours (20 hr × 30 submissions) at $56,779.50 ($1,892.65 × 30 submissions). After the anticipated initial 30 respondents, we expect less than 10 applicants to apply to become qualified CDSMs annually. Since we estimate fewer than 10 respondents, the information collection requirements and burden are exempt (5 CFR 1320.2(c)) from the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq). Given that qualified CDSMs must reapply every 5 years, in years 6–10, we expect the initial 30 entities will reapply. The ongoing burden for reapplying is expected to be half the burden of the initial application process. The CDSM developers will be able to make modifications to their original application which should result in a burden of 5 hours at $68.18/hr for a business operations specialist to compile, prepare and submit the required information, 1.25 hours at $86.72/hr for a computer system analyst to review and approve the submission, 1.25 hours at $135.58/hr for a computer and information systems manager to review and approve the submission, and 2.5 hours at $131.02/hr for a lawyer to review and approve the submission. Annually, we estimate 10 hours per submission at a cost of $946.33 per CDSM developer. In aggregate, we estimate 300 hours (10 hr × 30 E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80538 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations submissions) at $28,389.90 ($946.33 × 30 submissions). In response to public comments, we added a new requirement under § 414.94(g)(1)(xii) whereby CDSMs are required to notify ordering professionals upon de-qualification. We estimate that 1 CDSM will be de-qualified each year. Because this disclosure is required of less than 10 entities, the PRA is not applicable. The aforementioned requirements and burden will be submitted to OMB under control number 0938–1315 (CMS– 10624). As regulatory requirements become more complex, we will look to innovative technologies that minimize the burden on an organizations’ budget and manpower. To this end, the CDSM functionality requirements identified in § 414.94(g)(1) will help practitioners meet the requirements of the AUC program. While the CDSM application process in § 414.94(g)(2) is a new burden under this program, the CDSM functionality requirements in § 414.94(g)(1) do not add burden as they are functions of the CDSM. These mechanisms function consistently with their voluntary and individualized design so the requirements in § 414.94(g)(1) are either part of a mechanism’s functionality or not. If CDSM developers wish their CDSMs to become qualified under this program, they may choose to develop the functionality of their mechanisms consistent with these requirements to be qualified, but all CDSMs are not required to participate in this program. For example, a CDSM that does not incorporate AUC for any advanced diagnostic imaging services would likely choose not to seek to become qualified under this Medicare AUC program. As such, only CDSMs that wish to participate in the Medicare AUC for advanced diagnostic imaging services program are required to apply for qualification and, in choosing to seek qualification, CDSM developers would also choose to incorporate the requirements into their mechanism’s functionality. We received public comments (see below) regarding our proposed requirements and burden estimates. We considered the comments and are largely adopting the proposed provisions with minimal changes to improve clarity. Three areas where we have made more significant changes include: (1) Revising the proposed requirement for CDSMs to ‘‘reasonably encompass the entire clinical scope of all priority clinical areas’’ to now ‘‘reasonably address common and important clinical scenarios within all VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 priority clinical areas;’’ (2) a new requirement that qualified CDSMs notify ordering professionals upon dequalification; and (3) a new preliminary qualification period for CDSMs that apply for qualification during the first application period but do not fully meet all requirements under § 414.94(g)(1). Comment: The majority of commenters addressed the proposal to require CDSMs to contain, at a minimum, AUC that encompass the entire clinical scope of priority clinical areas. Commenters were split regarding the proposed requirement. Some commenters suggested that CDSMs requiring minimum AUC content would add cost and be unnecessary for CDSMs that serve specialists. They favored CDSMs determining, along with the ordering practitioners they serve, what AUC content would be made available. Other commenters favored requiring every CDSM to contain comprehensive AUC. Those commenters said this was the intent of the PAMA since ordering professionals must consult for every advanced diagnostic imaging order and takes into account the lessons learned from the MID to avoid ordering practitioners from consulting for imaging services and not finding relevant AUC within their CDSM. Other commenters agreed with a minimum floor of AUC but expressed concerned about the way CMS proposed that the priority clinical areas must be addressed stating that encompassing the entire clinical scope of priority clinical areas is not preferred and would draw in AUC without a strong evidence base. Response: We understand the significance of this aspect of the proposal, as well as the statements made by the commenters both for and against the requirement of an AUC floor related to priority clinical areas. We reiterate that, in alignment with statute, ordering professionals must consult for each advanced diagnostic imaging service ordered. Therefore, we believe many professionals will choose a qualified CDSM that best fits their ordering patterns and clinical practice. Those ordering a wide array of imaging services or perhaps infrequently ordering imaging services across a spectrum will align themselves with a mechanism that fits their needs and contains comprehensive specified applicable AUC so when the qualified CDSM is consulted they will lessen their chances of the qualified CDSM identifying no applicable AUC as this was a major frustration of the MID. Specialists may seek to align themselves with a qualified CDSM that contains AUC more exhaustive in one PO 00000 Frm 00370 Fmt 4701 Sfmt 4700 area of medicine to reflect the imaging services that they order most often. We continue to believe that all tools should contain the specified applicable AUC needed by the ordering professionals they serve, as well as contain specified applicable AUC related to the priority clinical areas to ensure that if the professional needs to order an imaging service then they will not have to go outside their regular qualified CDSM for the consultation. We reiterate that we envision having a given qualified CDSM allow efficient access to ordering professionals of one or more specialty-focused specified applicable AUC sets along with more comprehensive specified applicable AUC sets. We believe the determination of which AUC sets are made accessible through a given CDSM should be demand-driven by ordering professionals, who would be choosing from a marketplace of options for both CDSMs and AUC, all of which meet basic CMS qualifications to ensure implementation of the PAMA statutory requirements. To balance the requirement for the minimum floor, we believe it is important to reconsider the extent to which specified applicable AUC encompass the entire clinical scope of priority clinical areas. We agree that requiring the entire clinical scope may not yield consultation of the highest quality specified applicable AUC and that ordering professionals, particularly specialists, may not require specified applicable AUC addressing the entire clinical scope of a priority clinical area. Therefore, we agree with commenters who suggested we keep the AUC floor but allow the requirement to be fulfilled if specified applicable AUC address less than the entire scope of the priority clinical areas and instead reasonably address the common and important clinical scenarios within each priority clinical area. Comment: Some commenters expressed concerns regarding CDSMs that either fail to requalify after the first 5-year qualification period or are found to no longer be adherent to CDSM requirements during the 5-year qualification period. One commenter recommended that CDSMs be temporarily suspended before being disqualified. Other commenters recommended that CMS ensure providers using these mechanisms not be penalized while they seek a new mechanism for consultation. Another commenter suggested that the CDSM be required to notify ordering professionals of such a disqualification. Other commenters requested that qualification of CDSMs not be disrupted due to E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations standard technical updates to CDSMs made during the 5-year qualification period. Response: We agree and do not foresee penalties under these circumstances or disqualification of a CDSM due to a standard update assuming no changes are made to functionality that result in nonadherence to the CDSM requirements in § 414.94(g)(1). We agree that qualified CDSMs be required to notify ordering professionals in the event of disqualification and have added this requirement under § 414.94(g)(1). Comment: Some commenters cited insufficient time for CDSMs to incorporate requirements between the release of the final CDSM requirements, on or around November 1, 2016, and the January 1, 2017 due date for qualified CDSM applications. These commenters requested that CMS delay the deadline and accept applications later into the year for this first round of applicants. Due to the limited time between finalization of CDSM requirements and the application deadline, another commenter recommended that CDSMs be qualified based on their commitment to support required functionality, rather than an attestation that the existing functionality is fully implemented in a CDSM. Response: We recognize the challenge CDSM developers may have submitting applications by January 1, 2017, and have extended the deadline only for the first round of applications to March 1, 2017. To this end, all CDSMs qualified in this round only, receive preliminary qualification to conclude at such time as we implement the consultation and reporting requirements of this AUC program. 3. ICRs Regarding the Enrollment of MA Providers, Suppliers, and First-Tier, Downstream, and Related Entities (FDRs) (§ 422.222) There are approximately 1.9 million providers and suppliers nationwide that are enrolled in Medicare. Through our analysis of currently available encounter data provided by MA organizations, we have found that some providers and suppliers that furnish items or services to MA organization enrollees are not enrolled in Medicare in an approved status. Based on preliminary data, we estimate that 64,000 MA providers and suppliers will have to enroll in Medicare under § 422.222 in order to treat enrollees. About half of the approximately 64,000 unenrolled providers and suppliers, or 32,000, are individuals and the other half are organizations. We do not have data at this point to confirm the number of unenrolled individuals who are physicians as opposed to nonphysician practitioners. For purposes of fulfilling the requirements of the PRA, we will project that one-half (16,000) are physicians and the other half (16,000) are practitioners. Consistent with our prior time (per respondent) estimates, we project that it will take 3 hours at $194.66/hr for a physician and $93.30/hr for a nonphysician practitioner to complete their individual enrollments. For organizations (office and administrative support personnel), we estimate it will take 6 hours at $34.94/hr, since organizational enrollees typically must submit more data than individual enrollees. For physicians, we estimate a total burden of 48,000 hours (16,000 applicants × 3 hours) at a cost of $9,343,680 (48,000 hr × $194.66/hr). For non-physician practitioners, we estimate 48,000 hours (16,000 applicants × 3 hours) at a cost of $4,478,400 (48,000 hr × $93.30/hr). For organizations, we estimate 192,000 hours (32,000 applicants × 6 hours) at a cost of $6,708,480 (192,000 hr × $34.94). In aggregate, we estimate 288,000 hours at $20,530,560. When projected annually over OMB’s maximum 3-year approval period, we 80539 estimate 96,000 hours at a cost of $6,843,520. For physicians and non-physician practitioners, the requirements and annualized burden (32,000 hours) will be submitted to OMB under control number 0938–0685 (Form CMS–855I) because physicians and non-physician practitioners enroll via the Form CMS– 855I. For organizations, the requirements and annualized burden of 64,000 hours (192,000 hours/3 years) will be submitted to OMB under control number 0938–0685 (21,333.3 hours for Form CMS–855A and 21,333.3 hours for Form CMS–855B) and control number 0938–1056 (21,333.3 hours for Form CMS–855S). The specific form to be completed will depend upon the provider or supplier type at issue. For instance, and consistent with current enrollment policy, certified providers and certain certified suppliers will complete the Form CMS–855A; group practices, ambulance suppliers, and certain other supplier types will complete the Form CMS–855B; suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) will complete the Form CMS–855S. Please note that breakout of the organization burden (dividing 64,000 hours by 3 forms) is an estimate. Logistically, this is necessary for the purposes of submitting burden for approval. We have no way of estimating the number of providers/suppliers that will complete the individual forms. We welcomed comments on this issue to help us derive a more reliable breakout but received none. Nor did we receive comments pertaining to any other aspects of the proposed requirements or burden. Consequently, we are adopting our proposed requirements and burden estimates without change. TABLE 48—CMS–855 BURDEN IMPLICATIONS Individuals (32,000 total respondents) (3 hours/application) mstockstill on DSK3G9T082PROD with RULES2 CMS–855–I (32,000) .......................................... Physicians (16,000) $194.66/hour ..................... Non-physician Practitioners (16,000) $93.30/ hour. CMS–855–A (10,666) $34.94/hour .................... 32,000 respondents, 96,000 hours. 16,000 physicians × 3 hours = 48,000 hours @$194.66 = $9,343,680.00. 16,000 non-physician practitioners × 3 hours = 48,000 hours @$93.30 = $4,478,400.00. .......................................................................... CMS–855–B (10,666) ......................................... .......................................................................... VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00371 Fmt 4701 Sfmt 4700 Organizations (32,000 total respondents) (6 hours/application) 10,666 respondents × 6 hours = 63,996 hours 10,666 respondents × 6 hours = 63,996 hours @$34.94 = $2,236,020.24 10,666 respondents × 6 hours = 63,996 hours 10,666 respondents × 6 hours = 63,996 hours @$34.94 = $2,236,020.24 E:\FR\FM\15NOR2.SGM 15NOR2 80540 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 48—CMS–855 BURDEN IMPLICATIONS—Continued Individuals (32,000 total respondents) (3 hours/application) Organizations (32,000 total respondents) (6 hours/application) CMS–855–S (10,666) ......................................... .......................................................................... 10,666 respondents × 6 hours = 63,996 hours 10,666 respondents × 6 hours = 63,996 hours @$34.94 = $2,236,020.24 Sub-total respondents ................................. Sub-total hours ............................................ Sub-total cost .............................................. 32,000 respondents ......................................... 96,000 hours .................................................... $13,822,080.00 ................................................ 32,000 respondents 192,000 hours $6,708,060.72 Total ..................................................... 4. ICRs Regarding the Release of Medicare Advantage Bid Pricing Data (§ 422.272) and the Release of Part C and Part D Medical Loss Ratio (MLR) Data (§§ 422.2490 and 423.2490) In the proposed rule, new § 422.272 proposed an annual public release of MA bid pricing data (with specified exceptions from release), which would occur after the first Monday in October and would contain MA bid pricing data that was approved by CMS for a contract year at least 5 years prior to the upcoming calendar year. Under Part C, MA organizations (MAOs) are required to submit bid data to CMS each year for MA plans they wish to offer in the upcoming contract year (calendar year), under current authority at § 422.254. Proposed §§ 422.2490 (for Part C) and 423.2490 (for Part D) also provided for the public release of Part C and Part D MLR data for each contract year, which would occur no sooner than 18 months after the end of the contract year for which the MLR Report was submitted. Starting with contract year 2014, if an MAO or Part D sponsor fails to spend at least 85 percent of the revenue received under an MA or Part D contract on incurred claims and quality improvement activities, the MAO or Part D sponsor must remit to the Secretary the product of: (1) The contract’s total revenue; and (2) the difference between 85 percent and the contract’s MLR. For each contract year, each MAO and Part D sponsor must submit an MLR Report to CMS which 64,000 respondents, 288,000 hours, $20,530,140.72 includes the data needed by the MAO or Part D sponsor to calculate and verify the MLR and remittance amount, if any, for each contract. The proposed rule provided for the release of the Part C and Part D MLR data contained in the MLR Reports that we receive from MAOs and Part D sponsors, with specified exceptions to release. We determined for the proposed rule that the proposed provisions on the release of MA bid pricing data and the release of Part C and Part D MLR data did not change any of the existing requirements regarding submission of bid data and MLR data by MAOs or Part D plan sponsors, nor did the proposed rule propose any new or revised reporting, recordkeeping, or third-party disclosure requirements. We noted that although the proposed provisions have no impact on respondent requirements or burden, the changes have been submitted to OMB for approval under control number 0938–0944 (CMS– 10142) for MA bid pricing data and 0938–1232 (CMS–10476) for Part C and Part D MLR data. We did not receive any comments on the proposed requirements or burden and are finalizing them without change. 5. ICRs Regarding Application Requirements (§ 422.501) and Termination of Contract by CMS (§ 422.510) Changes to §§ 422.501 and 422.510 involve only CMS contract changes and will not result in any external charges or operational costs to MA organizations. Many MA organizations already require Medicare enrollment for all their network providers and suppliers. So there will be no additional costs to most MA and MA–PD plans. The only tangible costs will be to those providers or suppliers that are not enrolled and those costs are estimated in section IV.B.3. of this final rule. 6. ICRs Regarding Payment to Organizations That Provide Medicare Diabetes Prevention Program Services (§ 424.59) Section 1115A(d)(3) of the Social Security Act exempts the Center for Medicare and Medicaid Innovation (CMMI) model tests and expansions, including the Medicare Diabetes Prevention Program expansion, from the PRA. The section provides that Chapter 35 of title 44, United States Code, which includes such provisions as the PRA, shall not apply to the testing and evaluation of CMMI models or expansion of such models. 7. ICRs Regarding the Medicare Shared Savings Program (Part 425) Section 1899(e) of the Act provides that chapter 35 of title 44 of the U.S. Code, which includes such provisions as the PRA, shall not apply to any information collection activities under the Shared Savings Program. C. Summary of Annual Burden Estimates TABLE 49—ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS mstockstill on DSK3G9T082PROD with RULES2 Regulation section(s) under title 42 of the CFR § 414.94(g)(2) ...... § 414.94(g)(2) (reapply). § 422.222 (physicians and nonphysician practitioners). VerDate Sep<11>2014 OMB control No. Respondents Burden per response (hours) Total responses Total annual burden (hours) Labor cost of reporting ($) Total cost ($) * 0938–1315 30 30 ........................... 30 ........................... 20 10 600 300 varies ............. varies ............. 56,780 28,390 0938–0685 32,000 10,666.6 (32,000 responses annualized over 3 years). 3 32,000 varies ............. 4,607,360 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00372 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations 80541 TABLE 49—ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS—Continued Regulation section(s) under title 42 of the CFR OMB control No. Respondents § 422.222 (organizations). 0938–0685 32,000 § 422.222 (organizations). 0938–1056 ........................ ........................ 64,030 Total ............. Burden per response (hours) Total responses Total annual burden (hours) Labor cost of reporting ($) Total cost ($) * 7,111.1 for two CMS–855 forms (21,333.3 responses annualized over 3 years). 3,555.6 for one CMS–855 form. 6 42,666.6 34.94 .............. 1,490,771 6 21,333.3 34.94 .............. 745,386 21,393 .................... ........................ 96,900 varies ............. 6,928,687 * This rule does not set out any non-labor costs. D. Associated Information Collections Not Specified in Regulatory Text This rule references three information collection requirements that do not pertain to the amendments in the regulatory text. While the activities meet the PRA’s definition of an information collection requirement, section 220 of the Protecting Access to Medicare Act (PAMA) of 2014 (Pub. L. 113–93) provides that the activities are exempt from the requirements of under the PRA. The exemption applies to information collected to ensure the accurate valuation of services under the Physician Fee Schedule which includes but is not limited to surveys of physicians, other suppliers, providers of services, manufacturers, and vendors; surgical logs, billing systems, or other practice or facility records; electronic health records; and, any other mechanism deemed appropriate by the Secretary. The activities consist of the following: mstockstill on DSK3G9T082PROD with RULES2 1. Global Surgical Services Section II.D.2. of this final rule details our plans for a claims-based reporting program for global surgical services. Our claims-based data collection is applicable to 10- and 90-day global services furnished on or after January 1, 2017, which will set out: Who will be required to report, what they will be required to report, and how the reports will be submitted. 2. Survey of Practitioners As discussed earlier in section II.D.6.e.(1) through (2) of this final rule, we intend to conduct a survey of practitioners to help us explore options and collect data with respect to assessing and revaluing the global surgery services. 3. Data Collection for Accountable Care Organizations In section II. D.6.e.(3) of this final rule, we intend to conduct a survey of VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 ACOs on a number of issues surrounding pre- and post-operative surgical services. In addition to the PRA exemption as described above under PAMA, the survey is also exempt from the PRA under section 3022 of the Affordable Care Act which exempts collections associated with the Medicare Shared Savings Program. E. Submission of PRA-Related Comments We have submitted a copy of this rule’s information collection and recordkeeping requirements to OMB for review and approval. The requirements are not effective until they have been approved by the OMB. To obtain copies of the supporting statement and any related forms for the collections discussed above, please visit CMS’ Web site at https:// www.cms.hhs.gov/ PaperworkReductionActof1995, or call the Reports Clearance Office at 410– 786–1326. We invite public comments on these potential information collection requirements. If you wish to comment, please identify the rule (CMS–1654–F) and submit your comments to the OMB desk officer via one of the following transmissions: Mail: OMB, Office of Information and Regulatory Affairs, Attention: CMS Desk Officer, Fax Number: 202–395–5806 OR, Email: OIRA_submission@ omb.eop.gov. PRA-related comments must be received on/by December 2, 2016. V. Regulatory Impact Analysis A. Statement of Need This final rule makes payment and policy changes under the Medicare PFS and makes required statutory changes under the MACRA, ABLE, PAMA, and the Consolidated Appropriations Act of 2016. This final rule also makes changes to payment policy and other related PO 00000 Frm 00373 Fmt 4701 Sfmt 4700 policies for Medicare Part B, Part D, and Medicare Advantage. B. Overall Impact We examined the impact of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (February 2, 2013), 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). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). We estimate, as discussed in this section, that the PFS provisions included in this final rule would redistribute more than $100 million in 1 year. Therefore, we estimate that this rulemaking is ‘‘economically significant’’ as measured by the $100 million threshold, and hence also a major rule under the Congressional Review Act. Accordingly, we prepared an RIA that, to the best of our ability, presents the costs and benefits of the rulemaking. The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals, practitioners and most other providers E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 80542 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations and suppliers are small entities, either by nonprofit status or by having annual revenues that qualify for small business status under the Small Business Administration standards. (For details see the SBA’s Web site at https:// www.sba.gov/content/table-smallbusiness-size-standards (refer to the 620000 series)). Individuals and states are not included in the definition of a small entity. The RFA requires that we analyze regulatory options for small businesses and other entities. We prepare a regulatory flexibility analysis unless we certify that a rule would not have a significant economic impact on a substantial number of small entities. The analysis must include a justification concerning the reason action is being taken, the kinds and number of small entities the rule affects, and an explanation of any meaningful options that achieve the objectives with less significant adverse economic impact on the small entities. Approximately 95 percent of practitioners, other providers, and suppliers are considered to be small entities, based upon the SBA standards. There are over 1 million physicians, other practitioners, and medical suppliers that receive Medicare payment under the PFS. Because many of the affected entities are small entities, the analysis and discussion provided in this section, as well as elsewhere in this final rule is intended to comply with the RFA requirements regarding significant impact on a substantial number of small entities. In addition, section 1102(b) of the Act requires us to prepare an RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. We did not prepare an analysis for section 1102(b) of the Act because we determined, and the Secretary certified, that this final rule 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 on state, local, or tribal governments or on the private sector before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2016, that VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 threshold is approximately $146 million. This final rule will impose no mandates on state, local, or tribal governments or on the private sector. Executive Order 13132 establishes certain requirements that an agency must meet when it issues a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has Federalism implications. Since this regulation does not impose any costs on state or local governments, the requirements of Executive Order 13132 are not applicable. We prepared the following analysis, which together with the information provided in the rest of this preamble, meets all assessment requirements. The analysis explains the rationale for and purposes of this final rule; details the costs and benefits of the rule; analyzes alternatives; and presents the measures we would use to minimize the burden on small entities. As indicated elsewhere in this final rule, we are implementing a variety of changes to our regulations, payments, or payment policies to ensure that our payment systems reflect changes in medical practice and the relative value of services, and implementing statutory provisions. We provide information for each of the policy changes in the relevant sections of this final rule. We are unaware of any relevant federal rules that duplicate, overlap, or conflict with this final rule. The relevant sections of this final rule contain a description of significant alternatives if applicable. C. Changes in Relative Value Unit (RVU) Impacts 1. Resource-Based Work, PE, and MP RVUs Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or decreases in RVUs may not cause the amount of expenditures for the year to differ by more than $20 million from what expenditures would have been in the absence of these changes. If this threshold is exceeded, we make adjustments to preserve budget neutrality. Our estimates of changes in Medicare expenditures for PFS services compare payment rates for CY 2016 with proposed payment rates for CY 2017 using CY 2015 Medicare utilization. The payment impacts in this final rule reflect averages by specialty based on Medicare utilization. The payment impact for an individual practitioner could vary from the average and would depend on the mix of services he or she PO 00000 Frm 00374 Fmt 4701 Sfmt 4700 furnishes. The average percentage change in total revenues would be less than the impact displayed here because practitioners and other entities generally furnish services to both Medicare and non-Medicare patients. In addition, practitioners and other entities may receive substantial Medicare revenues for services under other Medicare payment systems. For instance, independent laboratories receive approximately 83 percent of their Medicare revenues from clinical laboratory services that are paid under the Clinical Lab Fee Schedule. The annual update to the PFS conversion factor (CF) was previously calculated based on a statutory formula; for details about this formula, we refer readers to the CY 2015 PFS final rule with comment period (79 FR 67741 through 67742). Section 101(a) of the MACRA repealed the previous statutory update formula and amended section 1848(d) of the Act to specify the update adjustment factors for calendar years 2015 and beyond. For CY 2017, the specified update is 0.5 percent before applying other adjustments. Section 220(d) of the PAMA added a new paragraph at section 1848(c)(2)(O) of the Act to establish an annual target for reductions in PFS expenditures resulting from adjustments to relative values of misvalued codes. Under section 1848(c)(2)(O)(ii) of the Act, if the net reduction in expenditures for the year is equal to or greater than the target for the year, reduced expenditures attributable to such adjustments shall be redistributed in a budget-neutral manner within the PFS in accordance with the existing budget neutrality requirement under section 1848(c)(2)(B)(ii)(II) of the Act. Section 1848(c)(2)(O)(iii) of the Act specifies that, if the estimated net reduction in PFS expenditures for the year is less than the target for the year, an amount equal to the target recapture amount shall not be taken into account when applying the budget neutrality requirements specified in section 1848(c)(2)(B)(ii)(II) of the Act. We estimate the CY 2017 net reduction in expenditures resulting from adjustments to relative values of misvalued codes to be 0.32 percent. Since this amount does not meet the 0.5 percent target established by the Achieving a Better Life Experience Act of 2014 (ABLE) (Division B of Pub. L. 113–295, enacted December 19, 2014), payments under the fee schedule must be reduced by the difference between the target for the year and the estimated net reduction in expenditures, known as the target recapture amount. As a result, we estimate that the CY 2017 target E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations recapture amount will produce a reduction to the conversion factor of ¥0.18 percent. Effective January 1, 2012, we implemented an MPPR of 25 percent on the professional component (PC) of advanced imaging services. Section 502(a)(2)(A) of Division O, Title V of the Consolidated Appropriations Act of 2016 (Pub. L 114–113, enacted on December 18, 2015) added a new section 1848(b)(10) of the Act, which revises the MPPR on the professional component of imaging services from 25 percent to 5 percent, effective January 1, 2017. Section 502(a)(2)(B) of Division O, Title V of the Consolidated Appropriations Act of 2016 added a new subclause at section 1848(c)(2)(B)(v)(XI) which exempts the MPPR reductions attributable to the new 5 percent MPPR on the PC of imaging from the PFS budget neutrality provision. However, the provision does not exempt the change attributable to the 25 percent MPPR from PFS budget neutrality. Therefore, for CY 2017 we must calculate PFS rates in a manner that exempts the 5 percent MPPR from budget neutrality but ensures that the elimination of the 25 percent MPPR is included in PFS budget neutrality. We note that the application of the 25 percent MPPR has been applied in a budget neutral fashion to date. The CY 2017 final PFS rates exclude the 5 percent MPPR for the professional component of imaging services by calculating the rates as if the discount does not occur, consistent with our approach to other discounts that occur outside of PFS budget neutrality. In order to implement the change from the 25 percent discount in 2016 to the 5 percent discount in 2017 within PFS budget neutrality, we measured the difference in total RVUs for the relevant services, assuming an MPPR of 25 percent and the total RVUs for the same services without an MPPR, and then applied that difference as an adjustment to the conversion factor to account for the increased expenditures attributable to the change, within PFS budget neutrality. This approach is consistent with the statutory provision that requires the 5 percent MPPR to be implemented outside of PFS budget neutrality. To calculate the final conversion factor for this year, we multiplied the product of the current year conversion factor and the update adjustment factor 80543 by the target recapture amount, the budget neutrality adjustment and the imaging MPPR adjustment described in the preceding paragraphs. We estimate the CY 2017 PFS conversion factor to be 35.8887, which reflects the budget neutrality adjustment, the 0.5 percent update adjustment factor specified under section 1848(d)(18) of the Act, the adjustment due to the non-budget neutral 5 percent MPPR for the professional component of imaging services, and the ¥0.18 percent target recapture amount required under section 1848(c)(2)(O)(iv) of the Act and described above. We estimate the CY 2017 anesthesia conversion factor to be 22.0454, which reflects the same overall PFS adjustments. We note that the proposed RVU budget neutrality adjustment was negative, due to the estimated overall increases in proposed RVUs relative to 2016. However, because we did not finalize the proposed changes to make separate payment for the additional resource costs involved in mobility impairment services, we are finalizing an overall decrease in RVUs relative to 2016. This results in an RVU budget neutrality adjustment that is positive. TABLE 50—CALCULATION OF THE FINAL CY 2017 PFS CONVERSION FACTOR Conversion factor in effect in CY 2016 35.8043 Update Factor ............................................................................. CY 2017 RVU Budget Neutrality Adjustment ............................. CY 2017 Target Recapture Amount ........................................... CY 2017 Imaging MPPR Adjustment ......................................... CY 2017 Conversion Factor ....................................................... 0.50 percent (1.0050). ¥0.013 percent (0.99987). ¥0.18 percent (0.9982). ¥0.07 percent (0.9993). ................................................................................................ 35.8887 TABLE 51—CALCULATION OF THE FINAL CY 2017 ANESTHESIA CONVERSION FACTOR (CM ESTIMATE) CY 2016 National Average Anesthesia Conversion Factor mstockstill on DSK3G9T082PROD with RULES2 Update Factor ............................................................................. CY 2017 RVU Budget Neutrality Adjustment ............................. CY 2017 Target Recapture Amount ........................................... CY 2017 Imaging MPPR Adjustment ......................................... CY 2017 Conversion Factor ....................................................... Table 52 shows the payment impact on PFS services of the proposals contained in this final rule. To the extent that there are year-to-year changes in the volume and mix of services provided by practitioners, the actual impact on total Medicare revenues would be different from those shown in Table 52 (CY 2017 PFS Estimated Impact on Total Allowed Charges by Specialty). The following is an explanation of the information represented in Table 52. • Column A (Specialty): Identifies the specialty for which data are shown. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 21.9935 0.50 percent (1.0050). 0.013 percent (0.99987). ¥0.18 percent (0.9982). ¥0.07 percent (0.9993). ................................................................................................ • Column B (Allowed Charges): The aggregate estimated PFS allowed charges for the specialty based on CY 2015 utilization and CY 2016 rates. That is, allowed charges are the PFS amounts for covered services and include coinsurance and deductibles (which are the financial responsibility of the beneficiary). These amounts have been summed across all services furnished by physicians, practitioners, and suppliers within a specialty to arrive at the total allowed charges for the specialty. • Column C (Impact of Work RVU Changes): This column shows the PO 00000 Frm 00375 Fmt 4701 Sfmt 4700 22.0454 estimated CY 2017 impact on total allowed charges of the changes in the work RVUs, including the impact of changes due to potentially misvalued codes. • Column D (Impact of PE RVU Changes): This column shows the estimated CY 2017 impact on total allowed charges of the changes in the PE RVUs. • Column E (Impact of MP RVU Changes): This column shows the estimated CY 2017 impact on total allowed charges of the changes in the MP RVUs, which are primarily driven E:\FR\FM\15NOR2.SGM 15NOR2 80544 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations by the required five-year review and update of MP RVUs. • Column F (Combined Impact): This column shows the estimated CY 2017 combined impact on total allowed charges of all the changes in the previous columns. Column F may not equal the sum of columns C, D, and E due to rounding. TABLE 52—CY 2017 PFS ESTIMATED IMPACT ON TOTAL ALLOWED CHARGES BY SPECIALTY * (A) Specialty mstockstill on DSK3G9T082PROD with RULES2 (C) Impact of work RVU changes (%) (B) Allowed charges (mil) TOTAL .................................................................................. ALLERGY/IMMUNOLOGY ................................................... ANESTHESIOLOGY ............................................................ AUDIOLOGIST ..................................................................... CARDIAC SURGERY .......................................................... CARDIOLOGY ..................................................................... CHIROPRACTOR ................................................................ CLINICAL PSYCHOLOGIST ............................................... CLINICAL SOCIAL WORKER ............................................. COLON AND RECTAL SURGERY ..................................... CRITICAL CARE .................................................................. DERMATOLOGY ................................................................. DIAGNOSTIC TESTING FACILITY ..................................... EMERGENCY MEDICINE ................................................... ENDOCRINOLOGY ............................................................. FAMILY PRACTICE ............................................................. GASTROENTEROLOGY ..................................................... GENERAL PRACTICE ......................................................... GENERAL SURGERY ......................................................... GERIATRICS ....................................................................... HAND SURGERY ................................................................ HEMATOLOGY/ONCOLOGY .............................................. INDEPENDENT LABORATORY .......................................... INFECTIOUS DISEASE ....................................................... INTERNAL MEDICINE ......................................................... INTERVENTIONAL PAIN MGMT ........................................ INTERVENTIONAL RADIOLOGY ....................................... MULTISPECIALTY CLINIC/OTHER PHYS ......................... NEPHROLOGY .................................................................... NEUROLOGY ...................................................................... NEUROSURGERY .............................................................. NUCLEAR MEDICINE ......................................................... NURSE ANES/ANES ASST ................................................ NURSE PRACTITIONER ..................................................... OBSTETRICS/GYNECOLOGY ............................................ OPHTHALMOLOGY ............................................................ OPTOMETRY ...................................................................... ORAL/MAXILLOFACIAL SURGERY ................................... ORTHOPEDIC SURGERY .................................................. OTHER ................................................................................. OTOLARNGOLOGY ............................................................ PATHOLOGY ....................................................................... PEDIATRICS ........................................................................ PHYSICAL MEDICINE ......................................................... PHYSICAL/OCCUPATIONAL THERAPY ............................ PHYSICIAN ASSISTANT ..................................................... PLASTIC SURGERY ........................................................... PODIATRY ........................................................................... PORTABLE X-RAY SUPPLIER ........................................... PSYCHIATRY ...................................................................... PULMONARY DISEASE ...................................................... RADIATION ONCOLOGY .................................................... RADIATION THERAPY CENTERS ..................................... RADIOLOGY ........................................................................ RHEUMATOLOGY ............................................................... THORACIC SURGERY ....................................................... UROLOGY ........................................................................... VASCULAR SURGERY ....................................................... $89,866 231 1,982 61 324 6,485 784 734 606 161 311 3,308 754 3,145 460 6,110 1,747 456 2,172 213 182 1,751 706 656 10,915 769 317 129 2,210 1,521 789 47 1,214 2,988 651 5,492 1,219 49 3,695 27 1,210 1,135 61 1,068 3,407 1,964 378 1,972 106 1,265 1,765 1,726 44 4,683 537 357 1,772 1,046 (D) Impact of PE RVU changes (%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ¥1 0 0 0 0 0 0 0 0 0 ¥1 0 0 0 ¥1 0 0 0 0 ¥1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ¥1 0 0 1 0 0 0 0 0 0 0 0 0 0 ¥1 0 0 1 0 0 0 1 0 0 ¥5 0 1 ¥1 0 0 0 0 0 0 0 0 0 ¥2 ¥1 ¥1 0 0 0 ¥2 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 ** Column F may not equal the sum of columns C, D, and E due to rounding. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00376 Fmt 4701 Sfmt 4700 E:\FR\FM\15NOR2.SGM 15NOR2 (E) Impact of MP RVU changes (%) (F) Combined impact ** (%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 ¥1 0 0 1 ¥1 1 0 1 0 0 ¥5 0 1 0 ¥1 1 0 0 ¥1 0 0 0 0 ¥2 ¥1 ¥1 0 0 ¥1 ¥1 0 0 1 0 0 0 0 0 0 0 0 ¥1 0 0 ¥2 ¥1 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations b. Impact a. Changes in RVUs mstockstill on DSK3G9T082PROD with RULES2 2. CY 2017 PFS Impact Discussion Column F of Table 52 displays the estimated CY 2017 impact on total allowed charges, by specialty, of all the RVU changes. A table shows the estimated impact on total payments for selected high volume procedures of all of the changes is available under ‘‘downloads’’ on the CY 2017 PFS final rule Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/. We selected these procedures for sake of illustration from among the most commonly furnished by a broad spectrum of specialties. The change in both facility rates and the nonfacility rates are shown. For an explanation of facility and nonfacility PE, we refer readers to Addendum A on the CMS Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/. The most widespread specialty impacts of the final RVU changes are generally related to the changes to RVUs for specific services resulting from the Misvalued Code Initiative, including finalized RVUs for new and revised codes. Several specialties, including interventional radiology and independent labs, would experience significant decreases to overall payments for services that they frequently furnish as a result of revisions to the coding structure or the final inputs used to develop RVUs for the codes that describe particular services. Other specialties, including endocrinology and family practice, would experience significant increases to payments for similar reasons. We note that the positive impact for CY 2017 several specialties is lower than it was in the proposed rule, especially for certain specialties disproportionately likely to have reported the proposed code related to mobility impairment services. Because we did not finalize that proposal, we do not anticipate that shift in payment for CY 2017. However, we note that we believe that many practitioners of those same specialties will likely report the several other new codes described in section F of this final rule. Based on the history with other, similar codes, we would anticipate significant changes in allowed charges for these specialties over a longer period of time thanis shown by the single year comparison that we believe is more generally relevant in displaying the impacts of changes in payment under the PFS. We often receive comments regarding the changes in RVUs displayed on the specialty impact table, including comments received in response to the proposed rates for the current year. We remind stakeholders that although the estimated impacts are displayed at the specialty level, typically the changes are driven by the valuation of a relatively small number of new and/or potentially misvalued codes. The percentages in the table are based upon aggregate estimated PFS allowed charges summed across all services furnished by physicians, practitioners, and suppliers within a specialty to arrive at the total allowed charges for the specialty, and compared to the same summed total from the previous calendar year. They are therefore averages, and may not necessarily be representative of what is happening to the particular services furnished by a single practitioner within any given specialty. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 D. Effect of Changes in Telehealth List As discussed in section II.I. of this final rule, we added several new codes to the list of Medicare telehealth services. Although we expect these changes to increase access to care in rural areas, based on recent utilization of similar services already on the telehealth list, we estimate no significant impact on PFS expenditures from the additions relative to overall PFS expenditures. E. Geographic Practice Cost Indices (GPCIs) Based upon statutory requirements, we proposed new GPCIs for each Medicare payment locality. The final GPCIs incorporate updated data and cost share weights as discussed in section II.I. The Act requires that updated GPCIs be phased in over two years. Addendum D shows the estimated effects of the revised GPCIs on area GAFs for the transition year (CY 2017) and the fully implemented year (CY 2018). The GAFs reflect the use of the updated underlying GPCI data, and the cost share weights remain unchanged from the previous (seventh) GPCI update. The GAFs are a weighted composite of each area’s work, PE and malpractice expense GPCIs using the national GPCI cost share weights. Although we do not actually use the GAFs in computing the PFS payment for a specific service, they are useful in comparing overall areas costs and payments. The actual effect on payment for any actual service will deviate from the GAF to the extent that the proportions of work, PE and malpractice expense RVUs for the service differ from those of the GAF. PO 00000 Frm 00377 Fmt 4701 Sfmt 4700 80545 The most significant changes occur in 19 non-California payment localities, where the fully implemented (CY 2018) GAF moves up by more than 1 percent (14 payment localities) or down by more than 2 percent (5 payment localities). These changes, required by section 1848(e)(6) of the Act, are discussed in section II.I. of this final rule. F. Other Provisions of the Proposed Regulation 1. Impact of Changing the Direct Supervision Requirement to General Supervision for CCM Services Furnished Incident to RHCs and FQHCs, and Impact of Revising the CCM Requirements for RHCs and FQHCs We are finalizing our proposal to revise § 405.2413(a)(5) and § 405.2415(a)(5) to state that services and supplies furnished incident to TCM and CCM services can be furnished under general supervision of a RHC or FQHC practitioner. This regulatory change was already made for CCM services furnished by practitioners billing the PFS, and changes to RHC and FQHC regulations have no impact on regulations for practitioners billing under the PFS. The impact of this change on RHCs and FQHCs in 2017 is negligible, as estimates are rounded to the nearest 5 million and 2017 was too small of an impact to have a notable effect on the estimate. We are also finalizing our proposal to revise the CCM requirements for RHCs and FQHCs to be consistent with the proposed revisions to the CCM requirements for practitioners billing under the PFS. These revisions will allow RHCs and FQHCs to provide TCM and CCM services at the level that was projected when the programs were authorized, and therefore, no impact on spending is expected. 2. FQHC-Specific Market Basket As discussed in section III.B of this final rule, we are finalizing our proposal to create a 2013-based FQHC market basket to update the FQHC PPS base payment rate. Table 53 shows the 5-year and 10-year fiscal cost estimates from switching from a MEI-adjusted base payment rate to a FQHC PPS market basket-adjusted base payment rate. This was determined by compiling data on historical FQHC spending, projecting it forward, and creating two separate baselines. The first baseline assumed an MEI price update and the second baseline assumed an FQHC specific market basket price update which was created by the Office of the Actuary within CMS. The utilization of services was held constant between the two E:\FR\FM\15NOR2.SGM 15NOR2 80546 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations baselines, and therefore, the impact table specifically captures the change in price from now growing at an FQHC MB update relative to how it was growing at the MEI updates. We estimate that this will cost approximately 210 million dollars over 10 years from FY 2017– 2026, 45 million of which would be paid for through beneficiary premiums and the remaining 165 million would be paid for through Part B. TABLE 53—5-YEAR AND 10-YEAR FISCAL COST ESTIMATES FROM SWITCHING FROM AN MEI-ADJUSTED BASE PAYMENT RATE TO A FQHC PPS MARKET BASKET-ADJUSTED BASE PAYMENT RATE Estimate (in millions) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 5-year impact 2017– 2021 10-year impact 2017– 2026 FY Cash Impact (with MC) Part B Benefits .......................................... Premium Offset .............................. Total Part B .................................... ........ ........ ........ 5 ........ 5 10 ........ 10 10 ........ 10 15 (5) 10 16 (5) 10 20 (5) 15 25 (5) 20 30 (5) 25 35 (10) 25 45 (10) 35 55 (10) 45 210 (45) 165 3. Appropriate Use Criteria for Advanced Diagnostic Imaging Services The clinical decision support mechanism (CDSM) requirements, as well as the application process that CDSM developers must comply with for their mechanisms to be specified as qualified under this program do not impact CY 2017 physician payments under the PFS. 4. Reports of Payments or Other Transfers of Value to Covered Recipients We solicited comments to inform future rulemaking. We do not intend to finalize any requirements directly as a result of this final rule; so there is no impact to CY 2017 physician payments under the PFS. mstockstill on DSK3G9T082PROD with RULES2 5. Release of Part C Medicare Advantage Bid Pricing Data and Part C and Part D Medical Loss Ratio (MLR) Data Under section III.E. of the preamble of this final rule, we describe our proposal to revise the existing regulations by adding § 422.272 to provide for an annual public release of MA bid pricing data (with specified exceptions from release). We proposed that the annual release would occur after the first Monday in October and would contain MA bid pricing data that was accepted or approved by CMS for a contract year at least 5 years prior to the upcoming calendar year. We noted that under current authority at § 422.254, MA organizations (MAOs) are required to submit bid pricing data to CMS each year for MA plans they wish to offer in the upcoming contract year (calendar year). In addition, we proposed to add § 422.2490 for Part C and § 423.2490 for Part D to provide for an annual public release of Part C and Part D medical loss ratio (MLR) data (with specified exceptions from release). This annual VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 release would occur no sooner than 18 months after the end of the contract year for which MLR data was reported to us. Starting with contract year 2014, each MAO or Part D sponsor that fails to spend at least 85 percent of revenue received under an MA or Part D contract on incurred claims and quality improving activities must remit the difference to the government. Under current authority at § 422.2460 and § 423.2460, each year MAOs and Part D sponsors must submit an MLR Report to us, which includes the data needed by the MAO or Part D sponsor to calculate and verify the MLR and remittance amount, if any, for each contract. We proposed to add regulatory language to permit our release of such data to the public. In the proposed rule, we determined that the proposed regulatory amendments do not impose any mandatory costs on the public or entities that seek to download and use the released data. We expect that this data will be available to the public from the CMS Web site (https:// www.cms.gov/). The public may elect to download the data files, which will not impose mandatory costs on any user. Therefore, we determined that there were not any significant effects of the proposed provisions. We also determined that the proposed regulatory amendments would not impose a burden on the entity requesting or downloading the data files. We did not receive any public comments on our proposed regulatory impact analysis and are finalizing our language as proposed. 6. Prohibition on Billing Qualified Medicare Beneficiary Individuals for Medicare Cost-Sharing We are restating information to inform providers to take steps to educate themselves and their staff about QMB billing prohibitions and to exempt QMB individuals from Medicare cost-sharing billing and related collection efforts. PO 00000 Frm 00378 Fmt 4701 Sfmt 4700 Therefore, there is no impact to CY 2017 physician payments under the PFS. 7. Recoupment or Offset of Payments to Providers Sharing the Same Taxpayer Identification Number This final rule implements section 1866(j) of the Act which grants the Secretary the authority to make any necessary adjustments to the payments of an applicable provider of services or supplier who shares a TIN with an obligated provider of services or supplier that has an outstanding Medicare overpayment. The Secretary is authorized to adjust the payments of such applicable provider, regardless of whether that applicable provider is assigned a different Medicare billing number or National Provider Identifier (NPI) number from the obligated provider with the outstanding Medicare overpayment. The concept of offsetting or recouping payments of providers sharing a TIN to satisfy a Medicare overpayment is analogous to Treasury’s current practice of offsetting against entities that share a TIN to collect Medicare overpayments. This final rule will help support our efforts to safeguard the Medicare Trust Funds by collecting its own overpayments more quickly and reducing the accounts receivable delinquency rates reported in the Treasury Report on Receivables. This final rule also helps the obligated provider because we will collect the overpayments more quickly; thus reducing the additional interest assessments that would continue on the provider’s outstanding delinquent balance until paid in full. Therefore, there is no impact to CY 2017 physician payments under the PFS. 8. Medicare Advantage Provider Enrollment This final rule will require that providers and suppliers must be enrolled in Medicare in approved status E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 in order to render services to beneficiaries in the Medicare Advantage program. This final rule will not have a significant economic impact on a substantial number of small businesses because the total number of nonenrolled providers and suppliers required to enroll in Medicare to comply with this rule appears to be small in comparison to the general population of providers and suppliers. The completion of the Form CMS–855 (as explained in section III.) will be required very infrequently, in many cases either only one time or once every several years. Also, the hour and cost burden per provider or supplier will not pose a significant burden on a provider and supplier, especially when considering the overall revenue that providers and suppliers receive per year. We thus do not believe our proposal will impact a substantial number of small businesses. Virtually all of the quantifiable costs associated with this final rule involve the paperwork burden to providers and suppliers (see section IV. of this final rule). The estimates presented in this section do not address the potential financial benefits of this final rule from the standpoint of the rule’s effectiveness in preventing or deterring certain providers from enrolling in or maintaining their enrollment in Medicare. We simply have no means of quantifying these benefits in monetary terms. There are three main uncertainties associated with this final rule. First, we are uncertain as to the number of providers and suppliers that will be required to enroll in Medicare under § 422.222. Second, we cannot estimate the savings in fraud and abuse prevention that will accrue from this rule. Third, since we have no systematic method to know how many FDRs may be used by MA or MA–PD organizations to deliver services to Medicare beneficiaries, therefore, we cannot estimate the possible impact to FDRs. 9. Expansion of the Diabetes Prevention Program (DPP) Model We proposed to expand the Diabetes Prevention Program (DPP) Model in accordance with section 1115A(c) of the Act, and we proposed to refer to this expanded model as the Medicare Diabetes Prevention Program (MDPP). We proposed that MDPP would become effective January 1, 2018, and we would continue to test and evaluate MDPP as finalized. In the future, we will assess whether the nationwide implementation of the MDPP is continuing to either reduce Medicare spending without reducing quality of care or improve the VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 quality of patient care without increasing spending, and could modify the nationwide MDPP as appropriate. In this final rule, we are finalizing the framework for expansion and finalizing details of the MDPP benefit, beneficiary eligibility criteria, and MDPP supplier eligibility criteria and enrollment policies. We will engage in additional rulemaking within the next year to address payment, delivery of virtual MDPP services, the preliminary recognition standard, use of coach information during enrollment and monitoring, and other program integrity safeguards. MDPP policies finalized in this rule and those proposed in future rulemaking will result in changes to our current financial projections and therefore affect economic impact estimates of MDPP. For these reasons, it is premature to provide an impact statement at this time. We intend to provide an impact statement in future rulemaking. 10. Medicare Shared Savings Program We are finalizing certain rules having to do with ACO quality reporting: (1) We are finalizing conforming changes to align with the policies adopted for the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) in the QPP final rule with comment period including changes to the quality measure set; (2) we are finalizing a policy to streamline the quality validation audit process and, absent unusual circumstances, to use the results to modify an ACO’s overall quality score; (3) we are finalizing revisions to references to the Quality Performance Standard and Minimum Attainment Level; (4) we are revising our policies regarding the application of flat percentages to provide that measures calculated as ratios are excluded from use of flat percentages when such benchmarks appear ‘‘clustered’’ or ‘‘topped out’’; and (5) we are modifying our PQRS alignment rules to permit flexibility for EPs to report quality data to PQRS to avoid the PQRS and VM downward adjustments for 2017 and 2018 in cases where an ACO fails to report on their behalf. (The rule can be accessed at https://qpp.cms.gov/ education.) In addition, we are updating the assignment methodology to include beneficiaries who identify ACO professionals as being responsible for coordinating their overall care. We are also finalizing additional beneficiary protections when ACOs in Track 3 make use of the SNF 3-day rule waiver under the Shared Savings Program. Finally, we are finalizing certain technical changes and clarifications related to financial PO 00000 Frm 00379 Fmt 4701 Sfmt 4700 80547 reconciliation for ACOs that fall below 5,000 assigned beneficiaries and related to our policies for consideration of claims billed by merged and acquired TINs. Because the final policies are not expected to substantially change the quality reporting burden for ACOs participating in the Shared Savings Program and their ACO participants or financial calculations under the Shared Savings Program, we do not anticipate any impact for these final policies. 11. Value-Based Payment Modifier and the Physician Feedback Program Section 1848(p) of the Act requires that we establish a value-based payment modifier (VM) and apply it to specific physicians and groups of physicians the Secretary determines appropriate starting January 1, 2015 and to all physicians and groups of physicians by January 1, 2017. Section 1848(p)(4)(C) of the Act requires the VM to be budget neutral. Budget-neutrality means that, in aggregate, the increased payments to high performing physicians and groups of physicians equal the reduced payments to low performing physicians and groups of physicians, as well as those physicians and groups of physicians that failed to avoid the PQRS payment adjustment as a group or as individuals. In the CY 2015 PFS final rule with comment period (79 FR 67936 and 67941 through 67942), we established that, beginning with the CY 2017 payment adjustment period, the VM will apply to physicians in groups with two or more EPs and to physicians who are solo practitioners based on the applicable performance period, including physicians that participate in an ACO under the Shared Savings Program. In the CY 2014 PFS final rule with comment period (78 FR 74771 through 74772), we established CY 2015 as the performance period for the VM that will be applied to payments during CY 2017. In CY 2017, the VM will be waived for groups and solo practitioners, as identified by their TIN, if at least one EP who billed for Medicare PFS items and services under the TIN during 2015 participated in the Pioneer ACO Model or the Comprehensive Primary Care initiative in 2015 (80 FR 71288). In the CY 2015 PFS final rule with comment period (79 FR 67938 through 67939), we adopted a two-category approach for the CY 2017 VM based on participation in the PQRS by groups and solo practitioners. Category 1 will include those groups that meet the criteria to avoid the PQRS payment adjustment for CY 2017 as a group E:\FR\FM\15NOR2.SGM 15NOR2 80548 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations practice participating in the PQRS GPRO in CY 2015. We finalized in the CY 2016 PFS final rule with comment period (80 FR 71280 through 71281) that, for the CY 2017 VM, Category 1 will also include groups that have at least 50 percent of the group’s EPs meet the criteria to avoid the PQRS payment adjustment for CY 2017 as individuals. In determining whether a group will be included in Category 1, we will consider whether the 50 percent threshold has been met regardless of whether the group registered to participate in the PQRS GPRO in CY 2015. Lastly, Category 1 will include those solo practitioners that meet the criteria to avoid the PQRS payment adjustment for CY 2017 as individuals. For groups and solo practitioners that participated in an ACO under the Shared Savings Program in CY 2015, they are considered to be Category 1 for the CY 2017 VM if the ACO in which they participated successfully reported on quality measures via the GPRO Web Interface in CY 2015 (79 FR 67946). As discussed in sections III.H. and III.K.1.e. of this final rule, we are finalizing our proposal to remove the prohibition on EPs who are part of a group or solo practitioner that participates in a Shared Savings Program ACO, for purposes of PQRS reporting for the CY 2017 and CY 2018 payment adjustments, to report outside the ACO. In section III.L.3.b. of this final rule, we are finalizing that for the CY 2017 payment adjustment period, if a Shared Savings Program ACO did not successfully report quality data as required by the Shared Savings Program under § 425.504 for the CY 2017 PQRS payment adjustment, then we will use the data reported to the PQRS by the EPs (as a group using one of the group registry, QCDR, or EHR reporting options or as individuals using the registry, QCDR, or EHR reporting option) under the participant TIN) outside of the ACO during the secondary PQRS reporting period to determine whether the TIN will fall in Category 1 or Category 2 under the VM. We are finalizing that groups that meet the criteria to avoid PQRS payment adjustment for CY 2018 as a group practice participating in the PQRS GPRO (using one of the group registry, QCDR, or EHR reporting options) or have at least 50 percent of the group’s EPs meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals (using the registry, QCDR, or EHR reporting option), based on data submitted outside the ACO and during the secondary PQRS reporting period, will be included in Category 1 for the CY 2017 VM. We are also finalizing that solo practitioners that meet the criteria to avoid the PQRS payment adjustment for CY 2018 as individuals using the registry, QCDR, or EHR reporting option, based on data submitted outside the ACO and during the secondary PQRS reporting period, will be included in Category 1 for the CY 2017 VM and be classified as ‘‘average quality’’ and ‘‘average cost’’ under the quality-tiering methodology. Category 2 will include those groups and solo practitioners subject to the CY 2017 VM that participate in a Shared Savings Program ACO and do not fall within Category 1. The CY 2017 VM payment adjustment amount for groups and solo practitioners in Category 2 is ¥4.0 percent for groups of physicians with 10 or more EPs and ¥2.0 percent for groups of physicians with between 2 to 9 EPs and physician solo practitioners. In the CY 2015 PFS final rule with comment period (79 FR 67939 through 67941), we finalized that quality-tiering, which is the methodology for evaluating performance on quality and cost measures for the VM, will apply to all groups of physicians and physician solo practitioners in Category 1 for the VM for CY 2017. However, groups of physicians with between 2 to 9 EPs and physician solo practitioners will be subject only to upward or neutral adjustments derived under qualitytiering, while groups of physicians with 10 or more EPs will be subject to upward, neutral, or downward adjustments derived under qualitytiering. That is, groups of physicians with between 2 to 9 EPs and physician solo practitioners in Category 1 will be held harmless from any downward adjustments derived under qualitytiering for the CY 2017 VM. Under the quality-tiering methodology, each group and solo practitioner’s quality and cost composites will be classified into high, average, and low categories depending upon whether the composites are at least one standard deviation above or below the mean and statistically different from the mean. We will compare their quality of care composite classification with the cost composite classification to determine their VM adjustment for the CY 2017 payment adjustment period according to the amounts in Tables 54 and 55. TABLE 54—CY 2017 VM PAYMENT ADJUSTMENT AMOUNTS UNDER QUALITY-TIERING FOR GROUPS OF PHYSICIANS WITH TWO TO NINE EPS AND PHYSICIAN SOLO PRACTITIONERS Cost/quality Low quality Low cost ..................................................................................................................... Average cost .............................................................................................................. High cost .................................................................................................................... Average quality +0.0% +0.0% +0.0% +1.0x* +0.0% +0.0% High quality +2.0x* +1.0x* +0.0% * Groups and solo practitioners eligible for an additional +1.0x if reporting measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores, where ‘x’ represents the upward payment adjustment factor. TABLE 55—CY 2017 VM PAYMENT ADJUSTMENT AMOUNTS UNDER QUALITY-TIERING FOR GROUPS OF PHYSICIANS WITH TEN OR MORE EPS mstockstill on DSK3G9T082PROD with RULES2 Cost/quality Low quality Low cost ..................................................................................................................... Average cost .............................................................................................................. High cost .................................................................................................................... Average quality +0.0% ¥2.0% ¥4.0% +2.0x* +0.0% ¥2.0% High quality +4.0x* +2.0x* +0.0% * Groups eligible for an additional +1.0x if reporting measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores, where ‘x’ represents the upward payment adjustment factor. Under the quality-tiering methodology, for groups and solo VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 practitioners that participated in a Shared Savings ACO that successfully PO 00000 Frm 00380 Fmt 4701 Sfmt 4700 reports quality data for CY 2015, the cost composite will be classified as E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations ‘‘Average’’ and the quality of care composite will be based on ACO-level quality measures. We will compare their quality of care composite classification with the ‘‘Average’’ cost composite classification to determine their VM adjustment for the CY 2017 payment adjustment period according to the amounts in Tables 54 and 55. We are finalizing in section III.L.3.b. of this final rule, for groups and solo practitioners that participate in a Shared Savings Program ACO that did not successfully report quality data for CY 2015 and are in Category 1 as a result of reporting quality data to the PQRS outside of the ACO using the secondary PQRS reporting period, our proposal to classify their quality composite for the VM for the CY 2017 payment adjustment period as ‘‘average quality.’’ Their cost composite will be classified as ‘‘average cost’’ (79 FR 67943). To ensure budget neutrality, we first aggregate the downward payment adjustments in Tables 54 and 55 for those groups and solo practitioners in Category 1 with the automatic downward payment adjustments of ¥2.0 percent or ¥4.0 percent for groups and solo practitioners subject to the VM that fall within Category 2. Using the aggregate downward payment adjustment amount, we then calculate the upward payment adjustment factor (x). We plan to incorporate assumptions about the number of physicians in groups and physician solo practitioners in the ACOs that did not successfully report their CY 2015 quality data whose status could potentially change from Category 2 to Category 1 if the group or solo practitioner satisfactorily report their 2016 data during the secondary PQRS reporting period. Additionally, as we had done when calculating the upward payment adjustment factor for the 2016 VM, we will also incorporate adjustments made for estimated changes in physician behavior (i.e., changes in the volume and/or intensity of services delivered and shifting of services to TINs that receive higher VM adjustments) and estimated impact of pending PQRS and VM informal reviews. These calculations will be done after the performance period has ended and announced around the start of the payment adjustment year after the informal review period ends. On September 26, 2016, we made the 2015 Annual QRURs available to all groups and solo practitioners based on their performance in CY 2015. We also completed a preliminary analysis (based on results included in the 2015 Annual QRURs and prior to accounting for the informal review process) of the impact of the VM in CY 2017 on physicians in groups with 2 or more EPs and physician solo practitioners based on their performance in CY 2015. A summary of the results for groups and solo practitioners subject to the 2017 VM is presented below. There are 208,832 groups and physician solo practitioners (as identified by their Taxpayer Identification Number (TIN)) consisting of 885,108 physicians whose physicians’ payments under the Medicare PFS will be subject to the VM 80549 in the CY 2017 payment adjustment period. These counts include both TINs that participated in a Shared Savings Program ACO in CY 2015 and TINs that did not. Of all the physicians subject to the CY 2017 VM, approximately 65 percent of the physicians (577,959 physicians) are in TINs that met the criteria for inclusion in Category 1 and are subject to the quality-tiering methodology in order to calculate their CY 2017 VM; and approximately 35 percent of the physicians (307,149 physicians) are in TINs that are Category 2. Physicians in Category 2 TINs with between 1 to 9 EPs will be subject to an automatic ¥2.0 percent payment adjustment, while physicians in Category 2 TINs with 10 or more EPs will be subject to an automatic ¥4.0 percent payment adjustment under the VM during the CY 2017 payment adjustment period for failing to meet quality reporting requirements. For physicians (428,461) that are in Category 1 TINs that did not participate in a Shared Savings Program ACO (61,445) in CY 2015, Tables 56 and 57 show the distribution of these physicians and TINs with between 1 to 9 EPs and 10 or more EPs, respectively, into the various quality and cost tiers. The results show that 2,351 TINs consisting of 12,026 physicians will receive an upward payment adjustment; 58,099 TINs consisting of 384,922 physicians will receive a neutral payment adjustment; and 995 TINs consisting of 31,513 physicians will receive a downward payment adjustment under the VM in CY 2017. TABLE 56—PRELIMINARY DISTRIBUTION OF CATEGORY 1 NON-SHARED SAVINGS PROGRAM TINS WITH BETWEEN 1 TO 9 EPS (AND PHYSICIANS IN THE TINS) UNDER THE CY 2017 VM [53,119 TINs; 101,168 physicians] Cost/quality Low quality Average quality Low Cost ................ +0.0% (6 TINs; 7 physicians) ............... Average Cost ......... +0.0% (4,632 TINs; 9,009 physicians) High Cost ............... +0.0% (516 TINs; 943 physicians) ....... +1.0x (36 TINs; 72 physicians) ............ +2.0x* (36 TINs; 75 physicians) ........... +0.0% (44,895 TINs; 85,466 physicians). +0.0% (948 TINs; 1,889 physicians) .... High quality +2.0x (8 TINs; 28 physicians). +3.0x* (11 TINs; 32 physicians). +1.0x (1,478 TINs; 2,480 physicians) +2.0x* (531 TINs; 1,104 physicians). +0.0% (22 TINs; 63 physicians). * These TINs were eligible for an additional +1.0x for reporting measures and having an average beneficiary risk score in the top 25 percent of all beneficiary risk scores. TABLE 57—PRELIMINARY DISTRIBUTION OF CATEGORY 1 NON-SHARED SAVINGS PROGRAM TINS WITH 10 OR MORE EPS (AND PHYSICIANS IN THE TINS) UNDER THE CY 2017 VM mstockstill on DSK3G9T082PROD with RULES2 [8,326 TINs; 327,293 physicians] Cost/quality Low quality Average quality Low Cost ................ +0.0% (3 TINs; 149 physicians) ........... Average Cost ......... ¥2.0% (612 TINs; 17,272 physicians) +2.0x (11 TINs; 383 physicians) .......... +3.0x* (24 TINs; 2,414 physicians) ...... +0.0% (7,069 TINs; 287,111 physicians). +4.0x (0 TINs; 0 physicians). +5.0x* (3 TINs; 69 physicians). +2.0x (95 TINs; 2,439 physicians) +3.0x* (118 TINs; 2,930 physicians). Fmt 4701 15NOR2 VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 PO 00000 Frm 00381 Sfmt 4700 E:\FR\FM\15NOR2.SGM High quality 80550 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations TABLE 57—PRELIMINARY DISTRIBUTION OF CATEGORY 1 NON-SHARED SAVINGS PROGRAM TINS WITH 10 OR MORE EPS (AND PHYSICIANS IN THE TINS) UNDER THE CY 2017 VM—Continued [8,326 TINs; 327,293 physicians] Cost/quality Low quality Average quality High Cost ............... ¥4.0% (122 TINs; 4,051 physicians) ... High quality ¥2.0% (261 TINs; 10,190 physicians) +0.0% (8 TINs; 285 physicians) * These TINs were eligible for an additional +1.0x for reporting measures and having an average beneficiary risk score in the top 25 percent of all beneficiary risk scores. For physicians (149,498) that are in Category 1 TINs that participated in a Shared Savings Program ACO (12,500) in CY 2015, Table 58 shows the distribution of the 389 ACOs into the various quality tiers along with the number of physicians in the ACOs. The results show that physicians in participant TINs in 3 ACOs will receive an upward payment adjustment; physicians in participant TINs in 382 ACOs will receive a neutral payment adjustment; and physicians in participant TINS with 10 or more EPs in 4 ACOs will receive a downward payment adjustment under the VM in CY 2017. Physicians in ACO TINs are more likely to be in a Category 1 TIN compared to those in non-ACO TINs and are less likely to get the downward adjustment based on performance compared to those in Category 1 nonACO TINs. Physicians in ACOs are also more likely to get either an average or upward adjustment under the VM compared to physicians overall. The VM is applied at the TIN-level, and the amount of the upward or downward adjustment will vary based on the size of the ACO’s participant TIN. TABLE 58—PRELIMINARY DISTRIBUTION OF CATEGORY 1 SHARED SAVINGS PROGRAM ACOS (AND PHYSICIANS IN THE ACOS’ PARTICIPANT TINS) UNDER THE CY 2017 VM [389 ACOs; 149,498 physicians] Cost/quality Low quality Average quality High quality Low Cost ................ Average Cost ......... High Cost ............... Does not apply ...................................... 4 ACOs ................................................. Does not apply ...................................... Does not apply ...................................... 382 ACOs ............................................. Does not apply ...................................... Does not apply. 3 ACOs. Does not apply. * These TINs were eligible for an additional +1.0x for reporting measures and having an average beneficiary risk score in the top 25 percent of all beneficiary risk scores. mstockstill on DSK3G9T082PROD with RULES2 The numbers presented above are preliminary numbers and may be subject to change as a result of the informal review process. In late 2016, after the conclusion of the informal review period, we will release updates to the number of TINs receiving upward, neutral, and downward adjustments, along with the adjustment factor for the CY 2017 VM on the CMS Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeedbackProgram/ 2015-QRUR.html. We note that in the 2015 QRUR Experience Report, which we intend to release in early 2017, we will provide a detailed analysis of the impact of the 2017 VM policies on physicians in groups of 2 or more EPs and physician solo practitioners subject to the VM in CY 2017, including findings based on the data contained in the 2015 Annual QRURs for all groups and solo practitioners. 12. Physician Self-Referral Updates The physician self-referral update provisions are discussed in section III.M of this final rule. We re-issued regulatory provisions prohibiting certain per-unit of service compensation formulas for determining rental charges in the exceptions for the rental of office space, rental of equipment, fair market VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 value compensation, and indirect compensation arrangements. These provisions are necessary to protect against potential abuses such as overutilization and stifling patient choice. We believe that most parties comply with these regulatory provisions since they originally became effective on October 1, 2009, and the re-issued regulations text is identical to the existing regulations text. Therefore, we do not believe that the provisions will have a significant burden. G. Alternatives Considered This final rule contains a range of policies, including some provisions related to specific statutory provisions. The preceding preamble provides descriptions of the statutory provisions that are addressed, identifies those policies when discretion has been exercised, presents rationale for our final policies and, where relevant, alternatives that were considered. For purposes of the payment impact on PFS services of the policies contained in this final rule, we presented the estimated impact on total allowed charges by specialty. The alternatives we considered, as discussed in the preceding preamble sections, will result in different final payment rates, and therefore, result in different estimates PO 00000 Frm 00382 Fmt 4701 Sfmt 4700 than those shown in Table 52 (CY 2017 PFS Estimated Impact on Total Allowed Charges by Specialty). For example, the estimated increases to primary care specialties would be lessened without the revised payment policies for certain care management and patient-specific services as described in section II.E. of this final rule with comment period. However, because PFS rates are based on relative value units, the final rates reflect all of the final changes and eliminate some of the proposed changes that might have multi-faceted impacts on the payment rates for other services. H. Impact on Beneficiaries There are a number of changes in this final rule that would have an effect on beneficiaries. In general, we believe that many of these changes, including those intended to improve accuracy in payment through revisions to the inputs used to calculate payments under the PFS, would have a positive impact and improve the quality and value of care provided to Medicare beneficiaries. In particular, we believe that improving payment for primary care and care management services based on more accurate assessment of patient needs and the resources involved in caring for them will benefit beneficiaries by improving care coordination and E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations providing more effective treatment, particularly to those beneficiaries with behavioral health conditions. Most of the aforementioned final policy changes could result in a change in beneficiary liability as relates to coinsurance (which is 20 percent of the fee schedule amount, if applicable for the particular provision after the beneficiary has met the deductible). To illustrate this point, as shown in our public use file Impact on Payment for Selected Procedures available on the CMS Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/, the CY 2016 national payment amount in the nonfacility setting for CPT code 99203 (Office/outpatient visit, new) was $108.85, which means that in CY 2016, a beneficiary would be responsible for 20 percent of this amount, or $21.77. Based on this final rule, using the CY 2017 CF, the CY 2017 national payment amount in the nonfacility setting for CPT code 99203, as shown in the Impact on Payment for Selected Procedures table, is $109.46, which means that, in CY 2017, the final beneficiary coinsurance for this service would be $21.89. As discussed in section III.B of this final rule, we proposed that beginning on January 1, 2017, the FQHC base rate would be updated using a FQHCspecific market basket instead of using the MEI to more accurately reflect changes in the cost of furnishing FQHC services. This would result in a higher payment to FQHCs, and since coinsurance is 20 percent of the lesser of the FQHC’s charge for the specific payment code or the PPS rate, beneficiary coinsurance would also increase. The FQHC market basket cost estimates in Table 53 include a premium offset line which is the amount of cost that would be offset by the beneficiaries. The beneficiaries would pay approximately $5 million and $35 million over the 5 and 10 year projection windows. mstockstill on DSK3G9T082PROD with RULES2 I. Accounting Statement As required by OMB Circular A–4 (available at https:// www.whitehouse.gov/omb/circulars/ a004/a-4.pdf), in Tables 59 and 60 (Accounting Statements), we have prepared an accounting statement. This estimate includes growth in incurred benefits from CY 2016 to CY 2017 based on the FY 2017 President’s Budget baseline. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 80551 TABLE 59—ACCOUNTING STATEMENT: diseases, Medicare, Reporting and CLASSIFICATION OF ESTIMATED EX- recordkeeping requirements. PENDITURES Category CY 2017 Annualized Monetized Transfers From Whom To Whom? Transfers Estimated increase in expenditures of $0.2 billion for PFS CF update Federal Government to physicians, other practitioners and providers and suppliers who receive payment under Medicare. 42 CFR Part 417 Administrative practice and procedure, Grant programs-health, Health care, Health insurance, Health maintenance organizations (HMO), Loan programs-health, Medicare, Reporting and recordkeeping requirements. 42 CFR Part 422 Administrative practice and procedure, Health facilities, Health maintenance organizations (HMO), Medicare, Penalties, Privacy, Reporting and recordkeeping requirements. 42 CFR Part 423 TABLE 60—ACCOUNTING STATEMENT: Administrative practice and ESTIMATED CLASSIFICATION OF procedure, Emergency medical services, COSTS, TRANSFER, AND SAVINGS Category CY 2017 Annualized Monetized Transfers of beneficiary cost coinsurance From Whom to Whom? Transfer $0.0 billion. Federal Government to Beneficiaries. J. Conclusion The analysis in the previous sections, together with the remainder of this preamble, provided an initial Regulatory Flexibility Analysis. The previous analysis, together with the preceding portion of this preamble, provides a Regulatory Impact Analysis. In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget. List of Subjects 42 CFR Part 405 Administrative practice and procedure, Health facilities, Health professions, Kidney diseases, Medical devices, Medicare, Reporting and recordkeeping requirements, Rural areas, X-rays. Health facilities, Health maintenance organizations (HMO), Medicare, Penalties, Privacy, Reporting and recordkeeping requirements. 42 CFR Part 424 Emergency medical services, Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements. 42 CFR Part 425 Administrative practice and procedure, Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements. 42 CFR Part 460 Aged, Health care, Health records, Medicaid, Medicare, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR chapter IV as set forth below: PART 405—FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED 1. The authority citation for part 405 continues to read as follows: ■ Health facilities, Health professions, Kidney diseases, Laboratories, Medicare, Reporting and recordkeeping requirements, Rural areas, X-rays. Authority: Secs. 205(a), 1102, 1861, 1862(a), 1869, 1871, 1874, 1881, and 1886(k) of the Social Security Act (42 U.S.C. 405(a), 1302, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and 1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C. 263a). 42 CFR Part 411 ■ ■ 42 CFR Part 410 Kidney diseases, Medicare, Physician Referral, Reporting and recordkeeping requirements. 42 CFR Part 414 Administrative practice and procedure, Biologics, Drugs, Health facilities, Health professions, Kidney PO 00000 Frm 00383 Fmt 4701 Sfmt 4700 2. Section 405.373 is amended by— a. Revising paragraphs (a) introductory text and (b). ■ b. Adding paragraph (f). The revisions and addition read as follows: § 405.373 Proceeding for offset or recoupment. (a) General rule. Except as specified in paragraphs (b) and (f) of this section, if E:\FR\FM\15NOR2.SGM 15NOR2 80552 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the Medicare Administrative Contractor or CMS has determined that an offset or recoupment of payments under § 405.371(a)(3) should be put into effect, the Medicare Administrative Contractor must— * * * * * (b) Exception to recouping payment. Paragraph (a) of this section does not apply if the Medicare Administrative Contractor, after furnishing a provider a written notice of the amount of program reimbursement in accordance with § 405.1803, recoups payment under paragraph (c) of § 405.1803. (For provider rights in this circumstance, see §§ 405.1809, 405.1811, 405.1815, 405.1835, and 405.1843.) * * * * * (f) Exception to offset or recoupment of payments for shared Taxpayer Identification Number. Paragraph (a) of this section does not apply in instances where the Medicare Administrative Contractor intends to offset or recoup payments to the applicable provider of services or supplier to satisfy an amount due from an obligated provider of services or supplier when the applicable and obligated provider of services or supplier share the same Taxpayer Identification Number. ■ 3. Section 405.2413 is amended by revising paragraph (a)(5) to read as follows: § 405.2413 Services and supplies incident to a physician’s services. (a) * * * (5) Furnished under the direct supervision of a physician, except that services and supplies furnished incident to transitional care management and chronic care management services can be furnished under general supervision of a physician when these services or supplies are furnished by auxiliary personnel, as defined in § 410.26(a)(1) of this chapter. * * * * * ■ 4. Section 405.2415 is amended by revising paragraph (a)(5) to read as follows: mstockstill on DSK3G9T082PROD with RULES2 § 405.2415 Incident to services and direct supervision. (a) * * * (5) Furnished under the direct supervision of a nurse practitioner, physician assistant, or certified nursemidwife, except that services and supplies furnished incident to transitional care management and chronic care management services can be furnished under general supervision of a nurse practitioner, physician assistant, or certified nurse-midwife, when these services or supplies are VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 furnished by auxiliary personnel, as defined in § 410.26(a)(1) of this chapter. * * * * * PART 410—SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS 5. The authority citation for part 410 continues to read as follows: ■ Authority: Secs. 1102, 1834, 1871, 1881, and 1893 of the Social Security Act (42 U.S.C. 1302. 1395m, 1395hh, and 1395ddd). 6. Section 410.26 is amended by— a. Redesignating paragraphs (a)(3) through (7) as paragraphs (a)(4) through (8), respectively. ■ b. Adding new paragraph (a)(3). ■ c. Revising paragraph (b)(5). The addition and revision reads as follows: ■ ■ § 410.26 Services and supplies incident to a physician’s professional services: Conditions. (a) * * * (3) General supervision means the service is furnished under the physician’s (or other practitioner’s) overall direction and control, but the physician’s (or other practitioner’s) presence is not required during the performance of the service. * * * * * (b) * * * (5) In general, services and supplies must be furnished under the direct supervision of the physician (or other practitioner). Designated care management services can be furnished under general supervision of the physician (or other practitioner) when these services or supplies are provided incident to the services of a physician (or other practitioner). The physician (or other practitioner) supervising the auxiliary personnel need not be the same physician (or other practitioner) who is treating the patient more broadly. However, only the supervising physician (or other practitioner) may bill Medicare for incident to services. * * * * * ■ 7. Section 410.79 is added to subpart B to read as follows: § 410.79 Medicare diabetes prevention program expanded model: Conditions of coverage. (a) Medicare Diabetes Prevention Program (MDPP) services will be available beginning on January 1, 2018. (b) Definitions. For purposes of this section, the following definitions apply: Baseline weight refers to the eligible beneficiary’s body weight recorded during that beneficiary’s first core session. PO 00000 Frm 00384 Fmt 4701 Sfmt 4700 CDC-approved DPP curriculum refers to the content of the core sessions, core maintenance sessions, and ongoing maintenance sessions. The curriculum may be either the CDC-preferred curriculum as designated by the CDC DPRP Standards or an alternative curriculum approved for use in DPP by the CDC. Coach refers to an individual who furnishes MDPP services on behalf of an MDPP supplier as an employee, contractor, or volunteer. Core maintenance sessions refer to at least 6 monthly sessions furnished over the MDPP core benefit’s months 6–12 and furnished after the core sessions, regardless of weight loss. Core sessions refer to at least 16 weekly sessions that are furnished over the MDPP core benefit’s months 1–6. Diabetes Prevention Recognition Program (DPRP) refers to a program administered by the Centers for Disease Control and Prevention (CDC) that recognizes organizations that are able to furnish diabetes prevention program (DPP) services, follow a CDC-approved DPP curriculum, and meet CDC’s performance standards and reporting requirements. Evaluation weight refers to the beneficiary’s body weight updated from the first core session and recorded before or during that beneficiary’s final core session. Full CDC DPRP recognition refers to the designation from the CDC that an organization has consistently furnished CDC-approved DPP sessions, met CDCperformance standards and met CDC reporting requirements for at least 24–36 months following the organization’s application to participate in the DPRP. Maintenance of weight loss refers to achieving the required minimum weight loss from baseline weight at any point during each 3-month core maintenance or ongoing maintenance session bundle. Maintenance session bundle refers to each 3-month interval of core maintenance or ongoing maintenance sessions. They must include at least one maintenance session furnished in each of the 3 months, for a minimum of three sessions in each bundle. MDPP core benefit refers to a 12month intensive behavioral change program that applies a CDC-approved curriculum. The core benefit consists of at least 16 weekly core sessions over the first 6 months and at least 6 monthly core maintenance sessions over the second 6 months, furnished regardless of weight loss. MDPP eligible beneficiary refers to an individual who satisfies the criteria defined in paragraph (c)(1) of this section. E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations MDPP services refer to structural health behavior change sessions with the goal of preventing diabetes among individuals with pre-diabetes. MDPP services consist of core sessions, core maintenance sessions, and ongoing maintenance sessions that follow a CDCapproved curriculum. The sessions provide practical training in long-term dietary change, increased physical activity, and problem-solving strategies for overcoming challenges to maintaining weight loss and a healthy lifestyle. MDPP supplier refers to an entity that has enrolled in Medicare, furnishes MDPP services, and has either preliminary or full CDC DPRP recognition. Medicare Diabetes Prevention Program (MDPP) refers to an expanded model test under section 1115A(c) of the Act that makes MDPP services available to MDPP eligible beneficiaries. National Diabetes Prevention Program (DPP) refers to an evidence-based intervention targeted to individuals with pre-diabetes that is furnished in community and health care settings and administered by the Centers for Disease Control and Prevention (CDC). Ongoing maintenance sessions refer to monthly sessions furnished after the 12-month core benefit has been completed and that teach a CDCapproved curriculum. Required minimum weight loss refers to the percentage by which the beneficiary’s evaluation weight is less than the baseline weight. The required minimum weight loss percentage is 5 percent. (c) Program requirements—(1) Beneficiary eligibility. Medicare beneficiaries are eligible for MDPP services if they meet all of the following criteria: (i) Are enrolled in Medicare Part B. (ii) Have as of the date of attendance at the first core session a body mass index (BMI) of at least 25 if not selfidentified as Asian and a BMI of at least 23 if self-identified as Asian. (iii) Have, within the 12 months prior to attending the first core session, a hemoglobin A1c test with a value between 5.7 and 6.4 percent, a fasting plasma glucose of 110–125 mg/dL, or a 2-hour plasma glucose of 140–199 mg/ dL (oral glucose tolerance test). (iv) Have no previous diagnosis of type 1 or type 2 diabetes. (v) Do not have end-stage renal disease (ESRD). (2) MDPP services—(i) Core sessions and core maintenance sessions. MDPP suppliers must furnish to MDPP beneficiaries the MDPP core benefit. 16 core sessions must be furnished at least VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 80553 a week apart over a period of at least 16 weeks to 26 weeks. At least one core maintenance session must be furnished in each of the second 6 months. All core sessions and core maintenance sessions must have a duration of approximately one hour. MDPP suppliers must address at least 16 different curriculum topics in the core sessions and at least 6 different curriculum topics in the core maintenance sessions. (ii) Ongoing maintenance sessions. MDPP suppliers must furnish each ongoing maintenance session bundle after the core benefit to MDPP eligible beneficiaries who have achieved maintenance of weight loss during the previous maintenance session bundle. All ongoing maintenance sessions must have a duration of approximately one hour. All curriculum topics may be offered except for the introductory sessions. (d) Limitations on coverage of MDPP services. (1) The MDPP core benefit is available only once per lifetime per MDPP eligible beneficiary. (2) Ongoing maintenance sessions are available only if the MDPP eligible beneficiary has achieved maintenance of weight loss. (ii) Per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. * * * * * (p) * * * (1) * * * (ii) * * * (B) Per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. * * * * * ■ 10. Section 411.372 is amended by revising paragraph (a) to read as follows: PART 411—EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE PAYMENT Authority: Secs. 1102, 1871, and 1881(b)(l) of the Social Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)). 8. The authority citation for part 411 continues to read as follows: ■ Authority: Secs. 1102, 1860D–1 through 1860D–42, 1871, and 1877 of the Social Security Act (42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh, and 1395nn). 9. Section 411.357 is amended by revising paragraphs (a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) to read as follows: ■ § 411.357 Exceptions to the referral prohibition related to compensation arrangements. * * * * * (a) * * * (5) * * * (ii) * * * (B) Per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. * * * * * (b) * * * (4) * * * (ii) * * * (B) Per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. * * * * * (l) * * * (3) * * * PO 00000 Frm 00385 Fmt 4701 Sfmt 4700 § 411.372 request. Procedure for submitting a (a) Format for a request. A party or parties must submit a request for an advisory opinion to CMS according to the instructions specified on the CMS Web site. * * * * * PART 414—PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES 11. The authority citation for part 414 continues to read as follows: ■ 12. Section 414.22 is amended by revising paragraphs (b)(5) introductory text and (b)(5)(i)(A) and (B) to read as follows: ■ § 414.22 Relative value units (RVUs). * * * * * (b) * * * (5) For services furnished in 2002 and subsequent years, the practice expense RVUs are based entirely on relative practice expense resources. (i) * * * (A) Facility practice expense RVUs. The facility practice expense RVUs apply to services furnished to patients in a hospital, a skilled nursing facility, a community mental health center, a hospice, or an ambulatory surgical center, or in a wholly owned or wholly operated entity providing preadmission services under § 412.2(c)(5) of this chapter, or via telehealth under § 410.78 of this chapter. (B) Nonfacility practice expense RVUs. The nonfacility practice expense RVUs apply to services furnished to patients in all locations other than those listed in paragraph (b)(5)(i)(A) of this section, but not limited to, a physician’s office, the patient’s home, a nursing facility, or a comprehensive outpatient rehabilitation facility (CORF). * * * * * E:\FR\FM\15NOR2.SGM 15NOR2 80554 § 414.32 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations [Removed] 13. Section 414.32 is removed. ■ 14. Section 414.90 is amended by adding paragraphs (j)(1)(ii), (j)(4)(v), (j)(7)(viii) and (k)(4)(ii) to read as follows: ■ § 414.90 Physician Quality Reporting System (PQRS). mstockstill on DSK3G9T082PROD with RULES2 * * * * * (j) * * * (1) * * * (ii) Secondary Reporting Period for the 2017 PQRS payment adjustment for certain eligible professionals or group practices– Individual eligible professionals or group practices, who bill under the TIN of an ACO participant if the ACO failed to report data on behalf of such EPs or group practices during the previously established reporting period for the 2017 PQRS payment adjustment, may separately report during a secondary reporting period for the 2017 PQRS payment adjustment. The secondary reporting period for the 2017 PQRS payment adjustment for the affected individual eligible professionals or group practices is January 1, 2016 through December 31, 2016. * * * * * (4) * * * (v) Paragraphs (j)(8)(ii), (iii), and (iv) of this section apply to individuals reporting using the secondary reporting period established under paragraph (j)(1)(ii) of this section for the 2017 PQRS payment adjustment. * * * * * (7) * * * (viii) Paragraphs (j)(9)(ii), (iii), and (iv) of this section apply to group practices reporting using the secondary reporting period established under paragraph (j)(1)(ii) of this section for the 2017 PQRS payment adjustment. * * * * * (k) * * * (4) * * * (ii) Section 414.90(k)(5) applies to individuals and group practices reporting using the secondary reporting period established under paragraph (j)(1)(ii) of this section for the 2017 PQRS payment adjustment. * * * * * ■ 15. Section 414.94 is amended by— ■ a. Amending paragraph (b) to add the definitions of ‘‘Applicable payment system’’ and ‘‘Clinical decision support mechanism’’ in alphabetical order. ■ b. Adding paragraphs (e)(5), (g), (h), and (i). The additions read as follows: § 414.94 Appropriate use criteria for advanced diagnostic imaging services. * * * VerDate Sep<11>2014 * * 22:03 Nov 11, 2016 Jkt 241001 (b) * * * Applicable payment system means the following: (i) The physician fee schedule established under section 1848(b) of the Act; (ii) The prospective payment system for hospital outpatient department services under section 1833(t) of the Act; and (iii) The ambulatory surgical center payment systems under section 1833(i) of the Act. * * * * * Clinical decision support mechanism (CDSM) means the following: an interactive, electronic tool for use by clinicians that communicates AUC information to the user and assists them in making the most appropriate treatment decision for a patient’s specific clinical condition. Tools may be modules within or available through certified EHR technology (as defined in section 1848(o)(4)) of the Act or private sector mechanisms independent from certified EHR technology or established by the Secretary. * * * * * (e) * * * (5) Priority clinical areas include the following: (i) Coronary artery disease (suspected or diagnosed). (ii) Suspected pulmonary embolism. (iii) Headache (traumatic and nontraumatic). (iv) Hip pain. (v) Low back pain. (vi) Shoulder pain (to include suspected rotator cuff injury). (vii) Cancer of the lung (primary or metastatic, suspected or diagnosed). (viii) Cervical or neck pain. * * * * * (g) Qualified clinical decision support mechanisms (CDSMs). Qualified CDSMs are those specified as such by CMS. Qualified CDSMs must adhere to the requirements described in paragraph (g)(1) of this section. (1) Requirements for qualification of CDSMs. A CDSM must meet all of the following requirements: (i) Make available specified applicable AUC and its related supporting documentation. (ii) Identify the appropriate use criterion consulted if the CDSM makes available more than one criterion relevant to a consultation for a patient’s specific clinical scenario. (iii) Make available, at a minimum, specified applicable AUC that reasonably address common and important clinical scenarios within all priority clinical areas identified in paragraph (e)(5) of this section. PO 00000 Frm 00386 Fmt 4701 Sfmt 4700 (iv) Be able to incorporate specified applicable AUC from more than one qualified PLE. (v) Determines, for each consultation, the extent to which the applicable imaging service is consistent with specified applicable AUC. (vi) Generate and provide a certification or documentation at the time of order that documents which qualified CDSM was consulted; the name and national provider identifier (NPI) of the ordering professional that consulted the CDSM; whether the service ordered would adhere to specified applicable AUC; whether the service ordered would not adhere to specified applicable AUC; or whether the specified applicable AUC consulted was not applicable to the service ordered. Certification or documentation must: (A) Be generated each time an ordering professional consults a qualified CDSM. (B) Include a unique consultation identifier generated by the CDSM. (vii) Modifications to AUC within the CDSM must comply with the following timeline requirements: (A) Make available updated AUC content within 12 months from the date the qualified PLE updates AUC. (B) A protocol must be in place to expeditiously remove AUC determined by the qualified PLE to be potentially dangerous to patients and/or harmful if followed. (C) Specified applicable AUC that reasonably address common and important clinical scenarios within any new priority clinical area must be made available for consultation through the qualified CDSM within 12 months of the priority clinical area being finalized by CMS. (viii) Meet privacy and security standards under applicable provisions of law. (ix) Provide to the ordering professional aggregate feedback regarding their consultations with specified applicable AUC in the form of an electronic report on at least an annual basis. (x) Maintain electronic storage of clinical, administrative, and demographic information of each unique consultation for a minimum of 6 years. (xi) Comply with modification(s) to any requirements under paragraph (g)(1) of this section made through rulemaking within 12 months of the effective date of the modification. (xii) Notify ordering professionals upon de-qualification. (2) Process to specify qualified CDSMs. (i) The CDSM developer must E:\FR\FM\15NOR2.SGM 15NOR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations submit an application to CMS for review that documents adherence to each of the CDSM requirements outlined in paragraph (g)(1) of this section; (ii) Receipt of applications. (A) Applications must be received by CMS annually by January 1 (except as stated in paragraph (g)(2)(ii)(B) of this section). (B) For CDSM applicants seeking qualification in CY 2017, applications must be submitted by March 1, 2017; and (1) Applications that document current adherence to qualified CDSM requirements will receive full qualification. (2) Applications that do not document current adherence to each qualified CDSM requirement, but that document how and when each requirement is reasonably expected to be met, will receive preliminary qualification. (3) A preliminary qualification period begins under paragraph (2) on June 30, 2017 and ends on the effective date of the requirements under sections 1834(q)(4)(A) and 1834(q)(4)(B) of the Act. (4) A CDSM with preliminary qualification will become fully qualified by the end of the preliminary qualification period, or earlier if CMS determines that the CDSM has demonstrated adherence to each qualified CDSM requirement, unless we determine that the CDSM fails to meet all requirements (including those requirements they expected to meet in paragraph (g)(2)(ii)(B)(2) of this section) by the end of the preliminary qualification period. (iii) All qualified CDSMs specified by CMS in each year will be included on the list of specified qualified CDSMs posted to the CMS Web site by June 30 of that year; and (iv) Qualified CDSMs are specified by CMS as such for a period of 5 years. (v) Qualified CDSMs are required to re-apply during the fifth year after they are specified by CMS in order to maintain their status as qualified CDSMs. This application must be received by CMS by January 1 of the 5th year after the most recent approval date. (h) Identification of non-adherence to requirements for qualified CDSMs. (1) If a qualified CDSM is found non-adherent to the requirements in paragraph (g)(1) of this section, CMS may terminate its qualified status or may consider this information during requalification. (i) Exceptions. Consulting and reporting requirements are not required for orders for applicable imaging services made by ordering professionals under the following circumstances: (1) Emergency services when provided to individuals with emergency VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 medical conditions as defined in section 1867(e)(1) of the Act. (2) For an inpatient and for which payment is made under Medicare Part A. (3) Ordering professionals who are granted a significant hardship exception to the Medicare EHR Incentive Program payment adjustment for that year under § 495.102(d)(4) of this chapter, except for those granted such an exception under § 495.102(d)(4)(iv)(C) of this chapter. ■ 16. Section 414.1210 is amended by revising paragraphs (b)(2)(i)(B), (C), (D), and (F) to read as follows: § 414.1210 Application of the value-based payment modifier. * * * * * (b) * * * (2) * * * (i) * * * (B) For groups and solo practitioners that participate in a Shared Savings Program ACO that successfully reports quality data as required by the Shared Savings Program under § 425.504 of this chapter, the quality composite score is calculated under § 414.1260(a) using quality data reported by the ACO for the performance period through the ACO GPRO Web interface as required under § 425.504(a)(1) of this chapter or another mechanism specified by CMS and the ACO all-cause readmission measure. Groups and solo practitioners that participate in two or more ACOs during the applicable performance period receive the quality composite score of the ACO that has the highest numerical quality composite score. For the CY 2018 payment adjustment period, the CAHPS for ACOs survey also will be included in the quality composite score. For the CY 2017 and 2018 payment adjustment periods, for groups and solo practitioners who participate in a Shared Savings Program ACO that does not successfully report quality data as required by the Shared Savings Program under § 425.504 and who meet the requirements to avoid the PQRS payment adjustment for CY 2018 by reporting to the PQRS outside the ACO, the quality composite is classified as ‘‘average’’ under § 414.1275(b). (C) For the CY 2017 payment adjustment period, the value-based payment modifier adjustment will be equal to the amount determined under § 414.1275 for the payment adjustment period, except that if the ACO (or groups and solo practitioners that participate in the ACO) does not successfully report quality data as described in paragraph (b)(2)(i)(B) of this section for the performance period, such adjustment will be equal to –4% PO 00000 Frm 00387 Fmt 4701 Sfmt 4700 80555 for groups of physicians with 10 or more eligible professionals and equal to –2% for groups of physicians with two to nine eligible professionals and for physician solo practitioners. If the ACO has an assigned beneficiary population during the performance period with an average risk score in the top 25 percent of the risk scores of beneficiaries nationwide, and a group of physician or physician solo practitioner that participates in the ACO during the performance period is classified as high quality/average cost under qualitytiering for the CY 2017 payment adjustment period, the group or solo practitioner receives an upward adjustment of +3 × (rather than +2 ×) if the group has 10 or more eligible professionals or +2 × (rather than +1 ×) for a solo practitioner or the group has two to nine eligible professionals. (D) For the CY 2018 payment adjustment period, the value-based payment modifier adjustment will be equal to the amount determined under § 414.1275 for the payment adjustment period, except that if the ACO (or groups and solo practitioners that participate in the ACO) does not successfully report quality data as described in paragraph (b)(2)(i)(B) of this section for the performance period, such adjustment will be equal to the downward payment adjustment amounts described at § 414.1270(d)(1). If the ACO has an assigned beneficiary population during the performance period with an average risk score in the top 25 percent of the risk scores of beneficiaries nationwide, and a group or solo practitioner that participates in the ACO during the performance period is classified as high quality/average cost under quality-tiering for the CY 2018 payment adjustment period, the group or solo practitioner receives an upward adjustment of +3 × (rather than +2 ×) if the group of physicians has 10 or more eligible professionals, +2 × (rather than +1 ×) for a physician solo practitioner or if the group of physicians has two to nine eligible professionals, or +2 × (rather than +1 ×) for a solo practitioner who is a nonphysician eligible professional or if the group consists of nonphysician eligible professionals. * * * * * (F) For groups and solo practitioners that participate in a Shared Savings Program ACO that successfully reports quality data as required by the Shared Savings Program under § 425.504 of this chapter, the same value-based payment modifier adjustment will be applied in the payment adjustment period to all groups based on size as specified under § 414.1275 and solo practitioners that E:\FR\FM\15NOR2.SGM 15NOR2 80556 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations participated in the ACO during the performance period. * * * * * ■ 22. Section 422.204 is amended by adding paragraph (b)(5) to read as follows: PART 417—HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL PLANS, AND HEALTH CARE PREPAYMENT PLANS § 422.204 Provider selection and credentialing. 17. The authority citation for part 417 continues to read as follows: ■ Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), secs. 1301, 1306, and 1310 of the Public Health Service Act (42 U.S.C. 300e, 300e–5, and 300e–9), and 31 U.S.C. 9701. 18. Section 417.478 is amended by adding paragraph (e) to read as follows: ■ § 417.478 Requirements of other laws and regulations. * * * * * (e) Sections 422.222 and 422.224 of this chapter which requires all providers or suppliers that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, to be enrolled in Medicare in an approved status and prohibits payment to providers and suppliers that are excluded or revoked. This includes locum tenens suppliers and, if applicable, incident-to suppliers. ■ 19. Section 417.484 is amended by adding paragraph (b)(3) to read as follows: § 417.484 Requirement applicable to related entities. * * * * * (b) * * * (3) All providers or suppliers that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, are enrolled in Medicare in an approved status. PART 422—MEDICARE ADVANTAGE PROGRAM 20. The authority citation for part 422 continues to read as follows: ■ 21. Section 422.1 is amended by redesignating paragraphs (a)(1)(i) through (x) as paragraphs (a)(1)(ii) through (xi) and adding new paragraph (a)(1)(i) to read as follows: mstockstill on DSK3G9T082PROD with RULES2 ■ Basis and scope. (a) * * * (1) * * * (i) 1106—Disclosure of information in possession of agency. * * * * * VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 * * * * (b) * * * (5) Ensures compliance with the provider and supplier enrollment requirements at § 422.222. ■ 23. Section 422.222 is added to subpart E to read as follows: § 422.222 Enrollment of MA organization network providers and suppliers; first-tier, downstream, and related entities (FDRs); cost HMO or CMP, and demonstration and pilot programs. (a) Providers or suppliers that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, must be enrolled in Medicare and be in an approved status in Medicare in order to provide health care items or services to a Medicare enrollee who receives his or her Medicare benefit through an MA organization. This requirement applies to all of the following providers and suppliers: (1) Network providers and suppliers. (2) First-tier, downstream, and related entities (FDR). (3) Providers and suppliers in Cost HMOs or CMPs, as defined in 42 CFR part 417. (4) Providers and suppliers participating in demonstration programs. (5) Providers and suppliers in pilot programs. (6) Locum tenens suppliers. (7) Incident-to suppliers. (b) MA organizations that do not ensure that providers and suppliers comply with paragraph (a) of this section, may be subject to sanctions under § 422.750 and termination under § 422.510. ■ 24. Section 422.224 is added to subpart E to read as follows: § 422.224 Payment to providers or suppliers excluded or revoked. Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). § 422.1 * (a) An MA organization may not pay, directly or indirectly, on any basis, for items or services (other than emergency and urgently needed services as defined in § 422.113) furnished to a Medicare enrollee by any individual or entity that is excluded by the Office of the Inspector General (OIG) or is revoked from the Medicare program except as provided. (b) If an MA organization receives a request for payment by, or on behalf of, an individual or entity that is excluded by the OIG or is revoked in the Medicare PO 00000 Frm 00388 Fmt 4701 Sfmt 4700 program, the MA organization must notify the enrollee and the excluded or revoked individual or entity in writing, as directed by contract or other direction provided by CMS, that payments will not be made. Payment may not be made to, or on behalf of, an individual or entity that is excluded by the OIG or is revoked in the Medicare program. ■ 25. Section 422.250 is revised to read as follows: § 422.250 Basis and scope. This subpart is based largely on section 1854 of the Act, but also includes provisions from sections 1853 and 1858 of the Act, and is also based on section 1106 of the Act. It sets forth the requirements for the Medicare Advantage bidding payment methodology, including CMS’ calculation of benchmarks, submission of plan bids by Medicare Advantage (MA) organizations, establishment of beneficiary premiums and rebates through comparison of plan bids and benchmarks, negotiation and approval of bids by CMS, and the release of MA bid submission data. ■ 26. Section 422.272 is added to subpart F to read as follows: § 422.272 Release of MA bid pricing data. (a) Terminology. For purposes of this section, the term ‘‘MA bid pricing data’’ means the following information that MA organizations must submit for each MA plan bid for the annual bid submission: (1) The pricing-related information described at § 422.254(a)(1); and (2) The information required for MSA plans, described at § 422.254(e). (b) Release of MA bid pricing data. Subject to paragraph (c) of this section and to the annual timing identified in paragraph (d) of this section, CMS will release to the public MA bid pricing data for MA plan bids accepted or approved by CMS for a contract year under § 422.256. The annual release will contain MA bid pricing data from the final list of MA plan bids accepted or approved by CMS for a contract year that is at least 5 years prior to the upcoming calendar year. (c) Exclusions from release of MA bid pricing data. For the purpose of this section, the following information is excluded from the data released under paragraph (b) of this section: (1) For an MA plan bid that includes Part D benefits, the information described at § 422.254(b)(1)(ii), (c)(3)(ii), and (c)(7). (2) Additional information that CMS requires to verify the actuarial bases of E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations the bids for MA plans for the annual bid submission, as follows: (i) Narrative information on base period factors, manual rates, costsharing methodology, optional supplement benefits, and other required narratives. (ii) Supporting documentation. (3) Any information that could be used to identify Medicare beneficiaries or other individuals. (4) Bid review correspondence and reports. (d) Timing of data release. CMS will release MA bid pricing data as provided in paragraph (b) of this section on an annual basis after the first Monday in October. ■ 27. Section 422.501 is amended by adding paragraph (c)(1)(iv) and revising paragraph (c)(2) to read as follows: § 422.501 Application requirements. * * * * * (c) * * * (1) * * * (iv) Documentation that all providers or suppliers in the MA or MA–PD plan that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, are enrolled in an approved status. (2) The authorized individual must thoroughly describe how the entity and MA plan meet, or will meet, all the requirements described in this part, including providing documentation that all providers and suppliers referenced in § 422.222 are enrolled in Medicare in an approved status. * * * * * ■ 28. Section 422.504 is amended by— ■ a. Revising paragraph (a)(6). ■ b. Adding paragraph (i)(2)(v). ■ c. Revising paragraph (n). The revisions and addition read as follows: § 422.504 Contract provisions. mstockstill on DSK3G9T082PROD with RULES2 * * * * * (a) * * * (6) To comply with all applicable provider and supplier requirements in subpart E of this part, including provider certification requirements, anti-discrimination requirements, provider participation and consultation requirements, the prohibition on interference with provider advice, limits on provider indemnification, rules governing payments to providers, limits on physician incentive plans, and Medicare provider and supplier enrollment requirements. * * * * * (i) * * * (2) * * * (v) They will require all of their providers and suppliers to be enrolled VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 in Medicare in an approved status consistent with § 422.222. * * * * * (n) Acknowledgements of CMS release of data—(1) Summary CMS payment data. The contract must provide that the MA organization acknowledges that CMS releases to the public summary reconciled CMS payment data after the reconciliation of Part C and Part D payments for the contract year as follows: (i) For Part C, the following data— (A) Average per member per month CMS payment amount for A/B (original Medicare) benefits for each MA plan offered, standardized to the 1.0 (average risk score) beneficiary. (B) Average per member per month CMS rebate payment amount for each MA plan offered (or, in the case of MSA plans, the monthly MSA deposit amount). (C) Average Part C risk score for each MA plan offered. (D) County level average per member per month CMS payment amount for each plan type in that county, weighted by enrollment and standardized to the 1.0 (average risk score) beneficiary in that county. (ii) For Part D plan sponsors, plan payment data in accordance with § 423.505(o) of this subchapter. (2) MA bid pricing data and Part C MLR data. The contract must provide that the MA organization acknowledges that CMS releases to the public data as described at §§ 422.272 and 422.2490. * * * * * ■ 29. Section 422.510 is amended by adding paragraph (a)(4)(xiii) to read as follows: § 422.510 Termination of contract by CMS. (a) * * * (4) * * * (xiii) Fails to meet provider and supplier enrollment requirements in accordance with §§ 422.222 and 422.224. * * * * * ■ 30. Section 422.752 is amended by adding paragraph (a)(13) to read as follows: § 422.752 Basis for imposing intermediate sanctions and civil money penalties. (a) * * * (13) Fails to comply with §§ 422.222 and 422.224, that requires the MA organization to ensure providers and suppliers are enrolled in Medicare and not make payment to excluded or revoked individuals or entities. * * * * * ■ 31. Section 422.2400 is revised to read as follows: PO 00000 Frm 00389 Fmt 4701 Sfmt 4700 § 422.2400 80557 Basis and scope. This subpart is based on sections 1857(e)(4), 1860D–12(b)(3)(D), and 1106 of the Act, and sets forth medical loss ratio requirements for Medicare Advantage organizations, financial penalties and sanctions against MA organizations when minimum medical loss ratios are not achieved by MA organizations, and release of medical loss ratio data to entities outside of CMS. ■ 32. Section 422.2490 is added to subpart X to read as follows: § 422.2490 Release of Part C MLR data. (a) Terminology. Subject to the exclusions in paragraph (b) of this section, Part C MLR data consists of the information contained in reports submitted under § 422.2460. (b) Exclusions from Part C MLR data. For the purpose of this section, the following items are excluded from Part C MLR data: (1) Narrative descriptions that MA organizations submit to support the information reported to CMS pursuant to the reporting requirements at § 422.2460, such as descriptions of expense allocation methods. (2) Information that is reported at the plan level, such as the number of member months associated with each plan under a contract, including information submitted for a contract consisting of only one plan. (3) Any information that could be used to identify Medicare beneficiaries or other individuals. (4) MLR review correspondence. (5) Any information for a contract for those contract years for which the contract is determined to be noncredible, as defined in accordance with § 422.2440(d). (c) Data release. CMS releases to the public Part C MLR data, for each contract for each contract year, no earlier than 18 months after the end of the applicable contract year. PART 423—VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT 33. The authority citation for part 423 continues to read as follows: ■ Authority: Sections 1102, 1106, 1860D–1 through 1860D–42, and 1871 of the Social Security Act (42 U.S.C. 1302, 1306, 1395w– 101 through 1395w–152, and 1395hh). 34. Section 423.505 is amended by revising paragraph (o) to read as follows: ■ § 423.505 Contract provisions. * * * * * (o) Acknowledgements of CMS release of data—(1) Summary CMS payment data. The contract must provide that the E:\FR\FM\15NOR2.SGM 15NOR2 80558 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations Part D sponsor acknowledges that CMS releases to the public summary reconciled Part D payment data after the reconciliation of Part D payments for the contract year as follows: (i) The average per member per month Part D direct subsidy standardized to the 1.0 (average risk score) beneficiary for each Part D plan offered. (ii) The average Part D risk score for each Part D plan offered. (iii) The average per member per month Part D plan low-income cost sharing subsidy for each Part D plan offered. (iv) The average per member per month Part D Federal reinsurance subsidy for each Part D plan offered. (v) The actual Part D reconciliation payment data summarized at the Parent Organization level including breakouts of risk sharing, reinsurance, and low income cost sharing reconciliation amounts. (2) Part D MLR data. The contract must provide that the Part D sponsor acknowledges that CMS releases to the public data as described at § 423.2490. * * * * * ■ 35. Section 423.2400 is revised to read as follows: § 423.2400 Basis and scope. This subpart is based on sections 1857(e)(4), 1860D–12(b)(3)(D), and 1106 of the Act, and sets forth medical loss ratio requirements for Part D sponsors, financial penalties and sanctions against Part D sponsors when minimum medical loss ratios are not achieved by Part D sponsors and release of medical loss ratio data to entities outside of CMS. ■ 36. Section 423.2490 is added to subpart X to read as follows: mstockstill on DSK3G9T082PROD with RULES2 § 423.2490 Release of Part D MLR data. (a) Terminology. Subject to the exclusions in paragraph (b) of this section, Part D MLR data consists of the information contained in reports submitted under § 423.2460. (b) Exclusions from Part D MLR data. For the purpose of this section, the following items are excluded from Part D MLR data: (1) Narrative descriptions that Part D sponsors submit to support the information reported to CMS pursuant to the reporting requirements at § 423.2460, such as descriptions of expense allocation methods. (2) Information that is reported at the plan level, such as the number of member months associated with each plan under a contract, including information submitted for a contract consisting of only one plan. VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 (3) Any information that could be used to identify Medicare beneficiaries or other individuals. (4) MLR review correspondence. (5) Any information for a contract for those contract years for which the contract is determined to be noncredible, as defined in accordance with § 423.2440(d). (c) Data release. CMS releases to the public Part D MLR data, for each contract for each contract year, no earlier than 18 months after the end of the applicable contract year. PART 424—CONDITIONS FOR MEDICARE PAYMENT 37. The authority citation for part 424 continues to read as follows: ■ Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). 38. Section 424.59 is added to subpart D to read as follows: ■ § 424.59 Requirements for Medicare diabetes prevention program suppliers. (a) Conditions for enrollment. An entity may enroll as an MDPP supplier if it satisfies all of the following criteria and meets all other applicable Medicare enrollment requirements: (1) At the time of enrollment has either preliminary or full CDC DPRP recognition. (2) Has obtained and maintains an active and valid TIN and NPI at the organizational level. (3) Has passed application screening at a high categorical risk level per § 424.518(c). (4) All coaches who will be furnishing MDPP services on the entity’s behalf have obtained and maintain active and valid NPIs. (5) Submits a roster of all coaches who will be furnishing MDPP services on the entity’s behalf that includes the coaches’ first and last names, date of birth, SSN, and NPI. (b) Documentation retention and provision requirements. An MDPP supplier must maintain all documentation in accordance with § 424.516(f) and all other federal and state laws. The MDPP supplier must submit any documentation requested by the government or a contractor to substantiate the attestations or claims submitted for payment under the Medicare program. (1) The records must contain documentation of the services furnished including evidence of the beneficiary’s eligibility, specific session topics attended, the NPI of the coach who furnished the session attended, the date and place of service of sessions attended, and weight. PO 00000 Frm 00390 Fmt 4701 Sfmt 4700 (2) MDPP suppliers are required to maintain and handle any beneficiary PII and PHI in compliance with HIPAA, other applicable privacy laws and CMS standards. (3) The MDPP supplier must maintain a crosswalk between the beneficiary identifiers submitted to CMS for billing and the beneficiary identifiers submitted to CDC for beneficiary levelclinical data. (4) The records must include an attestation from the supplier that the MDPP eligible beneficiary for which it is submitting a claim: (i) Has attended 1, 4 or 9 core sessions, or (ii) Has achieved the required minimum weight loss percentage specified in § 410.79 of this chapter, or (iii) Has achieved maintenance of weight loss and attended core maintenance sessions, or (iv) Has achieved maintenance of weight loss and attended ongoing maintenance sessions. (c) Conditions for payment of claims for MDPP services furnished. An MDPP supplier must meet all of the following requirements in order to receive payment for claims made for MDPP services furnished: (1) Establishes and maintains all enrollment and program requirements under Title 42. (2) Submits attestation as specified in paragraph (b) of this section. (d) Revocation of MDPP supplier enrollment. An MDPP supplier is subject to revocation of its MDPP supplier enrollment if: (1) It loses its CDC DPRP recognition or withdraws from seeking CDC DPRP recognition. (2) One of the revocation reasons specified in § 424.535 applies. (e) Procedures for revoking or denying MDPP supplier enrollment. (1) MDPP suppliers are subject to the enrollment regulations set forth in subpart P of this part. (2) An MDPP supplier that has had its MDPP supplier enrollment revoked may: (i) Become eligible to bill for MDPP services again if it reapplies for CDC DPRP recognition, successfully achieves preliminary CDC DPRP recognition, and enrolls again Medicare as an MDPP supplier subject to paragraph (a) of this section. (ii) Appeal in accordance with the procedures specified in 42 CFR part 405, subpart H, 42 CFR part 424, and 42 CFR part 498. References to suppliers in these sections apply to MDPP suppliers. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations PART 425—MEDICARE SHARED SAVINGS PROGRAM 39. AUTHORITY: Secs. 1102, 1106, 1871, and 1899 of the Social Security Act (42 U.S.C. 1302, 1306, 1395hh, and 1395jjj). ■ 40. Section 425.110 is amended by revising paragraph (b)(1) to read as follows: ■ § 425.110 Number of ACO professionals and beneficiaries. * * * * * (b) * * * (1) While under the CAP, the ACO remains eligible for shared savings and losses. (i) For ACOs with a variable MSR and MLR (if applicable), the MSR and MLR (if applicable) will be set at a level consistent with the number of assigned beneficiaries. (ii) For ACOs with a fixed MSR/MLR, the MSR/MLR will remain fixed at the level consistent with the choice of MSR and MLR that the ACO made at the start of the agreement period. * * * * * § 425.204 [Amended] 41. § 425.204 is amended by— a. Amending paragraph (g) heading to remove the phrase ‘‘and acquired Medicare-enrolled TINs’’ and adding in its place the phrase ‘‘and acquired entities’ TINs’’. ■ b. Amending paragraph (g) introductory text to remove the phrase ‘‘claims billed by Medicare-enrolled entities’ TINs that’’ and adding in its place the phrase ‘‘claims billed under the TINs of entities that’’. ■ c. Amending paragraph (g)(1) introductory text to remove the phrase ‘‘an acquired Medicare-enrolled entity’s TIN’’ and adding in its place the phrase ‘‘an acquired entity’s TIN’’. ■ d. Amending paragraph (g)(1)(i) to remove the phrase ‘‘the acquired entity’s Medicare-enrolled TIN’’ and adding in its place the phrase ‘‘the acquired entity’s TIN’’ ■ e. Amending paragraph (g)(2)(i)(A) to remove the phrase ‘‘Identifies by Medicare-enrolled TIN’’ and adding in its place the phrase ‘‘Identifies by TIN’’. ■ ■ § 425.316 [Amended] 42. Amend 425.316— a. In paragraph (c)(1), by removing the phrase ‘‘minimum attainment level in one or more domains as determined under § 425.502 and may be subject to a CAP. CMS, may forgo the issuance’’ and adding in its place the phrase ‘‘minimum attainment level on at least 70 percent of the measures, as determined under § 425.502, in one or mstockstill on DSK3G9T082PROD with RULES2 ■ ■ VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 more domains and may be subject to a CAP. CMS may forgo the issuance’’. ■ b. In paragraph (c)(2) by removing the phrase ‘‘quality performance standards’’ and adding in its place the phrase ‘‘quality performance standard’’. ■ 43. Section 425.402 is amended by— ■ a. In paragraph (b) introductory text, removing the phrase ‘‘beneficiaries to an ACO:’’ and adding in its place the phrase ‘‘beneficiaries to an ACO based on available claims information:’’ ■ b. Adding paragraph (e). The addition reads as follows: § 425.402 Basic assignment methodology. * * * * * (e) For performance year 2018 and subsequent performance years, if a system is available to allow a beneficiary to designate a provider or supplier as responsible for coordinating their overall care and for CMS to process the designation electronically, CMS will supplement the claims-based assignment methodology described in this section with information provided by beneficiaries regarding the provider or supplier they consider responsible for coordinating their overall care. Such designations must be made in the form and manner and by a deadline determined by CMS. (1) Notwithstanding the assignment methodology under paragraph (b) of this section, beneficiaries who designate an ACO professional participating in an ACO as responsible for coordinating their overall care are prospectively assigned to that ACO, regardless of track, annually at the beginning of each benchmark and performance year based on available data at the time assignment lists are determined for the benchmark and performance year. (2) Beneficiaries will be added to the ACO’s list of assigned beneficiaries if all of the following conditions are satisfied: (i) The beneficiary must have had at least one primary care service during the assignment window as defined under § 425.20 with a physician who is an ACO professional in the ACO who is a primary care physician as defined under § 425.20 or who has one of the primary specialty designations included in paragraph (c) of this section. (ii) The beneficiary meets the eligibility criteria established at § 425.401(a) and must not be excluded by the criteria at § 425.401(b). The exclusion criteria at § 425.401(b) apply for purposes of determining beneficiary eligibility for alignment to ACOs under all tracks based on the beneficiary’s designation of an ACO professional as responsible for coordinating their overall care under paragraph (e) of this section. PO 00000 Frm 00391 Fmt 4701 Sfmt 4700 80559 (iii) The beneficiary must have designated an ACO professional who is a primary care physician as defined at § 425.20, a physician with a specialty designation included at paragraph (c) of this section, or a nurse practitioner, physician assistant, or clinical nurse specialist as responsible for coordinating their overall care. (iv) If a beneficiary has designated a provider or supplier outside the ACO who is a primary care physician as defined at § 425.20, a physician with a specialty designation included at paragraph (c) of this section, or a nurse practitioner, physician assistant, or clinical nurse specialist, as responsible for coordinating their overall care, the beneficiary will not be added to the ACO’s list of assigned beneficiaries for a performance year under the assignment methodology in paragraph (b) of this section. (3) The ACO, ACO participants, ACO providers/suppliers, ACO professionals, and other individuals or entities performing functions and services related to ACO activities are prohibited from providing or offering gifts or other remuneration to Medicare beneficiaries as inducements for influencing a Medicare beneficiary’s decision to designate or not to designate an ACO professional under paragraph (e) of this section. The ACO, ACO participants, ACO providers/suppliers, ACO professionals, and other individuals or entities performing functions and services related to ACO activities must not, directly or indirectly, commit any act or omission, nor adopt any policy that coerces or otherwise influences a Medicare beneficiary’s decision to designate or not to designate an ACO professional as responsible for coordinating their overall care under paragraph (e) of this section, including but not limited to the following: (i) Offering anything of value to the Medicare beneficiary as an inducement to influence the Medicare beneficiary’s decision to designate or not to designate an ACO professional as responsible for coordinating their overall care under paragraph (e) of this section. Any items or services provided in violation of paragraph (e)(3) will not be considered to have a reasonable connection to the medical care of the beneficiary, as required under § 425.304(a)(2). (ii) Withholding or threatening to withhold medical services or limiting or threatening to limit access to care. 44. Section 425.500 is amended by revising paragraphs (e)(2) and (3) to read as follows: ■ E:\FR\FM\15NOR2.SGM 15NOR2 80560 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations § 425.500 Measures to assess the quality of care furnished by an ACO. mstockstill on DSK3G9T082PROD with RULES2 * * * * * (e) * * * (2) If, at the conclusion of the audit process the overall audit match rate between the quality data reported and the medical records provided under paragraph (e)(1) of this section is less than 90 percent, absent unusual circumstances, CMS will adjust the ACO’s overall quality score proportional to the ACO’s audit performance. (3) If, at the conclusion of the audit process CMS determines there is an audit match rate of less than 90 percent, the ACO may be required to submit a CAP under § 425.216 for CMS approval. * * * * * ■ 45. Section 425.502 is amended by— ■ a. Revising paragraph (a) introductory text. ■ b. In paragraph (a)(1), removing the phrase ‘‘period, CMS, CMS defines’’ and adding in its place the phrase ‘‘period, CMS defines’’. ■ c. In paragraphs (a)(2) and (3), removing the phrase ‘‘level of certain measures’’ and adding in its place ‘‘level of all measures’’. ■ d. In paragraph (a)(4), removing the phrases ‘‘The quality performance standard for a newly’’ and ‘‘periods, the quality performance standard for the measure’’ and adding in their place the phrases ‘‘A newly’’ and ‘‘periods, the measure’’, respectively. ■ e. In paragraph (b)(2)(ii), removing the phrase ‘‘95 percentt’’ and adding in its place the phrase ‘‘95 percent’’. ■ f. Revising paragraph (b)(3). ■ g. In paragraph (c)(2), removing the phrase ‘‘level for a measure’’ and adding in its place the phrase ‘‘level for a payfor-performance measure’’. ■ h. Adding paragraph (c)(5). ■ i. In paragraph (d) heading, removing the phrase ‘‘quality performance requirements’’ and adding in its place the phrase ‘‘quality requirements’’. ■ j. In paragraph (d)(1) introductory text, removing the phrase ‘‘individual quality performance standard measures’’ and adding in its place the phrase ‘‘individual measures’’. ■ k. In paragraph (d)(2) introductory text, removing the phrase ‘‘quality performance requirements’’ and adding in its place the phrase ‘‘quality requirements’’. ■ l. Revising paragraph (d)(2)(ii). The revisions and addition read as follows: § 425.502 Calculating the ACO quality performance score. (a) Establishing a quality performance standard. CMS designates the quality performance standard in each VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 performance year. The quality performance standard is the overall standard the ACO must meet in order to be eligible for shared savings. * * * * * (b) * * * (3) The minimum attainment level for pay for performance measures is set at 30 percent or the 30th percentile of the performance benchmark. The minimum attainment level for pay for reporting measures is set at the level of complete and accurate reporting. * * * * * (c) * * * (5) Performance equal to or greater than the minimum attainment level for pay-for-reporting measures will receive the maximum available points. (d) * * * (2) * * * (ii) CMS may take the compliance actions described in § 425.216 for ACOs exhibiting poor performance on a domain, as determined by CMS under § 425.316. * * * * * ■ 46. Section 425.504 is amended by— ■ a. Amending paragraph (c) to remove the phrase ‘‘for 2016 and subsequent years’’ everywhere it appears and adding in its place the phrase ‘‘for 2016’’. ■ b. Redesignating paragraph (d) as paragraph (c)(5). ■ c. Adding new paragraph (d). The addition reads as follows: § 425.504 Incorporating reporting requirements related to the Physician Quality Reporting System Incentive and Payment Adjustment. * * * * * (d) Physician Quality Reporting System payment adjustment for 2017 and 2018. (1) ACOs, on behalf of eligible professionals who bill under the TIN of an ACO participant, must submit all of the ACO GPRO measures determined under § 425.500 using a CMS web interface, to satisfactorily report on behalf of their eligible professionals for purposes of the Physician Quality Reporting System payment adjustment under the Shared Savings Program for 2017 and 2018. (2) Eligible professionals who bill under the TIN of an ACO participant within an ACO participate under their ACO participant TIN as a group practice under the Physician Quality Reporting System Group Practice Reporting Option of the Shared Savings Program for purposes of the Physician Quality Reporting System payment adjustment under the Shared Savings Program for 2017 and 2018. (3) If an ACO, on behalf of eligible professionals who bill under the TIN of PO 00000 Frm 00392 Fmt 4701 Sfmt 4700 an ACO participant, does not satisfactorily report for purposes of the Physician Quality Reporting System payment adjustment for 2017 or 2018, each eligible professional who bills under the TIN of an ACO participant will receive a payment adjustment, as described in § 414.90(e) of this chapter, unless such eligible professionals have reported quality measures apart from the ACO in the form and manner required by the Physician Quality Reporting System. (4) For eligible professionals subject to the Physician Quality Reporting System payment adjustment under the Medicare Shared Savings Program for 2017 or 2018, the Medicare Part B Physician Fee Schedule amount for covered professional services furnished during the program year is equal to the applicable percent of the Medicare Part B Physician Fee Schedule amount that would otherwise apply to such services under section 1848 of the Act, as described in § 414.90(e) of this chapter. (5) The reporting period for a year is the calendar year from January 1 through December 31 that occurs 2 years prior to the program year in which the payment adjustment is applied, unless otherwise specified by CMS under the Physician Quality Reporting System. ■ 47. Section 425.506 is amended by— ■ a. Revising the section heading. ■ b. Amending paragraph (d) introductory text to remove the phrase ‘‘Eligible professionals participating in an ACO’’ and adding in its place the phrase ‘‘Through reporting period 2016, eligible professionals participating in an ACO’’ ■ c. Adding paragraph (e). The revision and addition read as follows: § 425.506 Incorporating reporting requirements related to adoption of certified electronic health record technology. * * * * * (e) For 2017 and subsequent years, CMS will annually assess the degree of use of certified EHR technology by eligible clinicians billing through the TINs of ACO participants for purposes of meeting the CEHRT criterion necessary for Advanced Alternative Payment Models under the Quality Payment Program. (1) During years in which the measure is designated as pay for reporting, in order to demonstrate complete and accurate reporting, at least one eligible clinician billing through the TIN of an ACO participant must meet the reporting requirements under the Advancing Clinical Information category under the Quality Payment Program. E:\FR\FM\15NOR2.SGM 15NOR2 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations (2) During years in which the measure is designated as pay for performance, the quality measure regarding EHR adoption will be measured based on a sliding scale. ■ 48. Section 425.508 is added to subpart F to read as follows: § 425.508 Incorporating quality reporting requirements related to the Quality Payment Program. (a) For 2017 and subsequent reporting years. ACOs, on behalf of eligible clinicians who bill under the TIN of an ACO participant, must submit all of the CMS web interface measures determined under § 425.500 to satisfactorily report on behalf of their eligible clinicians for purposes of the quality performance category of the Quality Payment Program. (b) [Reserved] ■ 49. Section 425.612 is amended by— ■ a. Amending paragraph (a)(1) introductory text to remove the phrase ‘‘ACOs participating in Track 3 that receive otherwise’’ and adding in its place the phrase ‘‘ACOs participating in Track 3, and as provided in paragraph (a)(1)(iv) of this section during a grace period for beneficiaries excluded from prospective assignment to a Track 3 ACO, who receive otherwise’’. ■ b. Adding paragraphs (a)(1)(iv), (a)(1)(v), and (d)(4). The additions read as follows: mstockstill on DSK3G9T082PROD with RULES2 § 425.612 Waivers of payment rules or other Medicare requirements. (a) * * * (1) * * * (iv) For a beneficiary who was included on the prospective assignment list under § 425.400(a)(3) for a performance year for a Track 3 ACO for which a waiver of the SNF 3-day rule has been approved under paragraph (a)(1) of this section, but who was subsequently excluded from the ACO’s prospective assignment list, CMS makes payment for SNF services furnished to the beneficiary by a SNF affiliate if the following conditions are met: (A) The beneficiary was prospectively assigned to the ACO at the beginning of the applicable performance year but was excluded in the most recent quarterly update to the prospective assignment list under § 425.401(b). (B) The SNF services are furnished to a beneficiary who was admitted to a SNF affiliate within 90 days following the date that CMS delivers the quarterly exclusion list to the ACO. (C) But for the beneficiary’s exclusion from the ACO’s prospective assignment list, CMS would have made payment to the SNF affiliate for such services under VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 the waiver under paragraph (a)(1) of this section. (v) The following beneficiary protections apply when a beneficiary receives SNF services without a prior 3day inpatient hospital stay from a SNF affiliate that intended to provide services pursuant to a SNF 3-day rule waiver under paragraph (a)(1) of this section, but the beneficiary was not prospectively assigned to the ACO and was not in the 90 day grace period under paragraph (a)(1)(iv) of this section. The SNF affiliate services must be non-covered only because the SNF affiliate stay was not preceded by a qualifying hospital stay under section 1861(i) of the Act. (A) A SNF is presumed to intend to provide services pursuant to the SNF 3day rule waiver under paragraph (a)(1) of this section if the SNF submitting the claim is a SNF affiliate of an ACO for which such a waiver has been approved. (B) CMS makes no payments for SNF services to a SNF affiliate of an ACO for which a waiver of the SNF 3-day rule has been approved when the SNF affiliate admits a FFS beneficiary who was never prospectively assigned to the ACO or was prospectively assigned but was later excluded and the 90 day grace period under paragraph (a)(1)(iv) of this section has lapsed. (C) In the event that CMS makes no payment for SNF services furnished by a SNF affiliate as a result of paragraph (a)(1)(v)(B) of this section and the only reason the claim was non-covered is due to the lack of a qualifying inpatient stay, the following beneficiary protections will apply: (1) The SNF must not charge the beneficiary for the expenses incurred for such services; and (2) The SNF must return to the beneficiary any monies collected for such services; and (3) The ACO may be required to submit a corrective action plan under § 425.216(b) for CMS approval. If after being given an opportunity to act upon the corrective action plan the ACO fails to come into compliance with the requirements of paragraph (a)(1), approval for the SNF 3-day rule waiver under this section will be terminated as provided under paragraph (d) of this section. * * * * * (d) * * * (4) CMS reserves the right to take compliance action, including termination, against an ACO for noncompliance with program rules, including misuse of a waiver under this section, as specified at §§ 425.216 and 425.218. * * * * * PO 00000 Frm 00393 Fmt 4701 Sfmt 4700 80561 PART 460—PROGRAMS OF ALLINCLUSIVE CARE FOR THE ELDERLY (PACE) 50. The authority citation for part 460 continues to read as follows: ■ Authority: Secs. 1102, 1871, 1894(f), and 1934(f) of the Social Security Act (42 U.S.C. 1302, 1395, 1395eee(f), and 1396u–4(f)). 51. Section 460.40 is amended by adding paragraph (j) to read as follows: ■ § 460.40 Violations for which CMS may impose sanctions. * * * * * (j) Employs or contracts with any provider or supplier that is a type of individual or entity that can enroll in Medicare in accordance with section 1861 of the Act, that is not enrolled in Medicare in an approved status. ■ 52. Section 460.50 is amended by revising paragraph (b)(1)(ii) to read as follows: § 460.50 Termination of PACE program agreement. * * * * * (b) * * * (1) * * * (ii) The PACE organization failed to comply substantially with conditions for a PACE program or PACE organization under this part, or with terms of its PACE program agreement, including employing or contracting with any provider or supplier that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, that is not enrolled in Medicare in an approved status. * * * * * ■ 53. Section 460.68 is amended by adding paragraph (a)(4) to read as follows: § 460.68 Program integrity. (a) * * * (4) That are not enrolled in Medicare in an approved status, if the providers or suppliers are of the types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act. * * * * * ■ 54. Section 460.70 is amended by adding paragraph (b)(1)(iv) to read as follows: § 460.70 Contracted services. * * * * * (b) * * * (1) * * * (iv) Providers or suppliers that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, must be enrolled in Medicare and be in an E:\FR\FM\15NOR2.SGM 15NOR2 80562 Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Rules and Regulations approved status in Medicare in order to provide health care items or services to a PACE participant who receives his or her Medicare benefit through a PACE organization. * * * * * ■ 58. Section 460.71 is amended by adding paragraph (b)(7) to read as follows: § 460.71 care. Oversight of direct participant * * * * (b) * * * (7) Providers or suppliers that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, must be enrolled in Medicare and be in an approved status in Medicare in order to provide health care items or services to mstockstill on DSK3G9T082PROD with RULES2 * VerDate Sep<11>2014 22:03 Nov 11, 2016 Jkt 241001 a PACE participant who receives his or her Medicare benefit through a PACE organization. ■ 59. Section 460.86 is added to subpart E to read as follows: § 460.86 Payment to providers or suppliers excluded or revoked. (a) A PACE organization may not pay, directly or indirectly, on any basis, for items or services (other than emergency or urgently needed services as defined in § 460.100) furnished to a Medicare enrollee by any individual or entity that is excluded by the Office of the Inspector General (OIG) or is revoked from the Medicare program. (b) If a PACE organization receives a request for payment by, or on behalf of, an individual or entity that is excluded by the OIG or is revoked in the Medicare PO 00000 Frm 00394 Fmt 4701 Sfmt 9990 program, the PACE organization must notify the enrollee and the excluded or revoked individual or entity in writing, as directed by contract or other direction provided by CMS, that payments will not be made. Payment may not be made to, or on behalf of, an individual or entity that is exclude by the OIG or is revoked in the Medicare program. Dated: October 24, 2016. Andrew M. Slavitt, Acting Administrator, Centers for Medicare & Medicaid Services. Dated: October 27, 2016. Sylvia M. Burwell, Secretary, Department of Health and Human Services. [FR Doc. 2016–26668 Filed 11–2–16; 4:15 pm] BILLING CODE 4120–01–P E:\FR\FM\15NOR2.SGM 15NOR2

Agencies

[Federal Register Volume 81, Number 220 (Tuesday, November 15, 2016)]
[Rules and Regulations]
[Pages 80170-80562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26668]

[[Page 80169]]

Vol. 81

Tuesday,

No. 220

November 15, 2016

Part II

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

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42 CFR Parts 405, 410, 411, et al.

Medicare Program; Revisions to Payment Policies Under the Physician Fee
Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage
Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss
Ratio Data Release; Medicare Advantage Provider Network Requirements;
Expansion of Medicare Diabetes Prevention Program Model; Medicare
Shared Savings Program Requirements; Final Rule

Federal Register / Vol. 81 , No. 220 / Tuesday, November 15, 2016 /
Rules and Regulations

[[Page 80170]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 411, 414, 417, 422, 423, 424, 425, and 460

[CMS-1654-F]
RIN 0938-AS81

Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule and Other Revisions to Part B for CY 2017;
Medicare Advantage Bid Pricing Data Release; Medicare Advantage and
Part D Medical Loss Ratio Data Release; Medicare Advantage Provider
Network Requirements; Expansion of Medicare Diabetes Prevention Program
Model; Medicare Shared Savings Program Requirements

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

ACTION: Final rule.

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SUMMARY: This major final rule addresses changes to the physician fee
schedule and other Medicare Part B payment policies, such as changes to
the Value Modifier, to ensure that our payment systems are updated to
reflect changes in medical practice and the relative value of services,
as well as changes in the statute. This final rule also includes
changes related to the Medicare Shared Savings Program, requirements
for Medicare Advantage Provider Networks, and provides for the release
of certain pricing data from Medicare Advantage bids and of data from
medical loss ratio reports submitted by Medicare health and drug plans.
In addition, this final rule expands the Medicare Diabetes Prevention
Program model.

DATES: These regulations are effective on January 1, 2017.

FOR FURTHER INFORMATION CONTACT:
Jessica Bruton, (410) 786-5991, for issues related to
identification of potentially misvalued services and any physician
payment issues not identified below.
Gail Addis, (410) 786-4522, for issues related to diabetes self-
management training.
Jaime Hermansen, (410) 786-2064, for issues related to moderate
sedation coding and anesthesia services.
Roberta Epps, (410) 786-4503, for issues related to PAMA section
218(a) policy and the transition from traditional x-ray imaging to
digital radiography.
Ann Marshall, (410) 786-3059, for primary care issues related to
chronic care management (CCM), burden reduction, telehealth services
and evaluation and management services.
Emily Yoder, (410) 786-1804, for issues related to resource
intensive services, telehealth services and other primary care issues.
Lindsey Baldwin, (410) 786-1694, for primary care issues related to
behavioral health integration services.
Geri Mondowney, (410) 786-4584, and Donta Henson, (410) 786-1947,
for issues related to geographic practice cost indices.
Michael Soracoe, (410) 786-6312, for issues related to the target
and phase-in provisions, the practice expense methodology, impacts,
conversion factor, and the valuation of pathology and surgical
procedures.
Pamela West, (410) 786-2302, for issues related to therapy.
Patrick Sartini, (410) 786-9252, for issues related to malpractice
RVUs, radiation treatment, mammography and other imaging services.
Kathy Bryant, (410) 786-3448, for issues related to collecting data
on resources used in furnishing global services.
Donta Henson, (410) 786-1947, for issues related to ophthalmology
services.
Corinne Axelrod, (410) 786-5620, for issues related to rural health
clinics or federally qualified health centers.
Simone Dennis, (410) 786-8409, for issues related to FQHC-specific
market basket.
JoAnna Baldwin, (410) 786-7205, or Sarah Fulton, (410) 786-2749,
for issues related to appropriate use criteria for advanced diagnostic
imaging services.
Robin Usi, (410) 786-0364, for issues related to open payments.
Sean O'Grady, (410) 786-2259, or Julie Uebersax, (410) 786-9284,
for issues related to release of pricing data from Medicare Advantage
bids and release of medical loss ratio data submitted by Medicare
Advantage organizations and Part D sponsors.
Sara Vitolo, (410) 786-5714, for issues related to prohibition on
billing qualified Medicare beneficiary individuals for Medicare cost-
sharing.
Michelle Peterman, (410) 786-2591, for issues related to
Accountable Care Organization (ACO) participants who report PQRS
quality measures separately.
Katie Mucklow, (410) 786-0537 or John Spiegel, (410) 786-1909, for
issues related to Provider Enrollment Medicare Advantage Program.
Jen Zhu, (410) 786-3725, Carlye Burd, (410) 786-1972, or Nina
Brown, (410) 786-6103, for issues related to Medicare Diabetes
Prevention Program model expansion.
Rabia Khan or Terri Postma, (410) 786-8084 or ACO@cms.hhs.gov, for
issues related to the Medicare Shared Savings Program.
Kimberly Spalding Bush, (410) 786-3232, or Fiona Larbi, (410) 786-
7224, for issues related to Value-based Payment Modifier and Physician
Feedback Program.
Lisa Ohrin Wilson, (410) 786-8852, or Gabriel Scott, (410) 786-
3928, for issues related to physician self-referral updates.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary and Background
A. Executive Summary
B. Background
II. Provisions of the Final Rule for PFS
A. Determination of Practice Expense Relative Value Units (PE
RVUs)
B. Determination of Malpractice Relative Value Units (MRVUs)
C. Medicare Telehealth Services
D. Potentially Misvalued Services Under the Physician Fee
Schedule
1. Background
2. Progress in Identifying and Reviewing Potentially Misvalued
Codes
3. Validating RVUs of Potentially Misvalued Codes
4. CY 2017 Identification and Review of Potentially Misvalued
Services
5. Valuing Services That Include Moderate Sedation as an
Inherent Part of Furnishing the Procedure
6. Collecting Data on Resources Used in Furnishing Global
Services
E. Improving Payment Accuracy for Primary Care, Care Management
Services, and Patient-Centered Services
F. Improving Payment Accuracy for Services: Diabetes Self-
Management Training (DSMT)
G. Target for Relative Value Adjustments for Misvalued Services
H. Phase-In of Significant RVU Reductions
I. Geographic Practice Cost Indices (GPCIs)
J. Payment Incentive for the Transition From Traditional X-Ray
Imaging to Digital Radiography and Other Imaging Services
K. Procedures Subject to the Multiple Procedure Payment
Reduction (MPPR) and the OPPS Cap
L. Valuation of Specific Codes
M. Therapy Caps
III. Other Provisions of the Final Rule for PFS
A. Chronic Care Management (CCM) and Transitional Care
Management (TCM) Supervision Requirements in Rural Health Clinics
(RHCs) and Federally Qualified Health Centers (FQHCs)
B. FQHC-Specific Market Basket
C. Appropriate Use Criteria for Advanced Diagnostic Imaging
Services
D. Reports of Payments or Other Transfers of Value to Covered
Recipients: Summary of Public Comments
E. Release of Part C Medicare Advantage Bid Pricing Data and
Part C and Part D Medical Loss Ratio (MLR) Data

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F. Prohibition on Billing Qualified Medicare Beneficiary
Individuals for Medicare Cost-Sharing
G. Recoupment or Offset of Payments to Providers Sharing the
Same Taxpayer Identification Number
H. Accountable Care Organization (ACO) Participants Who Report
Physician Quality Reporting System (PQRS) Quality Measures
Separately
I. Medicare Advantage Provider Enrollment
J. Expansion of the Diabetes Prevention Program (DPP) Model
K. Medicare Shared Savings Program
L. Value-Based Payment Modifier and Physician Feedback Program
M. Physician Self-Referral Updates
N. Designated Health Services
IV. Collection of Information Requirements
V. Regulatory Impact Analysis
Regulations Text

Acronyms

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

A1c Hemoglobin A1c
AAA Abdominal aortic aneurysms
ACO Accountable care organization
AMA American Medical Association
ASC Ambulatory surgical center
ATA American Telehealth Association
ATRA American Taxpayer Relief Act (Pub. L. 112-240)
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)
BLS Bureau of Labor Statistics
CAD Coronary artery disease
CAH Critical access hospital
CBSA Core-Based Statistical Area
CCM Chronic care management
CEHRT Certified EHR technology
CF Conversion factor
CG-CAHPS Clinician and Group Consumer Assessment of Healthcare
Providers and Systems
CLFS Clinical Laboratory Fee Schedule
CoA Certificate of Accreditation
CoC Certificate of Compliance
CoR Certificate of Registration
CNM Certified nurse-midwife
CP Clinical psychologist
CPC Comprehensive Primary Care
CPEP Clinical Practice Expert Panel
CPT [Physicians] Current Procedural Terminology (CPT codes,
descriptions and other data only are copyright 2015 American Medical
Association. All rights reserved.)
CQM Clinical quality measure
CSW Clinical social worker
CT Computed tomography
CW Certificate of Waiver
CY Calendar year
DFAR Defense Federal Acquisition Regulations
DHS Designated health services
DM Diabetes mellitus
DSMT Diabetes self-management training
eCQM Electronic clinical quality measures
ED Emergency Department
EHR Electronic health record
E/M Evaluation and management
EMT Emergency Medical Technician
EP Eligible professional
eRx Electronic prescribing
ESRD End-stage renal disease
FAR Federal Acquisition Regulations
FDA Food and Drug Administration
FFS Fee-for-service
FQHC Federally qualified health center
FR Federal Register
FSHCAA Federally Supported Health Centers Assistance Act
GAF Geographic adjustment factor
GAO Government Accountability Office
GPCI Geographic practice cost index
GPO Group purchasing organization
GPRO Group practice reporting option
GTR Genetic Testing Registry
HCPCS Healthcare Common Procedure Coding System
HHS [Department of] Health and Human Services
HOPD Hospital outpatient department
HPSA Health professional shortage area
IDTF Independent diagnostic testing facility
IPPE Initial preventive physical exam
IPPS Inpatient Prospective Payment System
IQR Inpatient Quality Reporting
ISO Insurance service office
IT Information technology
IWPUT Intensity of work per unit of time
LCD Local coverage determination
MA Medicare Advantage
MAC Medicare Administrative Contractor
MACRA Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L.
114-10)
MAP Measure Applications Partnership
MAPCP Multi-payer Advanced Primary Care Practice
MAV Measure application validity [process]
MCP Monthly capitation payment
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MFP Multi-Factor Productivity
MIPPA Medicare Improvements for Patients and Providers Act (Pub. L.
110-275)
MMA Medicare Prescription Drug, Improvement and Modernization Act of
2003 (Pub. L. 108-173, enacted on December 8, 2003)
MP Malpractice
MPPR Multiple procedure payment reduction
MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MSA Metropolitan Statistical Areas
MSPB Medicare Spending per Beneficiary
MU Meaningful use
NCD National coverage determination
NCQDIS National Coalition of Quality Diagnostic Imaging Services
NP Nurse practitioner
NPI National Provider Identifier
NPP Nonphysician practitioner
NQS National Quality Strategy
OACT CMS's Office of the Actuary
OBRA '89 Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239)
OBRA '90 Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508)
OES Occupational Employment Statistics
OMB Office of Management and Budget
OPPS Outpatient prospective payment system
OT Occupational therapy
PA Physician assistant
PAMA Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)
PAMPA Patient Access and Medicare Protection Act (Pub. L. 114-115)
PC Professional component
PCIP Primary Care Incentive Payment
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment, Chain, and Ownership System
PFS Physician Fee Schedule
PLI Professional Liability Insurance
PMA Premarket approval
PPM Provider-Performed Microscopy
PQRS Physician Quality Reporting System
PPIS Physician Practice Expense Information Survey
PPS Prospective Payment System
PT Physical therapy
PT Proficiency Testing
PT/INR Prothrombin Time/International Normalized Ratio
PY Performance year
QA Quality Assessment
QC Quality Control
QCDR Qualified clinical data registry
QRUR Quality and Resources Use Report
RBRVS Resource-based relative value scale
RFA Regulatory Flexibility Act
RHC Rural health clinic
RIA Regulatory impact analysis
RUC American Medical Association/Specialty Society Relative (Value)
Update Committee
RUCA Rural Urban Commuting Area
RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SIM State Innovation Model
SLP Speech-language pathology
SMS Socioeconomic Monitoring System
SNF Skilled nursing facility
TAP Technical Advisory Panel
TC Technical component
TIN Tax identification number
TCM Transitional Care Management
UAF Update adjustment factor
UPIN Unique Physician Identification Number
USPSTF United States Preventive Services Task Force
VBP Value-based purchasing
VM Value-Based Payment Modifier

Addenda Available Only Through the Internet on the CMS Web Site

The PFS Addenda along with other supporting documents and tables
referenced in this final rule are available through the Internet on the
CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Click on
the link on the left side of the screen titled,

[[Page 80172]]

``PFS Federal Regulations Notices'' for a chronological list of PFS
Federal Register and other related documents. For the CY 2017 PFS Final
Rule, refer to item CMS-1654-F. Readers who experience any problems
accessing any of the Addenda or other documents referenced in this rule
and posted on the CMS Web site identified above should contact Jessica
Bruton at (410) 786-5991.

CPT (Current Procedural Terminology) Copyright Notice

Throughout this final rule, we use CPT codes and descriptions to
refer to a variety of services. We note that CPT codes and descriptions
are copyright 2015 American Medical Association. All Rights Reserved.
CPT is a registered trademark of the American Medical Association
(AMA). Applicable Federal Acquisition Regulations (FAR) and Defense
Federal Acquisition Regulations (DFAR) apply.

I. Executive Summary and Background

A. Executive Summary

1. Purpose
This major final rule revises payment polices under the Medicare
Physician Fee Schedule (PFS) and makes other policy changes related to
Medicare Part B payment. These changes will be applicable to services
furnished in CY 2017. In addition, this final rule includes the
following provisions: Payment policy changes for Rural Health Clinics
(RHCs) and Federally Qualified Health Centers (FQHCs); expansion of the
Medicare Diabetes Prevention Program model; policy changes related to
the Medicare Shared Savings Program; and release of pricing data
submitted to CMS by Medicare Advantage (MA) organizations; and medical
loss ratio reports submitted by MA plans and Part D plans. These
additional policies are addressed in section III. of this final rule.
2. Summary of the Major Provisions
The statute requires us to establish payments under the PFS based
on national uniform relative value units (RVUs) that account for the
relative resources used in furnishing a service. The statute requires
that RVUs be established for three categories of resources: Work,
practice expense (PE); and malpractice (MP) expense; and, that we
establish by regulation each year's payment amounts for all physicians'
services paid under the PFS, incorporating geographic adjustments to
reflect the variations in the costs of furnishing services in different
geographic areas. In this major final rule, we establish RVUs for CY
2017 for the PFS, 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, as well as changes in the
statute. In addition, this final rule includes summaries of public
comments and final policies regarding:
Potentially Misvalued Codes.
Telehealth Services.
Establishing Values for New, Revised, and Misvalued Codes.
Target for Relative Value Adjustments for Misvalued
Services.
Phase-in of Significant RVU Reductions.
Chronic Care Management (CCM) and Transitional Care
Management (TCM) Supervision Requirements in Rural Health Clinics
(RHCs) and Federally Qualified Health Centers (FQHCs).
FQHC-Specific Market Basket.
Appropriate Use Criteria for Advanced Diagnostic Imaging
Services.
Reports of Payments or Other Transfers of Value to Covered
Recipients: Solicitation of Public Comments.
Release of Part C Medicare Advantage Bid Pricing Data and
Part C and Part D Medical Loss Ratio (MLR) Data.
Prohibition on Billing Qualified Medicare Beneficiary
Individuals for Medicare Cost-Sharing.
Recoupment or Offset of Payments to Providers Sharing the
Same Taxpayer Identification Number.
Accountable Care Organization (ACO) Participants Who
Report Physician Quality Reporting System (PQRS) Quality Measures
Separately.
Medicare Advantage Provider Enrollment.
Expansion of the Diabetes Prevention Program (DPP) Model.
Medicare Shared Savings Program.
Value-Based Payment Modifier and the Physician Feedback
Program.
Physician Self-referral Updates.
Designated Health Services.
3. Summary of Costs and Benefits
The statute requires that annual adjustments to PFS RVUs may not
cause annual estimated expenditures to differ by more than $20 million
from what they would have been had the adjustments not been made. If
adjustments to RVUs would cause expenditures to change by more than $20
million, we must make adjustments to preserve budget neutrality. These
adjustments can affect the distribution of Medicare expenditures across
specialties. In addition, several changes in this final rule will
affect the specialty distribution of Medicare expenditures. When
considering the combined impact of work, PE, and MP RVU changes, the
projected payment impacts would be small for most specialties; however,
the impact would be larger for a few specialties.
We have determined that this major final rule is economically
significant. For a detailed discussion of the economic impacts, see
section VI. of this final rule.

B. 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 PFS relies on national relative values that
are established for work, PE, and MP, which are adjusted for geographic
cost variations. These values are multiplied by a conversion factor
(CF) to convert the RVUs into payment rates. The concepts and
methodology underlying the PFS were enacted as part of the Omnibus
Budget Reconciliation Act of 1989 (Pub. L. 101-239, enacted on December
19, 1989) (OBRA '89), and the Omnibus Budget Reconciliation Act of 1990
(Pub. L. 101-508, enacted on November 5, 1990) (OBRA '90). The final
rule published on November 25, 1991 (56 FR 59502) set forth the first
fee schedule used for payment for physicians' services.
We note that throughout this major final rule, unless otherwise
noted, the term ``practitioner'' is used to describe both physicians
and nonphysician practitioners (NPPs) who are permitted to bill
Medicare under the PFS for services furnished to Medicare
beneficiaries.
1. Development of the Relative Values
a. Work RVUs
The work RVUs established for the initial fee schedule, which was
implemented on January 1, 1992, were developed with extensive input
from the physician community. A research team at the Harvard School of
Public Health developed the original work RVUs for most codes under a
cooperative agreement with the Department of Health and Human Services
(HHS). In constructing the code-specific vignettes used in determining
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.
As specified in section 1848(c)(1)(A) of the Act, the work
component of physicians' services means the portion

[[Page 80173]]

of the resources used in furnishing the service that reflects physician
time and intensity. We establish work RVUs for new, revised and
potentially misvalued codes based on our review of information that
generally includes, but is not limited to, recommendations received
from the American Medical Association/Specialty Society Relative Value
Update Committee (RUC), the Health Care Professionals Advisory
Committee (HCPAC), the Medicare Payment Advisory Commission (MedPAC),
and other public commenters; medical literature and comparative
databases; as well as a comparison of the work for other codes within
the Medicare PFS, and consultation with other physicians and health
care professionals within CMS and the federal government. We also
assess the methodology and data used to develop the recommendations
submitted to us by the RUC and other public commenters, and the
rationale for their recommendations. In the CY 2011 PFS final rule with
comment period (75 FR 73328 through 73329), we discussed a variety of
methodologies and approaches used to develop work RVUs, including
survey data, building blocks, crosswalk to key reference or similar
codes, and magnitude estimation. More information on these issues is
available in that rule.
b. Practice Expense RVUs
Initially, only the work RVUs were resource-based, and the PE and
MP RVUs were based on average allowable charges. 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 required to consider general
categories of expenses (such as office rent and wages of personnel, but
excluding malpractice expenses) comprising PEs. The PE RVUs continue to
represent the portion of these resources involved in furnishing PFS
services.
Originally, the resource-based method was to be used beginning in
1998, but section 4505(a) of the Balanced Budget Act of 1997 (Pub. L.
105-33, enacted on August 5, 1997) (BBA) delayed 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
the charge-based PE RVUs to the resource-based PE RVUs.
We established the resource-based PE RVUs for each physicians'
service in a final rule, published on November 2, 1998 (63 FR 58814),
effective for services furnished in CY 1999. Based on the requirement
to transition to a resource-based system for PE over a 4-year period,
payment rates were not fully based upon resource-based PE RVUs until CY
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. (These data
sources are described in greater detail in the CY 2012 final rule with
comment period (76 FR 73033).
Separate PE RVUs are established for services furnished in facility
settings, such as a hospital outpatient department (HOPD) or an
ambulatory surgical center (ASC), and in nonfacility settings, such as
a physician's office. The nonfacility RVUs reflect all of the direct
and indirect PEs involved in furnishing a service described by a
particular HCPCS code. The difference, if any, in these PE RVUs
generally results in a higher payment in the nonfacility setting
because in the facility settings some costs are borne by the facility.
Medicare's payment to the facility (such as the outpatient prospective
payment system (OPPS) payment to the HOPD) would reflect costs
typically incurred by the facility. Thus, payment associated with those
facility resources is not made under the PFS.
Section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L.
106-113, enacted on November 29, 1999) (BBRA) 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 CY 2007 PFS final rule with comment period (71 FR 69624), we
revised the methodology for calculating direct PE RVUs from the top-
down to the bottom-up methodology beginning in CY 2007. We adopted a 4-
year transition to the new PE RVUs. This transition was completed for
CY 2010. In the CY 2010 PFS final rule with comment period, we updated
the practice expense per hour (PE/HR) data that are used in the
calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010,
we began a 4-year transition to the new PE RVUs using the updated PE/HR
data, which was completed for CY 2013.
c. Malpractice RVUs
Section 4505(f) of the BBA amended section 1848(c) of the Act to
require that we implement resource-based MP RVUs for services furnished
on or after CY 2000. The resource-based MP RVUs were implemented in the
PFS final rule with comment period published November 2, 1999 (64 FR
59380). The MP RVUs are based on commercial and physician-owned
insurers' malpractice insurance premium data from all the states, the
District of Columbia, and Puerto Rico. For more information on MP RVUs,
see section II.B.2. of this final rule.
d. Refinements to the RVUs
Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no
less often than every 5 years. Prior to CY 2013, we conducted periodic
reviews of work RVUs and PE RVUs independently. We completed five-year
reviews of work RVUs that were effective for calendar years 1997, 2002,
2007, and 2012.
Although refinements to the direct PE inputs initially relied
heavily on input from the RUC Practice Expense Advisory Committee
(PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to
the use of the updated PE/HR data in CY 2010 have resulted in
significant refinements to the PE RVUs in recent years.
In the CY 2012 PFS final rule with comment period (76 FR 73057), we
finalized a proposal to consolidate reviews of work and PE RVUs under
section 1848(c)(2)(B) of the Act and reviews of potentially misvalued
codes under section 1848(c)(2)(K) of the Act into one annual process.
In addition to the five-year reviews, beginning for CY 2009, CMS
and the RUC have identified and reviewed a number of potentially
misvalued codes on an annual basis based on various identification
screens. This annual review of work and PE RVUs for potentially
misvalued codes was supplemented by the amendments to section 1848 of
the Act, as enacted by section 3134 of the Affordable Care Act, that
require the agency to periodically

[[Page 80174]]

identify, review and adjust values for potentially misvalued codes.
e. Application of Budget Neutrality to Adjustments of RVUs
As described in section VI.C. of this final rule, in accordance
with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions to the RVUs
cause expenditures for the year to change by more than $20 million, we
make adjustments to ensure that expenditures did not increase or
decrease by more than $20 million.
2. Calculation of Payments Based on RVUs
To calculate the payment for each service, the components of the
fee schedule (work, PE, and MP RVUs) are adjusted by geographic
practice cost indices (GPCIs) to reflect the variations in the costs of
furnishing the services. The GPCIs reflect the relative costs of work,
PE, and MP in an area compared to the national average costs for each
component.
RVUs are converted to dollar amounts through the application of a
CF, which is calculated based on a statutory formula by CMS's Office of
the Actuary (OACT). The formula for calculating the Medicare fee
schedule payment amount for a given service and fee schedule area can
be expressed as:

Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU MP x GPCI
MP)] x CF.
3. Separate Fee Schedule Methodology for Anesthesia Services
Section 1848(b)(2)(B) of the Act specifies that the fee schedule
amounts for anesthesia services are to be based on a uniform relative
value guide, with appropriate adjustment of an anesthesia conversion
factor, in a manner to ensure that fee schedule amounts for anesthesia
services are consistent with those for other services of comparable
value. Therefore, there is a separate fee schedule methodology for
anesthesia services. Specifically, we establish a separate conversion
factor for anesthesia services and we utilize the uniform relative
value guide, or base units, as well as time units, to calculate the fee
schedule amounts for anesthesia services. Since anesthesia services are
not valued using RVUs, a separate methodology for locality adjustments
is also necessary. This involves an adjustment to the national
anesthesia CF for each payment locality.
4. Most Recent Changes to the Fee Schedule
Section 220(d) of the Protecting Access to Medicare Act of 2014
(Pub. L. 113-93, enacted on April 1, 2014) (PAMA) added a new
subparagraph (O) to section 1848(c)(2) of the Act to establish an
annual target for reductions in PFS expenditures resulting from
adjustments to relative values of misvalued codes. If the estimated net
reduction in expenditures for a year is equal to or greater than the
target for that year, the provision specifies that reduced expenditures
attributable to such adjustments shall be redistributed in a budget-
neutral manner within the PFS. The provision specifies that the amount
by which such reduced expenditures exceed the target for a given year
shall be treated as a reduction in expenditures for the subsequent year
for purposes of determining whether the target for the subsequent year
has been met. The provision also specifies that an amount equal to the
difference between the target and the estimated net reduction in
expenditures, called the target recapture amount, shall not be taken
into account when applying the budget neutrality requirements specified
in section 1848(c)(2)(B)(ii)(II) of the Act. The PAMA amendments
originally made the target provisions applicable for CYs 2017 through
2020 and set the target for reduced expenditures at 0.5 percent of
estimated expenditures under the PFS for each of those 4 years.
Subsequently, section 202 of the Achieving a Better Life Experience
Act of 2014 (Division B of Pub. L. 113-295, enacted December 19, 2014)
(ABLE) accelerated the application of the target, amending section
1848(c)(2)(O) of the Act to specify that target provisions apply for
CYs 2016, 2017, and 2018; and setting a 1 percent target for reduced
expenditures for CY 2016 and a 0.5 percent target for CYs 2017 and
2018. The implementation of the target legislation was finalized in the
CY 2016 PFS final rule with comment period, and revisions are discussed
in section II.G. of this final rule.
Section 1848(c)(7) of the Act, as added by section 220(e) of the
PAMA, specified that for services that are not new or revised codes, if
the total RVUs for a service for a year would otherwise be decreased by
an estimated 20 percent or more as compared to the total RVUs for the
previous year, the applicable adjustments in work, PE, and MP RVUs
shall be phased in over a 2-year period. Section 220(e) of the PAMA
required the phase-in of RVU reductions of 20 percent or more to begin
for 2017. Section 1848(c)(7) of the Act was later amended by section
202 of the ABLE Act to require instead that the phase-in must begin in
CY 2016. The implementation of the phase-in legislation was finalized
in the CY 2016 PFS final rule with comment period and revisions in this
year's rulemaking are discussed in section II.H. of this final rule.

II. Provisions of the Final Rule for PFS

A. Determination of Practice Expense (PE) Relative Value Units (RVUs)

1. Overview
Practice expense (PE) is the portion of the resources used in
furnishing a service that reflects the general categories of physician
and practitioner expenses, such as office rent and personnel wages, but
excluding malpractice expenses, as specified in section 1848(c)(1)(B)
of the Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use
a resource-based system for determining PE RVUs for each physicians'
service. We develop PE RVUs by considering the direct and indirect
practice resources involved in furnishing each service. Direct expense
categories include clinical labor, medical supplies, and medical
equipment. Indirect expenses include administrative labor, office
expense, and all other expenses. The sections that follow provide more
detailed information about the methodology for translating the
resources involved in furnishing each service into service-specific PE
RVUs. We refer readers to the CY 2010 PFS final rule with comment
period (74 FR 61743 through 61748) for a more detailed explanation of
the PE methodology.
2. Practice Expense Methodology
a. Direct Practice Expense
We determine the direct PE for a specific service by adding the
costs of the direct resources (that is, the clinical staff, medical
supplies, and medical equipment) typically involved with furnishing
that service. The costs of the resources are calculated using the
refined direct PE inputs assigned to each CPT code in our PE database,
which are generally based on our review of recommendations received
from the RUC and those provided in response to public comment periods.
For a detailed explanation of the direct PE methodology, including
examples, we refer readers to the Five-Year Review of Work Relative
Value Units under the PFS and Proposed Changes to the Practice Expense
Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final
rule with comment period (71 FR 69629).

[[Page 80175]]

b. Indirect Practice Expense per Hour Data
We use survey data on indirect PEs incurred per hour worked in
developing the indirect portion of the PE RVUs. Prior to CY 2010, we
primarily used the practice expense per hour (PE/HR) by specialty that
was obtained from the AMA's Socioeconomic Monitoring Surveys (SMS). The
AMA administered a new survey in CY 2007 and CY 2008, the Physician
Practice Expense Information Survey (PPIS). The PPIS is a
multispecialty, nationally representative, PE survey of both physicians
and nonphysician practitioners (NPPs) paid under the PFS using a survey
instrument and methods highly consistent with those used for the SMS
and the supplemental surveys. The PPIS gathered information from 3,656
respondents across 51 physician specialty and health care professional
groups. We believe the PPIS is the most comprehensive source of PE
survey information available. We used the PPIS data to update the PE/HR
data for the CY 2010 PFS for almost all of the Medicare-recognized
specialties that participated in the survey.
When we began using the PPIS data in CY 2010, we did not change the
PE RVU methodology itself or the manner in which the PE/HR data are
used in that methodology. We only updated the PE/HR data based on the
new survey. Furthermore, as we explained in the CY 2010 PFS final rule
with comment period (74 FR 61751), because of the magnitude of payment
reductions for some specialties resulting from the use of the PPIS
data, we transitioned its use over a 4-year period from the previous PE
RVUs to the PE RVUs developed using the new PPIS data. As provided in
the CY 2010 PFS final rule with comment period (74 FR 61751), the
transition to the PPIS data was complete for CY 2013. Therefore, PE
RVUs from CY 2013 forward are developed based entirely on the PPIS
data, except as noted in this section.
Section 1848(c)(2)(H)(i) of the Act requires us to use the medical
oncology supplemental survey data submitted in 2003 for oncology drug
administration services. Therefore, the PE/HR for medical oncology,
hematology, and hematology/oncology reflects the continued use of these
supplemental survey data.
Supplemental survey data on independent labs from the College of
American Pathologists were implemented for payments beginning in CY
2005. Supplemental survey data from the National Coalition of Quality
Diagnostic Imaging Services (NCQDIS), representing independent
diagnostic testing facilities (IDTFs), were blended with supplementary
survey data from the American College of Radiology (ACR) and
implemented for payments beginning in CY 2007. Neither IDTFs, nor
independent labs, participated in the PPIS. Therefore, we continue to
use the PE/HR that was developed from their supplemental survey data.
Consistent with our past practice, the previous indirect PE/HR
values from the supplemental surveys for these specialties were updated
to CY 2006 using the Medicare Economic Index (MEI) to put them on a
comparable basis with the PPIS data.
We also do not use the PPIS data for reproductive endocrinology and
spine surgery since these specialties currently are not separately
recognized by Medicare, nor do we have a method to blend the PPIS data
with Medicare-recognized specialty data.
Previously, we established PE/HR values for various specialties
without SMS or supplemental survey data by crosswalking them to other
similar specialties to estimate a proxy PE/HR. For specialties that
were part of the PPIS for which we previously used a crosswalked PE/HR,
we instead used the PPIS-based PE/HR. We continue previous crosswalks
for specialties that did not participate in the PPIS. However,
beginning in CY 2010, we changed the PE/HR crosswalk for portable X-ray
suppliers from radiology to IDTF, a more appropriate crosswalk because
these specialties are more similar to each other for work time.
For registered dietician services, the resource-based PE RVUs have
been calculated in accordance with the final policy that crosswalks the
specialty to the ``All Physicians'' PE/HR data, as adopted in the CY
2010 PFS final rule with comment period (74 FR 61752) and discussed in
more detail in the CY 2011 PFS final rule with comment period (75 FR
73183). We have incorporated the available utilization data for
interventional cardiology, which became a recognized Medicare specialty
during 2014. We finalized the use of a proxy PE/HR value for
interventional cardiology in the CY 2016 final rule with comment period
(80 FR 70892), as there are no PPIS data for this specialty, by
crosswalking the PE/HR from Cardiology, since the specialties furnish
similar services in the Medicare claims data.
Comment: A commenter questioned the validity of the PPIS survey
data since it is nearly 10 years old. Several other commenters stated
that CMS' estimated per-minute labor cost inputs are lower than actual
labor costs.
Response: We have previously identified several concerns regarding
the underlying data used in determining PE RVUs in the CY 2014 PFS
final rule (78 FR 74246-74247). Even when we first incorporated the
survey data into the PE methodology, many in the community expressed
serious concerns over the accuracy of this or other PE surveys as a way
of gathering data on PE inputs from the diversity of providers paid
under the PFS. However, we currently lack another source of
comprehensive data regarding PE costs, and as a result, we continue to
believe that the PPIS survey data is the best data currently available.
We continue to seek the best broad-based, auditable, routinely-updated
source of information regarding PE costs.
c. Allocation of PE to Services
To establish PE RVUs for specific services, it is necessary to
establish the direct and indirect PE associated with each service.
(1) Direct Costs
The relative relationship between the direct cost portions of the
PE RVUs for any two services is determined by the relative relationship
between the sum of the direct cost resources (that is, the clinical
staff, medical supplies, and medical equipment) typically involved with
furnishing each of the services. The costs of these resources are
calculated from the refined direct PE inputs in our PE database. For
example, if one service has a direct cost sum of $400 from our PE
database and another service has a direct cost sum of $200, the direct
portion of the PE RVUs of the first service would be twice as much as
the direct portion of the PE RVUs for the second service.
(2) Indirect Costs
Section II.A.2.b. of this final rule describes the current data
sources for specialty-specific indirect costs used in our PE
calculations. We allocated the indirect costs to the code level on the
basis of the direct costs specifically associated with a code and the
greater of either the clinical labor costs or the work RVUs. We also
incorporated the survey data described earlier in the PE/HR discussion.
The general approach to developing the indirect portion of the PE RVUs
is as follows:
For a given service, we used the direct portion of the PE
RVUs calculated as previously described and the average percentage that
direct costs represent of total costs (based on survey data) across the
specialties that furnish the service to determine an initial indirect
allocator. That is, the initial indirect allocator is

[[Page 80176]]

calculated so that the direct costs equal the average percentage of
direct costs of those specialties furnishing the service. For example,
if the direct portion of the PE RVUs for a given service is 2.00 and
direct costs, on average, represented 25 percent of total costs for the
specialties that furnished the service, the initial indirect allocator
would be calculated so that it equals 75 percent of the total PE RVUs.
Thus, in this example, the initial indirect allocator would equal 6.00,
resulting in a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and
6.00 is 75 percent of 8.00).
Next, we added the greater of the work RVUs or clinical
labor portion of the direct portion of the PE RVUs to this initial
indirect allocator. In our example, if this service had a work RVU of
4.00 and the clinical labor portion of the direct PE RVU was 1.50, we
would add 4.00 (since the 4.00 work RVUs are greater than the 1.50
clinical labor portion) to the initial indirect allocator of 6.00 to
get an indirect allocator of 10.00. In the absence of any further use
of the survey data, the relative relationship between the indirect cost
portions of the PE RVUs for any two services would be determined by the
relative relationship between these indirect cost allocators. For
example, if one service had an indirect cost allocator of 10.00 and
another service had an indirect cost allocator of 5.00, the indirect
portion of the PE RVUs of the first service would be twice as great as
the indirect portion of the PE RVUs for the second service.
Next, we incorporated the specialty-specific indirect PE/
HR data into the calculation. In our example, if, based on the survey
data, the average indirect cost of the specialties furnishing the first
service with an allocator of 10.00 was half of the average indirect
cost of the specialties furnishing the second service with an indirect
allocator of 5.00, the indirect portion of the PE RVUs of the first
service would be equal to that of the second service.
(3) Facility and Nonfacility Costs
For procedures that can be furnished in a physician's office, as
well as in a facility setting, where Medicare makes a separate payment
to the facility for its costs in furnishing a service, we establish two
PE RVUs: Facility, and nonfacility. The methodology for calculating PE
RVUs is the same for both the facility and nonfacility RVUs, but is
applied independently to yield two separate PE RVUs. In calculating the
PE RVUs for services furnished in a facility, we do not include
resources that would generally not be provided by physicians when
furnishing the service. For this reason, the facility PE RVUs are
generally lower than the nonfacility PE RVUs.
(4) Services With Technical Components (TCs) and Professional
Components (PCs)
Diagnostic services are generally comprised of two components: A
professional component (PC) and a technical component (TC). The PC and
TC may be furnished independently or by different providers, or they
may be furnished together as a ``global'' service. When services have
separately billable PC and TC components, the payment for the global
service equals the sum of the payment for the TC and PC. To achieve
this, we use a weighted average of the ratio of indirect to direct
costs across all the specialties that furnish the global service, TCs,
and PCs; that is, we apply the same weighted average indirect
percentage factor to allocate indirect expenses to the global service,
PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum
to the global.)
(5) PE RVU Methodology
For a more detailed description of the PE RVU methodology, we refer
readers to the CY 2010 PFS final rule with comment period (74 FR 61745
through 61746). We also direct interested readers to the file called
``Calculation of PE RVUs under Methodology for Selected Codes'' which
is available on our Web site under downloads for the CY 2017 PFS final
rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. This file
contains a table that illustrates the calculation of PE RVUs as
described below for individual codes.
(a) Setup File
First, we create a setup file for the PE methodology. The setup
file contains the direct cost inputs, the utilization for each
procedure code at the specialty and facility/nonfacility place of
service level, and the specialty-specific PE/HR data calculated from
the surveys.
(b) Calculate the Direct Cost PE RVUs
Sum the costs of each direct input.
Step 1: Sum the direct costs of the inputs for each service.
Step 2: Calculate the aggregate pool of direct PE costs for the
current year. We set the aggregate pool of PE costs equal to the
product of the ratio of the current aggregate PE RVUs to current
aggregate work RVUs and the proposed aggregate work RVUs.
Step 3: Calculate the aggregate pool of direct PE costs for use in
ratesetting. This is the product of the aggregate direct costs for all
services from Step 1 and the utilization data for that service.
Step 4: Using the results of Step 2 and Step 3, use the conversion
factor to calculate a direct PE scaling factor to ensure that the
aggregate pool of direct PE costs calculated in Step 3 does not vary
from the aggregate pool of direct PE costs for the current year. Apply
the scaling factor to the direct costs for each service (as calculated
in Step 1).
Step 5: Convert the results of Step 4 to an RVU scale for each
service. To do this, divide the results of Step 4 by the CF. Note that
the actual value of the CF used in this calculation does not influence
the final direct cost PE RVUs, as long as the same CF is used in Step 4
and Step 5. Different CFs will result in different direct PE scaling
factors, but this has no effect on the final direct cost PE RVUs since
changes in the CFs and changes in the associated direct scaling factors
offset one another.
(c) Create the Indirect Cost PE RVUs
Create indirect allocators.
Step 6: Based on the survey data, calculate direct and indirect PE
percentages for each physician specialty.
Step 7: Calculate direct and indirect PE percentages at the service
level by taking a weighted average of the results of Step 6 for the
specialties that furnish the service. Note that for services with TCs
and PCs, the direct and indirect percentages for a given service do not
vary by the PC, TC, and global service.
We use an average of the 3 most recent years of available Medicare
claims data to determine the specialty mix assigned to each code. As we
stated in the CY 2016 final rule with comment period (80 FR 70894), we
believe that the 3-year average will mitigate the need to use dominant
or expected specialty instead of the claims data. Because we
incorporated CY 2015 claims data for use in the CY 2017 proposed rates,
we believe that the finalized PE RVUs associated with the CY 2017 PFS
final rule provide a first opportunity to determine whether service-
level overrides of claims data are necessary. Currently, in the
development of PE RVUs we apply only the overrides that also apply to
the MP RVU calculation. Since the proposed PE RVUs include a new year
of claims into the 3-year average for the first time, we solicited
comment on the proposed CY 2017 PFS rates and whether or not the
incorporation of a new year of utilization data into a 3-year average
mitigates the need for alternative service-level overrides such as a
claims-based approach (dominant specialty) or stakeholder-recommended
approach

[[Page 80177]]

(expected specialty) in the development of PE (and MP) RVUs for low-
volume codes. Prior year RVUs are available at several locations on the
PFS Web site located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
Comment: Several commenters contended that even a multi-year
average of claims data to determine the mix of specialties that furnish
the services creates distortions and wide variability for low volume
services, particularly those services with fewer than 100 annual
Medicare claims. Commenters stated that low volume codes that use a
specialty override appear to have stable PE and MP RVUs, while other
low volume codes without overrides continue to shift from year to year.
Given these fluctuations, commenters suggested that CMS implement
service-level overrides to determine the specialty mix for these low
volume procedures. These commenters provided a list of nearly 2000
codes and suggested specialty overrides.
Response: We appreciate commenters' interest in relatively stable
PE and MP RVUs and for continuing to highlight the challenges faced
when determining the specialty allocation for low volume services.
Since we did not make a proposal regarding specialty overrides for low
volume services, we do not believe that it would be appropriate to
establish overrides for several thousand codes at this time. However,
given the continued concerns, we will consider the issue, including
these specific recommendations, for future rulemaking.
Step 8: Calculate the service level allocators for the indirect PEs
based on the percentages calculated in Step 7. The indirect PEs are
allocated based on the three components: The direct PE RVUs; the
clinical labor PE RVUs; and the work RVUs.
For most services the indirect allocator is: Indirect PE percentage
* (direct PE RVUs/direct percentage) + work RVUs.
There are two situations where this formula is modified:
If the service is a global service (that is, a service
with global, professional, and technical components), then the indirect
PE allocator is: Indirect percentage (direct PE RVUs/direct percentage)
+ clinical labor PE RVUs + work RVUs.
If the clinical labor PE RVUs exceed the work RVUs (and
the service is not a global service), then the indirect allocator is:
Indirect PE percentage (direct PE RVUs/direct percentage) + clinical
labor PE RVUs.
(Note: For global services, the indirect PE allocator is based on
both the work RVUs and the clinical labor PE RVUs. We do this to
recognize that, for the PC service, indirect PEs will be allocated
using the work RVUs, and for the TC service, indirect PEs will be
allocated using the direct PE RVUs and the clinical labor PE RVUs. This
also allows the global component RVUs to equal the sum of the PC and TC
RVUs.)
For presentation purposes, in the examples in the download file
called ``Calculation of PE RVUs under Methodology for Selected Codes'',
the formulas were divided into two parts for each service.
The first part does not vary by service and is the
indirect percentage (direct PE RVUs/direct percentage).
The second part is either the work RVU, clinical labor PE
RVU, or both depending on whether the service is a global service and
whether the clinical PE RVUs exceed the work RVUs (as described earlier
in this step).
Apply a scaling adjustment to the indirect allocators.
Step 9: Calculate the current aggregate pool of indirect PE RVUs by
multiplying the result of step 8 by the average indirect PE percentage
from the survey data.
Step 10: Calculate an aggregate pool of indirect PE RVUs for all
PFS services by adding the product of the indirect PE allocators for a
service from Step 8 and the utilization data for that service.
Step 11: Using the results of Step 9 and Step 10, calculate an
indirect PE adjustment so that the aggregate indirect allocation does
not exceed the available aggregate indirect PE RVUs and apply it to
indirect allocators calculated in Step 8.
Calculate the indirect practice cost index.
Step 12: Using the results of Step 11, calculate aggregate pools of
specialty-specific adjusted indirect PE allocators for all PFS services
for a specialty by adding the product of the adjusted indirect PE
allocator for each service and the utilization data for that service.
Step 13: Using the specialty-specific indirect PE/HR data,
calculate specialty-specific aggregate pools of indirect PE for all PFS
services for that specialty by adding the product of the indirect PE/HR
for the specialty, the work time for the service, and the specialty's
utilization for the service across all services furnished by the
specialty.
Step 14: Using the results of Step 12 and Step 13, calculate the
specialty-specific indirect PE scaling factors.
Step 15: Using the results of Step 14, calculate an indirect
practice cost index at the specialty level by dividing each specialty-
specific indirect scaling factor by the average indirect scaling factor
for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service
level to ensure the capture of all indirect costs. Calculate a weighted
average of the practice cost index values for the specialties that
furnish the service. (Note: For services with TCs and PCs, we calculate
the indirect practice cost index across the global service, PCs, and
TCs. Under this method, the indirect practice cost index for a given
service (for example, echocardiogram) does not vary by the PC, TC, and
global service.)
Step 17: Apply the service level indirect practice cost index
calculated in Step 16 to the service level adjusted indirect allocators
calculated in Step 11 to get the indirect PE RVUs.
(d) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs
from Step 17 and apply the final PE budget neutrality (BN) adjustment.
The final PE BN adjustment is calculated by comparing the sum of steps
5 and 17 of to the proposed aggregate work RVUs scaled by the ratio of
current aggregate PE and work RVUs. This adjustment ensures that all PE
RVUs in the PFS account for the fact that certain specialties are
excluded from the calculation of PE RVUs but included in maintaining
overall PFS budget neutrality. (See ``Specialties excluded from
ratesetting calculation'' later in this section.)
(e) Setup File Information
Specialties excluded from ratesetting calculation: For the
purposes of calculating the PE RVUs, we exclude certain specialties,
such as certain NPPs paid at a percentage of the PFS and low-volume
specialties, from the calculation. These specialties are included for
the purposes of calculating the BN adjustment. They are displayed in
Table 1.

Table 1--Specialties Excluded From Ratesetting Calculation
------------------------------------------------------------------------
Specialty code Specialty description
------------------------------------------------------------------------
49............................. Ambulatory surgical center.
50............................. Nurse practitioner.
51............................. Medical supply company with certified
orthotist.
52............................. Medical supply company with certified
prosthetist.
53............................. Medical supply company with certified
prosthetist-orthotist.
54............................. Medical supply company not included in
51, 52, or 53.
55............................. Individual certified orthotist.

[[Page 80178]]

56............................. Individual certified prosthetist.
57............................. Individual certified prosthetist-
orthotist.
58............................. Medical supply company with registered
pharmacist.
59............................. Ambulance service supplier, e.g.,
private ambulance companies, funeral
homes, etc.
60............................. Public health or welfare agencies.
61............................. Voluntary health or charitable
agencies.
73............................. Mass immunization roster biller.
74............................. Radiation therapy centers.
87............................. All other suppliers (e.g., drug and
department stores).
88............................. Unknown supplier/provider specialty.
89............................. Certified clinical nurse specialist.
96............................. Optician.
97............................. Physician assistant.
A0............................. Hospital.
A1............................. SNF.
A2............................. Intermediate care nursing facility.
A3............................. Nursing facility, other.
A4............................. HHA.
A5............................. Pharmacy.
A6............................. Medical supply company with respiratory
therapist.
A7............................. Department store.
B2............................. Pedorthic personnel.
B3............................. Medical supply company with pedorthic
personnel.
------------------------------------------------------------------------

Crosswalk certain low volume physician specialties:
Crosswalk the utilization of certain specialties with relatively low
PFS utilization to the associated specialties.
Physical therapy utilization: Crosswalk the utilization
associated with all physical therapy services to the specialty of
physical therapy.
Identify professional and technical services not
identified under the usual TC and 26 modifiers: Flag the services that
are PC and TC services but do not use TC and 26 modifiers (for example,
electrocardiograms). This flag associates the PC and TC with the
associated global code for use in creating the indirect PE RVUs. For
example, the professional service, CPT code 93010 (Electrocardiogram,
routine ECG with at least 12 leads; interpretation and report only), is
associated with the global service, CPT code 93000 (Electrocardiogram,
routine ECG with at least 12 leads; with interpretation and report).
Payment modifiers: Payment modifiers are accounted for in
the creation of the file consistent with current payment policy as
implemented in claims processing. For example, services billed with the
assistant at surgery modifier are paid 16 percent of the PFS amount for
that service; therefore, the utilization file is modified to only
account for 16 percent of any service that contains the assistant at
surgery modifier. Similarly, for those services to which volume
adjustments are made to account for the payment modifiers, time
adjustments are applied as well. For time adjustments to surgical
services, the intraoperative portion in the work time file is used;
where it is not present, the intraoperative percentage from the payment
files used by contractors to process Medicare claims is used instead.
Where neither is available, we use the payment adjustment ratio to
adjust the time accordingly. Table 2 details the manner in which the
modifiers are applied.

Table 2--Application of Payment Modifiers to Utilization Files
--------------------------------------------------------------------------------------------------------------------------------------------------------
Modifier Description Volume adjustment Time adjustment
--------------------------------------------------------------------------------------------------------------------------------------------------------
80, 81, 82......................... Assistant at Surgery...... 16%....................... Intraoperative portion.
AS................................. Assistant at Surgery-- 14% (85% * 16%)........... Intraoperative portion.
Physician Assistant.
50 or LT and RT.................... Bilateral Surgery......... 150%...................... 150% of work time.
51................................. Multiple Procedure........ 50%....................... Intraoperative portion.
52................................. Reduced Services.......... 50%....................... 50%.
53................................. Discontinued Procedure.... 50%....................... 50%.
54................................. Intraoperative Care only.. Preoperative + Preoperative + Intraoperative portion.
Intraoperative
Percentages on the
payment files used by
Medicare contractors to
process Medicare claims.
55................................. Postoperative Care only... Postoperative Percentage Postoperative portion.
on the payment files used
by Medicare contractors
to process Medicare
claims.
62................................. Co-surgeons............... 62.5%..................... 50%.
66................................. Team Surgeons............. 33%....................... 33%.
--------------------------------------------------------------------------------------------------------------------------------------------------------

We also make adjustments to volume and time that correspond to
other payment rules, including special multiple procedure endoscopy
rules and multiple procedure payment reductions (MPPRs). We note that
section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments
for multiple imaging procedures and multiple therapy services from the
BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These
MPPRs are not included in the development of the RVUs.
For anesthesia services, we do not apply adjustments to volume
since we use the average allowed charge when simulating RVUs;
therefore, the RVUs as calculated already reflect the payments as
adjusted by modifiers, and no volume adjustments are necessary.
However, a time adjustment of 33 percent is made only for medical
direction of two to four cases since that is the only situation where a
single practitioner is involved with multiple beneficiaries
concurrently, so that counting each service without regard to the
overlap with other services would overstate the amount of time spent by
the practitioner furnishing these services.
Work RVUs: The setup file contains the work RVUs from this
final rule.
(6) Equipment Cost Per Minute
The equipment cost per minute is calculated as:

[[Page 80179]]

(1/(minutes per year * usage)) * price * ((interest rate/(1-(1/((1 +
interest rate)[supcaret] life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous
(that is, usage = 1); generally 150,000 minutes.
usage = variable, see discussion below.
price = price of the particular piece of equipment.
life of equipment = useful life of the particular piece of
equipment.
maintenance = factor for maintenance; 0.05.
interest rate = variable, see discussion below.

Usage: We currently use an equipment utilization rate assumption of
50 percent for most equipment, with the exception of expensive
diagnostic imaging equipment, for which we use a 90 percent assumption
as required by section 1848(b)(4)(C) of the Act.
Stakeholders have often suggested that particular equipment items
are used less frequently than 50 percent of the time in the typical
setting and that CMS should reduce the equipment utilization rate based
on these recommendations. We appreciate and share stakeholders'
interest in using the most accurate assumption regarding the equipment
utilization rate for particular equipment items. However, we believe
that absent robust, objective, auditable data regarding the use of
particular items, the 50 percent assumption is the most appropriate
within the relative value system. We welcome the submission of data
that illustrates an alternative rate.
Maintenance: This factor for maintenance was finalized in the CY
1998 PFS final rule (62 FR 33164).
We continue to investigate potential avenues for determining
equipment maintenance costs across a broad range of equipment items.
Comment: One commenter stated that the cost of maintaining imaging
equipment exceeds the cost of general medical equipment, and that for
imaging modalities the median maintenance cost is approximately 10
percent of the equipment purchase price. The commenter stated that the
current 5 percent equipment maintenance rate continues to be an
inadequate and outdated reflection of actual maintenance costs. The
commenter also stated that information on maintenance costs is readily
available to CMS through both public and private sources. The commenter
did not identify these sources.
Response: As we previously stated in the CY 2016 final rule with
comment period (80 FR 70897), we agree with the commenter that we do
not believe the annual maintenance factor for all equipment is exactly
5 percent, and we concur that the current rate likely understates the
true cost of maintaining some equipment. We also believe it likely
overstates the maintenance costs for other equipment. When we solicited
comments regarding sources of data containing equipment maintenance
rates, commenters were unable to identify an auditable, robust data
source that could be used by CMS on a wide scale. As a result, in the
absence of publicly available datasets regarding equipment maintenance
costs or another systematic data collection methodology for determining
maintenance factor, we do not believe that we have sufficient
information at present to adopt a variable maintenance factor for
equipment cost per minute pricing. We continue to investigate potential
avenues for determining equipment maintenance costs across a broad
range of equipment items.
Interest Rate: In the CY 2013 PFS final rule with comment period
(77 FR 68902), we updated the interest rates used in developing an
equipment cost per minute calculation. The interest rate was based on
the Small Business Administration (SBA) maximum interest rates for
different categories of loan size (equipment cost) and maturity (useful
life). The interest rates are listed in Table 3. (See 77 FR 68902 for a
thorough discussion of this issue.) We did not propose any changes to
these interest rates for CY 2017.

Table 3--SBA Maximum Interest Rates
------------------------------------------------------------------------
Interest
Price Useful life rate (%)
------------------------------------------------------------------------
<$25K.............................. <7 Years.............. 7.50
$25K to $50K....................... <7 Years.............. 6.50
>$50K.............................. <7 Years.............. 5.50
<$25K.............................. 7+ Years.............. 8.00
$25K to $50K....................... 7+ Years.............. 7.00
>$50K.............................. 7+ Years.............. 6.00
------------------------------------------------------------------------

d. Changes to Direct PE Inputs for Specific Services
This section focuses on specific PE inputs. The direct PE inputs
are included in the CY 2017 direct PE input database, which is
available on our Web site under downloads for the CY 2017 PFS final
rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
(1) PE Inputs for Digital Imaging Services
Prior to the CY 2015 PFS rulemaking cycle, the RUC provided a
recommendation regarding the PE inputs for digital imaging services.
Specifically, the RUC recommended that we remove supply and equipment
items associated with film technology from a previously specified list
of codes since these items were no longer typical resource inputs. The
RUC also recommended that the Picture Archiving and Communication
System (PACS) equipment be included for these imaging services since
these items are typically used in furnishing imaging services. However,
since we did not receive any invoices for the PACS system prior to that
year's proposed rule, we were unable to determine the appropriate
pricing to use for the inputs. For CY 2015, we finalized our proposal
to remove the film supply and equipment items, and to create a new
equipment item as a proxy for the PACS workstation as a direct expense
(79 FR 67561-67563). We used the price associated with ED021 (computer,
desktop, w-monitor) to price the new item, ED050 (PACS Workstation
Proxy), pending receipt of invoices to facilitate pricing specific to
the PACS workstation. Subsequent to establishing payment rates for CY
2015, we received information from several stakeholders regarding
pricing for items related to the digital acquisition and storage of
images. We received invoices from one stakeholder that facilitated a
proposed price update for the PACS workstation in the CY 2016 PFS
proposed rule, and we updated the price for the PACS workstation to
$5,557 in the CY 2016 PFS final rule with comment period (80 FR 70899).
In addition to the workstation used by the clinical staff for
acquiring the images and furnishing the technical component (TC) of the
services, a stakeholder also submitted more detailed information
regarding a workstation used by the practitioner interpreting the image
in furnishing the professional component (PC) of many of these
services.
As we stated in the CY 2015 PFS final rule with comment period (79
FR 67563), we generally believe that workstations used by these
practitioners are more accurately considered indirect costs associated
with the PC of the service. However, we understand that the
professional workstations for interpretation of digital images are
similar in principle to some of the previous film inputs incorporated
into the global and technical components of the codes, such as the view
box equipment. Given that the majority of these services are reported
globally in the nonfacility setting, we believe it is appropriate to
include these costs as direct inputs for the associated HCPCS codes.
Based on our established

[[Page 80180]]

methodology in which single codes with professional and technical
components are constructed by assigning work RVUs exclusively to the
professional component and direct PE inputs exclusively to the
technical components, these costs would be incorporated into the PE
RVUs of the global and technical component of the HCPCS code.
We stated in the CY 2016 PFS final rule with comment period that
the costs of the professional workstation may be analogous to costs
related to the use of film previously incorporated as direct PE inputs
for these services. We also solicited comments on whether including the
professional workstation as a direct PE input for these codes would be
appropriate, given that the resulting PE RVUs would be assigned to the
global and technical components of the codes. Commenters responded by
indicating their approval of the concept of a professional PACS
workstation used for interpretation of digital images. We received
invoices for the pricing of a professional PACS workstation, as well as
additional invoices for the pricing of a mammography-specific version
of the professional PACS workstation. The RUC also included these new
equipment items in its recommendations for the CY 2017 PFS rulemaking
cycle.
Based on our analysis of submitted invoices, we proposed to price
the professional PACS workstation (ED053) at $14,616.93. We did not
propose a change in price for the current technical PACS workstation
(ED050), which will remain at a price of $5,557.00.
The price of the professional PACS workstation is based upon
individual invoices submitted for the cost of a PC Tower ($1531.52), a
pair of 3 MP monitors ($10,500.00 in total), a keyboard and mouse
($84.95), a UPS power backup devices for TNP ($1098.00), and a switch
for PACS monitors/workstations ($1402.46).
We proposed to add the professional PACS workstation to many CPT
codes in the 70000 series that use the current technical PACS
workstation (ED050) and include professional work for which such a
workstation would be used. We did not propose to add the equipment item
to add-on codes since the base codes would include minutes for the
item. We also did not propose to add the item to codes that are
therapeutic in nature, as the professional PACS workstation is intended
for use in diagnostic services. We therefore did not propose to add the
item to codes in the Radiation Therapy section (77261 through 77799) or
the Nuclear Medicine Cardiology section (78414-78499). We also did not
propose to add the item to image guidance codes where the dominant
provider is not a radiologist (77002, 77011, 77071, 77077, and 77081)
according to the most recent year of claims data, since we believe a
single workstation would be more typical in those cases. We identified
approximately 426 codes to which we proposed to add a professional PACS
workstation. Please see Table 4 for the full list of affected codes.
For the professional PACS workstation, we proposed to assign
equipment time equal to the intraservice work time plus half of the
preservice work time associated with the codes, since the work time
generally reflects the time associated with the professional
interpretation. We proposed half of the preservice work time for the
professional PACS workstation because we do not believe that the
practitioner would typically spend all of the preservice work period
using the equipment. For older codes that do not have a breakdown of
physician work time by service period, and only have an overall
physician work time, we proposed to use half the total work time as an
approximation of the intraservice work time plus one half of the
preservice work time. In our review of services that contained an
existing PACS workstation and had a breakdown of physician work time,
we found that half of the total time was a reasonable approximation for
the value of intraservice work time plus one half of preservice work
time where no such breakdown existed. We also considered using an
equipment time formula of the physician intraservice time plus 1 minute
(as a stand-in for the physician preservice work time). We solicited
public comment on the most accurate equipment time formula for the
professional PACS workstation.
We solicited public comment on the proposed list of codes that
would incorporate the professional PACS workstation. We were interested
in public comment on the codes for which a professional PACS
workstation should be included, and whether one of these professional
workstations should be included for codes outside the 70000 series. In
cases within the 70000 series where radiologists are not the typical
specialty reporting the code, such as CPT codes 77002 and 77011, we
asked whether it would be appropriate to add one of the professional
PACS workstations to these services.
The following is a summary of the comments we received on the
proposed addition of the professional PACS workstation, the pricing of
the workstation, the list of codes that would incorporate the
professional PACS workstation, and the equipment minutes to assign to
the workstation.
Comment: Commenters supported the general concept of the
professional PACS workstation and its addition to the proposed list of
codes. Commenters stated that the professional PACS workstation is an
essential component of diagnostic imaging procedures due to the switch
from film to digital technology, and the professional workstation would
be an appropriate inclusion as a direct PE input for these services.
Response: We appreciate the support from the commenters for the
addition of the professional PACS workstation.
Comment: Many commenters addressed the subject of the proper
pricing of the professional PACS workstation. Several commenters
requested that CMS increase the price of the workstation to include a
third and fourth monitor (for speech recognition) priced at $1,715.98,
an Admin Monitor (the extra working monitor) priced at $279.27, and a
Powerscribe Microphone priced at $424.00. Commenters stated that speech
recognition equipment is typical for a professional PACS workstation,
and that physicians typically employed a monitor with greater
resolution than what would be typically used for other purposes (such
as for electronic health records). Related comments contended that the
proposed pricing of the workstation remained significantly less than
what the average imaging facility spends on PACS technology. Other
commenters disagreed with these sentiments and supported the pricing of
the professional PACS workstation at the proposed rate of $14,616.93.
Response: We appreciate the feedback from the commenters regarding
the proper pricing of the professional PACS workstation. When proposing
a price for the professional PACS workstation, we did not include the
cost of the additional monitors and the Powerscribe microphone because
these items represent indirect costs under the established PE
methodology and the functionality would unlikely have been included in
the previously existing film inputs the professional PACS workstation
is replacing. Generally, we believe that monitors used to access
electronic health records and microphones used for dictation are often
used by practitioners who furnish a range a PFS services, are not
allocable to particular services or patients, and therefore, are
included in the administrative cost category of practice expense, and
therefore, are allocated to

[[Page 80181]]

individual codes through indirect PE RVUs.
Comment: Many commenters stated that CMS should expand the list of
codes with a professional PACS workstation. Commenters generally
focused on three of the criteria proposed by CMS: The exclusion of the
workstation from add-on services, the exclusion of therapeutic (as
opposed to diagnostic) services, and the exclusion of codes outside the
70000 series. Commenters stated that add-on codes should be
incorporated into the professional PACS workstation list, as they
require additional time to perform, and therefore, more time with the
technical PACS workstation for the technician, as well as additional
time for the review and interpretation performed by the physician using
the professional PACS workstation. Commenters also indicated that many
therapeutic services would also require a professional PACS
workstation, and disagreed with limiting the workstation to diagnostic
services only. Finally, commenters supplied extensive lists of
additional codes, both inside and outside of the 70000 series, where
they stated that the inclusion of a professional PACS workstation was
warranted.
Response: We appreciate the feedback from the commenters in helping
to define the criteria for inclusion of the professional PACS
workstation, along with more specific recommendations about which codes
should include the workstation. After considering these comments, we
will be adding the professional PACS workstation to additional
suggested codes. We took the following into account in making these
additions:
We did not add the professional PACS workstation to any
code that currently lacks a technical PACS workstation (ED050) or lacks
a work RVU. We continue to believe that procedures which do not include
a technical workstation, or do not have physician work, would not
require a professional workstation.
We did not add the professional PACS workstation to add-on
codes. Because the base codes include equipment minutes for the
workstation, we continue to believe it would be duplicative to add
additional equipment time for the professional PACS workstation in the
add-on code.
We agree with commenters that because the clinical utility
of the PACS workstation is not necessarily limited to diagnostic
services, there may be therapeutic codes where it would be reasonable
to assume its use to be typical. We believe that in these specific
cases, the use of the professional PACS workstation has been
established to be typical for the code in question by the specialties
furnishing the service, as a result of the evidence provided in the
comments submitted in response to our proposal. We have added the
workstation to many of the therapeutic codes requested by commenters,
specifically codes listed outside the 70000 series, where use of the
professional PACS station is typical.
Within the 70000 series, we reviewed each of the codes
submitted by commenters. Most of these codes did not fall within one of
the categories where we proposed to add the professional PACS
workstation in the proposed rule: They lacked a technical PACS
workstation, they were add-on codes, or they were diagnostic procedures
for which radiology is not the dominant specialty providing the
service. We continue to believe that the professional PACS workstation
should not be added to codes that do not fall into these categories,
since we believe that the image must be captured in order to for it to
be interpreted, that the use of the PACS workstation in the base code
reported with add-on codes would accurately capture the associated
resources used, and that the PACS professional workstation is only
typically used by radiologists. Based on comments, we are adding the
professional workstation to only one code in the 70000 series, CPT code
73562, as it includes a technical PACS workstation, is not an add-on
code, and is typically furnished by radiologists.
For codes in the 80000 and 90000 series, we are concerned
about whether it is appropriate to include the technical PACS
workstation into many of these services. PACS workstations were created
for imaging purposes, but many of these services that include a
technical PACS workstation do not appear to make use of imaging.
Although we are not removing the technical PACS workstation from these
codes at this time, we do not believe that a professional PACS
workstation should be added to these procedures. We will consider the
inclusion of both PACS workstations for future rulemaking.
Comment: Several commenters addressed the topic of equipment time
for the professional PACS workstation. Commenters requested that CMS
allocate the entire preservice physician work time associated with the
codes, as opposed to the proposed half of the preservice physician work
time. Commenters stated that although certain physician work activities
in the preservice period may not directly involve the professional
workstation, even when the physician is engaged in these parallel work
activities, the professional workstation is ``open'' to the patient at
hand and cannot be used for other patients. Commenters also disagreed
with the proposal to use half the total time for older codes in which
there is no separation of preservice and intraservice period times.
Commenters stated that using the entire physician work time would be
the best option since there is no accurate way to estimate the service
period times, and that it would avoid potential confusion in equipment
formulas in the future.
Response: We continue to believe that the professional PACS
workstation is more accurately assigned equipment time by using half of
the preservice physician work time rather than the full preservice
physician work time. As we stated in the proposed rule, we do not
believe that the practitioner would typically spend all of the
preservice work period using the equipment. Commenters agreed that the
physician may not need the professional workstation for the full
preservice period, but contended that the equipment would be ``open''
and unavailable for use by other physicians or for other patients. We
disagree with this argument on clinical practice and methodological
grounds. We do not agree that the professional PACS workstation would
necessarily be unavailable for use by other physicians when the
physician in question is not using the machine, Additionally, we note
that the number of minutes assigned to the predecessor film inputs did
not generally include the full number of pre-service minutes. Finally,
our PE methodology is based on the resources typically used to furnish
the procedure, and we typically assign time for equipment items based
on when it cannot be used by another practitioner or for another
patient due to its use in the given procedure. We continue to believe
that half of the preservice physician work time (along with the full
physician intraservice work time) is a good approximation of the time
in the preservice period that the professional PACS workstation will
typically be in use. As we stated in the proposed rule, we do not
believe that the practitioner would typically spend all of the
preservice time using the equipment, and would also spend preservice
time on other activities, such as scrubbing and dressing, for example.
For older codes where there is no breakdown of work time values by
service period, we do not agree with commenters that the professional
PACS workstation should use the total work time. The comments do not
provide a

[[Page 80182]]

persuasive rationale for using the total work time instead of our
proposed alternative, developed for consistency with codes for which we
do have work time breakdowns by service period. Therefore, in the
absence of service period work time detail, we continue to believe that
half of the total work time is a reasonable proxy for the small number
of old codes affected by this issue. We are not concerned about the
potential for confusion in the future with differing equipment time
formulas, as the addition of the professional PACS workstation to these
codes is a one-time inclusion that will not affect the future review of
this equipment.
Finally, we believe that there is a difference in the pattern of
equipment usage for the professional PACS workstation between
diagnostic and therapeutic codes. Generally, the intraservice work for
diagnostic imaging codes describes the review of images, while the
intraservice work for therapeutic services describes a broader range of
activities. Therefore, although we used an equipment formula of half
the preservice physician work time and the full intraservice physician
work time for the diagnostic procedures, we do not believe that this
same time formula would be appropriate for therapeutic procedures since
the professional PACS workstation would not be in use during the
intraservice portion of these services. Therefore, we will use an
equipment time formula of half the preservice physician work time and
half the postservice physician work time for the therapeutic codes to
which we are adding a professional PACS workstation, which we believe
is more consistent with the descriptions of work for the codes in
question. Consistent with our ongoing efforts to improve payment
accuracy for these costs, we seek recommendations from the RUC and
other stakeholders on a more precise allocation methodology for
equipment minutes for these procedures.
After consideration of comments received, we are finalizing our
proposal to add a professional PACS workstation (ED053) to the
equipment database and price it at the proposed rate of $14,616.93. We
are dividing the codes that will contain a professional PACS
workstation into diagnostic and therapeutic categories. For diagnostic
codes, we are assigning equipment minutes equal to half the preservice
physician work time and the full intraservice physician work time. For
the relatively smaller group of diagnostic codes with no service period
time breakdown, we are assigning equipment time equal to half of the
total physician work time. For therapeutic codes, we are assigning
equipment minutes equal to half the preservice physician work time and
half the postservice physician work time for the second group. There
are no therapeutic codes on our current list which lack a service
period time breakdown. The following table lists all of the codes that
include a professional PACS workstation for CY 2017, along with the
equipment minutes for the workstation.

Table 4--Codes With Professional PACS Workstation in the Direct PE Input
Database
------------------------------------------------------------------------
ED053
HCPCS Procedure type Minutes
------------------------------------------------------------------------
10030........................ Therapeutic................. 23
10035........................ Therapeutic................. 15
19081........................ Therapeutic................. 19
19083........................ Therapeutic................. 17
19085........................ Therapeutic................. 19
19281........................ Therapeutic................. 18
19283........................ Therapeutic................. 19
19285........................ Therapeutic................. 18
19287........................ Therapeutic................. 19
22510........................ Therapeutic................. 32
22511........................ Therapeutic................. 32
22513........................ Therapeutic................. 32
22514........................ Therapeutic................. 32
32555........................ Therapeutic................. 19
32557........................ Therapeutic................. 19
36221........................ Therapeutic................. 34
36222........................ Therapeutic................. 34
36223........................ Therapeutic................. 34
36224........................ Therapeutic................. 34
36225........................ Therapeutic................. 34
36226........................ Therapeutic................. 34
36251........................ Therapeutic................. 31
36252........................ Therapeutic................. 31
36253........................ Therapeutic................. 31
36254........................ Therapeutic................. 31
36598........................ Therapeutic................. 13
37184........................ Therapeutic................. 30
37187........................ Therapeutic................. 25
37188........................ Therapeutic................. 23
37191........................ Therapeutic................. 22
37192........................ Therapeutic................. 23
37193........................ Therapeutic................. 23
37197........................ Therapeutic................. 26
37220........................ Therapeutic................. 34
37221........................ Therapeutic................. 34
37224........................ Therapeutic................. 34
37225........................ Therapeutic................. 34
37226........................ Therapeutic................. 34
37227........................ Therapeutic................. 34
37228........................ Therapeutic................. 34
37229........................ Therapeutic................. 34
37230........................ Therapeutic................. 34
37231........................ Therapeutic................. 34
37236........................ Therapeutic................. 31
37238........................ Therapeutic................. 31
37241........................ Therapeutic................. 26
37242........................ Therapeutic................. 31
37243........................ Therapeutic................. 38
37244........................ Therapeutic................. 38
47531........................ Therapeutic................. 20
47532........................ Therapeutic................. 22
47533........................ Therapeutic................. 26
47534........................ Therapeutic................. 26
47535........................ Therapeutic................. 19
47536........................ Therapeutic................. 16
47537........................ Therapeutic................. 19
47538........................ Therapeutic................. 22
47539........................ Therapeutic................. 26
47540........................ Therapeutic................. 26
47541........................ Therapeutic................. 26
49083........................ Therapeutic................. 18
49405........................ Therapeutic................. 28
49406........................ Therapeutic................. 28
49407........................ Therapeutic................. 28
49418........................ Therapeutic................. 27
49440........................ Therapeutic................. 29
49441........................ Therapeutic................. 29
49442........................ Therapeutic................. 29
49446........................ Therapeutic................. 22
49450........................ Therapeutic................. 20
49451........................ Therapeutic................. 20
49452........................ Therapeutic................. 20
49460........................ Therapeutic................. 20
49465........................ Therapeutic................. 13
50382........................ Therapeutic................. 28
50384........................ Therapeutic................. 24
50385........................ Therapeutic................. 27
50386........................ Therapeutic................. 25
50387........................ Therapeutic................. 22
50389........................ Therapeutic................. 15
50430........................ Therapeutic................. 23
50431........................ Therapeutic................. 20
50432........................ Therapeutic................. 25
50433........................ Therapeutic................. 25
50434........................ Therapeutic................. 23
50435........................ Therapeutic................. 18
50693........................ Therapeutic................. 25
50694........................ Therapeutic................. 25
50695........................ Therapeutic................. 25
58340........................ Therapeutic................. 7
62302........................ Therapeutic................. 17
62303........................ Therapeutic................. 17
62304........................ Therapeutic................. 17
62305........................ Therapeutic................. 18
70015........................ Diagnostic.................. 12
70030........................ Diagnostic.................. 3
70100........................ Diagnostic.................. 3
70110........................ Diagnostic.................. 4
70120........................ Diagnostic.................. 3
70130........................ Diagnostic.................. 4
70134........................ Diagnostic.................. 4
70140........................ Diagnostic.................. 3
70150........................ Diagnostic.................. 4
70160........................ Diagnostic.................. 3
70190........................ Diagnostic.................. 3
70200........................ Diagnostic.................. 4
70210........................ Diagnostic.................. 3
70220........................ Diagnostic.................. 4
70240........................ Diagnostic.................. 3
70250........................ Diagnostic.................. 4
70260........................ Diagnostic.................. 7
70300........................ Diagnostic.................. 2
70310........................ Diagnostic.................. 3
70320........................ Diagnostic.................. 3
70328........................ Diagnostic.................. 3
70330........................ Diagnostic.................. 22
70332........................ Diagnostic.................. 6
70336........................ Diagnostic.................. 20
70350........................ Diagnostic.................. 3
70355........................ Diagnostic.................. 5
70360........................ Diagnostic.................. 3
70370........................ Diagnostic.................. 4
70371........................ Diagnostic.................. 9

[[Page 80183]]

70380........................ Diagnostic.................. 3
70390........................ Diagnostic.................. 5
70450........................ Diagnostic.................. 12
70460........................ Diagnostic.................. 15
70470........................ Diagnostic.................. 18
70480........................ Diagnostic.................. 13
70481........................ Diagnostic.................. 13
70482........................ Diagnostic.................. 14
70490........................ Diagnostic.................. 13
70491........................ Diagnostic.................. 13
70492........................ Diagnostic.................. 14
70540........................ Diagnostic.................. 14
70542........................ Diagnostic.................. 19
70543........................ Diagnostic.................. 19
70544........................ Diagnostic.................. 13
70545........................ Diagnostic.................. 18
70546........................ Diagnostic.................. 18
70547........................ Diagnostic.................. 13
70548........................ Diagnostic.................. 20
70549........................ Diagnostic.................. 25
70551........................ Diagnostic.................. 21
70552........................ Diagnostic.................. 23
70553........................ Diagnostic.................. 28
70554........................ Diagnostic.................. 43
71010........................ Diagnostic.................. 4
71015........................ Diagnostic.................. 3
71020........................ Diagnostic.................. 4
71021........................ Diagnostic.................. 4
71022........................ Diagnostic.................. 4
71023........................ Diagnostic.................. 5
71030........................ Diagnostic.................. 4
71034........................ Diagnostic.................. 5
71035........................ Diagnostic.................. 3
71100........................ Diagnostic.................. 5
71101........................ Diagnostic.................. 4
71110........................ Diagnostic.................. 4
71111........................ Diagnostic.................. 5
71120........................ Diagnostic.................. 3
71130........................ Diagnostic.................. 3
71250........................ Diagnostic.................. 18
71260........................ Diagnostic.................. 17
71270........................ Diagnostic.................. 13
71275........................ Diagnostic.................. 28
71550........................ Diagnostic.................. 15
71551........................ Diagnostic.................. 30
71552........................ Diagnostic.................. 28
71555........................ Diagnostic.................. 33
72020........................ Diagnostic.................. 3
72040........................ Diagnostic.................. 4
72050........................ Diagnostic.................. 6
72052........................ Diagnostic.................. 6
72070........................ Diagnostic.................. 4
72072........................ Diagnostic.................. 3
72074........................ Diagnostic.................. 3
72080........................ Diagnostic.................. 3
72081........................ Diagnostic.................. 6
72082........................ Diagnostic.................. 7
72083........................ Diagnostic.................. 8
72084........................ Diagnostic.................. 9
72100........................ Diagnostic.................. 4
72110........................ Diagnostic.................. 6
72114........................ Diagnostic.................. 6
72120........................ Diagnostic.................. 4
72125........................ Diagnostic.................. 18
72126........................ Diagnostic.................. 12
72127........................ Diagnostic.................. 12
72128........................ Diagnostic.................. 18
72129........................ Diagnostic.................. 12
72130........................ Diagnostic.................. 12
72131........................ Diagnostic.................. 18
72132........................ Diagnostic.................. 12
72133........................ Diagnostic.................. 12
72141........................ Diagnostic.................. 23
72142........................ Diagnostic.................. 26
72146........................ Diagnostic.................. 23
72147........................ Diagnostic.................. 26
72148........................ Diagnostic.................. 23
72149........................ Diagnostic.................. 26
72156........................ Diagnostic.................. 28
72157........................ Diagnostic.................. 28
72158........................ Diagnostic.................. 28
72159........................ Diagnostic.................. 31
72170........................ Diagnostic.................. 5
72190........................ Diagnostic.................. 3
72191........................ Diagnostic.................. 28
72192........................ Diagnostic.................. 12
72193........................ Diagnostic.................. 12
72194........................ Diagnostic.................. 12
72195........................ Diagnostic.................. 30
72196........................ Diagnostic.................. 26
72197........................ Diagnostic.................. 30
72198........................ Diagnostic.................. 28
72200........................ Diagnostic.................. 3
72202........................ Diagnostic.................. 3
72220........................ Diagnostic.................. 3
72240........................ Diagnostic.................. 19
72255........................ Diagnostic.................. 18
72265........................ Diagnostic.................. 18
72270........................ Diagnostic.................. 23
72275........................ Diagnostic.................. 36
72285........................ Diagnostic.................. 9
72295........................ Diagnostic.................. 9
73000........................ Diagnostic.................. 3
73010........................ Diagnostic.................. 3
73020........................ Diagnostic.................. 3
73030........................ Diagnostic.................. 5
73040........................ Diagnostic.................. 6
73050........................ Diagnostic.................. 3
73060........................ Diagnostic.................. 4
73070........................ Diagnostic.................. 3
73080........................ Diagnostic.................. 4
73085........................ Diagnostic.................. 6
73090........................ Diagnostic.................. 3
73092........................ Diagnostic.................. 3
73100........................ Diagnostic.................. 4
73110........................ Diagnostic.................. 4
73115........................ Diagnostic.................. 6
73120........................ Diagnostic.................. 4
73130........................ Diagnostic.................. 4
73140........................ Diagnostic.................. 3
73200........................ Diagnostic.................. 18
73201........................ Diagnostic.................. 11
73202........................ Diagnostic.................. 12
73206........................ Diagnostic.................. 35
73218........................ Diagnostic.................. 25
73219........................ Diagnostic.................. 25
73220........................ Diagnostic.................. 30
73221........................ Diagnostic.................. 23
73222........................ Diagnostic.................. 23
73223........................ Diagnostic.................. 35
73225........................ Diagnostic.................. 31
73501........................ Diagnostic.................. 4
73502........................ Diagnostic.................. 5
73503........................ Diagnostic.................. 6
73521........................ Diagnostic.................. 5
73522........................ Diagnostic.................. 6
73523........................ Diagnostic.................. 7
73525........................ Diagnostic.................. 6
73551........................ Diagnostic.................. 4
73552........................ Diagnostic.................. 5
73560........................ Diagnostic.................. 4
73562........................ Diagnostic.................. 5
73564........................ Diagnostic.................. 6
73565........................ Diagnostic.................. 4
73580........................ Diagnostic.................. 6
73590........................ Diagnostic.................. 4
73592........................ Diagnostic.................. 3
73600........................ Diagnostic.................. 4
73610........................ Diagnostic.................. 4
73615........................ Diagnostic.................. 6
73620........................ Diagnostic.................. 4
73630........................ Diagnostic.................. 4
73650........................ Diagnostic.................. 3
73660........................ Diagnostic.................. 3
73700........................ Diagnostic.................. 18
73701........................ Diagnostic.................. 11
73702........................ Diagnostic.................. 12
73706........................ Diagnostic.................. 35
73718........................ Diagnostic.................. 20
73719........................ Diagnostic.................. 25
73720........................ Diagnostic.................. 30
73721........................ Diagnostic.................. 23
73722........................ Diagnostic.................. 24
73723........................ Diagnostic.................. 32
73725........................ Diagnostic.................. 33
74000........................ Diagnostic.................. 4
74010........................ Diagnostic.................. 3
74020........................ Diagnostic.................. 4
74022........................ Diagnostic.................. 4
74150........................ Diagnostic.................. 14
74160........................ Diagnostic.................. 17
74170........................ Diagnostic.................. 21
74174........................ Diagnostic.................. 33
74175........................ Diagnostic.................. 28
74176........................ Diagnostic.................. 25
74177........................ Diagnostic.................. 28
74178........................ Diagnostic.................. 33
74181........................ Diagnostic.................. 15
74182........................ Diagnostic.................. 28
74183........................ Diagnostic.................. 35
74185........................ Diagnostic.................. 33
74210........................ Diagnostic.................. 5
74220........................ Diagnostic.................. 5
74230........................ Diagnostic.................. 12
74240........................ Diagnostic.................. 7
74241........................ Diagnostic.................. 7
74245........................ Diagnostic.................. 9
74246........................ Diagnostic.................. 7
74247........................ Diagnostic.................. 18
74249........................ Diagnostic.................. 9
74250........................ Diagnostic.................. 5
74251........................ Diagnostic.................. 33
74260........................ Diagnostic.................. 6
74261........................ Diagnostic.................. 43
74262........................ Diagnostic.................. 48
74263........................ Diagnostic.................. 42
74270........................ Diagnostic.................. 7
74280........................ Diagnostic.................. 23
74283........................ Diagnostic.................. 19
74290........................ Diagnostic.................. 4
74400........................ Diagnostic.................. 18
74410........................ Diagnostic.................. 6
74415........................ Diagnostic.................. 6
74430........................ Diagnostic.................. 4
74440........................ Diagnostic.................. 5
74455........................ Diagnostic.................. 4
74485........................ Diagnostic.................. 6

[[Page 80184]]

74710........................ Diagnostic.................. 4
74712........................ Diagnostic.................. 68
74740........................ Diagnostic.................. 5
75557........................ Diagnostic.................. 45
75559........................ Diagnostic.................. 58
75561........................ Diagnostic.................. 50
75563........................ Diagnostic.................. 66
75571........................ Diagnostic.................. 13
75572........................ Diagnostic.................. 25
75573........................ Diagnostic.................. 38
75574........................ Diagnostic.................. 35
75600........................ Diagnostic.................. 6
75605........................ Diagnostic.................. 11
75625........................ Diagnostic.................. 11
75630........................ Diagnostic.................. 13
75635........................ Diagnostic.................. 50
75658........................ Diagnostic.................. 13
75705........................ Diagnostic.................. 20
75710........................ Diagnostic.................. 11
75716........................ Diagnostic.................. 13
75726........................ Diagnostic.................. 11
75731........................ Diagnostic.................. 11
75733........................ Diagnostic.................. 13
75736........................ Diagnostic.................. 11
75741........................ Diagnostic.................. 13
75743........................ Diagnostic.................. 16
75746........................ Diagnostic.................. 11
75756........................ Diagnostic.................. 11
75791........................ Diagnostic.................. 33
75809........................ Diagnostic.................. 5
75820........................ Diagnostic.................. 7
75822........................ Diagnostic.................. 11
75825........................ Diagnostic.................. 11
75827........................ Diagnostic.................. 11
75831........................ Diagnostic.................. 11
75833........................ Diagnostic.................. 14
75840........................ Diagnostic.................. 11
75842........................ Diagnostic.................. 14
75860........................ Diagnostic.................. 11
75870........................ Diagnostic.................. 11
75872........................ Diagnostic.................. 11
75880........................ Diagnostic.................. 7
75885........................ Diagnostic.................. 14
75887........................ Diagnostic.................. 14
75889........................ Diagnostic.................. 11
75891........................ Diagnostic.................. 11
75893........................ Diagnostic.................. 6
75901........................ Diagnostic.................. 11
75902........................ Diagnostic.................. 13
75962........................ Diagnostic.................. 6
75966........................ Diagnostic.................. 13
75978........................ Diagnostic.................. 6
75984........................ Diagnostic.................. 8
75989........................ Diagnostic.................. 12
76000........................ Diagnostic.................. 3
76010........................ Diagnostic.................. 3
76080........................ Diagnostic.................. 6
76098........................ Diagnostic.................. 3
76100........................ Diagnostic.................. 6
76101........................ Diagnostic.................. 6
76102........................ Diagnostic.................. 6
76120........................ Diagnostic.................. 5
76376........................ Diagnostic.................. 8
76380........................ Diagnostic.................. 10
76390........................ Diagnostic.................. 28
76506........................ Diagnostic.................. 10
76536........................ Diagnostic.................. 12
76604........................ Diagnostic.................. 9
76700........................ Diagnostic.................. 14
76705........................ Diagnostic.................. 11
76706........................ Diagnostic.................. 13
76770........................ Diagnostic.................. 13
76775........................ Diagnostic.................. 11
76776........................ Diagnostic.................. 13
76800........................ Diagnostic.................. 14
76801........................ Diagnostic.................. 18
76805........................ Diagnostic.................. 18
76811........................ Diagnostic.................. 35
76813........................ Diagnostic.................. 23
76815........................ Diagnostic.................. 8
76816........................ Diagnostic.................. 18
76817........................ Diagnostic.................. 13
76818........................ Diagnostic.................. 35
76819........................ Diagnostic.................. 28
76820........................ Diagnostic.................. 13
76821........................ Diagnostic.................. 13
76825........................ Diagnostic.................. 45
76826........................ Diagnostic.................. 11
76830........................ Diagnostic.................. 13
76831........................ Diagnostic.................. 30
76856........................ Diagnostic.................. 13
76857........................ Diagnostic.................. 10
76870........................ Diagnostic.................. 10
76872........................ Diagnostic.................. 20
76873........................ Diagnostic.................. 40
76881........................ Diagnostic.................. 18
76885........................ Diagnostic.................. 20
76886........................ Diagnostic.................. 15
76936........................ Diagnostic.................. 71
76942........................ Diagnostic.................. 19
76970........................ Diagnostic.................. 8
77012........................ Diagnostic.................. 11
77014........................ Diagnostic.................. 9
77021........................ Diagnostic.................. 53
77053........................ Diagnostic.................. 5
77054........................ Diagnostic.................. 5
77058........................ Diagnostic.................. 50
77059........................ Diagnostic.................. 55
77072........................ Diagnostic.................. 3
77074........................ Diagnostic.................. 5
77075........................ Diagnostic.................. 6
77076........................ Diagnostic.................. 12
77084........................ Diagnostic.................. 15
78012........................ Diagnostic.................. 8
78013........................ Diagnostic.................. 13
78014........................ Diagnostic.................. 13
78015........................ Diagnostic.................. 31
78016........................ Diagnostic.................. 49
78018........................ Diagnostic.................. 29
78070........................ Diagnostic.................. 13
78071........................ Diagnostic.................. 18
78072........................ Diagnostic.................. 23
78075........................ Diagnostic.................. 38
78102........................ Diagnostic.................. 18
78103........................ Diagnostic.................. 22
78104........................ Diagnostic.................. 20
78135........................ Diagnostic.................. 48
78140........................ Diagnostic.................. 40
78185........................ Diagnostic.................. 16
78190........................ Diagnostic.................. 40
78195........................ Diagnostic.................. 30
78201........................ Diagnostic.................. 16
78202........................ Diagnostic.................. 20
78205........................ Diagnostic.................. 20
78206........................ Diagnostic.................. 25
78215........................ Diagnostic.................. 13
78216........................ Diagnostic.................. 22
78226........................ Diagnostic.................. 13
78227........................ Diagnostic.................. 18
78230........................ Diagnostic.................. 19
78231........................ Diagnostic.................. 23
78232........................ Diagnostic.................. 28
78258........................ Diagnostic.................. 27
78261........................ Diagnostic.................. 21
78262........................ Diagnostic.................. 25
78264........................ Diagnostic.................. 13
78265........................ Diagnostic.................. 18
78266........................ Diagnostic.................. 23
78278........................ Diagnostic.................. 18
78290........................ Diagnostic.................. 18
78291........................ Diagnostic.................. 31
78300........................ Diagnostic.................. 15
78305........................ Diagnostic.................. 22
78306........................ Diagnostic.................. 11
78315........................ Diagnostic.................. 11
78320........................ Diagnostic.................. 24
78579........................ Diagnostic.................. 8
78580........................ Diagnostic.................. 13
78582........................ Diagnostic.................. 15
78597........................ Diagnostic.................. 13
78598........................ Diagnostic.................. 13
78600........................ Diagnostic.................. 16
78601........................ Diagnostic.................. 18
78605........................ Diagnostic.................. 21
78606........................ Diagnostic.................. 22
78607........................ Diagnostic.................. 29
78610........................ Diagnostic.................. 10
78630........................ Diagnostic.................. 24
78635........................ Diagnostic.................. 36
78645........................ Diagnostic.................. 32
78647........................ Diagnostic.................. 15
78650........................ Diagnostic.................. 40
78660........................ Diagnostic.................. 16
78700........................ Diagnostic.................. 17
78701........................ Diagnostic.................. 18
78707........................ Diagnostic.................. 22
78708........................ Diagnostic.................. 32
78709........................ Diagnostic.................. 40
78710........................ Diagnostic.................. 21
78740........................ Diagnostic.................. 30
78761........................ Diagnostic.................. 20
78800........................ Diagnostic.................. 28
78801........................ Diagnostic.................. 32
78802........................ Diagnostic.................. 24
78803........................ Diagnostic.................. 43
78804........................ Diagnostic.................. 35
78805........................ Diagnostic.................. 25
78806........................ Diagnostic.................. 23
78807........................ Diagnostic.................. 37
79440........................ Diagnostic.................. 24
G0106........................ Diagnostic.................. 24
G0120........................ Diagnostic.................. 24
G0297........................ Diagnostic.................. 18
G0365........................ Diagnostic.................. 20
G0389........................ Diagnostic.................. 9
------------------------------------------------------------------------

(2) Standardization of Clinical Labor Tasks
As we noted in the CY 2015 PFS final rule (79 FR 67640-67641), we
continue to make improvements to the direct PE input database to
provide the number of clinical labor minutes assigned for each task for
every code in the database instead of only including the number of

[[Page 80185]]

clinical labor minutes for the preservice, service, and postservice
periods for each code. In addition to increasing the transparency of
the information used to set PE RVUs, this improvement would allow us to
compare clinical labor times for activities associated with services
across the PFS, which we believe is important to maintaining the
relativity of the direct PE inputs. This information would facilitate
the identification of the usual numbers of minutes for clinical labor
tasks and the identification of exceptions to the usual values. It
would also allow for greater transparency and consistency in the
assignment of equipment minutes based on clinical labor times. Finally,
we believe that the information can be useful in maintaining standard
times for particular clinical labor tasks that can be applied
consistently to many codes as they are valued over several years,
similar in principle to the use of physician preservice time packages.
We believe such standards would provide greater consistency among codes
that share the same clinical labor tasks and could improve relativity
of values among codes. For example, as medical practice and
technologies change over time, changes in the standards could be
updated simultaneously for all codes with the applicable clinical labor
tasks, instead of waiting for individual codes to be reviewed.
In the following paragraphs, we address a series of issues related
to clinical labor tasks, particularly relevant to services currently
being reviewed under the misvalued code initiative.
(a) Clinical Labor Tasks Associated With Digital Imaging
In CY 2015 PFS rulemaking, we noted that the RUC recommendation
regarding inputs for digital imaging services indicated that, as each
code is reviewed under the misvalued code initiative, the clinical
labor tasks associated with digital technology (instead of film) would
need to be addressed. When we reviewed that recommendation, we did not
have the capability of assigning standard clinical labor times for the
hundreds of individual codes since the direct PE input database did not
previously allow for comprehensive adjustments for clinical labor times
based on particular clinical labor tasks. Therefore, consistent with
the recommendation, we proposed to remove film-based supply and
equipment items but maintain clinical labor minutes that were assigned
based on film technology.
As noted in the paragraphs above, we continue to improve the direct
PE input database by specifying for each code the minutes associated
with each clinical labor task. Once completed, this work would allow
adjustments to be made to minutes assigned to particular clinical labor
tasks related to digital technology that occur in multiple codes,
consistent with the changes that were made to individual supply and
equipment items. In the meantime, we believe it would be appropriate to
establish standard times for clinical labor tasks associated with all
digital imaging services for purposes of reviewing individual services
at present, and for possible broad-based standardization once the
changes to the direct PE input database facilitate our ability to
adjust time across services. During the CY 2016 PFS rulemaking cycle,
we proposed appropriate standard minutes for five different clinical
labor tasks associated with services that use digital imaging
technology. In the CY 2016 PFS final rule with comment period (80 FR
70901), we finalized appropriate standard minutes for four of those
five activities, which are listed in Table 5.

Table 5--Clinical Labor Tasks Associated With Digital Imaging Technology
------------------------------------------------------------------------
Typical
Clinical labor task minutes
------------------------------------------------------------------------
Availability of prior images confirmed.................. 2
Patient clinical information and questionnaire reviewed 2
by technologist, order from physician confirmed and
exam protocoled by radiologist.........................
Review examination with interpreting MD................. 2
Exam documents scanned into PACS. Exam completed in RIS 1
system to generate billing process and to populate
images into Radiologist work queue.....................
------------------------------------------------------------------------

We did not finalize standard minutes for the activity
``Technologist QC's images in PACS, checking for all images, reformats,
and dose page.'' We agreed with commenters that this task may require a
variable length of time depending on the number of images to be
reviewed. We stated that it may be appropriate to establish several
different standard times for this clinical labor task for a low/medium/
high quantity of images to be reviewed, in the same fashion that the
clinical labor assigned to clean a surgical instrument package has two
different standard times depending on the use of a basic pack (10
minutes) or a medium pack (30 minutes). We solicited public comment and
feedback on this subject, with the anticipation of including a proposal
in the CY 2017 proposed rule.
We received many comments suggesting that this clinical labor
activity should not have a standard time value. Commenters stated that
the number of minutes varies significantly for different imaging
modalities; and the time is not simply based on the quantity of images
to be reviewed, but also the complexity of the images. The commenters
recommended that time for this clinical labor activity should be
assigned on a code by code basis. We agree with the commenters that the
amount of clinical labor needed to check images in a PACS workstation
may vary depending on the service. However, we do not believe that this
precludes the possibility of establishing standards for clinical labor
tasks as we have done in the past by creating multiple standard times,
for example, those assigned to cleaning different kinds of scopes. We
continue to believe that the use of clinical labor standards provides
greater consistency among codes that share the same clinical labor
tasks and can improve relativity of values among codes. We proposed to
establish a range of appropriate standard minutes for the clinical
labor activity, ``Technologist QCs images in PACS, checking for all
images, reformats, and dose page.'' These standard minutes will be
applied to new and revised codes that make use of this clinical labor
activity when they are reviewed by us for valuation. We proposed 2
minutes as the standard for the simple case, 3 minutes as the standard
for the intermediate case, and 4 minutes as the standard for the
complex case. We proposed the simple case of 2 minutes as the standard
for the typical procedure code involving routine use of imaging. These
values are based upon a review of the existing minutes assigned for
this clinical labor activity; we have determined that 2 minutes is the

[[Page 80186]]

duration for most services and a small number of codes with more
complex forms of digital imaging have higher values. We proposed to use
2 minutes for services involving routine X-rays (simple), 3 minutes for
services involving CTs and MRIs (intermediate), and 4 minutes for the
most highly complex services, which would exceed these more typical
cases. We solicited comments regarding the most accurate category--
simple, intermediate, or complex for existing codes, and in particular
what criteria might be used to identify complex cases systematically.
The following is summary of the comments we received regarding the
ongoing standardization of clinical labor tasks, and our specific
proposal regarding the clinical labor task, ``Technologist QCs images
in PACS, checking for all images, reformats, and dose page.''
Comment: Many commenters restated their opposition to the principle
of establishing standard values for clinical labor tasks. Commenters
contended that clinical labor tasks were highly variable across
different specialties, that the standardization process would disrupt
the relativity of direct PE inputs across the PFS, and that the
proposed standard times were too low and underestimated the staffing
time needed to carry out the tasks in question. Commenters stressed
that each code should be evaluated on an individual basis. One
commenter expressed support for the overall concept regarding efforts
to streamline the time for clinical labor activities.
Response: We note the objections raised by the commenters to the
process of standardizing time values for clinical labor tasks. However,
as we have stated previously, we believe the establishment of standards
can provide greater consistency among codes that share the same
clinical labor tasks, as well as improve relativity of values among
codes. We also note that we do evaluate each code on an individual
basis for direct PE inputs, and establishing clinical labor standards
assists in that process of individual review. We continue to allow
clinical labor times above the standard values for individual services,
provided that there is a compelling rationale to explain why that
particular service requires additional clinical labor time above and
beyond the standard. We believe that establishing a range of standard
minutes for this particular digital imaging clinical labor task will
provide clarity and help maintain relativity across a wide range of
imaging services.
Comment: One commenter requested a broad study of the actual
clinical labor times associated with digital imaging.
Response: We appreciate the importance of incorporating robust,
auditable, and routinely updated data sources for use in the
determination of RVUs. We welcome stakeholder information on the
availability of such data, while we continue to consider the best means
of acquiring such data.
Comment: Several commenters addressed our specific proposal for the
clinical labor task, ``Technologist QCs images in PACS, checking for
all images, reformats, and dose page.'' Commenters requested that,
short of no standard times at all, the establishment of categories for
this clinical labor task should be as follows: Simple (2 min);
intermediate (3 min), complex (4 min) and highly complex (5 min).
Response: We appreciate the suggestion from the commenters to adopt
a categorization system very similar to our proposal, with the addition
of an extra category for highly complex services valued at 5 minutes.
We agree with this addition to our proposal, as it will allow for
additional specificity in classifying different types of imaging
services, including those that are unusually complex. However, we note
that we proposed to define the simple case of 2 minutes as the standard
for the typical procedure code involving routine use of imaging, and we
believe only a small number of codes with more complex forms of digital
imaging would typically involve more time for the task. We proposed to
use 2 minutes for services involving routine X-rays (the simple case),
and 3 minutes for services involving CTs and MRIs (the intermediate
case). We seek recommendations from the RUC and other stakeholders and
we intend to request feedback from commenters through future rulemaking
to assist in identifying what we believe would be the small number of
services that fall into the complex (4 min) and highly complex (5 min)
categories, and the specific basis used to set the two categories apart
from one another. In the meantime, we will consider individual codes on
a case by case basis for this clinical labor task.
After considering the comments received, we are finalizing a range
of appropriate standard minutes for the clinical labor activity,
``Technologist QCs images in PACS, checking for all images, reformats,
and dose page'' as follows: Simple (2 min); intermediate (3 min),
complex (4 min) and highly complex (5 min). We are also finalizing our
criteria for determining the simple and intermediate categories as
proposed.
(b) Pathology Clinical Labor Tasks
As with the clinical labor tasks associated with digital imaging,
many of the currently assigned times for the specialized clinical labor
tasks associated with pathology services are not consistent across
codes. In reviewing past RUC recommendations for pathology services, we
have not identified information that supports the judgment that the
same tasks take significantly more or less time depending on the
individual service for which they are performed, especially given the
high degree of specificity with which the tasks are described. We
continue to believe that, in general, a clinical labor task will tend
to take the same amount of time to perform for one individual service
as the same clinical labor task when it is performed in a clinically
similar service.
Therefore, we developed standard times for clinical labor tasks
that we have used in finalizing direct PE inputs in recent years,
starting in the CY 2012 PFS final rule with comment period (76 FR
73213). These times were based on our review and assessment of the
current times included for these clinical labor tasks in the direct PE
input database. We proposed in the CY 2016 PFS proposed rule to
establish standard times for a list of 17 clinical labor tasks related
to pathology services, and solicited public feedback regarding our
proposed standards. Many commenters stated in response to our proposal
that they did not support the standardization of clinical labor
activities across pathology services. Commenters stated that
establishing a single standard time for each clinical labor task was
infeasible due to the differences in batch size or number of blocks
across different pathology procedures. Several commenters indicated
that it might be possible to standardize across codes with the same
batch sizes, and urged us to consider pathology-specific details, such
as batch size and block number, in the creation of any future standard
times for clinical labor tasks related to pathology services.
As we stated in the CY 2016 PFS proposed rule, we developed the
proposed standard times based on our review and assessment of the
current times included for these clinical labor tasks in the direct PE
input database. We believe that, generally speaking, clinical labor
tasks with the same description are comparable across different
pathology procedures. We believe this to be true based on the
comparability of clinical labor tasks in

[[Page 80187]]

non-pathology services, as well as the high degree of specificity with
which most clinical labor tasks for pathology services are described
relative to clinical labor tasks associated with other PFS services. We
concurred with commenters that accurate clinical labor times for
pathology codes may be dependent on the number of blocks or batch size
typically used for each individual service. However, we also believe
that it is appropriate and feasible to establish ``per block''
standards or standards varied by batch size assumptions for many
clinical labor activities that would be comparable across a wide range
of individual services. We have received detailed information regarding
batch size and number of blocks during review of individual pathology
services on an intermittent basis in the past. We requested regular
submission of these details on the PE worksheets supplied by the RUC as
part of the review process for pathology services, as a means to assist
in the determination of the most accurate direct PE inputs.
We also stated our belief that many of the clinical labor
activities for which we proposed to establish standard times were tasks
that do not depend on number of blocks or batch size. Clinical labor
activities such as ``Clean room/equipment following procedure'' and
``Dispose of remaining specimens'' would typically remain standard
across different services without varying by block number or batch
size, with the understanding that additional time may be required above
the standard value for a clinical labor task that is part of an
unusually complex or difficult service. As a result, we ultimately
finalized standard times for 6 of the 17 proposed clinical labor
activities in the CY 2016 final rule with comment period (80 FR 70902).
We have listed the finalized standard times in Table 6. We are taking
no further action on the remaining 11 clinical labor activities in this
final rule, pending further action by the RUC (see below).

Table 6--Standard Times for Clinical Labor Tasks Associated With
Pathology Services
------------------------------------------------------------------------
Standard
Clinical labor task clinical labor
time (minutes)
------------------------------------------------------------------------
Accession specimen/prepare for examination............ 4
Assemble and deliver slides with paperwork to 0.5
pathologists.........................................
Assemble other light microscopy slides, open nerve 0.5
biopsy slides, and clinical history, and present to
pathologist to prepare clinical pathologic
interpretation.......................................
Clean room/equipment following procedure (including 1
any equipment maintenance that must be done after the
procedure)...........................................
Dispose of remaining specimens, spent chemicals/other 1
consumables, and hazardous waste.....................
Prepare, pack and transport specimens and records for 1
in-house storage and external storage (where
applicable)..........................................
------------------------------------------------------------------------

We remain committed to the process of establishing standard
clinical labor times for tasks associated with pathology services. This
may include establishing standards on a per-block or per-batch basis,
as we indicated during the previous rulemaking cycle. However, we are
aware that the PE Subcommittee of the RUC is currently working to
standardize the pathology clinical labor activities they use in making
their recommendations. We believe the RUC's efforts to narrow the
current list of several hundred pathology clinical labor tasks to a
more manageable number through the consolidation of duplicative or
highly similar activities into a single description may serve PFS
relativity and facilitate greater transparency in PFS ratesetting. We
also believe that the RUC's standardization of pathology clinical labor
tasks would facilitate our capacity to establish standard times for
pathology clinical labor tasks in future rulemaking. Therefore, we did
not propose any additional changes to clinical labor tasks associated
with pathology services.
(3) Equipment Recommendations for Scope Systems
During our routine reviews of direct PE input recommendations, we
have regularly found unexplained inconsistencies involving the use of
scopes and the video systems associated with them. Some of the scopes
include video systems bundled into the equipment item, some of them
include scope accessories as part of their price, and some of them are
standalone scopes with no other equipment included. It is not always
clear which equipment items related to scopes fall into which of these
categories. We have also frequently found anomalies in the equipment
recommendations, with equipment items that consist of a scope and video
system bundle recommended, along with a separate scope video system.
Based on our review, the variations do not appear to be consistent with
the different code descriptions.
To promote appropriate relativity among the services and facilitate
the transparency of our review process, during review of recommended
direct PE inputs for the CY 2017 PFS proposed rule, we developed a
structure that separates the scope and the associated video system as
distinct equipment items for each code. Under this approach, we
proposed standalone prices for each scope, and separate prices for the
video systems that are used with scopes. We would define the scope
video system as including: (1) A monitor; (2) a processor; (3) a form
of digital capture; (4) a cart; and (5) a printer. We believe that
these equipment components represent the typical case for a scope video
system. Our model for this system is the ``video system, endoscopy
(processor, digital capture, monitor, printer, cart)'' equipment item
(ES031), which we proposed to re-price as part of this separate pricing
approach. We obtained current pricing invoices for the endoscopy video
system as part of our investigation of these issues involving scopes,
which we proposed to use for this re-pricing. We understand that there
may be other accessories associated with the use of scopes; we proposed
to separately price any scope accessories, and individually evaluate
their inclusion or exclusion as direct PE inputs for particular codes
as usual under our current policy based on whether they are typically
used in furnishing the services described by the particular codes.
We also proposed standardizing refinements to the way scopes have
been defined in the direct PE input database. We believe that there are
four general types of scopes: Non-video scopes; flexible scopes; semi-
rigid scopes, and rigid scopes. Flexible scopes, semi-rigid scopes, and
rigid scopes would typically be paired with one of the video scope
systems, while the non-video scopes would not. The

[[Page 80188]]

flexible scopes can be further divided into diagnostic (or non-
channeled) and therapeutic (or channeled) scopes. We proposed to
identify for each anatomical application: (1) A rigid scope; (2) a
semi-rigid scope; (3) a non-video flexible scope; (4) a non-channeled
flexible video scope; and (5) a channeled flexible video scope. We
proposed to classify the existing scopes in our direct PE database
under this classification system, to improve the transparency of our
review process and improve appropriate relativity among the services.
We plan to propose input prices for these equipment items through
future rulemaking.
We proposed these changes only for the reviewed codes that make use
of scopes; this applies to the codes in the Flexible Laryngoscope
family (CPT codes 31572, 31573, 31574, 31575, 31576, 31577, 31578,
31579) (see section II.L) and the Laryngoplasty family (CPT codes
31551, 31552, 31553, 31554, 31580, 31584, 31587, 31591, 31592) (see
section II.L) along with updated prices for the equipment items related
to scopes utilized by these services. We also solicited comment on this
separate pricing structure for scopes, scope video systems, and scope
accessories, which we could consider proposing to apply to other codes
in future rulemaking.
The following is a summary of the comments we received on this
separate pricing structure for scopes, scope video systems, and scope
accessories.
Comment: Many commenters addressed our general proposal to
reclassify scopes and their related equipment items. Commenters
expressed their support for the decision to remove the scopes from the
proposed scope packages, and the proposed definition of the scope video
system based on the current endoscopy video system equipment item
(ES031). There were no comments opposing the general principle behind
reclassifying scopes and scope equipment.
Response: We appreciate the support from the commenters for the
broad project to clarify these issues related to scopes.
Comment: Many commenters also requested that CMS delay implementing
the scope proposal until additional time could be devoted to the
subject. Several commenters asked CMS to wait to make any changes until
the RUC could form a PE Subcommittee to address this issue. For codes
with proposed CY 2017 values, commenters urged CMS to adopt the RUC-
recommended direct PE inputs instead of the proposed direct PE inputs,
pending anticipated RUC recommendations on the subject. Another
commenter requested that CMS make no change for CY 2017 for any
endoscopy procedures until proper identification of the capital and
disposable cost inputs could be confirmed.
Response: We appreciate commenters' interests in making certain
that there is appropriate opportunity for stakeholders to provide
feedback and recommendations on the reclassification of scopes and
related scope equipment. This was our primary rationale for limiting
proposed changes regarding these kinds of inputs to codes reviewed for
the current CY 2017 rule cycle, that is, the Flexible Laryngoscope and
Laryngoplasty families of codes. Because these codes are under current
review; however, we believe that they should be valued according to a
scheme that accurately describes the scope equipment typically used in
the services. As a result, we continue to believe that our proposed
classification system for scopes is the more sound methodology to use
for valuation of these two families of codes for CY 2017. However, we
note that we would expect to include examination of these codes as part
of any broader proposal we would make regarding scope equipment items,
in response to new recommendations on the subject.
We look forward to receiving recommendations from the upcoming RUC
PE Subcommittee regarding scopes and related scope equipment items. We
note that in order for these recommendations to be considered for CY
2018 rulemaking, we would need to receive these recommendations by the
same February deadline for the submission of recommendations on code
valuations.
Comment: Many commenters disagreed with the CMS proposal to price
the endoscopy video system (ES031) at a price of $15,045.00. Some
commenters stated that CMS should use the submitted invoices for the
pricing of this equipment, which recommended a price of $49,400.00. One
commenter stated that the proposed amount did not accurately reflect
the current price of GI endoscopy video systems. Another commenter
stated that CMS had defined the endoscopy video system as containing
five items: (1) A monitor; (2) a processor; (3) a form of digital
capture; (4) a cart; and (5) a printer. However, the commenter pointed
out that CMS had not included a price for the digital capture device,
which the commenter stressed was a significant part of the overall cost
and needed to be included in the equipment's pricing. The commenter
submitted a series of new invoices for endoscopy video system and
requested that CMS incorporate them into the pricing of the equipment.
Response: We appreciate the feedback from the commenters about
pricing, especially the submission of new data in the form of
additional invoices. We agree that the cost of a digital capture device
should be included in the cost of the endoscopy video system; it was
our belief that the digital capture device was included in the cost of
the processor. We appreciate the clarification from the commenters
indicating that this is not the case, and that the digital capture
device is a separately priced component of the video system. As a
result, we are averaging the price of the digital capture device on the
two submitted invoices and pricing it at $18,346.00. We will add this
into the overall cost of the endoscopy video system.
For the other four components of the video system, we are
finalizing the prices as proposed. The invoices submitted for these
components indicate that they are different forms of equipment with
different product IDs and different prices. For example, our price for
the processor comes from a ``Video Processor with keyboard & video
cable'' (CV-180) as opposed to the newly submitted invoice for a
``Viscera Elite Video System'' (OTV-S190). These are two distinct
equipment items, and we do not have any data to indicate that the
equipment on the newly submitted invoices is more typical in its use
than the equipment that we are currently using to price the endoscopy
video system.
Therefore, we are finalizing the price of the endoscopy video
system at $33,391.00, based on component prices of $9,000.00 for the
processor, $18,346.00 for the digital capture device, $2,000.00 for the
monitor, $2,295.00 for the printer, and $1,750.00 for the cart.
Comment: A few commenters also addressed the pricing of related
scope accessories. They stated that the proposed price for the
fiberscope, flexible, rhinolaryngoscopy (ES020) was decreased by 33
percent based on one unrepresentative invoice and that this price
undervalued the actual cost. Similarly, commenters stated that the
proposed price for the stroboscopy system (ES065) at $19,100 was much
lower than the manufacturer average invoice pricing. The proposed
prices for the channeled and non-channeled flexible video
rhinolaryngoscopes (ES064 and ES063 respectively) were also both two to
three times lower than the manufacturer's average invoice price. One
commenter submitted additional invoices for pricing these scopes and
scope accessories.

[[Page 80189]]

Response: We appreciate the submission of this additional pricing
data for review. Although many commenters stated that the price of the
stroboscopy system was too low, only one commenter supplied additional
invoices for the same equipment item that we defined in the proposed
rule, the StrobeLED system, and these invoices reflected lower prices
than the one we had proposed. These invoices reflected prices of
$16,431.00 and $15,000.00. We are averaging these together with our
previously submitted price of $19,100.00 for the stroboscopy system,
which results in a new price of $16,843.87.
When we reviewed the invoices for the channeled and non-channeled
flexible video rhinolaryngoscopes (ES064 and ES063 respectively), we
found that the product numbers indicated that these were different
equipment items than the scopes that we priced in the proposed rule. As
we mentioned for the pricing of the endoscopy video system, we have no
data to indicate that use of these particular rhinolaryngoscopes would
be typical, as opposed to the rhinolaryngoscopes that we proposed to
use to establish prices in the proposed rule. As a result, we are
maintaining our current prices for these scopes pending the submission
of additional information.
We similarly found that the invoices with recommended price
increases for the endoscope, rigid, sinoscopy (ES013) from the current
price of $2,414.17 to $4,024.00 and for the videoscope, colonoscopy
(ES033) from $23,650.00 to $37,273.00 related to different equipment
items that we do not believe are a better reflection of the typical
case than the item we currently use. We did not propose to make price
changes for these scopes, and we have not incorporated these equipment
items into the new scope classification system. As we stated
previously, we are currently limiting the scope changes to the CPT
codes under review for CY 2017 and their associated equipment items. We
will consider pricing changes for the rest of the scopes and associated
scope equipment as part of the broader scope reclassification and
pricing effort in future rulemaking.
We received invoices for a series of equipment items listed as
``other capital inputs not included in CMS estimate'' as part of this
collection of invoices. Since these equipment items were not included
in the original recommendations or our proposed valuations for the
Flexible Laryngoscope and Laryngoplasty families of codes, we are not
adding them to our equipment database at this time. We will consider
the addition of these equipment items as part of the broader
recommendations from the RUC PE Subcommittee on the scope
classification project.
We did not receive an invoice or other data to support a change in
the pricing of the fiberscope, flexible, rhinolaryngoscopy (ES020).
Comment: Many commenters objected to the use of a vendor quote for
pricing of the scope equipment. Commenters requested that specialty
societies should also be allowed to submit quotes for pricing as they
are easier to obtain than paid invoices. Commenters also stated that
the use of vendor prices created transparency issues and asked CMS to
explain why they are appropriate to use rather than invoices supplied
by specialties. One commenter stated that a single invoice was not an
adequate sample to use as a pricing input for many types of endoscopic
equipment.
Response: We are always interested in investigating multiple data
sources for use in pricing supplies and equipment, provided that the
information can be verified as accurate. We agree with the commenter
that a single voluntarily submitted invoice may not be an adequate
source for making wide ranging pricing decisions. We prefer to have
pricing information from multiple data sources whenever possible, which
may include information obtained from vendors of medical supplies and
equipment. We continue to believe that there are risks of bias in
submission of price quotes used for purposes of ratesetting. However,
given the way we use these prices in the current ratesetting
methodologies, we believe the risk of bias is located in submission of
overstated, not understated prices. Therefore, we believe it is
reasonable to assume that practitioners would generally be able acquire
particular items at the prices vendors submit to CMS.
After consideration of comments received, we are finalizing our
proposals as detailed in the proposed rule, with the updated prices for
the endoscopy video system and the stroboscopy system.
(4) Technical Corrections to Direct PE Input Database and Supporting
Files
Subsequent to the publication of the CY 2016 PFS final rule with
comment period, stakeholders alerted us to several clerical
inconsistencies in the direct PE database. We proposed to correct these
inconsistencies as described below and reflected in the CY 2017 direct
PE input database displayed on our Web site under downloads for the CY
2017 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
For CY 2017, we proposed the following technical corrections:
For CPT codes 72081-72084, a stakeholder informed us that
the equipment time for the PACS workstation (ED050) should be equal to
the clinical labor during the service period; the equipment time
formula we used for these codes for CY 2016 erroneously included 4
minutes of preservice clinical labor. We agree with the stakeholder
that the PACS workstation should use the standard equipment time
formula for a PACS workstation for these codes. As a result, we
proposed to refine the ED050 equipment time to 21 minutes for CPT code
72081, 36 minutes for CPT code 72082, 44 minutes for CPT code 72083,
and 53 minutes for CPT code 72084 to reflect the clinical labor time
associated with these codes. This same commenter also indicated that a
number of clinical labor activities had been entered in the database in
the incorrect service period for CPT codes 37215, 50432, 50694, and
72081. These clinical labor activities were incorrectly listed in the
``postservice'' period instead of the ``service post'' period. We
proposed to make these technical corrections as well so that the
minutes are assigned to the appropriate service period within the
direct PE input database.
Another stakeholder alerted us that ileoscopy CPT codes
44380, 44381 and 44382 did not include the direct PE input equipment
item called the Gomco suction machine (EQ235) and indicated that this
omission appeared to be inadvertent. We agreed that it was. We have
included the item EQ235 in the final direct PE input database for CPT
code 44380 at a time of 29 minutes, for CPT code 44381 at a time of 39
minutes, and CPT code 44382 at a time of 34 minutes.
The PE RVUs displayed in Addendum B on our Web site were calculated
with the inputs displayed in the CY 2017 direct PE input database.
Comment: One commenter expressed support for the proposed technical
corrections to these services.
Response: We appreciate the support from the commenter. After
consideration of comments received, we are finalizing these technical
corrections.
Comment: Several commenters contacted CMS during the comment period
after noticing that six services where CMS proposed to accept the
refinement panel work RVU did not contain the updated work RVU in the

[[Page 80190]]

Addendum B file for the proposed rule. These commenters requested that
CMS address these discrepancies.
Response: We appreciate the assistance from the commenters in
recognizing these discrepancies. We have corrected them and assigned
the refinement panel work RVUs to the six services in question.
Comment: One commenter stated that there were potential technical
errors in the clinical labor inputs for CPT codes 88329, 88331, 88360,
and 88361.
Response: We have reviewed these codes and they do not contain
technical errors. The clinical labor inputs were adjusted in the CY
2016 rule cycle as a result of CMS refinement (80 FR 70981-70983).
(5) Restoration of Inputs
Several of the PE worksheets included in the RUC recommendations
for CY 2016 contained time for the equipment item ``xenon light
source'' (EQ167). Because there appeared to be two special light
sources already present (the fiberoptic headlight and the endoscope
itself) in the services for which this equipment item was recommended
by the RUC, we believed that the use of only one of these light sources
would be typical and proposed to remove the xenon light equipment time.
In the CY 2016 PFS final rule with comment period, we restored the
xenon light (EQ167) and removed the fiberoptic headlight (EQ170) with
the same number of equipment minutes for CPT codes 30300, 31295, 31296,
31297, and 92511.
We received comments expressing approval for the restoration of the
xenon light. However, the commenters also stated that the two light
sources were not duplicative, but rather, both a headlight and a xenon
light source are required concurrently for otolaryngology procedures
when scopes are utilized. The commenters requested that the fiberoptic
headlight be restored to these codes.
We agreed with the commenters that the use of both light sources
would be typical for these procedures. Therefore, we proposed in the CY
2017 proposed rule to add the fiberoptic headlight (EQ170) to CPT codes
30300, 31295, 31296, 31297, and 92511 at the same number of equipment
minutes as the xenon light (EQ167).
Comment: One commenter expressed appreciation for the CMS proposal
to restore the fiberoptic headlight to the codes in question. The
commenter also stated that it had supplied invoices for LED lights,
which are significantly less expensive than the xenon light source, as
it was this commenter's understanding that xenon lights are no longer
the typical light source for these procedures and they are no longer
widely available for purchase from vendors. The commenter expressed
support for retaining the xenon light as the standard light source line
item for all endoscopy codes if that remained CMS' preference.
Response: We appreciate the support for our proposal from the
commenter, as well as the submission of additional information
regarding the typical light source for these procedures. We will add
the LED light source to our equipment database at the submitted invoice
price of $1,915.00. However, we will not replace the xenon light with
the LED light at this time, as we believe the subject deserves further
consideration. We will consider proposing this change in future
rulemaking.
Comment: We received new invoices for the xenon light equipment
from a different commenter which averaged out to a price of $12,298.00.
Response: We are finalizing our proposed price of $7,000.00 for the
xenon light source. Since we received a comment stating that xenon
lights are no longer a typical light source for procedure use, and that
they have been supplanted by the use of LED lights, we are viewing the
current input as a proxy item, and therefore, do not believe that it
would be appropriate to increase the cost of the xenon light source at
this time. We will consider making a proposal to address this subject
in future rulemaking.
After consideration of comments received, we are finalizing our
proposal to add the fiberoptic headlight (EQ170) to CPT codes 30300,
31295, 31296, 31297, and 92511 at the same number of equipment minutes
as the xenon light (EQ167).
(6) Updates to Prices for Existing Direct PE Inputs
In the CY 2011 PFS final rule with comment period (75 FR 73205), we
finalized a process to act on public requests to update equipment and
supply price and equipment useful life inputs through annual
rulemaking, beginning with the CY 2012 PFS proposed rule. For CY 2017,
we proposed the following price updates for existing direct PE inputs:
Several commenters wrote to discuss the price of the Antibody
Estrogen Receptor monoclonal (SL493). We received information including
three invoices with new pricing information regarding the SL493 supply.
We proposed to use this information to propose for the supply item
SL493 a price of $14.00 per test, which is the average price based on
the invoices that we received in total for the item.
Comment: Several commenters supported the proposed price increase
and urged CMS to finalize the proposal.
Response: We appreciate the support from the commenters. After
consideration of comments received, we are finalizing the price of the
Antibody Estrogen Receptor monoclonal (SL493) supply at $14.00 as
proposed.
We also proposed to update the price for two supplies in response
to the submission of new invoices. The proposed price for ``antigen,
venom'' supply (SH009) reflects an increase from $16.67 to $20.14 per
milliliter, and the proposed price for ``antigen, venom, tri-vespid''
supply (SH010) reflects an increase from $30.22 to $44.05 per
milliliter.
Comment: Several commenters stated that they strongly supported the
proposed price updates for antigen supplies and urged CMS to finalize
the proposal.
Response: We appreciate the support from the commenters. After
consideration of comments received, we are finalizing the price of the
``antigen, venom'' (SH009) and ``antigen, venom, tri-vespid'' (SH010)
supplies as proposed.
We proposed to remove the laser tip, diffuser fiber supply (SF030)
and replace it with the laser tip, bare (single use) supply (SF029) for
CPT code 31572 (formerly placeholder code 317X1). We did not propose a
price change for the SF030 supply.
Comment: In reference to CPT code 52648, a commenter stated that
the price for the laser tip, diffuser fiber supply (SF030) was
decreasing from $850 to $197.50. The commenter stated that the
methodology for this adjustment was opaque, unanticipated, and not
proposed for comment in the proposed rule. The commenter stated that
the $850 supply cost would be more appropriate for the laser tip,
diffuser fiber supply.
Response: We stated in the CY 2017 proposed rule (81 FR 46247) that
we did not believe that the submitted invoice for the laser tip,
diffuser supply at $197.50 was current enough to establish a new price
for the supply. As a result, we proposed to remove the laser tip,
diffuser fiber supply (SF030) and replaced it with the laser tip, bare
(single use) supply (SF029) for CPT code 31572 (Laryngoscopy, flexible;
with ablation or destruction of lesion(s) with laser, unilateral), as
we did not believe that it was appropriate to use a supply with an
outdated invoice. However, we inadvertently set the price of the laser
tip, diffuser fiber supply to

[[Page 80191]]

$197.50 in the proposed direct PE input database in contradiction of
our written proposal. We apologize for the confusion caused by this
error. In the final direct PE input database, we are restoring the
price of the laser tip, diffuser fiber supply to $850.00, since we did
not intend to propose a change the price of this supply. We are also
requesting the submission of additional current pricing information for
the laser tip, diffuser fiber supply, given the significant difference
between the $197.50 and $850.00 prices.
Comment: A commenter submitted two invoices containing pricing data
for a Cook Biopsy device.
Response: While we appreciate the submission of this pricing
information from the commenter, we are unable to determine which supply
or equipment item these invoices were in reference to. The invoices
were not mentioned in the text of the commenter's letter. We request
that invoices submitted for pricing updates should contain clear
documentation regarding the item in question: its name, the CMS supply/
equipment code that it references (if any), the unit quantity if the
item is shipped in boxes or batches, and any other information relevant
for pricing.
We routinely accept public submission of invoices as part of our
process for developing payment rates for new, revised, and potentially
misvalued codes. Often these invoices are submitted in conjunction with
the RUC-recommended values for the codes. For CY 2017, we note that
some stakeholders have submitted invoices for new, revised, or
potentially misvalued codes after the February deadline established for
code valuation recommendations. To be considered for a given year's
proposed rule, we generally need to receive invoices by the same
February deadline. In similar fashion, we generally need to receive
invoices by the end of the comment period for the proposed rule in
order to consider them for supply and equipment pricing in the final
rule for that calendar year. Of course, we consider invoices submitted
as public comments during the comment period following the publication
of the proposed rule when relevant for services with values open for
comment, and will consider any other invoices received after February
and/or outside of the public comment process as part of our established
annual process for requests to update supply and equipment prices as
finalized in the CY 2011 final rule with comment period (75 FR 73205).
(7) Radiation Treatment Delivery Practice Expense RVUs
Comment: Several commenters noticed that there was a 10 percent
decrease in the proposed Non Facility PE RVUs for HCPCS code G6011
despite proposed changes in direct PE inputs. Commenters requested an
explanation for why this decrease was taking place, and referenced
section 3 of the Patient Access and Medicare Protection Act (PAMPA)
(Pub. L. 114-115, enacted December 18, 2015), which requires CMS to
maintain the associated ``definitions, units, and inputs'' for certain
radiation treatment and related services for CY 2017 and CY 2018.
Several commenters stated that they believed that this decrease in the
PE RVU was in violation of section 1848(c)(2)(C)(i-ii) of the Act
(added by section 3 of the PAMPA), which requires inputs for these
services to remain unchanged for CY 2017 and 2018.
Response: We agree with the commenters that we did not propose to
change any of the direct PE inputs for HCPCS code G6011, and we
understand the proposed change in the nonfacility PE RVUs would
generally not be expected absent a corresponding change in direct PE
inputs. However, the change in the PE RVU for HCPCS code G6011 is
caused by a significant shift in the specialties furnishing the service
in the Medicare claims data. In the claims data we used to establish
the PE RVUs for CY 2016, dermatology furnished 51 percent of the
services, while radiation oncology furnished 43 percent. The most
recent claims data reflects a major shift, with radiation oncology now
furnishing about 85 percent of the services and dermatology only about
6 percent. The decrease in the PE RVU between CY 2016 and CY 2017
resulted from this shift in specialty mix, as the specialties actually
furnishing the service, reflected in the claims data, have a higher
percentage of direct PE relative to indirect PE, and therefore, a lower
percentage of indirect PE, than the specialties that were previously
furnishing the service in the claims data. In other words, consistent
with the established methodology for allocating indirect PE to
services, a specialty mix with a lower percentage of indirect PE
results in fewer indirect PE RVUs being allocated and a lower overall
PE RVU for the code even though the direct PE inputs have remained the
same. This kind of shift is relatively unusual outside of low-volume
codes, but it is consistent with our established methodology for
allocating indirect PE to services. We believe that in many cases, the
change in specialty utilization for a particular service would warrant
a re-examination of the direct PE inputs for the service under the
misvalued code initiative. Given the statutory provision that prohibits
us from changing the direct PE inputs prior to CY 2019 or considering
these services as potentially misvalued, we will consider this issue
further for future rulemaking.
We recognize that this change would be unanticipated, but we do not
believe there is a straightforward, transparent way to offset the
change since the statutory provision requires that we maintain the
direct inputs for the PE RVUs. We note that this change is unique among
the radiation therapy and related imaging codes where the maintenance
of inputs has generally resulted in payment rate stability for these
services.

B. Determination of Malpractice Relative Value Units (RVUs)

1. Overview
Section 1848(c) of the Act requires that each service paid under
the PFS be composed of three components: Work, PE, and malpractice (MP)
expense. As required by section 1848(c)(2)(C)(iii) of the Act,
beginning in CY 2000, MP RVUs are resource based. Malpractice RVUs for
new codes after 1991 were extrapolated from similar existing codes or
as a percentage of the corresponding work RVU. Section 1848(c)(2)(B)(i)
of the Act also requires that we review, and if necessary adjust, RVUs
no less often than every 5 years. In the CY 2015 PFS final rule with
comment period, we implemented the third review and update of MP RVUs.
For a comprehensive discussion of the third review and update of MP
RVUs see the CY 2015 proposed rule (79 FR 40349 through 40355) and
final rule with comment period (79 FR 67591 through 67596).
To determine MP RVUs for individual PFS services, our MP
methodology is comprised of three factors: (1) Specialty-level risk
factors derived from data on specialty-specific MP premiums incurred by
practitioners, (2) service level risk factors derived from Medicare
claims data of the weighted average risk factors of the specialties
that furnish each service, and (3) an intensity/complexity of service
adjustment to the service level risk factor based on either the higher
of the work RVU or clinical labor RVU. Prior to CY 2016, MP RVUs were
only updated once every 5 years, except in the case of new and revised
codes.
As explained in the CY 2011 PFS final rule with comment period (75
FR

[[Page 80192]]

73208), MP RVUs for new and revised codes effective before the next 5-
year review of MP RVUs were determined either by a direct crosswalk
from a similar source code or by a modified crosswalk to account for
differences in work RVUs between the new/revised code and the source
code. For the modified crosswalk approach, we adjust (or scale) the MP
RVU for the new/revised code to reflect the difference in work RVU
between the source code and the new/revised work RVU (or, if greater,
the difference in the clinical labor portion of the fully implemented
PE RVU) for the new code. For example, if the proposed work RVU for a
revised code were 10 percent higher than the work RVU for its source
code, the MP RVU for the revised code would be increased by 10 percent
over the source code MP RVU. Under this approach, the same risk factor
is applied for the new/revised code and source code, but the work RVU
for the new/revised code is used to adjust the MP RVUs for risk.
In the CY 2016 PFS final rule with comment period (80 FR 70906
through 70910), we finalized a policy to begin conducting annual MP RVU
updates to reflect changes in the mix of practitioners providing
services (using Medicare claims data), and to adjust MP RVUs for risk
for intensity and complexity (using the work RVU or clinical labor
RVU). We also finalized a policy to modify the specialty mix assignment
methodology (for both MP and PE RVU calculations) to use an average of
the 3 most recent years of data instead of a single year of data. We
stated that under this approach, the specialty-specific risk factors
would continue to be updated through notice and comment rulemaking
every 5 years using updated premium data, but would remain unchanged
between the 5-year reviews.
For CY 2016, we did not propose to discontinue our current approach
for determining MP RVUs for new/revised codes. For the new and revised
codes for which we proposed work RVUs and PE inputs, we also published
the proposed MP crosswalks used to determine their MP RVUs. We address
comments regarding valuation of new and revised codes in section II.L
of this final rule, which makes clear the codes with interim final
values for CY 2016 had newly proposed values for CY 2017, all of which
were again open for comment. The MP crosswalks for new and revised
codes with interim final values were established in the CY 2016 PFS
final rule with comment period; we proposed these same crosswalks in
the CY 2017 PFS proposed rule.
2. Updating Specialty Specific Risk Factors
The proposed CY 2017 GPCI update (eighth update), discussed in
section II.E of this final rule, reflects updated MP premium data,
collected for the purpose of proposing updates to the MP GPCIs.
Although we could have used the updated MP premium data obtained for
the purposes of the proposed eighth GPCI update to propose updates to
the specialty risk factors used in the calculation of MP RVUs, this
would not be consistent with the policy we previously finalized in the
CY 2016 PFS final rule with comment period. In that rule, we indicated
that the specialty-specific risk factors would continue to be updated
through notice and comment rulemaking every 5 years using updated
premium data, but would remain unchanged between the 5-year reviews.
Additionally, consistent with the statutory requirement at section
1848(e)(1)(C) of the Act, only one half of the adjustment to MP GPCIs
would be applied for CY 2017 based on the new MP premium data. As such,
we did not think it would be appropriate to propose to update the
specialty risk factors for CY 2017 based on the updated MP premium data
that is reflected in the proposed CY 2017 GPCI update. Therefore, we
did not propose to update the specialty-risk factors based on the new
premium data collected for the purposes of the 3-year GPCI update for
CY 2017 at this time. However, we solicited comment on whether we
should consider doing so, perhaps as early as for 2018, prior to the
fourth review and update of MP RVUs that must occur no later than CY
2020.
The following is summary of the comments we received on whether we
should consider updating the specialty-risk factors based on the new
premium data collected for the purposes of the 3-year GPCI update,
perhaps as early as for 2018, prior to the fourth review and update of
MP RVUs that must occur no later than CY 2020.
Comment: We received few comments regarding this issue. Some
commenters, including the RUC, recommended that CMS use the updated MP
premium data collected as part of the CY 2017 GPCI update in the
creation of the MP RVUs for CY 2017. One commenter stated that CMS
should follow its normal process to update MP RVUs for CY 2020. Another
commenter supported the technical and policy changes that CMS made
related to the MP RVUs for the CY 2016 PFS, and appreciated CMS'
reluctance to change direction a year later and use the updated
malpractice premium data gathered for the purpose of the GPCI update,
in advance of the next 5-year review of the MP RVUs, to propose updates
to the specialty risk factors used in the calculation of MP RVUs. The
commenter suggested that CMS consider using the updated data to update
the specialty-risk factors in the MP RVU methodology as early as CY
2018, noting that by CY 2018, the adjustment of the malpractice GPCIs
would be complete, so the potential disconnect in the use of the
updated premium data would no longer be an issue.
Response: We appreciate the commenters' feedback. In response to
the commenters who recommended that CMS use the updated MP premium data
collected as part of the CY 2017 GPCI update in the creation of the MP
RVUs for CY 2017, we reiterate that we did not propose to update the
specialty-risk factors based on the new premium data collected for the
purposes of the 3-year GPCI update for the CY 2017 MP RVUs. Instead, we
solicited comment on whether we should consider doing so prior to the
next 5-year interval, perhaps as early as for CY 2018. We will consider
the possibility of using the updated MP data to update the specialty
risk factors used in the calculation of the MP RVUs prior to the next
5-year update in future rulemaking.
Comment: One commenter stated that CPT code 93355 should be added
to the MP RVUs Invasive Cardiology Outside of Surgical Range list so
that the surgical risk factor is applied when calculating the MP RVU.
Response: We did not previously propose to include this code on the
list of Invasive Cardiology Outside of Surgical Range when we updated
MP risk factors for CY 2015 and we did not propose the change in the CY
2017 PFS proposed rule. We will consider that request for future
rulemaking in conjunction with the next update of MP risk factors.

C. Medicare Telehealth Services

1. Billing and Payment for Telehealth Services
Several conditions must be met for Medicare to make payments for
telehealth services under the PFS. The service must be on the list of
Medicare telehealth services and meet all of the following additional
requirements:
The service must be furnished via an interactive
telecommunications system.
The service must be furnished by a physician or other
authorized practitioner.
The service must be furnished to an eligible telehealth
individual.

[[Page 80193]]

The individual receiving the service must be located in a
telehealth originating site.
When all of these conditions are met, Medicare pays a facility fee
to the originating site and makes a separate payment to the distant
site practitioner furnishing the service.
Section 1834(m)(4)(F)(i) of the Act defines Medicare telehealth
services to include professional consultations, office visits, office
psychiatry services, and any additional service specified by the
Secretary, when furnished via a telecommunications system. We first
implemented this statutory provision, which was effective October 1,
2001, in the CY 2002 PFS final rule with comment period (66 FR 55246).
We established a process for annual updates to the list of Medicare
telehealth services as required by section 1834(m)(4)(F)(ii) of the Act
in the CY 2003 PFS final rule with comment period (67 FR 79988).
As specified at Sec. 410.78(b), we generally require that a
telehealth service be furnished via an interactive telecommunications
system. Under Sec. 410.78(a)(3), an interactive telecommunications
system is defined as multimedia communications equipment that includes,
at a minimum, audio and video equipment permitting two-way, real-time
interactive communication between the patient and distant site
physician or practitioner.
Telephones, facsimile machines, and stand-alone electronic mail
systems do not meet the definition of an interactive telecommunications
system. An interactive telecommunications system is generally required
as a condition of payment; however, section 1834(m)(1) of the Act
allows the use of asynchronous ``store-and-forward'' technology when
the originating site is part of a federal telemedicine demonstration
program in Alaska or Hawaii. As specified in Sec. 410.78(a)(1),
asynchronous store-and-forward is the transmission of medical
information from an originating site for review by the distant site
physician or practitioner at a later time.
Medicare telehealth services may be furnished to an eligible
telehealth individual notwithstanding the fact that the practitioner
furnishing the telehealth service is not at the same location as the
beneficiary. An eligible telehealth individual is an individual
enrolled under Part B who receives a telehealth service furnished at a
telehealth originating site.
Practitioners furnishing Medicare telehealth services are reminded
that these services are subject to the same non-discrimination laws as
other services, including the effective communication requirements for
persons with disabilities of section 504 of the Rehabilitation Act and
language access for persons with limited English proficiency, as
required under Title VI of the Civil Rights Act of 1964. For more
information, see https://www.hhs.gov/ocr/civilrights/resources/specialtopics/hospitalcommunication.
Practitioners furnishing Medicare telehealth services submit claims
for telehealth services to the MACs that process claims for the service
area where their distant site is located. Section 1834(m)(2)(A) of the
Act requires that a practitioner who furnishes a telehealth service to
an eligible telehealth individual be paid an amount equal to the amount
that the practitioner would have been paid if the service had been
furnished without the use of a telecommunications system.
Originating sites, which can be one of several types of sites
specified in the statute where an eligible telehealth individual is
located at the time the service is being furnished via a
telecommunications system, are paid a facility fee under the PFS for
each Medicare telehealth service. The statute specifies both the types
of entities that can serve as originating sites and the geographic
qualifications for originating sites. With regard to geographic
qualifications, Sec. 410.78(b)(4) limits originating sites to those
located in rural health professional shortage areas (HPSAs) or in a
county that is not included in a metropolitan statistical area (MSA).
Historically, we have defined rural HPSAs to be those located
outside of MSAs. Effective January 1, 2014, we modified the regulations
regarding originating sites to define rural HPSAs as those located in
rural census tracts as determined by the Federal Office of Rural Health
Policy of the Health Resources and Services Administration (HRSA) (78
FR 74811). Defining ``rural'' to include geographic areas located in
rural census tracts within MSAs allows for broader inclusion of sites
within HPSAs as telehealth originating sites. Adopting the more precise
definition of ``rural'' for this purpose expands access to health care
services for Medicare beneficiaries located in rural areas. HRSA has
developed a Web site tool to provide assistance to potential
originating sites to determine their geographic status. To access this
tool, see the CMS Web site at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/.
An entity participating in a federal telemedicine demonstration
project that has been approved by, or received funding from, the
Secretary as of December 31, 2000 is eligible to be an originating site
regardless of its geographic location.
Effective January 1, 2014, we also changed our policy so that
geographic status for an originating site would be established and
maintained on an annual basis, consistent with other telehealth payment
policies (78 FR 74400). Geographic status for Medicare telehealth
originating sites for each calendar year is now based upon the status
of the area as of December 31 of the prior calendar year.
For a detailed history of telehealth payment policy, see 78 FR
74399.
2. Adding Services to the List of Medicare Telehealth Services
As noted previously, in the CY 2003 PFS final rule (67 FR 79988),
we established a process for adding services to or deleting services
from the list of Medicare telehealth services. This process provides
the public with an ongoing opportunity to submit requests for adding
services. Under this process, we assign any qualifying request to make
additions to the list of telehealth services to one of two categories.
Revisions to criteria that we use to review requests in the second
category were finalized in the CY 2012 PFS final rule (76 FR 73102).
The two categories are:
Category 1: Services that are similar to professional
consultations, office visits, and office psychiatry services that are
currently on the list of telehealth services. In reviewing these
requests, we look for similarities between the requested and existing
telehealth services for the roles of, and interactions among, the
beneficiary, the physician (or other practitioner) at the distant site
and, if necessary, the telepresenter, a practitioner who is present
with the beneficiary in the originating site. We also look for
similarities in the telecommunications system used to deliver the
service; for example, the use of interactive audio and video equipment.
Category 2: Services that are not similar to the current
list of telehealth services. Our review of these requests includes an
assessment of whether the service is accurately described by the
corresponding code when furnished via telehealth and whether the use of
a telecommunications system to furnish the service produces
demonstrated clinical benefit to the patient. Submitted evidence should
include both a description of relevant clinical studies that
demonstrate the service furnished by telehealth to a Medicare
beneficiary

[[Page 80194]]

improves the diagnosis or treatment of an illness or injury or improves
the functioning of a malformed body part, including dates and findings,
and a list and copies of published peer reviewed articles relevant to
the service when furnished via telehealth. Our evidentiary standard of
clinical benefit does not include minor or incidental benefits.
Some examples of clinical benefit include the following:
Ability to diagnose a medical condition in a patient
population without access to clinically appropriate in-person
diagnostic services.
Treatment option for a patient population without access
to clinically appropriate in-person treatment options.
Reduced rate of complications.
Decreased rate of subsequent diagnostic or therapeutic
interventions (for example, due to reduced rate of recurrence of the
disease process).
Decreased number of future hospitalizations or physician
visits.
More rapid beneficial resolution of the disease process
treatment.
Decreased pain, bleeding, or other quantifiable symptom.
Reduced recovery time.
For the list of telehealth services, see the CMS Web site at
https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/. Requests to add services to the list of Medicare telehealth
services must be submitted and received no later than December 31 of
each calendar year to be considered for the next rulemaking cycle. For
example, qualifying requests submitted before the end of CY 2016 will
be considered for the CY 2018 proposed rule. Each request to add a
service to the list of Medicare telehealth services must include any
supporting documentation the requester wishes us to consider as we
review the request. Because we use the annual PFS rulemaking process as
a vehicle for making changes to the list of Medicare telehealth
services, requesters should be advised that any information submitted
is subject to public disclosure for this purpose. For more information
on submitting a request for an addition to the list of Medicare
telehealth services, including where to mail these requests, see the
CMS Web site at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/.
3. Submitted Requests To Add Services to the List of Telehealth
Services for CY 2017
Under our existing policy, we add services to the telehealth list
on a category 1 basis when we determine that they are similar to
services on the existing telehealth list for the roles of, and
interactions among, the beneficiary, physician (or other practitioner)
at the distant site and, if necessary, the telepresenter. As we stated
in the CY 2012 final rule with comment period (76 FR 73098), we believe
that the category 1 criteria not only streamline our review process for
publicly requested services that fall into this category, but also
expedite our ability to identify codes for the telehealth list that
resemble those services already on this list.
We received several requests in CY 2015 to add various services as
Medicare telehealth services effective for CY 2017. The following
presents a discussion of these requests, and our decisions regarding
additions to the CY 2017 telehealth list. Of the requests received, we
found that four services were sufficiently similar to ESRD-related
services currently on the telehealth list to qualify on a category 1
basis. Therefore, we proposed to add the following services to the
telehealth list on a category 1 basis for CY 2017:
CPT codes 90967 (End-stage renal disease (ESRD) related
services for dialysis less than a full month of service, per day; for
patients younger than 2 years of age; 90968 (End-stage renal disease
(ESRD) related services for dialysis less than a full month of service,
per day; for patients 2-11 years of age; 90969 (End-stage renal disease
(ESRD) related services for dialysis less than a full month of service,
per day; for patients 12-19 years of age); and 90970 (End-stage renal
disease (ESRD) related services for dialysis less than a full month of
service, per day; for patients 20 years of age and older).
As we indicated in the CY 2015 final rule with comment period (80
FR 41783), for the ESRD-related services (CPT codes 90963-90966) added
to the telehealth list for CY 2016, the required clinical examination
of the catheter access site must be furnished face-to-face ``hands on''
(without the use of an interactive telecommunications system) by a
physician, CNS, NP, or PA. This requirement also applies to CPT codes
90967-90970.
While we did not receive a specific request, we also proposed to
add two advance care planning services to the telehealth list. We have
determined that these services are similar to the annual wellness
visits (HCPCS codes G0438 & G0439) currently on the telehealth list:
CPT codes 99497 (advance care planning including the
explanation and discussion of advance directives such as standard forms
(with completion of such forms, when performed), by the physician or
other qualified health care professional; first 30 minutes, face-to-
face with the patient, family member(s), or surrogate); and 99498
(advance care planning including the explanation and discussion of
advance directives such as standard forms (with completion of such
forms, when performed), by the physician or other qualified health care
professional; each additional 30 minutes (list separately in addition
to code for primary procedure)).

We also received requests to add services to the telehealth list that
do not meet our criteria for Medicare telehealth services. We did not
propose to add the following procedures for observation care, emergency
department visits, critical care E/M, psychological testing, and
physical, occupational and speech therapy, for the reasons noted:
a. Observation Care: CPT Codes--
99217 (observation care discharge day management (this
code is to be utilized to report all services provided to a patient on
discharge from ``observation status'' if the discharge is on other than
the initial date of ``observation status.'' To report services to a
patient designated as ``observation status'' or ``inpatient status''
and discharged on the same date, use the codes for observation or
inpatient care services [including admission and discharge services,
99234-99236 as appropriate.]));
99218 (initial observation care, per day, for the
evaluation and management of a patient which requires these three key
components: A detailed or comprehensive history; a detailed or
comprehensive examination; and medical decision making that is
straightforward or of low complexity. Counseling and coordination of
care with other physicians, other qualified health care professionals,
or agencies are provided consistent with the nature of the problem(s)
and the patient's and family's needs. Usually, the problem(s) requiring
admission to ``observation status'' are of low severity. Typically, 30
minutes are spent at the bedside and on the patient's hospital floor or
unit);
99219 (initial observation care, per day, for the
evaluation and management of a patient, which requires these three key
components: A comprehensive history; a comprehensive examination; and
medical decision making of moderate complexity. Counseling and
coordination of care with other physicians, other qualified health care
professionals, or agencies are provided consistent with the nature of
the problem(s) and the patient's and family's needs. Usually, the
problem(s) requiring admission to ``observation status'' are of
moderate severity.

[[Page 80195]]

Typically, 50 minutes are spent at the bedside and on the patient's
hospital floor or unit);
99220 (initial observation care, per day, for the
evaluation and management of a patient, which requires these three key
components: A comprehensive history; a comprehensive examination; and
medical decision making of high complexity. Counseling and coordination
of care with other physicians, other qualified health care
professionals, or agencies are provided consistent with the nature of
the problem(s) and the patient's and family's needs. Usually, the
problem(s) requiring admission to ``observation status'' are of high
severity. Typically, 70 minutes are spent at the bedside and on the
patient's hospital floor or unit);
99224 (subsequent observation care, per day, for the
evaluation and management of a patient, which requires at least two of
these three key components: Problem focused interval history; problem
focused examination; medical decision making that is straightforward or
of low complexity. Counseling and coordination of care with other
physicians, other qualified health care professionals, or agencies are
provided consistent with the nature of the problem(s) and the patient's
and family's needs. Usually, the patient is stable, recovering, or
improving. Typically, 15 minutes are spent at the bedside and on the
patient's hospital floor or unit);
99225 (subsequent observation care, per day, for the
evaluation and management of a patient, which requires at least two of
these three key components: An expanded problem focused interval
history; an expanded problem focused examination; medical decision
making of moderate complexity. Counseling and coordination of care with
other physicians, other qualified health care professionals, or
agencies are provided consistent with the nature of the problem(s) and
the patient's and family's needs. Usually, the patient is responding
inadequately to therapy or has developed a minor complication.
Typically, 25 minutes are spent at the bedside and on the patient's
hospital floor or unit);
99226 (subsequent observation care, per day, for the
evaluation and management of a patient, which requires at least two of
these three key components: A detailed interval history; a detailed
examination; medical decision making of high complexity. Counseling and
coordination of care with other physicians, other qualified health care
professionals, or agencies are provided consistent with the nature of
the problem(s) and the patient's and family's needs. Usually, the
patient is unstable or has developed a significant complication or a
significant new problem. Typically, 35 minutes are spent at the bedside
and on the patient's hospital floor or unit);
99234 (observation or inpatient hospital care, for the
evaluation and management of a patient including admission and
discharge on the same date, which requires these three key components:
A detailed or comprehensive history; a detailed or comprehensive
examination; and medical decision making that is straightforward or of
low complexity. Counseling and coordination of care with other
physicians, other qualified health care professionals, or agencies are
provided consistent with the nature of the problem(s) and the patient's
and family's needs. Usually the presenting problem(s) requiring
admission are of low severity. Typically, 40 minutes are spent at the
bedside and on the patient's hospital floor or unit);
99235 (observation or inpatient hospital care, for the
evaluation and management of a patient including admission and
discharge on the same date, which requires these three key components:
A comprehensive history; a comprehensive examination; and medical
decision making of moderate complexity. Counseling and coordination of
care with other physicians, other qualified health care professionals,
or agencies are provided consistent with the nature of the problem(s)
and the patient's and family's needs. Usually the presenting problem(s)
requiring admission are of moderate severity. Typically, 50 minutes are
spent at the bedside and on the patient's hospital floor or unit);
99236 (observation or inpatient hospital care, for the
evaluation and management of a patient including admission and
discharge on the same date, which requires these three key components:
A comprehensive history; a comprehensive examination; and medical
decision making of high complexity. Counseling and coordination of care
with other physicians, other qualified health care professionals, or
agencies are provided consistent with the nature of the problem(s) and
the patient's and family's needs. Usually the presenting problem(s)
requiring admission are of high severity. Typically, 55 minutes are
spent at the bedside and on the patient's hospital floor or unit);
The request to add these observation services referenced various
studies supporting the use of observation units. The studies indicated
that observation units provide safe, cost effective care to patients
that need ongoing evaluation and treatment beyond the emergency
department visit by having reduced hospital admissions, shorter lengths
of stay, increased safety and reduced cost. Additional studies cited
indicated that observation units reduce the work load on emergency
department physicians, and reduce emergency department overcrowding.
In the CY 2005 PFS proposed rule (69 FR 47510), we considered a
request but did not propose to add the observation CPT codes 99217-
99220 to the list of Medicare telehealth services on a category two
basis for the reasons described in that rule. The most recent request
did not include any information that would cause us to question the
previous evaluation under the category one criterion, which has not
changed, regarding the significant differences in patient acuity
between these services and services on the telehealth list. While the
request included evidence of the general benefits of observation units,
it did not include specific information demonstrating that the services
described by these codes provided clinical benefit when furnished via
telehealth, which is necessary for us to consider these codes on a
category two basis. Therefore, we did not propose to add these services
to the list of approved telehealth services.
b. Emergency Department Visits: CPT Codes--
99281 (emergency department visit for the evaluation and
management of a patient, which requires these three key components: A
problem focused history; a problem focused examination; and
straightforward medical decision making. Counseling and coordination of
care with other physicians, other qualified health care professionals,
or agencies are provided consistent with the nature of the problem(s)
and the patient's and family's needs. Usually, the presenting
problem(s) are self-limited or minor);
99282 (emergency department visit for the evaluation and
management of a patient, which requires these three key components: An
expanded problem focused history; an expanded problem focused
examination; and medical decision making of low complexity. Counseling
and coordination of care with other physicians, other qualified health
care professionals, or agencies are provided consistent with the nature
of the problem(s) and the patient's and family's needs. Usually, the
presenting problem(s) are of low to moderate severity);

[[Page 80196]]

99283 (emergency department visit for the evaluation and
management of a patient, which requires these three key components: An
expanded problem focused history; an expanded problem focused
examination; and medical decision making of moderate complexity.
Counseling and coordination of care with other physicians, other
qualified health care professionals, or agencies are provided
consistent with the nature of the problem(s) and the patient's and
family's needs. Usually, the presenting problem(s) are of moderate
severity);
99284 (emergency department visit for the evaluation and
management of a patient, which requires these three key components: A
detailed history; a detailed examination; and medical decision making
of moderate complexity. Counseling and coordination of care with other
physicians, other qualified health care professionals, or agencies are
provided consistent with the nature of the problem(s) and the patient's
and family's needs. Usually, the presenting problem(s) are of high
severity, and require urgent evaluation by the physician, or other
qualified health care professionals but do not pose an immediate
significant threat to life or physiologic function); and
99285 (emergency department visit for the evaluation and
management of a patient, which requires these three key components
within the constraints imposed by the urgency of the patient's clinical
condition and mental status: A comprehensive history; a comprehensive
examination; and medical decision making of high complexity. Counseling
and coordination of care with other physicians, other qualified health
care professionals, or agencies are provided consistent with the nature
of the problem(s) and the patient's and family's needs. Usually, the
presenting problem(s) are of high severity and pose an immediate
significant threat to life or physiologic function).
In the CY 2005 PFS proposed rule (69 FR 47510), we considered a
request but did not propose to add the emergency department visit CPT
codes 99281-99285 to the list of Medicare telehealth services for the
reasons described in that rule.
The current request to add the emergency department E/M services
stated that the codes are similar to outpatient visit codes (CPT codes
99201-99215) that have been on the telehealth list since CY 2002. As we
noted in the CY 2005 PFS final rule, while the acuity of some patients
in the emergency department might be the same as in a physician's
office; we believe that, in general, more acutely ill patients are more
likely to be seen in the emergency department, and that difference is
part of the reason there are separate codes describing evaluation and
management visits in the Emergency Department setting. The practice of
emergency medicine often requires frequent and fast-paced patient
reassessments, rapid physician interventions, and sometimes the
continuous physician interaction with ancillary staff and consultants.
This work is distinctly different from the pace, intensity, and acuity
associated with visits that occur in the office or outpatient setting.
Therefore, we did not propose to add these services to the list of
approved telehealth services on a category one basis.
The requester did not provide any studies supporting the clinical
benefit of managing emergency department patients with telehealth which
is necessary for us to consider these codes on a category two basis.
Therefore, we did not propose to add these services to the list of
approved telehealth services on a category two basis.
Many requesters of additions to the telehealth list urged us to
consider the potential value of telehealth for providing beneficiaries
access to needed expertise. We note that if clinical guidance or advice
is needed in the emergency department setting, a consultation may be
requested from an appropriate source, including consultations that are
currently included on the list of telehealth services.
c. Critical Care Evaluation and Management: CPT Codes--
99291 (critical care, evaluation and management of the
critically ill or critically injured patient; first 30-74 minutes); and
99292 (critical care, evaluation and management of the critically ill
or critically injured patient; each additional 30 minutes (list
separately in addition to code for primary service).
We previously considered and rejected adding these codes to the
list of Medicare telehealth services in the CY 2009 PFS final rule (74
FR 69744) on a category 1 basis because, due to the acuity of
critically ill patients, we did not believe critical care services are
similar to any services on the current list of Medicare telehealth
services. In that rule, we said that critical care services must be
evaluated as category 2 services. Because we considered critical care
services under category 2, we needed to evaluate whether these are
services for which telehealth can be an adequate substitute for a face-
to-face encounter, based on the category 2 criteria at the time of that
request. We had no evidence suggesting that the use of telehealth could
be a reasonable surrogate for the face-to-face delivery of this type of
care.
The American Telemedicine Association (ATA) submitted a new request
for CY 2016 that cited several studies to support adding these services
on a category 2 basis. To qualify under category 2, we would need
evidence that the service furnished via telehealth is still described
accurately by the requested code and produces a clinical benefit for
the patient via telehealth. However, in reviewing the information
provided by the ATA and a study titled, ``Impact of an Intensive Care
Unit Telemedicine Program on Patient Outcomes in an Integrated Health
Care System,'' published July 2014 in JAMA Internal Medicine, which
found no evidence that the implementation of ICU telemedicine
significantly reduced mortality rates or hospital length of stay, which
could be indicators of clinical benefit. Therefore, we stated that we
do not believe that the submitted evidence demonstrates a clinical
benefit to patients. Therefore, we did not propose to add these
services on a category 2 basis to the list of Medicare telehealth
services for CY 2016 (80 FR 71061).
This year, requesters cited additional studies to support adding
critical care services to the Medicare telehealth list on a category 2
basis. Eight of the studies dealt with telestroke and one with
teleneurology. Telestroke is an approach that allows a neurologist to
provide remote treatment to vascular stroke victims. Teleneurology
offers consultations for neurological problems from a remote location.
It may be initiated by a physician or a patient, for conditions such as
headaches, dementia, strokes, multiple sclerosis and epilepsy.
However, according to the literature, the management of stroke via
telehealth requires more than a single practitioner and is distinct
from the work described by the above E/M codes, 99291 and 99292. One
additional study cited involved pediatric patients, while another noted
that the Department of Defense has used telehealth to provide critical
care services to hospitals in Guam for many years. Another reference
study indicated that consulting intensivists thought that telemedicine
consultations were superior to telephone consultations. In all of these
cases, we believe the evidence demonstrates that interaction between
these patients and distant site practitioners can have clinical
benefit.

[[Page 80197]]

However, we do not agree that the kinds of services described in the
studies are those that are included in the above critical care E/M
codes 99291 and 99292. We note that CPT guidance makes clear that a
variety of other services are bundled into the payment rates for
critical care, including gastric intubations and vascular access
procedures among others We do not believe these kinds of services are
furnished via telehealth. Public comments, included cited studies, can
be viewed at https://www.regulations.gov/#!documentDetail;D=CMS-2015-
0081-0002. Therefore, we did not propose to add CPT codes 99291 or
99292 to the list of Medicare telehealth services for CY 2017.
However, we are persuaded by the requests that we recognize the
potential benefit of critical care consultation services that are
furnished remotely. We note that there are currently codes on the
telehealth list that could be reported when consultation services are
furnished to critically ill patients. In consideration of these public
requests, we recognize that there may be greater resource costs
involved in furnishing these services relative to the existing
telehealth consultation codes. We also agree with the requesters that
there may be potential benefits of remote care by specialists for these
patients. For these reasons, we think it would be advisable to create a
coding distinction between telehealth consultations for critically ill
patients, for example stroke patients, relative to telehealth
consultations for other hospital patients. Such a coding distinction
would allow us to recognize the additional resource costs in terms of
time and intensity involved in furnishing such services, under the
conditions where remote, intensive consultation is required to provide
access to appropriate care for the critically ill patient. We recognize
that the current set of E/M codes, including current CPT codes 99291
and 99292, may not adequately describe such services because current E/
M coding presumes that the services are occurring in-person, in which
case the expert care would be furnished in a manner described by the
current codes for critical care.
Therefore, we proposed to make payment through new HCPCS codes
G0508 and G0509, initial and subsequent, used to describe critical care
consultations furnished via telehealth. This new coding would provide a
mechanism to report an intensive telehealth consultation service,
initial or subsequent, for the critically ill patient, such as a stroke
patient, under the circumstance when a qualified health care
professional has in-person responsibility for the patient but the
patient benefits from additional services from a distant-site
consultant specially trained in providing critical care services. We
proposed limiting these services to once per day per patient. Like the
other telehealth consultations, these services would be valued relative
to existing E/M services.
More details on the new coding (G0508 and G0509) and valuation for
these services are discussed in section II.L. of this final rule and
the final RVUs for this service are included in Addendum B of this
final rule, including a summary of the public comments we received and
our responses to the comments. Like the other telehealth consultation
codes, we proposed that these services would be added to the telehealth
list and would be subject to the geographic and other statutory
restrictions that apply to telehealth services.
d. Psychological Testing: CPT Codes--
96101 (psychological testing (includes psychodiagnostic
assessment of emotionality, intellectual abilities, personality and
psychopathology, e.g., MMPI, Rorschach, WAIS), per hour of the
psychologist's or physician's time, both face-to-face time
administering tests to the patient and time interpreting these test
results and preparing the report);
96102 psychological testing (includes psychodiagnostic
assessment of emotionality, intellectual abilities, personality and
psychopathology, e.g., MMPI and WAIS), with qualified health care
professional interpretation and report, administered by technician, per
hour of technician time, face-to-face);
96118 Neuropsychological testing (e.g., Halstead-Reitan
neuropsychological battery, Wechsler memory scales and Wisconsin card
sorting test), per hour of the psychologist's or physician's time, both
face-to-face time administering tests to the patient and time
interpreting these test results and preparing the report); and,
96119 Neuropsychological testing (e.g., Halstead-Reitan
neuropsychological battery, Wechsler memory scales and Wisconsin card
sorting test), with qualified health care professional interpretation
and report, administered by technician, per hour of technician time,
face-to-face).
Requesters indicated that there is nothing in the Minnesota
Multiphasic Personality Inventory (MMPI), the Rorschach inkblot test,
the Wechsler Adult Intelligence Scale (WAIS), the Halstead-Reitan
Neuropsychological Battery and Allied Procedures, or the Wisconsin Card
Sorting Test (WCST), that cannot be done via telehealth nor is
different than neurological tests done for Parkinson's disease, seizure
medication side effects, gait assessment, nor any of the many
neurological examinations done via telehealth with the approved
outpatient office visit and inpatient visit CPT codes currently on the
telehealth list. As an example, requesters indicated that the MPPI is
administered by a computer, which generates a report that is
interpreted by the clinical psychologist, and that the test requires no
interaction between the clinician and the patient.
We previously considered the request to add these codes to the
Medicare telehealth list in the CY 2015 final rule with comment period
(79 FR 67600). We decided not to add these codes, indicating that these
services are not similar to other services on the telehealth list
because they require close observation of how a patient responds. We
noted that the requesters did not submit evidence supporting the
clinical benefit of furnishing these services via telehealth so that we
could evaluate them on a category 2 basis. While we acknowledge that
requesters believe that some of these tests require minimal, if any,
interaction between the clinician and patient, we disagree. We continue
to believe that successful completion of the tests listed as examples
in these codes require the clinical psychologist to closely observe the
patient's response, which cannot be performed via telehealth. Some
patient responses, for example, sweating and fine tremors, may be
missed when the patient and examiner are not in the same room.
Therefore, we did not propose to add these services to the list of
Medicare telehealth services for CY 2017.
e. Physical and Occupational Therapy and Speech-Language Pathology
Services: CPT Codes--
92507 (treatment of speech, language, voice,
communication, and auditory processing disorder; individual); and,
92508 (treatment of speech, language, voice, communication, and
auditory processing disorder; group, 2 or more individuals); 92521
(evaluation of speech fluency (e.g., stuttering, cluttering)); 92522
(evaluation of speech sound production (e.g., articulation,
phonological process, apraxia, dysarthria)); 92523 (evaluation of
speech sound production (e.g., articulation, phonological process,
apraxia, dysarthria); with evaluation of language comprehension and
expression

[[Page 80198]]

(e.g., receptive and expressive language)); 92524 (behavioral and
qualitative analysis of voice and resonance); (evaluation of oral and
pharyngeal swallowing function); 92526 (treatment of swallowing
dysfunction or oral function for feeding); 92610 (evaluation of oral
and pharyngeal swallowing function); CPT codes 97001 (physical therapy
evaluation); 97002 (physical therapy re-evaluation); 97003
(occupational therapy evaluation); 97004 (occupational therapy re-
evaluation); 97110 (therapeutic procedure, 1 or more areas, each 15
minutes; therapeutic exercises to develop strength and endurance, range
of motion and flexibility); 97112 (therapeutic procedure, 1 or more
areas, each 15 minutes; neuromuscular reeducation of movement, balance,
coordination, kinesthetic sense, posture, or proprioception for sitting
or standing activities); 97116 (therapeutic procedure, 1 or more areas,
each 15 minutes; gait training (includes stair climbing)); 97532
(development of cognitive skills to improve attention, memory, problem
solving (includes compensatory training), direct (one-on-one) patient
contact, each 15 minutes); 97533 (sensory integrative techniques to
enhance sensory processing and promote adaptive responses to
environmental demands, direct (one-on-one) patient contact, each 15
minutes); 97535 (self-care/home management training (e.g., activities
of daily living (adl) and compensatory training, meal preparation,
safety procedures, and instructions in use of assistive technology
devices/adaptive equipment) direct one-on-one contact, each 15
minutes); 97537 (community/work reintegration training (e.g., shopping,
transportation, money management, avocational activities or work
environment/modification analysis, work task analysis, use of assistive
technology device/adaptive equipment), direct one-on-one contact, each
15 minutes); 97542 (wheelchair management (e.g., assessment, fitting,
training), each 15 minutes); 97750 (physical performance test or
measurement (e.g., musculoskeletal, functional capacity), with written
report, each 15 minutes); 97755 (assistive technology assessment (e.g.,
to restore, augment or compensate for existing function, optimize
functional tasks and maximize environmental accessibility), direct one-
on-one contact, with written report, each 15 minutes); 97760
Orthotic(s) management and training (including assessment and fitting
when not otherwise reported), upper extremity(s), lower extremity(s)
and/or trunk, each 15 minutes); 97761 (prosthetic training, upper and
lower extremity(s), each 15 minutes); and 97762 (checkout for orthotic/
prosthetic use, established patient, each 15 minutes).
The statute defines who is an authorized practitioner of telehealth
services. Physical therapists, occupational therapists and speech-
language pathologists are not authorized practitioners of telehealth
under section 1834(m)(4)(E) of the Act, as defined in section
1842(b)(18)(C) of the Act. Because the above services are predominantly
furnished by physical therapists, occupational therapists and speech-
language pathologists, we do not believe it would be appropriate to add
them to the list of telehealth services at this time. One requester
suggested that we can add telehealth practitioners without legislation,
as evidenced by the addition of nutritional professionals. However, we
do not believe we have such authority and note that nutritional
professionals are included as practitioners in the definition at
section 1834(b)(18)(C)(vi) of the Act, and thus, are within the
statutory definition of telehealth practitioners. Therefore, we did not
propose to add these services to the list of Medicare telehealth
services for CY 2017.
In summary, we proposed to add the following codes to the list of
Medicare telehealth services beginning in CY 2017 on a category 1
basis:
ESRD-related services 90967 through 90970. The required
clinical examination of the catheter access site must be furnished
face-to-face ``hands on'' (without the use of an interactive
telecommunications system) by a physician, CNS, NP, or PA.
Advance care planning (CPT codes 99497 and 99498).
Telehealth Consultations for a Patient Requiring Critical
Care Services (G0508 and G0509).
The following is summary of the comments we received regarding the
proposed addition of services to the list of Medicare telehealth
services:
Comment: Many commenters supported one or more of our proposals to
add ESRD-related services (CPT codes 90967, 90968, 90969 and 90970) and
advance care planning services (CPT codes 99497 and 99498) to the list
of Medicare telehealth services for CY 2017.
Response: We appreciate the commenters' support for the proposed
additions to the list of Medicare telehealth services. After
consideration of the public comments received, we are finalizing our
proposal to add these services to the list of Medicare telehealth
services for CY 2017 on a category 1 basis.
Comment: Many commenters also supported the proposal to make
payment through new codes, initial and subsequent, used to describe
critical care consultations furnished via telehealth. Commenters
indicated that the codes will improve patient outcomes and quality of
care.
Response: We thank the commenters for their support. We believe the
new coding G0508 and G0509 would provide a mechanism to report an
intensive telehealth consultation service, initial or subsequent, for
the critically ill patient, for example a stroke patient, under the
circumstance when a qualified health care professional has in-person
responsibility for the patient but the patient benefits from additional
services from a distant-site consultant specially trained in furnishing
critical care services. After consideration of the public comments
received, we are finalizing our proposal to add these critical care
consultation services to the list of Medicare telehealth services for
CY 2017 on a category 1 basis. We are finalizing these services as
limited to once per day per patient.
We are also finalizing our proposal to make payment for these
critical care consultation services through new codes G0508 and G0509,
initial and subsequent, used to describe critical care consultations
furnished via telehealth. More details on the new coding and valuation
for these services are discussed in section II.L. of this final rule
and the final RVUs for this service are included in Addendum B of this
final rule. Like the other telehealth consultation codes, we proposed
and are finalizing that these services would be added to the telehealth
list and would be subject to the geographic and other statutory
restrictions that apply to telehealth services.
Comment: Several commenters agreed with our decision not to add
psychological and neuropsychological testing services to the telehealth
list, noting that the face-to-face contact between the psychologist or
technician and the beneficiary is critical for detecting behaviors
related to test taking, such as movements or other nonverbal signals
that could be missed by using current telehealth media.
A few commenters disagreed with our decision not to add
psychological and neuropsychological testing services. Commenters cited
general benefits, such as increased access to care, improved health
outcomes, and as a remedy to address provider shortages. One commenter
maintained that the requested codes are similar to many

[[Page 80199]]

neurological examinations done via telehealth with the approved
outpatient office visit and inpatient visit CPT codes currently on the
telehealth list.
Response: As noted above, we previously considered the request to
add these codes to the telehealth list, on a category 1 basis, in the
CY 2015 final rule with comment period (79 FR 67600). We decided not to
add these codes, indicating that these services are not similar to
other services on the telehealth list because they require close
observation of how a patient responds. Commenters provided no evidence
of clinical benefit, which is necessary to support adding these
services on a category 2 basis. Therefore, we are not adding these
services to the list of Medicare list telehealth services for CY 2017.
Comment: A few commenters disagreed with our decision not to add
observation care and emergency department visits. Commenters cited
general benefits, such as improved quality of care, reduced physician
workload, reduced emergency department overcrowding, and reduced
shortage of available specialty services. Concerning CPT codes 99281-
99283, one commenter indicated that none of these codes include what is
categorized as a ``detailed'' or ``comprehensive'' history or exam;
none of these codes include complexity in medical decision making that
is categorized as ``high;'' and none of these codes include presenting
problems of ``high'' or ``high severity/immediate significant threat to
life or physiological function.''
Response: As noted above, we previously considered and rejected
adding these codes to the list of Medicare telehealth services in the
CY 2005 PFS final rule (69 FR 66276) on a category 1 basis because of
the difference in typical patient acuity relative to any services on
the current list of Medicare telehealth services. While CPT codes
99281-99283 may not include a detailed or comprehensive history or exam
or a high level of medical decision making, we do not agree that these
codes are similar to outpatient visit codes (CPT codes 99201-99215)
currently on the list of Medicare telehealth services. As previously
stated, more acutely ill patients are more likely to be seen in the
emergency department, and that difference is part of the reason there
are separate codes describing evaluation and management visits in the
Emergency Department setting. The work in an Emergency Department
setting is distinctly different from the pace, intensity, and acuity
associated with visits that occur in the office or outpatient setting.
Commenters provided no evidence of clinical benefit for these services
when furnished via telehealth specifically, which is necessary to
support adding these services on a category 2 basis. Therefore, we are
not adding these services to the list of Medicare telehealth services
for CY 2017.
We remind stakeholders that if consultative telehealth services are
required for patients where emergency department or observation care
services would ordinarily be reported, multiple codes describing
consultative services are currently on the telehealth list and can be
used to bill for such telehealth services.
Comment: Concerning various services primarily furnished by
physical therapists, occupational therapists, and speech-language
pathologists, commenters recognized that a statutory change is required
to allow such services to be added to the list of Medicare telehealth
services.
Response: We appreciate commenters recognizing the statutory
limitation on adding these services. Therefore, we are not adding these
services to the list of Medicare telehealth services for CY 2017.
4. Place of Service (POS) Code for Telehealth Services
We have received multiple requests from various stakeholders to
establish a POS code to identify services furnished via telehealth.
These requests have come from other payers, but may also be related to
confusion concerning whether to use the POS where the distant site
physician is located or the POS where the patient is located. The
process for establishing POS codes is managed by the POS Workgroup
within CMS, is available for use by all payers, and is not contingent
upon Medicare PFS rulemaking. We noted in the CY 2017 proposed rule (81
FR 46184) that, if such a POS code were created, in order to make it
valid for use in Medicare, we would have to determine the appropriate
payment rules associated with the code. Therefore, we proposed how a
POS code for telehealth would be used under the PFS with the
expectation that, if such a code is available, it would be used as
early as January 1, 2017. We proposed that the physicians or
practitioners furnishing telehealth services would be required to
report the telehealth POS code to indicate that the billed service is
furnished as a telehealth service from a distant site. As noted below,
since the publication of the CY 2017 proposed rule, the telehealth POS
code has been created.
Our requirement for physicians and practitioners to use the
telehealth POS code to report that telehealth services were furnished
from a distant site would improve payment accuracy and consistency in
telehealth claims submission. Currently, for services furnished via
telehealth, we have instructed practitioners to report the POS code
that would have been reported had the service been furnished in person.
However, some practitioners use the POS where they are located when the
service is furnished, while others use the POS corresponding to the
patient's location.
Under the PFS, the POS code determines whether a service is paid
using the facility or non-facility practice expense relative value
units (PE RVUs). The facility rate is paid when a service is furnished
in a location where Medicare is making a separate facility payment to
an entity other than the physician or practitioner that is intended to
reflect the facility costs associated with the service (clinical staff,
supplies and equipment). We note that in accordance with section
1834(m)(2)(B) of the Act, the payment amount for the telehealth
facility fee paid to the originating site is a national fee, paid
without geographic or site of service adjustments that generally are
made for payments to different kinds of Medicare providers and
suppliers. In the case of telehealth services, we believe that facility
costs (clinical staff, supplies, and equipment) associated with
furnishing the service would generally be incurred by the originating
site, where the patient is located, and not by the practitioner at the
distant site. The statute requires Medicare to pay a fee to the site
that hosts the patient. This is analogous to the circumstances under
which the facility PE RVUs are used to pay for services under the PFS.
Therefore, we proposed to use the facility PE RVUs to pay for
telehealth services reported by physicians or practitioners with the
telehealth POS code. We note that there are only three codes on the
telehealth list with a difference greater than 1.0 PE RVUs between the
facility PE RVUs and the non-facility PE RVUs. We did not anticipate
that this proposal would result in a significant change in the total
payment for the majority of services on the telehealth list. Moreover,
many practitioners already use a facility POS when billing for
telehealth services (those that report the POS of the originating site
where the beneficiary is located). The policy to use the telehealth POS
code for telehealth services would not affect payment for

[[Page 80200]]

telehealth services for these practitioners.
The POS code for telehealth would not apply to originating sites
billing the facility fee. Originating sites are not furnishing a
service via telehealth since the patient is physically present in the
facility. Accordingly, the originating site would continue to use the
POS code that applies to the type of facility where the patient is
located.
We also proposed a change to Sec. 414.22(b)(5)(i)(A) that
addresses the PE RVUs used in different settings. These revisions would
improve clarity regarding our current policies. Specifically, we
proposed to amend this section to specify that the facility PE RVUs are
paid for practitioner services furnished via telehealth under Sec.
410.78. In addition, we proposed a change to resolve any potential
ambiguity and clarify that payment under the PFS is made at the
facility rate (facility PE RVUs) when services are furnished in a
facility setting paid by Medicare, including in off-campus provider
based departments. As proposed, the regulation reflected the policy
being proposed, for CY 2017 only, to pay the physician the nonfacility
rate for services furnished in an off-campus provider based department
that was not excepted under section 603 of the Bipartisan Budget Act of
2015. Finally, to streamline the existing regulation, we also proposed
to delete Sec. 414.32 of our regulation that refers to the calculation
of payments for certain services prior to 2002.
The following is summary of the comments we received regarding the
proposal to use a POS code for services furnished via telehealth:
Comment: Many commenters supported the proposal to use the POS code
for telehealth, indicating that it would clarify and simplify billing
requirements, improve payment accuracy and consistency in telehealth
claims submissions, and provide more reliable data regarding telehealth
services.
Response: We appreciate the support for this proposal.
Comment: One commenter asked us to reconsider the proposal, noting
that the AMA's CPT Editorial Panel has adopted a telehealth modifier
for those medical services that are currently covered telehealth
services by Medicare or other payers, which obviates the need for the
POS code.
Response: The POS code was requested by other payers, and we
continue to believe that adopting it for use in the Medicare program
would provide consistency in reporting and identifying services
furnished via telehealth. We have had longstanding HCPCS modifiers for
telehealth. While these modifiers were not adopted by CPT, they have
been available for use by other payers. Despite the availability of
these HCPCS modifiers noting telehealth services, payers have requested
creation of the new POS code. Therefore, we do not understand why
introduction of a new CPT modifier as opposed to a HCPCS modifier would
obviate the need for a POS code. Instead, we agree with other payers
that the POS code would provide consistency in reporting and
identifying services furnished via telehealth, since it eliminates the
need for service-specific rules regarding appropriate POS reporting for
telehealth services.
Comment: Another commenter stated that use of the POS code, or
originating site restrictions, would place additional administrative
barriers for telepsychiatric access.
Response: We note that the POS is a required field on the
professional claim, regardless of whether the service is furnished via
telehealth. Since a selection needs to be made, we believe that
requiring the selection of a specific code is no more burdensome than
requiring the claim to specify the POS appropriate to either the
setting of the telehealth patient or the setting of the distant site
practitioner. The POS code does not entail any new originating site
restrictions.
Comment: Various commenters asked for clarification of the
following:
Whether the POS code would replace the GT modifier.
Whether the description of telehealth as a service
furnished via an interactive audio and video telecommunications system
applies to the POS code as it does to the GT modifier.
How to ensure proper payment when the distant site
practitioner is at a facility, but the patient is not.
Response: Under current policy, use of the GT and GQ modifiers
certifies that the service meets the telehealth requirements, and would
continue to be required. The POS code would be used in addition to the
GT and GQ modifiers. We did not propose to implement a change in the
requirement to use either the GT and GQ modifier because at the time of
the proposed rule, we did not know whether the telehealth POS code
would be made effective for January 1, 2017. However, because under our
proposal the POS code would serve to identify telehealth services
furnished under section 1834(m) of the Act via an interactive audio and
video telecommunications system, we believe that we should consider
eliminating the required use of the GT and GQ telehealth modifiers, and
we may revisit this question through future rulemaking. Like the
modifiers, use of the POS code certifies that the service meets the
telehealth requirements. Distant site providers will be paid using the
facility PE RVUs, regardless of their location. The setting of the
patient does not affect the payment to the distant site provider.
Comment: Commenters also asked for clarification that the proposal
to adopt the telehealth POS relates solely to payment, and not to
licensure requirements. The commenter noted that practitioners who
furnish telehealth services must adhere to the standard of care and
licensure rules, regulations and laws of the state where the patient is
located, just as the practitioner would in a traditional face-to-face
encounter.
Response: The commenters are correct that the purpose of our POS
proposal is to assist in determining proper payment. It will also help
us to accurately track telehealth utilization and spending. The
proposal to adopt the telehealth POS code has no bearing on state
licensure requirements or other state regulations. We appreciate the
commenters' request for clarification.
Comment: Several commenters supported the proposal to use the
facility PE RVUs for telehealth services. One commenter said paying
some telehealth services at non-facility rates creates undesirable
financial incentives to prefer telehealth services over services that
are furnished in person at the originating site.
Response: We appreciate the support for the proposal and agree with
the commenter's articulation regarding the importance of developing
payment rates that reflect the relative resource costs of furnishing
the services and that do not create unintended financial incentives.
Comment: Many other commenters opposed the proposal. Commenters
stated that it would result in lower fees for telehealth services
furnished by psychologists. Commenters also stated that PE costs
increase for services furnished via telehealth due to the costs of
HIPAA-compliant telecommunication equipment.
One commenter remarked that use of a POS code should not be the
basis for reducing payments and that many codes would experience a
significant payment change. The commenter noted that a 1.0 RVU
reduction would result in a $36 payment reduction for the service. One
commenter stated CMS should propose budget neutral PE and originating
site fees, based on data, for CY 2018. One commenter noted that there
are no facility PE RVUs for several codes.

[[Page 80201]]

Response: We do not believe that use of the telehealth POS code
produces a significant payment change in the vast majority of
circumstances. For distant site practitioners who are already paid
using the facility PE RVUs and for services where there is no payment
difference between the facility and non-facility PE RVUs, there will be
no change in payment as a result of the telehealth POS code.
There is utilization data for 56 of the 81 codes on the telehealth
list. For these codes, 20 are not paid differently based on site of
service, and 27 codes are paid differently by fewer than 0.5 RVUs.
There are only three codes on the telehealth list with a difference
greater than 1.0 PE RVUs between the facility PE RVUs and the non-
facility PE RVUs.
Concerning psychotherapy and psychological testing services, we
note that for the vast majority of psychiatric services the difference
between the two rates is very small. For example, the difference
between the facility and non-facility national rates for 45 minutes of
psychotherapy is 0.02 RVUs per service: Less than $1.00. The
differences between the facility PE RVUs and non-facility PE RVUS
ranges from 0.01-0.03 RVUs for nine of the psychological testing codes
on the Medicare telehealth list, and 0.12 RVUs lower for two other
codes. We do not consider these reductions significant, nor do we have
any evidence that practice expense costs are greater for furnishing
such services via telehealth than for furnishing a face-to-face
service. Commenters provided no evidence that practice expense costs
for services furnished via telehealth are greater, due to the
requirement for HIPAA-compliant equipment, than for furnishing in-
person services, even in the facility setting.
There are a few HCPCS codes on the telehealth list that do not have
a calculated facility PE RVU. For these services, the non-facility PE
RVUs would serve as a proxy, and therefore, there would be no payment
change for these codes.
Finally, we note that the originating site facility fee is
established by statute (section 1834(m)(2)(B) of the Act) and is not
affected by this proposal.
We note that we believe that payment using the facility PE RVUs for
telehealth services is consistent our belief that the direct practice
expense costs are generally incurred at the location of the beneficiary
and not by the distant site practitioner. After reviewing the current
list of telehealth services in the context of the comments, we continue
to believe this is accurate.
After consideration of the public comments received, we are
finalizing our proposal to use the POS code for telehealth and to use
the facility PE RVUs to pay for telehealth service reported by
physicians or practitioners with the telehealth POS code for CY 2017.
However, we understand commenters' concerns and will consider the
concerns regarding use of the facility payment rate as we monitor
utilization of telehealth services. We will welcome information from
stakeholders regarding any potential unintended consequences of the
payment policy. We will also consider the applicability of the facility
rate to any codes newly added to the list of telehealth services.
We have updated the POS code list on our Web site at https://www.cms.gov/Medicare/Coding/place-of-service-codes/Place_of_Service_Code_Set.html to include POS 02: Telehealth
(Descriptor: The location where health services and health related
services are provided or received, through telecommunication
technology). The new code will be used for services furnished on or
after January 1, 2017.
We are finalizing proposed revisions to our regulation at Sec.
414.22(b)(5)(i)(A) that addresses the PE RVUs used in different
settings as described above, except that we are not finalizing the
proposed change that would have resulted in the payment of the
nonfacility rate for services furnished in off-campus provider based
departments that are not excepted under Section 603 of the Bipartisan
Budget Act of 2015 since we are finalizing that payments to such non-
excepted PBDs will be made under the PFS. In a separate interim final
rule with comment period issued in conjunction with the CY 2017 OPPS/
ASC final rule with comment period (see Medicare Program: Hospital
Outpatient Prospective Payment and Ambulatory Surgical Center Payment
Systems and Quality Reporting Programs; Organ Procurement Organization
Reporting and Communication; Transplant Outcome Measures and
Documentation Requirements; Electronic Health Record (EHR) Incentive
Programs; Payment to Certain Off-Campus Outpatient Departments of a
Provider; Hospital Value-Based Purchasing (VBP) Program; Establishment
of Physician Fee Schedule Payment Rates for Nonexcepted Items and
Services Billed by Applicable Departments of a Hospital), we are
finalizing other payment policies for nonexcepted items and services
furnished by such non-excepted off-campus provider based departments.
Accordingly, physicians furnishing services in such provider-based
departments will continue to be paid the facility rate. We are also
finalizing the proposal to delete Sec. 414.32 of our regulation that
refers to the calculation of payments for certain services prior to
2002.
We remind the public that we are currently soliciting requests to
add services to the list of Medicare telehealth services. To be
considered during PFS rulemaking for CY 2018, these requests must be
submitted and received by December 31, 2016. Each request to add a
service to the list of Medicare telehealth services must include any
supporting documentation the requester wishes us to consider as we
review the request. For more information on submitting a request for an
addition to the list of Medicare telehealth services, including where
to mail these requests, we refer readers to the CMS Web site at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/.
5. Telehealth Originating Site Facility Fee Payment Amount Update
Section 1834(m)(2)(B) of the Act establishes the Medicare
telehealth originating site facility fee for telehealth services
furnished from October 1, 2001 through December 31, 2002, at $20.00.
For telehealth services furnished on or after January 1 of each
subsequent calendar year, the telehealth originating site facility fee
is increased by the percentage increase in the MEI as defined in
section 1842(i)(3) of the Act. The originating site facility fee for
telehealth services furnished in CY 2016 is $25.10. The MEI increase
for 2017 is 1.2 percent and is based on the most recent historical
update through 2016Q2 (1.6 percent), and the most recent historical MFP
through calendar year 2015 (0.4 percent). Therefore, for CY 2017, the
payment amount for HCPCS code Q3014 (Telehealth originating site
facility fee) is 80 percent of the lesser of the actual charge or
$25.40. The Medicare telehealth originating site facility fee and the
MEI increase by the applicable time period is shown in Table 6.

Table 6--The Medicare Telehealth Originating Site Facility Fee and MEI
[Increase by the applicable time period]
------------------------------------------------------------------------
MEI Facility
Time period increase fee
------------------------------------------------------------------------
10/01/2001-12/31/2002............................. N/A $20.00
01/01/2003-12/31/2003............................. 3.0 20.60
01/01/2004-12/31/2004............................. 2.9 21.20
01/01/2005-12/31/2005............................. 3.1 21.86
01/01/2006-12/31/2006............................. 2.8 22.47
01/01/2007-12/31/2007............................. 2.1 22.94
01/01/2008-12/31/2008............................. 1.8 23.35
01/01/2009-12/31/2009............................. 1.6 23.72

[[Page 80202]]

01/01/2010-12/31/2010............................. 1.2 24.00
01/01/2011-12/31/2011............................. 0.4 24.10
01/01/2012-12/31/2012............................. 0.6 24.24
01/01/2013-12/31/2013............................. 0.8 24.43
01/01/2014-12/31/2014............................. 0.8 24.63
01/01/2015-12/31/2015............................. 0.8 24.83
01/01/2016-12/31/2016............................. 1.1 25.10
01/01/2017-12/31/2017............................. 1.2 25.40
------------------------------------------------------------------------

D. Potentially Misvalued Services Under the Physician Fee Schedule

1. Background
Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a
periodic review, not less often than every 5 years, of the RVUs
established under the PFS. Section 1848(c)(2)(K) of the Act requires
the Secretary to periodically identify potentially misvalued services
using certain criteria and to review and make appropriate adjustments
to the relative values for those services. Section 1848(c)(2)(L) to the
Act also requires the Secretary to develop a process to validate the
RVUs of certain potentially misvalued codes under the PFS, using the
same criteria used to identify potentially misvalued codes, and to make
appropriate adjustments.
As discussed in section II.B. of this final rule, each year we
develop appropriate adjustments to the RVUs taking into account
recommendations provided by the American Medical Association/Specialty
Society Relative Value Scale Update Committee (RUC), the Medicare
Payment Advisory Commission (MedPAC), and others. For many years, the
RUC has provided us with recommendations on the appropriate relative
values for new, revised, and potentially misvalued PFS services. We
review these recommendations on a code-by-code basis and consider these
recommendations in conjunction with analyses of other data, such as
claims data, to inform the decision-making process as authorized by the
law. We may also consider analyses of work time, work RVUs, or direct
PE inputs using other data sources, such as Department of Veteran
Affairs (VA), National Surgical Quality Improvement Program (NSQIP),
the Society for Thoracic Surgeons (STS), and the Physician Quality
Reporting System (PQRS) databases. In addition to considering the most
recently available data, we also assess the results of physician
surveys and specialty recommendations submitted to us by the RUC for
our review. We also consider information provided by other
stakeholders. We conduct a review to assess the appropriate RVUs in the
context of contemporary medical practice. We note that section
1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and
other techniques to determine the RVUs for physicians' services for
which specific data are not available and requires us to take into
account the results of consultations with organizations representing
physicians who provide the services. In accordance with section 1848(c)
of the Act, we determine and make appropriate adjustments to the RVUs.
In its March 2006 Report to the Congress (https://www.medpac.gov/documents/reports/Mar06_EntireReport.pdf?sfvrsn=0), MedPAC discussed
the importance of appropriately valuing physicians' services, noting
that misvalued services can distort the market for physicians'
services, as well as for other health care services that physicians
order, such as hospital services. In that same report MedPAC postulated
that physicians' services under the PFS can become misvalued over time.
MedPAC stated, ``When a new service is added to the physician fee
schedule, it may be assigned a relatively high value because of the
time, technical skill, and psychological stress that are often required
to furnish that service. Over time, the work required for certain
services would be expected to decline as physicians become more
familiar with the service and more efficient in furnishing it.'' We
believe services can also become overvalued when PE declines. This can
happen when the costs of equipment and supplies fall, or when equipment
is used more frequently than is estimated in the PE methodology,
reducing its cost per use. Likewise, services can become undervalued
when physician work increases or PE rises.
As MedPAC noted in its March 2009 Report to Congress (https://www.medpac.gov/documents/reports/march-2009-report-to-congress-medicare-payment-policy.pdf?sfvrsn=0), in the intervening years since
MedPAC made the initial recommendations, CMS and the RUC have taken
several steps to improve the review process. Also, section
1848(c)(2)(K)(ii) of the Act augments our efforts by directing the
Secretary to specifically examine, as determined appropriate,
potentially misvalued services in the following categories:
Codes that have experienced the fastest growth.
Codes that have experienced substantial changes in
practice expenses.
Codes that describe new technologies or services within an
appropriate time period (such as 3 years) after the relative values are
initially established for such codes.
Codes which are multiple codes that are frequently billed
in conjunction with furnishing a single service.
Codes with low relative values, particularly those that
are often billed multiple times for a single treatment.
Codes that have not been subject to review since
implementation of the fee schedule.
Codes that account for the majority of spending under the
physician fee schedule.
Codes for services that have experienced a substantial
change in the hospital length of stay or procedure time.
Codes for which there may be a change in the typical site
of service since the code was last valued.
Codes for which there is a significant difference in
payment for the same service between different sites of service.
Codes for which there may be anomalies in relative values
within a family of codes.
Codes for services where there may be efficiencies when a
service is furnished at the same time as other services.
Codes with high intra-service work per unit of time.
Codes with high practice expense relative value units.
Codes with high cost supplies.
Codes as determined appropriate by the Secretary.
Section 1848(c)(2)(K)(iii) of the Act also specifies that the
Secretary may use existing processes to receive recommendations on the
review and appropriate adjustment of potentially misvalued services. In
addition, the Secretary may conduct surveys, other data collection
activities, studies, or other analyses, as the Secretary determines to
be appropriate, to facilitate the review and appropriate adjustment of
potentially misvalued services. This section also authorizes the use of
analytic contractors to identify and analyze potentially misvalued
codes, conduct surveys or collect data, and make recommendations on the
review and appropriate adjustment of potentially misvalued services.
Additionally, this section provides that the Secretary may coordinate
the review and adjustment of

[[Page 80203]]

any RVU with the periodic review described in section 1848(c)(2)(B) of
the Act. Section 1848(c)(2)(K)(iii)(V) of the Act specifies that the
Secretary may make appropriate coding revisions (including using
existing processes for consideration of coding changes) that may
include consolidation of individual services into bundled codes for
payment under the physician fee schedule.
2. Progress in Identifying and Reviewing Potentially Misvalued Codes
To fulfill our statutory mandate, we have identified and reviewed
numerous potentially misvalued codes as specified in section
1848(c)(2)(K)(ii) of the Act, and we plan to continue our work
examining potentially misvalued codes in these areas over the upcoming
years. As part of our current process, we identify potentially
misvalued codes for review, and request recommendations from the RUC
and other public commenters on revised work RVUs and direct PE inputs
for those codes. The RUC, through its own processes, also identifies
potentially misvalued codes for review. Through our public nomination
process for potentially misvalued codes established in the CY 2012 PFS
final rule with comment period, other individuals and stakeholder
groups submit nominations for review of potentially misvalued codes as
well.
Since CY 2009, as a part of the annual potentially misvalued code
review and Five-Year Review process, we have reviewed over 1,671
potentially misvalued codes to refine work RVUs and direct PE inputs.
We have assigned appropriate work RVUs and direct PE inputs for these
services as a result of these reviews. A more detailed discussion of
the extensive prior reviews of potentially misvalued codes is included
in the CY 2012 PFS final rule with comment period (76 FR 73052 through
73055). In the CY 2012 PFS final rule with comment period, we finalized
our policy to consolidate the review of physician work and PE at the
same time (76 FR 73055 through 73958), and established a process for
the annual public nomination of potentially misvalued services.
In the CY 2013 PFS final rule with comment period, we built upon
the work we began in CY 2009 to review potentially misvalued codes that
have not been reviewed since the implementation of the PFS (so-called
``Harvard-valued codes''). In CY 2009, we requested recommendations
from the RUC to aid in our review of Harvard-valued codes that had not
yet been reviewed, focusing first on high-volume, low intensity codes
(73 FR 38589). In the fourth Five-Year Review (76 FR 32410), we
requested recommendations from the RUC to aid in our review of Harvard-
valued codes with annual utilization of greater than 30,000. In the CY
2013 PFS final rule with comment period, we identified specific
Harvard-valued services with annual allowed charges that total at least
$10,000,000 as potentially misvalued. In addition to the Harvard-valued
codes, in the CY 2013 PFS final rule with comment period we finalized
for review a list of potentially misvalued codes that have stand-alone
PE (codes with physician work and no listed work time and codes with no
physician work that have listed work time).
In the CY 2016 PFS final rule with comment period, we finalized for
review a list of potentially misvalued services, which included eight
codes in the neurostimulators analysis-programming family (CPT 95970-
95982). We also finalized as potentially misvalued 103 codes identified
through our screen of high expenditure services across specialties.
3. Validating RVUs of Potentially Misvalued Codes
Section 1848(c)(2)(L) of the Act requires the Secretary to
establish a formal process to validate RVUs under the PFS. The Act
specifies that the validation process may include validation of work
elements (such as time, mental effort and professional judgment,
technical skill and physical effort, and stress due to risk) involved
with furnishing a service and may include validation of the pre-, post-
, and intra-service components of work. The Secretary is directed, as
part of the validation, to validate a sampling of the work RVUs of
codes identified through any of the 16 categories of potentially
misvalued codes specified in section 1848(c)(2)(K)(ii) of the Act.
Furthermore, the Secretary may conduct the validation using methods
similar to those used to review potentially misvalued codes, including
conducting surveys, other data collection activities, studies, or other
analyses as the Secretary determines to be appropriate to facilitate
the validation of RVUs of services.
In the CY 2011 PFS proposed rule (75 FR 40068) and CY 2012 PFS
proposed rule (76 FR 42790), we solicited public comments on possible
approaches, methodologies, and data sources that we should consider for
a validation process. A summary of the comments along with our
responses are included in the CY 2011 PFS final rule with comment
period (75 FR 73217) and the CY 2012 PFS final rule with comment period
(73054 through 73055).
We contracted with two outside entities to develop validation
models for RVUs.
Given the central role of time in establishing work RVUs and the
concerns that have been raised about the current time values used in
rate setting, we contracted with the Urban Institute to develop
empirical time estimates based on data collected from several health
systems with multispecialty group practices. The Urban Institute
collected data by directly observing the delivery of services and
through the use of electronic health records for services selected by
the contractor in consultation with CMS and is using this data to
produce objective time estimates. We expect the final Urban Institute
report will be made available on the CMS Web site later this year.
The second contract is with the RAND Corporation, which used
available data to build a validation model to predict work RVUs and the
individual components of work RVUs, time and intensity. The model
design was informed by the statistical methodologies and approach used
to develop the initial work RVUs and to identify potentially misvalued
procedures under current CMS and RUC processes. RAND consulted with a
technical expert panel on model design issues and the test results. The
RAND report is available under downloads on the Web site for the CY
2015 PFS final rule with comment period at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices-Items/CMS-1612-FC.html.
After posting RAND's report on the models and results on our Web
site, we received comments indicating that the models did not
adequately address global surgery services due to the lack of available
data on included visits. Therefore, we modified the RAND contract to
include the development of G-codes that could be used to collect data
about post-surgical follow-up visits on Medicare claims to meet the
requirements in section 1848(c)(8)(B) of the Act regarding collection
of data on global services. Our discussion related to this data
collection requirement is in section II.D.6. Also, the data from this
project would provide information that would allow the time for these
services to be included in the model for validating RVUs.

[[Page 80204]]

4. CY 2017 Identification and Review of Potentially Misvalued Services
a. 0-Day Global Services That Are Typically Billed With an Evaluation
and Management (E/M) Service With Modifier 25
Because routine E/M is included in the valuation of codes with 0-,
10-, and 90-day global periods, Medicare only makes separate payment
for E/M services that are provided in excess of those considered
included in the global procedure. In such cases, the physician would
report the additional E/M service with Modifier 25, which is defined as
a significant, separately identifiable E/M service performed by the
same physician on the day of a procedure above and beyond other
services provided or beyond the usual preservice and postservice care
associated with the procedure that was performed. Modifier 25 allows
physicians to be paid for E/M services that would otherwise be denied
as bundled.
In reviewing misvalued codes, both CMS and the RUC have often
considered how frequently particular codes are reported with E/M codes
to account for potential overlap in resources. Some stakeholders have
expressed concern with this policy especially with regard to the
valuation of 0-day global services that are typically billed with a
separate E/M service with the use of Modifier 25. For example, when we
established our valuation of the osteopathic manipulative treatment
(OMT) services, described by CPT codes 98925-98929, we did so with the
understanding that these codes are usually reported with E/M codes.
For our CY 2017 proposal (81 FR 46187), we investigated Medicare
claims data for CY 2015 and found that 19 percent of the codes that
described 0-day global services were billed over 50 percent of the time
with an E/M with Modifier 25. Since routine E/M is included in the
valuation of 0-day global services, we believed that the routine
billing of separate E/M services may have indicated a possible problem
with the valuation of the bundle, which is intended to include all the
routine care associated with the service.
In the proposed rule (81 FR 46187), we stated that reviewing the
procedure codes typically billed with an E/M with Modifier 25 may be
one avenue to appropriate valuation for these services. Therefore, we
developed and proposed a screen for potentially misvalued codes that
identified 0-day global codes billed with an E/M 50 percent of the time
or more, on the same day of service, with the same physician and same
beneficiary. We included a list of codes with total allowed services
greater than 20,000. There are 83 codes that met the proposed criteria
for the screen and were proposed as potentially misvalued. We also
sought comment regarding additional ways to address appropriate
valuations for all services that are typically billed with an E/M with
Modifier 25.
The following is the summary of the comments we received.
Comment: Several commenters disagreed with CMS' assertion that
there is a possible valuation problem with the bundle when an E/M with
Modifier 25 is typically reported on the same day of service as a 0-day
global procedure. Commenters stated that billing an E/M with Modifier
25 pays physicians for the justifiable and appropriate services they
render to patients; allowing for a patient-centered approach to care.
Some commenters considered the possibility that there could be
fraudulent billing practices when reporting an E/M with Modifier 25 and
a few offered various solutions for rectifying the problem from a
program integrity perspective. For example, one commenter suggested
that further education on the appropriate use of Modifier 25 or penalty
for misuse would be effective alternatives to combat inappropriate
billing while another commenter suggested investigating the diagnosis
coding for services.
Commenters overwhelmingly opposed any change to billing policies or
standard valuation for 0-day services that are billed with an E/M with
Modifier 25.
Response: We appreciate commenters' perspective on this issue.
While we understand the commenters' views, since routine E/M is
included in the valuation of 0-day global services we continue to
believe that the routine billing of separate E/M services may still
indicate a possible problem with the valuation of the global period or
the assignment of the global period for particular codes, given that
the period is intended to include all the routine care associated with
the service. As discussed below, we are finalizing some of the 0-day
global services as potentially misvalued. We will also continue to
consider this issue for future rulemaking.
Comment: Several commenters expressed appreciation for the
identification of an objective screen and reasonable query. While some
commenters were accepting of the screen as proposed, others stated
their preference for the screen to be withdrawn entirely or limited in
scope, with some commenters suggesting the screen be limited to the
codes that met the criteria and for which the overlap had not already
been considered by the RUC in developing recommended values. Several
thousand commenters suggested withdrawing or limiting the scope of this
screen, particularly as it pertains to the OMT codes.
Response: Section 1848(c)(2)(K) of the Act requires the Secretary
to periodically identify potentially misvalued services and to review
and make appropriate adjustments to the relative values for those
services. Section 1848(c)(2)(K) of the Act identifies several
categories of services as potentially misvalued, including codes for
services where there may be efficiencies when a service is furnished at
the same time as other services, along with codes as determined
appropriate by the Secretary. Based on the comments received, we
understand that stakeholders would have us identify as potentially
misvalued only those individual codes with obvious overlapping resource
costs when typically reported with an E/M, rather than consider the
issue of misvaluation of the global period more broadly. In response to
these comments, we are finalizing the use of our screen for 0-day
global services that are typically billed with an E/M with Modifier 25
as a mechanism for identifying services that are potentially misvalued.
Because we recognize that the primary purpose in displaying lists
of misvalued codes in rulemaking has been to seek recommendations
regarding appropriate valuation from stakeholders, including the RUC,
for 2017 we are only identifying the services for which we believe
there might be the kind of misvaluation the RUC and the medical
specialty societies recognize. Based on the comments from these
organizations, we believe that for codes reviewed in the past 5 years,
the RUC has already addressed that kind of misvaluation. In other
words, commenters have made clear that external review of these
services is likely to be limited to clear overlap in resource costs,
but will not address the broader concerns we have about developing
rates for services that include routine E/M when evaluation and
management is also routinely separately reported. As a result, we will
continue to consider that issue for future rulemaking. We note that we
are required under statute to improve the valuation of the 10- and 90-
day global periods, and therefore, we will consider this issue in that
context, as well.
Comment: While some commenters supported our review of the 83 codes
that were proposed as potentially

[[Page 80205]]

misvalued through the screen, the majority of commenters, including the
RUC, stated that the codes detailed in Table 7 did not meet the
criteria for the screen because they were either reviewed in the last 5
years and/or are not typically reported with an E/M, and therefore,
should be removed. While commenters largely disagreed on the list of
proposed codes, most agreed that the services they believed met the
screen criteria should be reviewed.

Table 7--Codes Requested To Be Removed From the List of Potentially
Misvalued Services
------------------------------------------------------------------------
HCPCS Long descriptor
------------------------------------------------------------------------
11000............................. Removal of inflamed or infected
skin, up to 10% of body surface.
11100............................. Biopsy of single growth of skin and/
or tissue.
11300............................. Shaving of 0.5 centimeters or less
skin growth of the trunk, arms, or
legs.
11301............................. Shaving of 0.6 centimeters to 1.0
centimeters skin growth of the
trunk, arms, or legs.
11302............................. Shaving of 1.1 to 2.0 centimeters
skin growth of the trunk, arms, or
legs.
11305............................. Shaving of 0.5 centimeters or less
skin growth of scalp, neck, hands,
feet, or genitals.
11306............................. Shaving of 0.6 centimeters to 1.0
centimeters skin growth of scalp,
neck, hands, feet, or genitals.
11307............................. Shaving of 1.1 to 2.0 centimeters
skin growth of scalp, neck, hands,
feet, or genitals.
11310............................. Shaving of 0.5 centimeters or less
skin growth of face, ears, eyelids,
nose, lips, or mouth.
11311............................. Shaving of 0.6 centimeters to 1.0
centimeters skin growth of face,
ears, eyelids, nose, lips, or
mouth.
11312............................. Shaving of 1.1 to 2.0 centimeters
skin growth of face, ears, eyelids,
nose, lips, or mouth.
11740............................. Removal of blood accumulation
between nail and nail bed.
11900............................. Injection of up to 7 skin growths.
11901............................. Injection of more than 7 skin
growths.
12001............................. Repair of wound (2.5 centimeters or
less) of the scalp, neck,
underarms, trunk, arms and/or legs.
12002............................. Repair of wound (2.6 to 7.5
centimeters) of the scalp, neck,
underarms, genitals, trunk, arms
and/or legs.
12004............................. Repair of wound (7.6 to 12.5
centimeters) of the scalp, neck,
underarms, genitals, trunk, arms
and/or legs.
12011............................. Repair of wound (2.5 centimeters or
less) of the face, ears, eyelids,
nose, lips, and/or mucous
membranes.
12013............................. Repair of wound (2.6 to 5.0
centimeters) of the face, ears,
eyelids, nose, lips, and/or mucous
membranes.
17250............................. Application of chemical agent to
excessive wound tissue.
20550............................. Injections of tendon sheath,
ligament, or muscle membrane.
20552............................. Injections of trigger points in 1 or
2 muscles.
20553............................. Injections of trigger points in 3 or
more muscles.
20600............................. Aspiration and/or injection of small
joint or joint capsule.
20604............................. Arthrocentesis, aspiration and/or
injection, small joint or bursa
(eg, fingers, toes); with
ultrasound guidance, with permanent
recording and reporting.
20605............................. Aspiration and/or injection of
medium joint or joint capsule.
20606............................. Arthrocentesis, aspiration and/or
injection, intermediate joint or
bursa (eg, temporomandibular,
acromioclavicular, wrist, elbow or
ankle, olecranon bursa); with
ultrasound guidance, with permanent
recording and reporting.
20610............................. Aspiration and/or injection of large
joint or joint capsule.
20611............................. Arthrocentesis, aspiration and/or
injection, major joint or bursa
(eg, shoulder, hip, knee,
subacromial bursa); with ultrasound
guidance, with permanent recording
and reporting.
20612............................. Aspiration and/or injection of
cysts.
29125............................. Application of non-moveable, short
arm splint (forearm to hand).
29515............................. Application of short leg splint
(calf to foot).
30901............................. Simple control of nose bleed.
30903............................. Complex control of nose bleed.
31231............................. Diagnostic examination of nasal
passages using an endoscope.
31238............................. Control of nasal bleeding using an
endoscope.
31500............................. Emergent insertion of breathing tube
into windpipe cartilage using an
endoscope.
31575............................. Diagnostic examination of voice box
using flexible endoscope.
31579............................. Examination to assess movement of
vocal cord flaps using an
endoscope.
31645............................. Aspiration of lung secretions from
lung airways using an endoscope.
32551............................. Removal of fluid from between lung
and chest cavity, open procedure.
32554............................. Removal of fluid from chest cavity.
40490............................. Biopsy of lip.
46600............................. Diagnostic examination of the anus
using an endoscope.
51701............................. Insertion of temporary bladder
catheter.
51702............................. Insertion of indwelling bladder
catheter.
51703............................. Insertion of indwelling bladder
catheter.
56605............................. Biopsy of external female genitals.
57150............................. Irrigation of vagina and/or
application of drug to treat
infection.
57160............................. Fitting and insertion of vaginal
support device.
58100............................. Biopsy of uterine lining.
64418............................. Injection of anesthetic agent,
collar bone nerve.
65222............................. Removal of foreign body, external
eye, cornea with slit lamp
examination.
67810............................. Biopsy of eyelid.
67820............................. Removal of eyelashes by forceps.
68200............................. Injection into conjunctiva.
69100............................. Biopsy of ear.
69200............................. Removal of foreign body from ear
canal.
69210............................. Removal of impact ear wax, one ear.
69220............................. Removal of skin debris and drainage
of mastoid cavity.
92511............................. Examination of the nose and throat
using an endoscope.
92941............................. Insertion of stent, removal of
plaque and/or balloon dilation of
coronary vessel during heart
attack, accessed through the skin.
92950............................. Attempt to restart heart and lungs.

[[Page 80206]]

98925............................. Osteopathic manipulative treatment
to 1-2 body regions.
98926............................. Osteopathic manipulative treatment
to 3-4 body regions.
98927............................. Osteopathic manipulative treatment
to 5-6 body regions.
98928............................. Osteopathic manipulative treatment
to 7-8 body regions.
98929............................. Osteopathic manipulative treatment
to 9-10 body regions.
------------------------------------------------------------------------

Response: After considering the comments received, we are
significantly reducing the number of codes identified as potentially
misvalued. We agree with commenters that the majority of the codes that
we are not finalizing have been recently reviewed. Due to a drafting
error in the proposed rule, we stated that we had exempted codes that
had been reviewed in the past 5 years. While that exclusion has been
standard for many other misvalued code screens, we did not intend to
apply it in this case, given our concerns with the valuation of the
global period when E/M visits are routinely reported at the same time.
As displayed in the proposed rule, the list of codes reflected our
intention to include codes that have been recently reviewed.
Regardless, we understand based on comments that any review by
stakeholders for recently reviewed codes would be likely to result in
similar valuation. Therefore, we do not believe that we should include
codes reviewed in the past 5 years on this list of misvalued codes,
given the limited nature of the likely review. Regarding the accuracy
of which of the codes are typically reported with E/M codes, we note
that our review included analysis was based on more recent, full claims
data than had yet been made public. In the interest of transparency, we
are finalizing the list of services based on the publically available
data.

Table 8--List of Potentially Misvalued Services Identified Through the
Screen for 0-Day Global Services That Are Typically Billed With an
Evaluation and Management (E/M) Service With Modifier 25
------------------------------------------------------------------------
HCPCS Long descriptor
------------------------------------------------------------------------
11755............................. Biopsy of finger or toe nail.
20526............................. Injection of carpal tunnel.
20551............................. Injections of tendon attachment to
bone.
20612............................. Aspiration and/or injection of
cysts.
29105............................. Application of long arm splint
(shoulder to hand).
29540............................. Strapping of ankle and/or foot.
29550............................. Strapping of toes.
43760............................. Change of stomach feeding, accessed
through the skin.
45300............................. Diagnostic examination of rectum and
large bowel using an endoscope.
57150............................. Irrigation of vagina and/or
application of drug to treat
infection.
57160............................. Fitting and insertion of vaginal
support device.
58100............................. Biopsy of uterine lining.
64405............................. Injection of anesthetic agent,
greater occipital nerve.
64455............................. Injections of anesthetic and/or
steroid drug into nerve of foot.
65205............................. Removal of foreign body in external
eye, conjunctiva.
65210............................. Removal of foreign body in external
eye, conjunctiva or sclera.
67515............................. Injection of medication or substance
into membrane covering eyeball.
G0168............................. Wound closure utilizing tissue
adhesive(s) only.
G0268............................. Removal of impacted cerumen (one or
both ears) by physician on same
date of service as audiologic
function testing.
------------------------------------------------------------------------

b. End-Stage Renal Disease Home Dialysis Services (CPT Codes 90963
Through 90970)
In the CY 2004 PFS final rule with comment period (68 FR 63216), we
established new Level II HCPCS G-codes for end-stage renal disease
(ESRD) services and established payment for those codes through monthly
capitation payment (MCP) rates. For ESRD center-based patients, payment
for the G-codes varied based on the age of the beneficiary and the
number of face-to-face visits furnished each month (for example, 1
visit, 2-3 visits and 4 or more visits). We believed that many
physicians would provide 4 or more visits to center-based ESRD patients
and a small proportion will provide 2-3 visits or only one visit per
month. Under the MCP methodology, to receive the highest payment, a
physician would have to provide at least four ESRD-related visits per
month. However, payment for home dialysis MCP services only varied by
the age of beneficiary. Although we did not initially specify a
frequency of required visits for home dialysis MCP services, we stated
that we expect physicians to provide clinically appropriate care to
manage the home dialysis patient.
The CPT Editorial Panel created new CPT codes to replace the G-
codes for monthly ESRD-related services, and we accepted the new codes
for use under the PFS in CY 2009. The CPT codes created were 90963-
90966 for monthly ESRD-related services for home dialysis patient and
CPT codes 90967-90970 for dialysis with less than a full month of
services.
In a GAO report titled ``END-STAGE RENAL DISEASE Medicare Payment
Refinements Could Promote Increased Use of Home Dialysis'' dated
October 2015, https://www.gao.gov/products/GAO-16-125, the GAO stated
that experts and stakeholders they interviewed indicated that home
dialysis could be clinically appropriate for at least half of patients.
Also, at a meeting in 2013, the chief medical officers of 14 dialysis
facility chains jointly estimated that a realistic target for home
dialysis would be 25 percent of dialysis patients. The GAO noted that
CMS data showed that about 10 percent of adult Medicare dialysis
patients use home dialysis as of March 2015.

[[Page 80207]]

In the report, the GAO noted that CMS intended for the existing
payment structure to create an incentive for physicians to prescribe
home dialysis, because the monthly payment rate for managing the
dialysis care of home patients, which requires a single in-person
visit, was approximately equal to the rate for managing and providing
two to three visits to ESRD center-based patients. However, GAO found
that, in 2013, the rate of $237 for managing home patients was lower
than the average payment of $266 and maximum payment of $282 for
managing ESRD center-based patients. The GAO stated that this
difference in payment rates may discourage physicians from prescribing
home dialysis.
Physician associations and other physicians GAO interviewed stated
that the visits with home patients are often longer and more
comprehensive than in-center visits; this is in part because physicians
may conduct visits with individual home patients in a private setting,
but they may be able to more easily visit multiple in-center patients
on a single day as they receive dialysis. The physician associations
GAO interviewed also said that they may spend a similar amount of time
outside of visits to manage the care of home patients and that they are
required to provide at least one visit per month to perform a complete
assessment of the patient.
It is important to note that, as stated in the CY 2011 PFS final
rule with comment period (75 FR 73296), we believe that furnishing
monthly face-to-face visits is an important component of high quality
medical care for ESRD patients being dialyzed at home and generally
would be consistent with the current standards of medical practice.
However, we also acknowledged that extenuating circumstances may arise
that make it difficult for the MCP physician (or NPP) to furnish a
visit to a home dialysis patient every month. Therefore, we allow
Medicare contractors the discretion to waive the requirement for a
monthly face-to-face visit for the home dialysis MCP service on a case-
by-case basis, for example, when the MCP physician's (or NPP's) notes
indicate that the MCP physician (or NPP) actively and adequately
managed the care of the home dialysis patient throughout the month.
The GAO recommended, and we agreed, that CMS examine Medicare
policies for monthly payments to physicians to manage the care of
dialysis patients and revise them if necessary to ensure that these
policies are consistent with our goal of encouraging the use of home
dialysis among patients for whom it is appropriate. Therefore, we
proposed to identify CPT codes 90963 through 90970 as potentially
misvalued codes based on the volume of claims submitted for these
services relative to those submitted for facility ESRD services.
The following is summary of the comments we received.
Comment: Commenters supported the proposal to identify these codes
as potentially misvalued and supported CMS' goal of encouraging the use
of home dialysis among patients for whom it is appropriate. Some
commenters suggested we establish parity between payment for four ESRD-
related visits per month for in-center dialysis patients and payment
for the care of home dialysis patients for an entire month. One
commenter cautioned that CMS should also consider factors other than
payment that play a critical role in whether a patient decides to use a
home dialysis modality as outlined in a recent GAO report and requested
that CMS work closely with nephrologists on this issue. One commenter
encouraged CMS to focus on incentives for the adult population
separately from pediatrics as they see no benefit from reanalysis of
the pediatric home and daily dialysis CPT codes 90963-90965 and 90967-
90969.
Response: We appreciate all of the comments and agree that CPT
codes 90963 through 90970 should be identified as potentially
misvalued. After considering the comments, we are finalizing the
addition of CPT codes 90963 through 90970 to the list of potentially
misvalued codes. We will also continue to consider these issues for
future rulemaking.
c. Direct PE Input Discrepancies
i. Appropriate Direct PE Inputs Involved in Procedures Involving
Endoscopes
In the proposed rule (81 FR 46190), we stated that stakeholders had
raised concerns about potential inconsistencies with the inputs and the
prices related to endoscopic procedures in the direct PE database. Upon
review, we noted that there are 45 different pieces of endoscope
related-equipment and 25 different pieces of endoscope related-supplies
that are currently associated with these services. Relative to other
kinds of equipment items in the direct PE input, these items are much
more varied and used for many fewer services. Given the frequency with
which individual codes can be reviewed and the importance of
standardizing inputs for purposes of maintaining relativity across PFS
services, we believed that this unusual degree of variation was likely
to result in code misvaluation. To facilitate efficient review of this
particular kind of misvaluation, and because we believed that
stakeholders would prefer the opportunity to contribute to such
standardization, we requested that stakeholders like the AMA RUC review
and make recommendations on the appropriate endoscopic equipment and
supplies typically provided in all endoscopic procedures for each
anatomical body region, along with their appropriate prices.
The following is summary of the comments we received.
Comment: Many commenters stated that the RUC is the appropriate
resource for the review of appropriate direct PE inputs involved in
procedures involving endoscopes and urged CMS to work with the RUC to
address this issue. Additionally, the RUC stated that due to the
complexity of this issue and the need to incorporate input from various
specialty societies that the RUC planned to form a workgroup of the PE
subcommittee to review the issue.
Response: We appreciate the comments and will review any
recommendation provided to us by the RUC for use in future rulemaking,
consistent with our normal review processes.
ii. Appropriate Direct PE Inputs in the Facility Post-Service Period
When Post-Operative Visits Are Excluded
In the proposed rule (81 FR 46190), we identified a potential
inconsistency in instances where there are direct PE inputs included in
the facility postservice period even though post-operative visit is not
included in a service. We identified 13 codes affected by this issue
and stated that we were unclear if the discrepancy was caused by
inaccurate direct PE inputs or inaccurate post-operative data in the
work time file. We requested that stakeholders including the AMA RUC
review these discrepancies and provide their recommendations on the
appropriate direct PE inputs for the codes.
The following is summary of the comments we received.
Comment: The RUC stated that for CPT codes 21077 (Impression and
preparation of eye socket prosthesis), 21079 (Impression and custom
preparation of temporary oral prosthesis), 21080 (Impression and custom
preparation of permanent oral prosthesis), 21081 (Impression and custom
preparation of lower jaw bone prosthesis), 21082 (Impression and custom
preparation of prosthesis for

[[Page 80208]]

roof of mouth enlargement), 21083 (Impression and custom preparation of
roof of mouth prosthesis), and 21084 (Impression and custom preparation
of speech aid prosthesis) the practice expense time in the postservice
period in the facility setting is completely distinct from the
physician post-operative visit and that time must be accounted for the
manufacture and fitting of the prosthetics. The RUC stated that the
following codes all had inaccurate post-operative data in the work time
file and provided recommendations on appropriate post-operative visits:
CPT codes 28636 (Insertion of hardware to foot bone dislocation with
manipulation, accessed through the skin), 28666 (Insertion of hardware
to toe joint dislocation with manipulation, accessed through the skin),
43652 (Incision of vagus nerves of stomach using an endoscope), 47570
(Connection of gall bladder to bowel using an endoscope), and 66986
(Exchange of lens prosthesis). Additionally, another commenter stated
that CPT code 46900 (Chemical destruction of anal growths) also had
inaccurate post-operative data in the work time file and provided a
recommendation on the appropriate post-operative visit.
Response: We thank stakeholders for their comments. We will review
the recommendations provided to us by the AMA RUC and other commenters
and will consider for future rulemaking, consistent with our normal
review processes.
d. Insertion and Removal of Drug Delivery Implants--CPT Codes 11981 and
11983
In the proposed rule (81 FR 46190), we stated that stakeholders had
urged CMS to create new coding describing the insertion and removal of
drug delivery implants for buprenorphine hydrochloride, formulated as a
4 rod, 80 mg, long acting subdermal drug implant for the treatment of
opioid addiction. The stakeholders suggested that current coding
describing insertion and removal of drug delivery implants was too
broad and that new coding was needed to account for specific additional
resource costs associated with particular treatment. We identified
existing CPT codes 11981 (Insertion, non-biodegradable drug delivery
implant), 11982 (Removal, non-biodegradable drug delivery implant), and
11983 (Removal with reinsertion, non-biodegradable drug delivery
implant) as potentially misvalued codes and sought comment and
information regarding whether the current resource inputs in work and
practice expense for the codes appropriately accounted for variations
in the service relative to which devices and related drugs are inserted
and removed.
The following is summary of the comments we received.
Comment: One commenter stated that CMS should create distinct codes
and payment levels for a four-rod implant as opposed to the one-rod
implant detailed in CPT codes 11981-11983. In contrast, another
commenter stated that the identified codes adequately describe the work
and practice expense for drug implant delivery and removal services.
Additionally, another commenter stated the codes should be removed from
the potentially misvalued list. The RUC stated that a coding change
proposal had been submitted for the services under the CPT process and
that the RUC anticipated providing relevant recommendations for CY
2018.
Response: We thank stakeholders for their comments. We will review
new coding and recommended valuations for future rulemaking, consistent
with our normal review processes.
5. Valuing Services That Include Moderate Sedation as an Inherent Part
of Furnishing the Procedure
The CPT manual identifies more than 400 diagnostic and therapeutic
procedures (listed in Appendix G) for which the CPT Editorial Panel has
determined that moderate sedation is an inherent part of furnishing the
procedure. In developing RVUs for these services, we include the
relative resources associated with moderate sedation in the valuation
since the CPT codes include moderate sedation as an inherent part of
the procedure. Therefore, practitioners only report the procedure code
when furnishing the service. Endoscopic procedures constitute a
significant portion of the services identified in Appendix G. In the CY
2015 PFS proposed rule (79 FR 40349), we noted that it appeared that
practice patterns for endoscopic procedures were changing, with
anesthesia increasingly being separately reported for these procedures,
meaning that the relative resources associated with sedation were no
longer incurred by the practitioner reporting the Appendix G procedure.
We indicated that, in order to reflect apparent changes in medical
practice, we were considering establishing a uniform approach to the
appropriate valuation of all Appendix G services for which moderate
sedation is no longer inherent, rather than addressing the issue at the
procedure level as individual codes are revalued. We solicited public
comment on approaches to the appropriate valuation of these services.
In the CY 2016 PFS proposed rule (80 FR 41707), we again solicited
public comment and recommendations on approaches to address the
appropriate valuation of moderate sedation related to Appendix G
services. Following our comment solicitation, the CPT Editorial Panel
created CPT codes for separately reporting moderate sedation services
in association with the elimination of Appendix G from the CPT manual
for CY 2017. This coding change would provide for payment for moderate
sedation services only in cases where they are furnished. In addition
to providing recommended values for the new codes used to separately
report moderate sedation, the RUC provided a methodology for revaluing
all services previously identified in Appendix G, without moderate
sedation, in order to make appropriate corresponding adjustments for
the procedural services. The RUC recommended this methodology to
address moderate sedation valuation generally instead of recommending
that it be addressed as individual codes are reviewed. The RUC's
recommended methodology would remove work RVUs for moderate sedation
from Appendix G codes based on a code-level assessment of whether the
procedures are typically furnished to straightforward patients or more
difficult patients. Based on its recommended methodology, the RUC
recommended removal of fewer RVUs from each of the procedural services
than it recommended for valuing the moderate sedation services. If we
were to use the RUC-recommended values for both the moderate sedation
codes and the Appendix G procedural codes without refinement, overall
payments for these procedures, when moderate sedation is furnished,
would increase relative to the current payment.
We direct readers to section II.L. of this final rule, which
includes more detail regarding our valuation of the new moderate
sedation codes, our methodology for revaluation of the procedural codes
previously identified in Appendix G, and discussion and responses to
the public comments we received regarding our proposal. We believe that
the RVUs assigned under the PFS should reflect the overall relative
resources of PFS services, regardless of how many codes are used to
report the services. Therefore, our methodology for valuation of
Appendix G procedural services maintains current resource assumptions
for the procedures when furnished with moderate sedation and
redistributes the RVUs associated with moderate sedation (previously

[[Page 80209]]

included in the Appendix G procedural codes) to other PFS services. We
believe that this methodology for revaluation of Appendix G services
without moderate sedation is consistent with our general principle that
the overall relative resources for the procedures do not change based
solely on changes in coding.
We also noted in the CY 2017 PFS proposed rule that stakeholders
presented information to CMS regarding specialty group survey data for
physician work. The stakeholders shared survey results for physician
work involved in furnishing moderate sedation that demonstrated a
significant bimodal distribution between procedural services furnished
by gastroenterologists (GI) and procedural services furnished by other
specialties. Since we believe that gastroenterologists furnish the
highest volume of services previously identified in Appendix G, and
services primarily furnished by gastroenterologists prompted the
concerns that led to our identification of changes in medical practice
and potentially duplicative payment for these codes, we have addressed
the variations between GI and other specialties in our review of the
new moderate sedation CPT codes and their recommended values. We again
direct readers to section II.L. of this final rule where we discuss our
establishment of an endoscopy-specific moderate sedation G-code that
augments the new CPT codes for moderate sedation, the public comments
we received, and our finalized valuations reflecting the differences in
the physician survey data between GI and other specialties.
6. Collecting Data on Resources Used in Furnishing Global Services
a. Background
(1) Current Payment Policy for Global Packages
Under the PFS, certain services, such as surgery, are valued and
paid for as part of global packages that include the procedure and the
services typically furnished in the periods immediately before and
after the procedure. For each of these global packages, we establish a
single PFS payment that includes payment for particular services that
we assume to be typically furnished during the established global
period. There are three primary categories of global packages that are
labeled based on the number of post-operative days included in the
global period: 0-day; 10-day; and 90-day. The 0-day global packages
include the surgical procedure and the pre-operative and post-operative
services furnished by the physician on the day of the service. The 10-
day global packages include these services and, in addition, visits
related to the procedure during the 10 days following the day of the
procedure. The 90-day global packages include the same services as the
0-day global codes plus the pre-operative services furnished one day
prior to the procedure and post-operative services during the 90 days
immediately following the day of the procedure. Section 40.1 of Chapter
12 of the Claims Processing Manual (Pub. 100-04) defines the global
surgical package to include the following services related to the
surgery when furnished during the global period by the same physician
or another practitioner in the same group practice:
Pre-operative Visits: Pre-operative visits after the
decision is made to operate beginning with the day before the day of
surgery for major procedures and the day of surgery for minor
procedures;
Intra-operative Services: Intra-operative services that
are normally a usual and necessary part of a surgical procedure;
Complications Following Surgery: All additional medical or
surgical services required of the surgeon during the post-operative
period of the surgery because of complications that do not require
additional trips to the operating room;
Post-operative Visits: Follow-up visits during the post-
operative period of the surgery that are related to recovery from the
surgery;
Post-surgical Pain Management: By the surgeon; and
Miscellaneous Services: Items such as dressing changes;
local incisional care; removal of operative pack; removal of cutaneous
sutures and staples, lines, wires, tubes, drains, casts, and splints;
insertion, irrigation and removal of urinary catheters, routine
peripheral intravenous lines, nasogastric and rectal tubes; and changes
and removal of tracheostomy tubes.
In the CY 2015 PFS proposed and final rules we extensively
discussed the problems with accurate valuation of 10- and 90-day global
packages. Our concerns included the fact that we do not use actual data
on services furnished to update the rates, questions regarding the
accuracy of our current assumptions about typical services, whether we
will be able to adjust values on a regular basis to reflect changes in
the practice of medicine and health care delivery, and how our global
payment policies affect what services are actually furnished (79 FR
67582 through 67585). In finalizing a policy to transform all 10- and
90-day global codes to 0-day global codes in CY 2017 and CY 2018,
respectively, to improve the accuracy of valuation and payment for the
various components of global packages, including pre- and post-
operative visits and the procedure itself, we stated that we were
adopting this policy because it is critical that PFS payment rates be
based upon RVUs that reflect the relative resources involved in
furnishing the services. We also stated our belief that transforming
all 10- and 90-day global codes to 0-day global packages would:
Increase the accuracy of PFS payment by setting payment
rates for individual services that more closely reflect the typical
resources used in furnishing the procedures;
Avoid potentially duplicative or unwarranted payments when
a beneficiary receives post-operative care from a different
practitioner during the global period;
Eliminate disparities between the payment for E/M services
in global periods and those furnished individually;
Maintain the same-day packaging of pre- and post-operative
physicians' services in the 0-day global packages; and
Facilitate the availability of more accurate data for new
payment models and quality research.
(2) Data Collection & Revaluation of Global Packages Required by MACRA
Section 523(a) of the Medicare Access and CHIP Reauthorization Act
of 2015 (MACRA) (Pub. L. 114-10, enacted April 16, 2015) added section
1848(c)(8)(A) of the Act, which prohibits the Secretary from
implementing the policy, described above, that would have transformed
all 10-day and 90-day global surgery packages to 0-day global packages.
Section 1848(c)(8)(B) of the Act, which was also added by section
523(a) of the MACRA, requires us to collect data to value surgical
services. Section 1848(c)(8)(B)(i) of the Act requires us to develop,
through rulemaking, a process to gather information needed to value
surgical services from a representative sample of physicians, and
requires that the data collection begin no later than January 1, 2017.
The collected information must include the number and level of medical
visits furnished during the global period and other items and services
related to the surgery and furnished during the global period, as
appropriate. This information must be reported on claims at the end of
the global period or in another manner specified by the Secretary.
Section 1848(c)(8)(B)(ii) of the Act requires that,

[[Page 80210]]

every 4 years, we reassess the value of this collected information; and
allows us to discontinue the collection of this information if the
Secretary determines that we have adequate information from other
sources to accurately value global surgical services. Section
1848(c)(8)(B)(iii) of the Act specifies that the Inspector General
shall audit a sample of the collected information to verify its
accuracy. Section 1848(c)(9) of the Act (added by section 523(b) of the
MACRA) authorizes the Secretary, through rulemaking, to delay up to 5
percent of the PFS payment for services for which a physician is
required to report information under section 1848(c)(8)(B)(i) of the
Act until the required information is reported.
Section 1848(c)(8)(C) of the Act, which was also added by section
523(a) of the MACRA, requires that, beginning in CY 2019, we must use
the information collected as appropriate, along with other available
data, to improve the accuracy of valuation of surgical services under
the PFS.
(3) Public Input
As noted above, section 1848(c)(8)(C) of the Act mandates that we
use the collected data to improve the accuracy of valuation of surgery
services beginning in 2019. We described in the CY 2015 PFS final rule
(79 FR 67582 through 67591) the limitations and difficulties involved
in the appropriate valuation of the global packages, especially when
the resources and the related values assigned to the component services
are not defined. To gain input from stakeholders on implementation of
this data collection, we sought comment on various aspects of this task
in the CY 2016 proposed rule (80 FR 41707 through 41708). We solicited
comments from the public regarding the kinds of auditable, objective
data (including the number and type of visits and other services
furnished during the post-operative period by the practitioner
furnishing the procedure) needed to increase the accuracy of the
valuation and payment for 10- and 90-day global packages. We also
solicited comment on the most efficient means of acquiring these data
as accurately and efficiently as possible. For example, we sought
information on the extent to which individual practitioners or
practices may currently maintain their own data on services furnished
during the post-operative period, and how we might collect and
objectively analyze those data and use the results for increasing the
accuracy of the values beginning in CY 2019.
We received many comments in response to the comment solicitation
in the CY 2016 proposed rule regarding potential methods of valuing the
individual components of the global surgical package. A large number of
comments expressed strong support for our proposal to hold an open door
forum or town hall meetings with the public. In response, we held a
national listening session on January 20, 2016. Prior to the listening
session, the topics for which guidance was being sought were sent
electronically to those who registered for the session and made
available on our Web site. The topics were:
Capturing the types of services typically furnished during
the global period.
Determining the representative sample for the claims-based
data collection.
Determining whether we should collect data on all surgical
services or, if not, which services should be sampled.
Potential for designing data collection elements to
interface with existing infrastructure used to track follow-up visits
within the global period.
Consideration of using the 5 percent withhold until
required information is furnished to encourage reporting.
The 658 participants in the national listening session provided
valuable information on this task. A written transcript and an audio
recording of this session are available at https://www.cms.gov/Outreach-and-Education/Outreach/NPC/National-Provider-Calls-and-Events-Items/2016-01-20-MACRA.html.
b. Data Collection Required To Accurately Value Global Packages
Resource-based valuation of individual physicians' services is a
critical foundation for Medicare payment to physicians. It is essential
that the RVUs under the PFS be based as closely and accurately as
possible on the actual resources used in furnishing specific services
to make appropriate payment and preserve relativity among services. For
global surgical packages, this requires using objective data on all of
the resources used to furnish the services that are included in the
package. Not having such data for some components may significantly
skew relativity and create unwarranted payment disparities within the
PFS.
The current valuations for many services valued as global packages
are based upon the total package as a unit rather than by determining
the resources used in furnishing the procedure and each additional
service/visit and summing the results. As a result, we do not have the
same level of information about the components of global packages as we
do for other services. To value global packages accurately and relative
to other procedures, we need accurate information about the resources--
work, PEs and malpractice--used in furnishing the procedure, similar to
what is used to determine RVUs for all services. In addition we need
the same information on the post-operative services furnished in the
global period (and pre-operative services the day before for 90-day
global packages). Public comments about our CY 2015 proposal to value
all global services as 0-day global services and pay separately for
additional post-operative services when furnished indicated that there
were no reliable data available on the value of the underlying
procedure that did not also incorporate the value of the post-operative
services, reinforcing our view that more data are needed across the
board.
While we believe that most of the services furnished in the global
period are visits for follow-up care, we do not have accurate
information on the number and level of visits typically furnished
because those billing for global services are not required to submit
claims for post-operative visits. A May 2012 Office of Inspector
General (OIG) report, titled Cardiovascular Global Surgery Fees Often
Did Not Reflect the Number of Evaluation and Management Services
Provided (https://oig.hhs.gov/oas/reports/region5/50900054.pdf) found
that for 202 of the 300 sampled cardiovascular global surgeries, the
Medicare payment rates were based on a number of visits that did not
reflect the actual number of services provided. Specifically,
physicians provided fewer services than the visits included in the
payment calculation for 132 global surgery services and provided more
services than were included in the payment calculations for 70
services. Similar results were found in OIG reports titled
``Musculoskeletal Global Surgery Fees Often Did Not Reflect The Number
Of Evaluation And Management Services Provided'' (https://oig.hhs.gov/oas/reports/region5/50900053.asp) and ``Review of Cataract Global
Surgeries and Related Evaluation and Management Services, Wisconsin
Physicians Service Insurance Corporation Calendar Year 2003, March
2007.'' (https://oig.hhs.gov/oas/reports/region5/50600040.pdf).
Claims data plays a major role in PFS ratesetting. Specifically,
Medicare claims data are a primary driver in the allocation of indirect
PE RVUs and MP RVUs across the codes used by

[[Page 80211]]

particular specialties, and in making overall budget neutrality and
relativity adjustments. In most cases, a claim must be filed for all
visits. Such claims provide information such as the place of service,
the type and, if relevant, the level of the service, the date of the
service, and the specialty of the practitioner furnishing the services.
Because we have not required claims reporting of visits included in
global surgical packages, we do not have any of this information for
the services bundled in the package.
In addition to the lack of information about the number and level
of visits actually furnished, the current global valuations rely on
crosswalks to E/M visits, based upon the assumption that the resources,
including work, used in furnishing pre- and post-operative visits are
similar to those used in furnishing E/M visits. We are unaware of any
studies or surveys that verify this assertion. Although we generally
value the visits included in global packages using the same direct PE
inputs as are used for E/M visits, for services for which the RUC
recommendations include specific PE inputs in addition to those
typically included for E/M visits, we generally use the additional
inputs in the global package valuation. In contrast, when a visit
included in a global package would use fewer resources than a
comparable E/M service, the RUC generally does not include
recommendations to decrease the PE inputs of the visit included in the
global package, and we have not generally made comparable reductions.
Another inconsistency with our current global package valuation
approach is that even though we effectively assume that the E/M codes
are appropriate for valuing pre- and post-operative services, the
indirect PE inputs used for calculating payments for global services
are based upon the specialty mix furnishing the global service, not the
specialty mix of the physicians furnishing the E/M services, resulting
in a different valuation for the E/M services contained in global
packages than for separately billable E/M services. There is a critical
need to obtain complete information if we are to value global packages
accurately and in a way that preserves relativity across the fee
schedule.
In response to the requirement of section 1848(c)(8)(B)(i) of the
Act that we develop, through rulemaking, a process to gather
information needed to value surgical services, we proposed a rigorous
data collection effort to provide us the data needed to accurately
value the 4,200 codes with a 10- or 90-day global period. Using our
authority under sections 1848(c)(2)(M) and (c)(8)(B)(i) of the Act, we
proposed to gather the data needed to determine how to best structure
global packages with post-operative care that is typically delivered
days, weeks or months after the procedure and whether there are some
procedures for which accurate valuation for packaged post-operative
care is not possible. Finally, we indicated that these data would
provide useful information to assess the resources used in furnishing
pre- and post-operative care in global periods. To accurately do so, we
need to know the volume and costs of the resources typically used.
We proposed a three-pronged approach to collect timely and accurate
data on the frequency of and the level of pre- and post-operative
visits and the resources involved in furnishing the pre-operative
visits, post-operative visits, and other services for which payment is
included in the global surgical payment. By analyzing these data, we
would not only have the most comprehensive information available on the
resources used in furnishing these services, but also would be able to
determine the appropriate packages for such services. Specifically, the
proposal included:
A requirement for claims-based reporting about the number
and level of pre- and post-operative visits furnished for 10- and 90-
day global services.
A survey of a representative sample of practitioners about
the activities involved in and the resources used in providing a number
of pre- and post-operative visits during a specified, recent period of
time, such as two weeks.
A more in-depth study, including direct observation of the
pre- and post-operative care delivered in a small number of sites, and
a separate survey module for practitioners practicing in ACOs.
The information collected and analyzed through the activities would
be the first comprehensive look at the volume and level of services in
a global period, and the activities and inputs involved in furnishing
global services. The data from these activities would ultimately inform
our revaluation of global surgical packages as required by statute.
To expand awareness of the proposal for data collection, we held a
national listening session in which CMS reviewed the proposal for
participants. Subsequent to this national listening session, we held a
town hall meeting at the CMS headquarters in which participants, in
person and virtual, shared their views on the proposal with CMS. The
transcript from these town halls is available on the CMS Web site with
the CY 2017 final rule downloads.
(1) Statutory Authority for Data Collection
As described in this section of the final rule, section
1848(c)(8)(B)(i) of the Act requires us to develop, through rulemaking,
a process to gather information needed to value surgical services from
a representative sample of physicians. The statute requires that the
collected information include the number and level of medical visits
furnished during the global period and other items and services related
to the surgery and furnished during the global period, as appropriate.
In addition, section 1848(c)(2)(M) of the Act, which was added to
the Act by section 220 of the PAMA, authorizes the Secretary to collect
or obtain information on resources directly or indirectly related to
furnishing services for which payment is made under the PFS. Such
information may be collected or obtained from any eligible professional
or any other source. Information may be collected or obtained from
surveys of physicians, other suppliers, providers of services,
manufacturers, and vendors. That section also authorizes the Secretary
to collect information through any other mechanism determined
appropriate. When using information gathered under this authority, the
statute requires the Secretary to disclose the information source and
discuss the use of such information in the determination of relative
values through notice and comment rulemaking.
As described in this section of the final rule, to gain information
to assist CMS in determining the appropriate packages for global
services and to revalue those services, CMS needs more information on
the resources used in furnishing such services. Through the claims-
based data collection and the study we are finalizing in this final
rule, we would have better information about the actual number of
services furnished to Medicare beneficiaries to use in valuation for
these codes than has been typically available, such as from RUC surveys
that reflect practitioner's estimates of the number of services
typically furnished. We anticipate that such efforts would inform how
to more regularly collect data on the resources used in furnishing
physicians' services. To the extent that such mechanisms prove
valuable, they may be used to collect data for valuing other services.
To achieve this significant data collection, we proposed to collect
data under the authority of both section 1848(c)(8)(B) and (c)(2)(M) of
the Act.

[[Page 80212]]

(2) Claims-Based Data Collection
We proposed a claims-based data collection that would have required
all those providing 10- or 90-day global services to report on services
furnished during the global period using a series of G-codes specially
created for this purpose, beginning January 1, 2017.
In response to the comments submitted on the proposal, we are
finalizing a claims-based data collection that differs from this
proposal in the following significant ways:
CPT code 99024 will be used for reporting post-operative
services rather than the proposed set of G-codes. Reporting will not be
required for pre-operative visits included in the global package or for
services not related to patient visit.
Reporting will be required only for services related to
codes reported annually by more than 100 practitioners and that are
reported more than 10,000 times or have allowed charges in excess of
$10 million annually.
Practitioners are encouraged to begin reporting post-
operative visits for procedures furnished on or after January 1, 2017,
but the mandatory requirement to report will be effective for services
related to global procedures furnished on or after July 1, 2017.
Only practitioners who practice in groups with 10 or more
practitioners in Florida, Kentucky, Louisiana, Nevada, New Jersey,
North Dakota, Ohio, Oregon, and Rhode Island will be required to
report. Practitioners who only practice in smaller practices or in
other geographic areas are encouraged to report data, if feasible.
Given that the data collection will be limited to only some states,
a subset of global services, and only to those who practice in larger
practices the information collected through claims for global packages
services will not parallel the claims data that are available in
pricing other PFS services. However, we believe that the information
collected through this data collection will be a significant
improvement over the information currently available to value these
services and will be supplemented with information obtained through
other mechanisms.
In the following sections, we discuss the comments on each element
of our data collection proposal, our responses and our final decision.
(a) Information To Be Reported
A key element of claims-based reporting is using codes that
appropriately reflect the services furnished. In response to the
comment solicitation in the CY 2016 PFS proposed rule and the input
received via the January 2016 listening session, we received numerous
recommendations for the information to be reported on claims. The most
frequently recommended approach was for practitioners to report the
existing CPT code for follow-up visits included in the surgical package
(CPT 99024--Postoperative follow-up visit, normally included in the
surgical package, to indicate that an E/M service was performed during
a postoperative period for a reason(s) related to the original
procedure). Others suggested using this code for outpatient visits and
using length of stay data to estimate the number of inpatient visits
during the global period. In response to our concerns that CPT code
99024 would provide only the number of visits and not the level of
visits as required by the statute, one commenter suggested using
modifiers in conjunction with CPT code 99024 to indicate the level of
the visit furnished. Others recommended using existing CPT codes for E/
M visits to report post-operative care. One commenter suggested that
CMS analyze data from a sample of large systems and practices that are
using electronic health records that require entry of some CPT code for
every visit to capture the number of post-operative visits. After
noting that the documentation requirements and PEs required for post-
operative visits differ from those of E/M visits outside the global
period, one commenter encouraged us to develop a separate series of
codes to capture the work of the post-operative services and to
measure, not just estimate, the number and complexity of visits during
the global period.
Other commenters opposed the use of a new set of codes or the use
of modifiers to report post-operative visits. Commenters also noted
several issues for us to consider in developing data collection
mechanisms, including that many post-operative services do not have CPT
codes to bill separately, that surgeons perform a wide range of
collaborative care services, and that patient factors, including
disease severity and comorbidities, influence what post-operative care
is furnished.
To assist us in determining appropriate coding for claims-based
reporting, we added a task to the RAND validation contract for
developing a model to validate the RVUs in the PFS, which was awarded
in response to a requirement in the Affordable Care Act. Comments that
we received on the validation report suggested the models did not
adequately address global surgery services due to the lack of available
data on visits included in the global package. Therefore, we modified
the validation contract to include the development of G-codes that
could be used to collect data about post-surgical follow-up visits on
Medicare claims for valuing global services under MACRA so that this
time could be included in the model for validating RVUs.
To inform its work on developing coding for claims-based reporting,
the contractor conducted interviews with surgeons and other physicians/
non-physician practitioners (NPP) who provide post-operative care. A
technical expert panel (TEP), convened by the contractor, reviewed the
findings of the interviews and provided input on how to best capture
care provided in the post-operative period on claims.
In summarizing the input from the interviews and the TEP, the
contractor indicated that several considerations were important in
developing a claims-based method for capturing post-operative services.
First, a simple system to facilitate reporting was needed. Since it was
reported that a majority of post-operative visits are straightforward,
the contractor found that a key for any proposed system is identifying
the smaller number of complex post-operative visits. Another
consideration was not using the existing CPT E/M structure to capture
postoperative care because of concerns that E/M codes are inadequately
designed to capture the full scope of post-operative care and that
using such codes might create confusion. Another consideration was that
the TEP was most enthusiastic about a set of codes that used site of
care, time, and complexity to report visits. The contractor also
believed it was important to distinguish--particularly in the inpatient
setting--between circumstances where a surgeon is providing primary
versus secondary management of a patient. Finally, a mechanism for
reporting the postoperative care occurs outside of in-person visits and
by clinical staff was needed. The report noted that in the inpatient
setting in particular, surgeons spend considerable time reviewing test
results and coordinating care with other practitioners.
After reviewing various approaches, a set of time-based, post-
operative visit codes that could be used for reporting care provided
during the post-operative period was recommended.
The recommended codes distinguish services by the setting of care
and whether they are furnished by a physician/NPP or by clinical staff.
All codes are intended to be reported in 10-minute increments. A copy
of the report

[[Page 80213]]

is available on the CMS Web site under downloads for the CY 2017 PFS
proposed rule with comment period at https://www.cms.gov/physicianfeesched/downloads/.
We proposed the following no-pay codes be used for reporting on
claims the services actually furnished but not paid separately because
they are part of global packages.

Table 9--Proposed Global Service Codes
------------------------------------------------------------------------

------------------------------------------------------------------------
Inpatient...................... GXXX1 Inpatient visit,
typical, per 10
minutes, included in
surgical package.
GXXX2 Inpatient visit,
complex, per 10
minutes, included in
surgical package.
GXXX3 Inpatient visit,
critical illness, per
10 minutes, included in
surgical package.
Office or Other Outpatient..... GXXX4 Office or other
outpatient visit,
clinical staff, per 10
minutes, included in
surgical package.
GXXX5 Office or other
outpatient visit,
typical, per 10
minutes, included in
surgical package.
GXXX6 Office or other
outpatient visit,
complex, per 10
minutes, included in
surgical package.
Via Phone or Internet.......... GXXX7 Patient interactions via
electronic means by
physician/NPP, per 10
minutes, included in
surgical package.
GXXX8 Patient interactions via
electronic means by
clinical staff, per 10
minutes, included in
surgical package.
------------------------------------------------------------------------

(i) Coding for Inpatient Global Service Visits
Our proposal included three codes for reporting inpatient pre- and
post-operative visits that distinguish the intensity involved in
furnishing the services. Under this proposal, visits that involve any
combination or number of the services listed in Table 10, which were
recommended by the contractor as those in a typical visit, would be
reported using GXXX1. Based on the findings from the interviews and the
TEP, the report indicated that the vast majority of inpatient post-
operative visits would be expected to be reported using GXXX1.

Table 10--Activities Included in Typical Visit (GXXX1 & GXXX5)
------------------------------------------------------------------------

-------------------------------------------------------------------------
Review vitals, laboratory or pathology results, imaging, progress notes.
Take interim patient history and evaluate post-operative progress.
Assess bowel function.
Conduct patient examination with a specific focus on incisions and
wounds, post-surgical pain, complications, fluid and diet intake.
Manage medications (for example, wean pain medications).
Remove stitches, sutures, and staples.
Change dressings.
Counsel patient and family in person or via phone.
Write progress notes, post-operative orders, prescriptions, and
discharge summary.
Contact/coordinate care with referring physician or other clinical
staff.
Complete forms or other paperwork.
------------------------------------------------------------------------

Under our proposal, inpatient pre- and post-operative visits that
are more complex than typical visits but do not qualify as critical
illness visits would be coded using GXXX2 (Inpatient visit, complex,
per 10 minutes, included in surgical package). To report this code, the
practitioner would be required to furnish services beyond those
included in a typical visit and have documentation that indicates what
services were provided that exceeded those included in a typical visit.
In the proposed rule, we noted some circumstances that might merit the
use of the complex visit code are secondary management of a critically
ill patient where another provider such as an intensivist is providing
the primary management, primary management of a particularly complex
patient such as a patient with numerous comorbidities or high
likelihood of significant decline or death, management of a significant
complication, or complex procedures outside of the operating room (For
example, significant debridement at the bedside).
The highest level of inpatient pre- and post-operative visits,
critical illness visits (GXXX3--Inpatient visit, critical illness, per
10 minutes, included in surgical package) would be reported when the
physician is providing primary management of the patient at a level of
care that would be reported using critical care codes if it occurred
outside of the global period. This involves acute impairment of one or
more vital organ systems such that there is a high probability of
imminent or life threatening deterioration in the patient's condition.
Similar to how time is now counted for the existing CPT critical
care codes, we proposed that all time spent engaged in work directly
related to the individual patient's care would count toward the time
reported with the inpatient visit codes; this includes time spent at
the immediate bedside or elsewhere on the floor or unit, such as time
spent with the patient and family members, reviewing test results or
imaging studies, discussing care with other staff, and documenting
care.
(ii) Coding for Office and Other Outpatient Global Services Visits
For the three codes in our proposal that would be used for
reporting post-operative visits in the office or other outpatient
settings, codes, time would be defined as the face-to-face time with
patient, which reflects the current rules for time-based outpatient
codes.
Like GXXX1, GXXX5 (Office or other outpatient visit, typical, per
10 minutes, included in surgical package) would be used for reporting
any combination of activities in Table 10 under our proposal.
We proposed only face-to-face time spent by the practitioner with
the patient and their family members would count toward the time
reported with the office visit codes.
(iii) Coding for Services Furnished via Electronic Means
Services that are furnished via phone, the internet, or other
electronic means outside the context of a face-to-face visit would be
reported using GXXX7 when furnished by a practitioner and GXXX8 when
provided by clinical staff under our proposal. We proposed that
practitioners would not report these services if they are furnished the
day before, the day of, or the day after a visit as we believe these
would be included in the pre- and post-service activities in the
typical visit. However, we proposed that these codes be used to report
non-face-to-face services provided by clinical staff prior to the
primary procedure since global surgery codes are typically valued with
assumptions regarding pre-service clinical labor time. Given that some
practitioners have indicated that services they furnish commonly
include activities outside the face-to-face service, we believed it was
important to capture information about those activities in both the
pre- and post-service periods. We also believed these requirements to
report on clinical

[[Page 80214]]

labor time are consistent with and no more burdensome than those used
to report clinical labor time associated with chronic care management
services, which similarly describe care that takes place over more than
one patient encounter.
In addition, we proposed for services furnished via interactive
telecommunications that meet the requirements of a Medicare telehealth
service visit, the appropriate global service G-code for the services
would be reported with the GT modifier to indicate that the service was
furnished ``via interactive audio and video telecommunications
systems.''
(iv) Rationale for Use of G-Codes
After considering the contractor report, the comments in response
to the comment solicitation in the CY 2016 proposed rule and other
stakeholder input that we have received, and our needs for data to
fulfill our statutory mandate and to value surgical services
appropriately, we proposed this new set of codes because we believe it
provides us the most robust data upon which to determine the most
appropriate way and amounts to pay for PFS surgical services. We noted
that these proposed codes would provide data of the kind that can
reasonably collected through claims data and that reflect what we
believe are key issues in the valuation of post-operative care--where
the service is provided, who furnishes the service, its relative
complexity, and the time involved in the service.
We solicited public comments about all aspects of these codes,
including the nature of the services described, the time increment, and
any other areas of interest to stakeholders. We noted particular
interest in any pre- or post-operative services furnished that could
not be appropriately captured by these codes. We solicited comments on
whether the proposed codes were appropriate for collecting data on pre-
operative services. We also sought comment on any activities that
should be added to the list of activities in Table 10 to reflect
typical pre-operative visit activities.
(v) Alternative Approach to Coding
In making the proposal for G-codes, we noted that many stakeholders
had expressed strong support for the use of CPT code 99024
(Postoperative follow-up visit, normally included in the surgical
package, to indicate that an evaluation and management service was
performed during a post-operative period for a reason(s) related to the
original procedure) to collect data on post-operative care. In response
to stakeholders noting that practitioners are familiar with this
existing CPT code and the burden on practitioners would be minimized by
only having to report that a visit occurred, not the level of the
visit, we noted that we did not believe that this code alone would
provide the information that we need for valuing surgical services nor
do we believe it alone can meet the statutory requirement that we
collect data on the number and level of visits. Given the strong
support for the use of CPT code 99024, we solicited comments
specifically on how we could use this code to capture the statutorily
required data on the number and level of visits and the data that we
would need to value global services in the future.
We also discussed in the proposed rule our concern that using CPT
code 99024 with modifiers to indicate to which of the existing levels
of E/M codes the visit corresponds may not accurately capture what
drives greater complexity in post-operative visits. We noted that as
outlined in the contractor's report, E/M billing requirements are built
upon complexity in elements such as medical history, review of systems,
family history, social history, and how many organ systems are
examined. In the context of a post-operative visit, many of these
elements may be irrelevant. The contractor's report also notes that
there was significant concern from interviewees and the expert panel
about documentation that is required for reporting E/M codes.
Specifically, they stated that documentation requirements for surgeons
to support the relevant E/M visit code would place undue administrative
burden on surgeons given that many surgeons currently use minimal
documentation when they provide a postoperative visit. We also noted
that to value surgical packages accurately we need to understand the
activities involved in furnishing post-operative care and as discussed
above, we lack information that would demonstrate that activities
involved in post-operative care are similar to those in E/M services.
In addition, the use of modifiers to report levels of services is more
difficult to operationalize than using unique HCPCS codes. However, we
sought comments on whether, and if so, why, practitioners would find it
easier to report CPT code 99024 with modifiers corresponding to the
proposed G-code levels rather than the new G-codes, as proposed. We
also sought comment on whether practitioners would find it difficult to
use this for pre-operative visits since the CPT code descriptor
specifically defines it as a ``post-operative follow-up'' service.
We also sought comment on whether time of visits could alone be a
proxy for the level of visit. If pre- and post-operative care varies
only by the time the practitioner spends on care so that time could be
a proxy for complexity of the service, then we could use the reporting
of CPT code 99024 in 10-minute increments to meet the statutory
requirement of collecting claims-based data on the number and level of
visits. In addition to comments on whether time is an accurate proxy
for level of visit, we solicited comment on the feasibility and
desirability of reporting CPT code 99024 in 10-minute increments.
The following is a summary of the comments that we received on our
proposal to use G-codes for reporting the services furnished during the
pre- and post-operative periods of 10- and 90-day global services.
Comment: Many commenters offered critiques of the G-codes. Most
objected to reporting using the proposed G-codes. Some commenters
raised concerns with the code definitions. These included: Lack of
alignment with clinical workflow, failure to adequately account for
variation in complexity and medical decision-making, and use of the
term ``typical'' to define visits in a different way than the term is
generally used in PFS valuations. One commenter suggested that CMS
should require care plans for outpatient visits in the post-operative
period. It was also suggested that the complex visit code could be
improved by using a term other than ``complex'' in the definition. A
commenter questioned whether that vast majority of cases would be
complex instead of ``typical,'' since the definition of ``complex''
included management of a patient with multiple comorbidities and most
Medicare beneficiaries have multiple comorbidities. A commenter also
suggested that CMS refine the G-codes to distinguish physician visits
from NPP visits. In addition, several commenters objected to the
proposed G-codes for on-line and telephone services because they
believed it would be nearly impossible to track these data and
extremely burdensome to do so. Commenters indicated that the G-codes
were not well-defined overall and should not be used without testing to
determine their validity.
Response: We appreciate the detailed comments on the design of the
G-codes and the concerns regarding their limitations in appropriately
reflecting the services furnished in 10- and 90-day global periods.
These comments provide information for how the G-codes could

[[Page 80215]]

be modified to better reflect services furnished in global periods,
however, as is discussed at the outset of this section, we are not
using the proposed G-codes for this data collection effort.
Comment: Most commenters objected to using codes based on time
increments and the proposed 10-minute increments, specifically. Some
stated that reporting of services by time did not reflect the way
surgeons practiced and would divert practitioners from patient care.
One commenter stated that it was not feasible for practitioners to
collect time data for every task that they or their clinical staff
performed. Another stated that requesting physicians and/or their staff
to use a stop-watch to, in effect, conduct time and motion studies for
all their non-operating room patient care activities is an incredible
burden. Another stated that reporting time in 10-minute increments ``is
untenable,'' noting that, except for a few specialties, physicians do
not think of providing care in terms of timed increments. The commenter
added that surgeons, in particular, are not accustomed to reporting
time for all pre- and post-operative visits and to do so would be a
huge disruption to workflow. In addition to objections about the burden
of reporting time data, some commenters objected to the use of time
data as a factor in valuations.
Three organizations commented that it was appropriate to collect
time data, but recommended that we do so based upon 15-minute
increments as these were more familiar to physicians than the proposed
10-minue increments. In addition, some other groups, including MedPAC,
agreed that data on time was needed for valuations.
Response: Time is a key factor in valuing physician services under
the physician fee schedule. Section 1848(c)(1) of the Act defines the
work component as the portion of the resources used in furnishing the
service that reflects physician time and intensity in furnishing the
service. We also note that time-based codes are used by practitioners
for a range of services in the PFS including psychotherapy,
anesthesiology and critical care services. Critical care services are
notable because these services are likely to be furnished
intermittently as many commenters suggested is typical for post-
operative follow-up services. Since issues have not been raised about
the difficulty of using the current critical care codes, it is unclear
why reporting of time would be burdensome and disruptive of care in
this area. We have no reason to believe the documentation of time is
more difficult or burdensome for those furnishing 10- and 90-day global
services than for other practitioners. However, based on the comments,
it is clear that many practitioners would perceive reporting of time
involved in furnishing these services to be a significant increase in
burden relative to existing practice. Before implementing a change
considered by so many to be so burdensome, we are exploring other ways
of obtaining information that can be used to improve the accuracy of
valuing these services. Accordingly, we are not finalizing, at this
time, the requirement to use time-based codes.
Comment: Many commenters stated that the use of these codes would
be costly, requiring extensive education of practitioners and staff and
necessitating updates to EHR systems and billing software. Some also
noted the cost of processing additional claims. Many commenters noted
that this would be particularly difficult as this additional
administrative burden would come at the same time practitioners are
adjusting the Merit-based Incentive Payment System (MIPS). One
commenter provided the results of a survey of surgical practitioners in
20 specialties in which 30 percent of respondents stated that the cost
of integrating the new G-codes into their practice would cost more than
$100,000 and only about 10 percent stated that it would cost less than
$25,000.
Some commenters expressed specific concern about the documentation
burden that would come from using these codes. On the other hand, other
commenters suggested that providers of visits during the global
surgical services should be held to the same documentation standards as
providers of E/M services. One stated that the ``administrative burden
on surgeons should be no different and certainly no less than that on
non-surgeons when it comes to documenting a visit with a patient. If
many surgeons currently use minimal documentation when they provide a
post-operative visit that is no excuse for expecting the same
inadequate level of documentation going forward. To require anything
less than the same level of documentation for all clinicians providing
E/M services would be irresponsible and unfair and would defeat the
very purpose of documenting the actual types and extent of these
services in the post-operative period.''
Response: The need for accurate, complete and useful data must be
balanced with administrative burden and cost. We articulated that using
a select number of G-codes based on time would impose a burden on
providers, but that burden is necessary for us to comply with the
statutory requirement to gather the data necessary to value global
procedures. We note that CPT routinely incorporates more than 100 new
codes in annual updates, and for this reason we did not anticipate that
the inclusion of eight new G-codes was likely to present significant
challenges to EHR systems or other infrastructure. Based on the
comments we received, however, it is clear that the majority of
stakeholders believe the burden is much greater than we had assumed. In
general, we agree with commenters that comparable documentation is
appropriate for all physicians furnishing and being paid by Medicare
for similar services.
Comment: Several commenters noted that the difficulties of using
these codes would affect the accuracy of the data reported. One
commenter stated that the G-code proposal would be impossible to
implement and ``at the very least'' would yield incomplete and
unreliable results.
Response: We agree with commenters that implementation burden is an
important consideration in determining how practitioners should report
on care provided in the post-operative period and that if practitioners
find the reporting requirements to be excessive and require great
expenditures to incorporate into their practice, the accuracy of the
data could be undermined. We considered this in determining the final
policy described below.
Comment: Some commenters criticized the proposed G-codes because
they were not directly linked to E/M codes or comparable to existing E/
M codes. On the other hand, some commenters preferred the codes
describing such visits not be linked or comparable to E/M codes to
avoid confusion or unintentional, inappropriate payments. One commenter
stated that the follow-up work performed within the global periods and
the continuity work performed by cognitive physicians should not be
represented by the same codes. Another commenter stated that the care
required by a patient recovering from a procedure is fundamentally
different from the typical follow-up of an established outpatient or
inpatient, especially when there are multiple simultaneous interacting
conditions, a single metastable chronic illness, or one or more acute
exacerbated chronic illnesses that requires inpatient care and
expertise.
Response: Commenters' belief that the work in follow-up visits
included in the global package is not necessarily well described by the
work of current E/M

[[Page 80216]]

codes is worth exploring. Current data does not allow us to determine
the validity of these commenters' assertion but given its importance,
we believe it is critical to gather data on whether follow-up visits
provided in the post-operative period are different than other E/M
services. To the extent the services in the post-operative period are
different from other E/M services, it would not make sense to use E/M
codes in valuing global services as is ostensibly the case under the
current process the RUC uses in developing recommended values for PFS
services.
Comment: Most commenters supported using CPT codes, rather than the
proposed G-codes. A few pointed to the existing E/M codes, but most
recommended that any claims-based reporting use CPT code 99024, an
existing CPT code that describes post-operative services in a global
period. Commenters noted that since this is a current CPT code the
administrative burden would be much less than that associated with
using the proposed new G-codes. These commenters suggest that
practitioners are likely already familiar with the code, some already
use it to track services within their practice, and some others already
report it to other payers. Also, they suggest that because EHR and
billing systems already include CPT code 99024, it will be less costly
to implement than the proposal. Some also preferred using CPT code
99024 because unlike the proposed G-codes it does not require the
reporting of time units.
Most commenters disagreed that time could be a proxy for the
complexity of the visit and objected to reporting time for the same
reasons discussed above. These commenters did not agree that CPT code
99024 could be reported in time units as a proxy for collecting the
required information about the level of visits.
Three organizations disagreed, however, stating that time is a
sufficient proxy for work relativity in post-operative visits and that
the number units of CPT code 99024 could reflect the complexity
involved. These commenters recommended reporting data in 15-minute
intervals, rather than the proposed 10-minute increments, stating that
physicians are familiar with 15-minute increments and thus the use of
15-minute increments would greatly reduce the administrative burden.
They recommended that CMS clearly define how time is to be reported and
suggested that the 8-minute rule is already a familiar concept that
could be used.
Many commenters suggested that other approaches, such as a survey,
clinical registries, or on-line portals be used to collect data on
level of visits.
Several commenters stated that CMS should not collect data on the
level of visits based on these commenters' perspective that there is no
problem with the level of visits currently used in the valuation of
global packages. One commenter pointed out that only 1 percent of all
established patient office visits used in valuing 10-day and 90-day
global surgery packages have a visit level above a CPT code 99213.
Another commenter suggested that the survey be used to collect data on
the level of visits. Others suggested that RUC surveys be used to
measure level of visits.
Response: We understand that stakeholders believe that using CPT
code 99024 rather than the proposed G-codes will significantly lower
administrative burden and lower costs related to the collection of this
data. We do not have data showing that the level of visits used in
valuation of global packages are correct or incorrect; to the best of
our knowledge, this has never been assessed outside of the RUC process.
While the current valuations for global packages rely primarily on CPT
codes 99212 and 99213 for the visit component, we do not agree that
this means that the levels are accurate. Further, as some commenters
have made clear, there is not consensus among stakeholders that the
post-operative visits are equivalent to other E/M visits. Additionally,
the relationship between the number and level of visits assumed to be
in the global period and the overall work RVUs for the global codes is
often unclear. For all of these reasons, we disagree with commenters
that we do not need to collect data on the level of services.
In addition to the statutory reference to collecting data on the
level of visits, we believe that code valuations can be more accurate
with more complete information. While we continue to believe that data
only on the number of visits furnished would not provide data on both
the number and level of visits needed for valuation of services, data
on the number of visits alone is an important input in valuing global
packages and having accurate data on the number of visits could be a
useful first step in analyzing the global packages.
After considering the comments, we are finalizing a requirement to
report post-operative visits furnished during 10- and 90-day global
periods. However, rather than using the proposed set of G-codes for
this reporting, we are requiring that CPT code 99024 be used to report
such visits. We will not, at this time, require time units or modifiers
to distinguish levels of visits to be reported. Since this code is
specifically limited to post-operative care, we are only requiring
reporting of post-operative visits. We expect that the reporting of
this information through Medicare claims will provide us with
information about the actual number of visits furnished during the
post-operative periods for many services reported using global codes.
Because the number of visits is a major factor in valuation of global
services, we believe that examination of such information, when
available, can improve the accuracy of the global codes. The use of a
simple code that practitioners are familiar with should facilitate the
submission of accurate information. We expect practitioners to note the
visit in the medical chart documenting the post-operative visit.
Since CPT code 99024 will only provide data on the number of visits
and no data on the level or resources used in furnishing the visit, we
believe this is only the first step in gathering the data required by
Section 1848(c)(8). The proposed G-codes could have provided
information to better understand the resources used in furnishing
services during global periods and in valuation of such services
assuming that they could be accurately reported. However, widespread
concerns from groups representing the practitioners that would be
reporting these services, including concerns about the burdens
regarding and the inability of physicians to track time and the need to
learn a new 8-code coding system, persuade us that we should pursue
less burdensome ways of obtaining information. We will assess whether
these methods will lead to the collection of necessary data, including
data on time and intensity, of these services.
As suggested by commenters, we will explore whether the data
collected from the survey that we are conducting, which is discussed
later in this preamble, can provide information on the level of visits
and other resources needed to value surgical services accurately.
Stakeholders should be aware that since this a new approach for
collecting data, and one that has not been used previously, we are
concerned that additional or different reporting will be necessary to
collect data on the number and level of visits and other information
needed to value surgical services as required by Section 1848(c)(8).

[[Page 80217]]

b. Reporting of Claims
We proposed that the G-codes detailed above would be reported for
services related to and within 10- and 90-day global periods for
procedures furnished on or after January 1, 2017. Services related to
the procedure furnished following recovery and otherwise within the
relevant global period would be required to be reported. These codes
would be included on claims filed through the usual process. Through
this mechanism, we would collect all of the information reported on a
claim for services, including information about the practitioner,
service furnished, date of service, and the units of service. By not
imposing special reporting requirements on these codes, we proposed to
allow practitioners the flexibility to report the services on a rolling
basis as they are furnished or to report all of the services on one
claim once all have been furnished, as long as the filed claims meet
the requirements for filing claims.
We did not propose any special requirements for inclusion of
additional data on claims that could be used for linking the post-
operative care furnished to a particular service. To use the data
reported on post-operative visits for analysis and valuation, we
proposed to link the data reported on post-operative care to the
related procedure using date of service, practitioner, beneficiary, and
diagnosis. While we believed this approach to matching would allow us
to accurately link the preponderance of G-codes to the related
procedure, we sought comment on the extent to which post-operative care
may not be appropriately linked to related procedures whether we should
consider using additional variables to link these aspects of the care,
and whether additional data should be required to be reported to enable
a higher percentage of matching.
The following is summary of the comments we received on our
proposal to require reporting on pre- and post-operative care
associated with all procedures with 10- and 90-day global periods.
Comment: Many commenters objected to the proposal to require
reporting on post-operative services for all 10- or 90-day global
services. Some suggested that many of the global services are low
volume and have little impact on Medicare spending. It was also noted
that it would be difficult to obtain a meaningful sample of low-volume
services. Others discussed the burden of reporting on all services. The
RUC recommended that CMS only require reporting on services that are
furnished by more than 100 providers and that either are furnished more
than 10,000 times or have allowed charges of more than $10 million
annually to obtain meaningful data for valuation. The RUC noted that
many procedures were infrequently furnished and thus useful data would
not be obtained. This position was supported by a significant number of
commenters. In response to the stated concern about having complete
data when more than one surgical service is furnished during the global
period, a commenter pointed out that a review of the 2014 Medicare 5
percent sample file shows that, two surgical global codes are performed
on the same date of service, by the same physician, only 18 percent of
the time.
Response: The commenters are correct that the vast majority of 10-
and 90-day procedures are furnished infrequently and thus have little
effect on Medicare expenditures or direct impact on the valuations of
other services under the PFS. We proposed to collect data on all
procedures since we believed the data we collected would be more
accurate if physicians reported on all services as it would be routine
and would not have required physicians to determine at each pre- and
post-operative visit whether or not reporting the service was required.
Moreover, as pointed out by commenters, we believe that reporting on
all applicable services would have provided more complete data when
multiple surgeries occurred during the global period.
Having specific data on all procedures would provide specific
information for each service that Medicare pays for using a global
period. In assessing the likely benefit of the additional data as
compared to the burden of reporting based on the comments we received,
we agree with commenters that collecting the data from high volume/high
cost procedures could provide adequate information to improve the
accuracy of valuation of global packages overall. Even if all
practitioners reported data on all procedures, it is likely that we
would not receive enough data on low-volume services for the data to be
reliable for use in valuations. There are more than 1,500 services that
are furnished less than 100 times per year. Because of this, data that
we could collect on these services would be extremely limited. We also
find that data on services with low volumes are not reliable due to
variability from year to year. Since we often value related services by
extrapolating data on one service to other services in the family, with
adjustments as necessary to reflect variations in the procedure, the
data gathered on high-volume services could similarly be used to value
low-volume services in the same family. As a result we, believe that
the data on high-volume services can improve the accuracy of values for
all 10- and 90-day services.
After consideration of the comments, we are implementing a
requirement for reporting on services that are furnished by more than
100 practitioners and are either furnished more than 10,000 times or
have allowed charges of more than $10 million annually as recommended
by the RUC and many other commenters. Under this policy, we estimate
that we would collect data on about 260 codes that describe
approximately 87 percent of all furnished 10- and 90-day global
services and about 77 percent of all Medicare expenditures for 10- and
90-day global services under the PFS. Given that this data would
provide information on the codes describing the vast majority of 10-
and 90-day global services and expenditures, it will provide
significant data for valuation. For 2017, we will use the CY 2014
claims data to determine the codes for which reporting is required and
display the list on the CMS Web site. In subsequent years, we will
update the list to reflect more recent claims data and publish a list
of codes prior to the beginning of the reporting year. The services for
which reporting is required will include successor codes to those
deleted or modified since CY 2014 for which reporting would have been
required if the code had not been deleted or modified.
The following is summary of the comments we received on our
proposal to require claims-based reporting for services related to
procedures furnished on or after January 1, 2017.
Comments: Many commenters expressed concerns regarding the
difficulty of making the changes required to implement this new
reporting by January 1, 2017. Some commenters noted that this change
was coming at the same time as the new MIPS program. Some commenters
stated that the statute required a process to be in place by January 1,
2017, but that CMS has flexibility regarding when to begin the required
reporting. Some commenters suggested that CMS consider conducting the
proposed survey before implementing any claims-based reporting.
Response: We proposed to begin required reporting on January 1,
2017, based upon the statutory language regarding both the collection
and use of the data for revaluation of services. We understand that
some practices will need to make modifications to their EHR and billing
systems to report this data to

[[Page 80218]]

us. We also acknowledge that an opportunity for testing the systems and
training will enhance the quality of data that we receive.
After consideration of comments, we are encouraging practitioners
to begin reporting data on post-operative services for procedures
furnished on or after January 1, 2017. However, the requirement to
report will become mandatory for post-operative services related to
procedures furnished on or after July 1, 2017 rather than as of January
1, 2017, as proposed. This delay will not negatively impact the use
value of the collected data since we expect that data received early in
the year might be less complete than data submitted once practitioners
adjusted to the requirements. Also, by allowing time for practitioners
to adjust EHR and billing software, to test such systems and to train
staff, we think the quality of the data will be enhanced by providing
flexibility with regard to the effective date of the requirement.
Finally, because we are limiting required reporting to high-volume
codes, meaningful data for CY 2017 should be available from 6 months of
reporting. Our systems can now accept the post-operative visit data so
practitioners can begin submitting such claims at any time.
c. Special Provisions for Teaching Physicians
We sought comment on whether special provisions are needed to
capture the pre- and post-operative services provided by residents in
teaching settings. If the surgeon is present for the key portion of the
visit, should the surgeon report the joint time spent by the resident
and surgeon with the patient? If the surgeon is not present for the key
portion of the visit, should the resident report the service? If we
value services without accounting for services provided by residents
that would otherwise be furnished by the surgeon in non-teaching
settings, subsequent valuations based upon the data we collect may
underestimate the resources used, particularly for the types of
surgeries typically furnished in teaching facilities. However, there is
also a risk of overvaluing services if the reporting includes services
that are provided by residents when those services would otherwise be
furnished by a physician other than the surgeon, such as a hospitalist
or intensivist, and as such, should not be valued in the global
package.
Comment: We received only a few comments on this issue. Some
commenters suggested using the CMS policies that apply to other
services that teaching surgeons report to CMS for the reporting of CPT
code 99024. More specifically, when the appropriate conditions are met
they would use the GC or GE modifier to identify those services in
which surgical residents are involved. One of these suggested that once
we have the data we discuss with stakeholders how to use the data
involving residents in future valuations. Others suggested that we
capture data on resident's time as it could be important for valuation,
especially for the more complex cases in a teaching facility setting.
Some urged that we provide clear guidance on when the resident's time
could be reported. One commenter stated that teaching physicians should
be exempt from reporting requirements.
Response: These comments reinforce the importance of collecting
data from teaching physicians and to do so using the existing Medicare
rules that teaching physicians use in reporting services in which
residents are involved in furnishing. Because we are finalizing data
collection using CPT code 99024, the issues regarding the reporting of
time data are no longer relevant.
After consideration of the comments, we are finalizing a
requirement that teaching physicians will be subject to the reporting
requirements in the same way that other physicians are. Such physicians
should report CPT code 99024 only when the services furnished would
meet the general requirements for reporting services and should use the
GC or GE modifier as appropriate.
e. Who Reports
In both the comments on the CY 2016 proposed rule and in input from
the January 2016 national listening session, there was a great deal of
discussion regarding the challenges that we are likely to encounter in
obtaining adequate data to support appropriate valuation. Some
indicated that a broad sample and significant cooperation from
physicians would be necessary to understand what is happening as part
of the global surgical package. One commenter suggested that
determining a representative sample would be difficult and, due to the
variability related to the patient characteristics, it would be easier
to have all practitioners report. Many suggested that we conduct an
extensive analysis across surgical specialties with a sample that is
representative of the entire physician community and covers the broad
spectrum of the various types of physician practice to avoid problems
that biased or inadequate data collection would cause. Suggestions of
factors to account for in selecting a sample include specialty,
practice size (including solo practices), practice setting, volume of
claims, urban, rural, type of surgery, and type of health care delivery
systems. Another commenter pointed out that small sample sizes may lead
to unreliable data. Some commenters stated that requiring all
practitioners to report this information is unreasonable and would be
an insurmountable burden. A participant acknowledged that it would be
difficult for practitioners to report on only certain procedures, while
another stated that this would not be an administrative burden.
After considering the input of stakeholders on the CY 2016 proposed
rule and at the January 2016 national listening session discussed
above, we proposed that any practitioner who furnishes a procedure that
is a 10- or 90-day global service report the pre- and post-operative
services furnished on a claim using the proposed G-codes. We agreed
with stakeholders that it would be necessary to obtain data from a
broad, representative sample. However, as we struggled to develop a
nationally representative sampling approach that would result in
statistically reliable and valid data, it became apparent that we do
not have adequate information about how post-operative care is
delivered, how it varies and, more specifically, what drives variation
in post-operative care to develop a sampling frame. In its work to
develop the coding used for its study, the contractor found a range of
opinions on what drives variation in post-operative care. (The report
is available on the CMS Web site under downloads for the CY 2017 PFS
proposed rule with comment period at https://www.cms.gov/physicianfeesched/downloads/.) Without information on what drives
variation in pre- and post-operative care, we would have to speculate
about the factors upon which to base a sample or assume that the
variation in such care results from the same variables as are
frequently identified for explaining variation in health care and
clinical practice. In addition, we expressed concern about whether a
sample could provide sufficient volume to value accurately the global
package, except in the case of a few high-volume procedures.
In addition to concerns about achieving a statistically
representative sample of all practitioners nationally, we noted in the
proposed rule significant operational concerns with limiting data
collection to a subset of practitioners or a subset of services. These
include how to gain sufficient information on practitioners to stratify
the sample, how to identify the

[[Page 80219]]

practitioners who must report, and for those who practice in multiple
settings or with multiple groups in which settings the practitioner
would report. We concluded that establishing the rules to govern which
post-operative care should be reported based on our proposed G-codes
would be challenging for us to develop and difficult for physicians to
apply in the limited time between the issuance of the CY 2017 PFS final
rule with comment period and the beginning of reporting on January 1,
2017. We do not believe that the same problems apply to the same extent
to our final policy to use a single code that already exists to report
services described only by codes reported in high volumes. For example,
implementation of new sets of codes associated with annual PFS updates
are often supported by informational and educational efforts undertaken
by national organizations, like the national medical specialty
societies. Given that many practitioners are already familiar with CPT
code 99024 (as noted by many commenters), the need for such efforts is
significantly mitigated.
We also noted in the proposed rule that the more robust the
reported data, the more accurate our ultimate valuations can be. We
stated that given the importance of data on visits in accurate
valuations for global packages, collecting data on all pre- and post-
operative visits in the global period is the best way to accurately
value surgical procedures with global packages.
We recognized that reporting would require submission of additional
claims by those practitioners furnishing global services, but indicated
that we believed the benefits of accurate data for valuation of
services merited the imposition of this requirement. By using the
claims system to report the data, we believed the additional burden
would be minimized and referred to stakeholder reports that many
practitioners are already required by their practice or health care
system to report a code for each visit for internal control purposes
and some of these systems already submit claims for these services,
which are denied. We noted that requiring only some physicians to
report this information, or requiring reporting for only some codes,
could actually be more burdensome to physicians than requiring this
information from all physicians on all services because of the
additional steps necessary to determine whether a report is required
for a particular service and adopting a mechanism to assure that data
is collected and reported when required. Moreover, we stated that the
challenges with implementing a limited approach at the practice level
as compared to a requirement for all global services would result in
less reliable data being reported.
We noted that as we analyzed the data collected and made decisions
about valuations, we would reassess the data needed and what should be
required from whom. Through the data collected under our proposal, we
indicated that we would have the information to assess whether the
post-operative care furnished varies by factors such as specialty,
geography, practice setting, and practice size, and thus, the
information needed for a sample selection to be representative.
While section 1848(c)(8)(B) of the Act requires us to collect data
from a representative sample of physicians on the number and level of
visits provided during the global period, we stated that it does not
prohibit us from collecting data from a broad set of practitioners. In
addition, section 1848(c)(2)(M) of the Act authorizes the collection of
data from a wide range of physicians. Given the benefits of more robust
data, including avoiding sample bias, obtaining more accurate data, and
facilitating operational simplicity, we noted that we believed
collecting data on all post-operative care initially is the best way to
undertake an accurate valuation of surgical services in the future.
The following is a summary of the comments that we received on our
proposal to require all practitioners furnishing 10- or 90-day global
services to submit claims for the pre- and post-operative services
furnished.
Comment: Commenters overwhelmingly opposed requiring all
practitioners to submit claims for postoperative services. Several
reasons were cited for the opposition. The most significant reason was
the administrative burden and costs to physicians. Many commenters also
stated that requiring all practitioners who furnish 10- or 90-day
global services to report data is counter to the statute because the
statute refers to collection of data from a representative sample of
physicians.
One commenter stated that requiring every practitioner to report
these codes will be in many ways less representative than a targeted
sample, explaining that given the limited time for education, only
large, technologically rich practices will have the ability to properly
report these services. The commenter noted that this will leave many,
smaller or rural practices without the proper education and robust
billing systems in place to adequately, if at all, report these G-
codes. The commenter also noted that smaller, rural practices have
smaller patient populations, which can often be older and sicker than
the typical patient seen in a large practice and by creating a complex
system that favors one type of practice, the collected data is more
likely to be biased rather than representative. Another commenter
suggested that a small number of representative practices could provide
us with the same level of accuracy as collected data from all
physicians.
Response: In response to commenters' opposition to our proposal to
require all providers of covered services to report data, we
acknowledge that the stakeholders describe a much larger burden from
using the G-codes than we anticipated. On the other hand, we also
believe that our final policy will result in a much lower burden than
the proposed policy would have. As noted above, we are not finalizing
the proposed requirements to use the G-codes or the proposed
requirement to report on all 10- and 90-day global procedures and thus,
we believe that the overall administrative burden is significantly
reduced.
We do not agree with commenters that state that we do not have the
statutory authority to require reporting by all practitioners
furnishing certain services. We point commenters to section
1848(c)(2)(M) of the Act, which authorizes the collection of data to
use in valuing PFS services. We continue to believe that section
1848(c)(8) of the Act requires us to collect data that is
representative. We also continue to believe that requiring all
practitioners to report is more likely to be representative than a
sample given our lack of information about what drives variation in
post-operative care. However, after considering the information
presented by commenters regarding the difficulties that would be placed
on many physicians by the proposal, we believe that requiring reporting
by all practitioners for CY 2017 may present unforeseen, alternative
impediments to the sample being nationally representative of all
practitioners, such as practitioners being unable to report data
accurately due to constraints of time, finances or technical ability.
Comment: We did not receive any comments on the appropriate sample
size. Nor did we receive data on variations in the delivery of post-
operative care in response to our concern that we lacked data on how
post-operative care was delivered to select a representative sample.
Many commenters stated that it was possible to select a representative
sample, but none provided details on how to do so.

[[Page 80220]]

Several commenters suggested broadly sampling using the
characteristics that are frequently used for health care sampling
generally, such as geographic areas, urban and rural, practice types,
practice sizes, specialties and academic and non-academic. One
commenter recommended that we select a sample using geographical data
to identify a sample including practices of all sizes. The commenter
suggested, for example, that large hospital-based practices often have
practice patterns that are different from the majority of the
practicing physicians in suburban and rural areas. Another commenter
stated that we should not only collect data from MSAs but also from
rural and less urban areas.
One commenter suggested that we consider phasing in the
requirement, perhaps starting with larger groups. The commenter stated
that through one of these approaches we could avoid ``burdening
providers with unfunded work that has not yet been tested.''
One commenter suggested that we use a geographic sampling approach
similar to that one used for Comprehensive Care for Joint Replacement
(CJR) model or the episode payment models proposed for cardiac and
surgical hip/femur fraction and modify it to choose a geographic
sampling unit of MSAs and non-MSAs.
Response: We agree with commenters that we could select a sample
using an approach typically used in health care surveys or in Medicare
models and other programs. To the extent that the delivery of post-
operative care varies only based upon the criteria we selected, a
sample based on being representative for that criteria would be likely
to produce valid data.
However, instead of sampling by practice or practitioner or type of
service, a geographic approach to sampling (for example, sampling all
practitioners in a selected state) could help to alleviate the need to
stratify the sample on a long list of criteria. By using broad
geographical areas from varied areas of the country, we believe our
sample will capture data from practitioners who practice in a variety
of settings, single and multispecialty practices, urban and rural, a
variety of medical specialties, and practitioners operating in both
academic and non-academic institutions. Surgeons interviewed for the G-
code development suggested that post-operative care might vary across
these dimensions. A geographic approach could also mitigate some of the
practical operational barriers. For example, we believe that by having
all practitioners in the practice participate in reporting, we avoid
concerns about incomplete data when a required reporter furnishes a
procedure and another practitioner in the practice furnishes the post-
operative visits. A geographic approach also makes it easier to educate
practitioners on data collection requirements.
Comment: In response to operational difficulties with a
representative sample, such as how to make sure participants were aware
of the requirement to report and how to do so, one commenter stated
that notifying a small targeted sample is a much smaller task than
notifying the entire population of participating Medicare
practitioners. They also stated that a targeted approach will encourage
open dialogue between the participating practices and CMS, ensuring the
data collected are reliable. Others suggested providing compensation
for a sample of physicians to submit detailed data, would lead to
capturing accurate data because they would more likely to understand
and prioritize reporting because of their participation in this type of
study.
Response: We disagree that it is operationally easier to notify a
small segment of broadly diverse practitioners than the entire
population of practitioners unless that small segment has a degree of
cohesiveness, such as being in the same geographic area or specialty.
We have long appreciated the stakeholder community's collaboration in
broad communication efforts. In general, we have found that when
something affects a small number of providers it does not receive the
same response from entities that are critical for widespread adoption
such as associations, who are key purveyors of information, and those
developing software systems. We appreciate the suggestion that
interaction among those that need to report will facilitate compliance
and the quality of the data. With regard to compensation, we note that
the statute provided for a 5 percent withhold to encourage compliance
and we chose not to propose to implement this provision.
After consideration of the comments, we are finalizing a
requirement for reporting that only applies to practitioners in
selected states. In addition, those practicing only in small practices
are excluded from required reporting. Those not required to report can
do so voluntarily and we encourage them to do so.
Geographic Sample
As we noted in the proposed rule, we do not have adequate data on
what drives variations in the delivery of pre- and post-operative care
to design a sampling methodology that is certain to be representative.
We also believe that submission by all practitioners would be
consistent with our extensive use of claims data for other PFS
services. Additionally, we understand the statute directs us to gather
data from more than a select group of practitioners based on any
particular attributes, such as gathering data only from ``efficient''
practices, consistent with longstanding recommendations from MedPAC
regarding limiting data collection. We also believed that there were
significant operational impairments to data reporting by a limited
sample of physicians. In consideration of these factors, we proposed to
require reporting by all physicians to make sure that the data we
obtained reflected all services furnished. In light of the comments
regarding the burden that would be created by requiring reporting by
all physicians and the data that was actually needed for valuation, we
think that reporting by a subset of practitioners could provide us
valuable information on the number of visits typically furnished in
global periods. This data could enhance the information we currently
use to establish values for these services. While we acknowledge that
we believe the data under this less burdensome approach will provide
less information than necessary for optimal valuation for these
services, we believe that the information on the number of actual
visits from a subset of practitioners is preferable to the information
on which we currently rely, which is the results of survey data
reflecting respondents' assessment of the number of visits considered
to be typical.
One commenter suggested that we could develop a geographic sample
using a similar approach used by the Center for Medicare and Medicaid
Innovation for the Comprehensive Care for Joint Replacement (CJR) or
other proposed episode payment models, with an adjustment that would
make certain we received data from rural, as well as urban areas. We
reviewed these approaches and concluded that such an approach for
sample selection could maximize the variability of the sample, mitigate
some of our concerns, and provide a robust set of data for
consideration.
Commenters suggested a sample should include geographic diversity.
Studies show that health care delivery patterns often vary between
geographic areas and while we have no specific information that the
number of post-operative visits varies by geographic areas, it seems
prudent to gather data from a variety of geographic areas to determine
if there is such variation and

[[Page 80221]]

to account for it in our data collection if it exists. In order to
maximize the variability of our limited sample, we are using a
methodology that requires reporting from practices in 9 states of
various sizes and from various geographic areas of the country. We are
using whole states for the geographic areas rather than MSAs as are
used for the CJR and proposed for other models for several reasons.
First, MSAs are not used for geographic adjustments under the PFS.
Indeed, practitioners in most states receive state-wide geographic
adjustments under the PFS. Additionally, an MSA-based approach would,
by definition, not include large rural areas, something mentioned by
many commenters as an important factor in variation in medical
practice, and therefore, a critical criterion for sampling. Also, due
to a variety of governmental and institutional requirements, the
practice of medicine is primarily a state-based activity and thus the
use of states will reduce the number of practitioners for whom we have
only partial data based on geographic location. In contrast, we believe
that practitioners often practice across county lines or in more than
one MSA. We also believe that the state-wide approach will be helpful
for compliance and education because there are state medical
associations in every state and specialty associations in many.
To make sure that we had states of a variety of sizes, we ranked
states according to the number of Medicare beneficiaries in each state.
We chose the number of Medicare beneficiaries to reflect the general
need for Medicare services. We divided states into four groups: The top
5 states in terms of the number of Medicare beneficiaries (group 1);
6th through 15th largest states in terms Medicare beneficiaries (group
2); the 16th through 25th largest states in terms of Medicare
beneficiaries (group 3); and all remaining states (26 including the
District of Columbia, group 4). The states in each group are:
Group 1--California, Florida, New York, Pennsylvania &
Texas.
Group 2--Georgia, Illinois, Massachusetts, Michigan, New
Jersey, North Carolina, Ohio, Tennessee, Virginia, and Washington.
Group 3--Alabama, Arizona, Indiana, Kentucky, Louisiana,
Maryland, Minnesota, Missouri, Wisconsin, and South Carolina.
Group 4--Alaska, Arkansas, Colorado, Connecticut, District
of Columbia, Delaware, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi,
Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota,
Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West
Virginia and Wyoming.
We also recorded the Census region for each state using the Census
Bureau's nine regions (New England, Middle Atlantic, South Atlantic,
East South Central, West South Central, East North Central, West North
Central, Mountain, and Pacific). Puerto Rico and other territories were
excluded.
To ensure a mix of states in terms of size (measured by number of
Medicare beneficiaries), we selected 1 state at random from group 1,
followed by 2 states each at random from groups 2 and 3, and lastly 4
states from group four. After each random selection, we eliminated the
remaining states in the same Census region from the remaining groups
for which selection was pending to maximize geographic variation in the
selection of states. In the event that this process resulted in fewer
than 9 selected states (for example if none of the three Middle
Atlantic states--all in Group 1 and 2--were selected in the first three
picks), the last selection(s) were made randomly from states in the
remaining Census region from which selections previously had not been
made.
Practitioners located in the following states who meet the criteria
for required reporting will be required to report the data discussed in
this section of the final rule:
Florida.
Kentucky.
Louisiana.
Nevada.
New Jersey.
North Dakota.
Ohio.
Oregon.
Rhode Island.
Exclusion for Practitioners in Small Practices
In response to comment about the burden of our proposed requirement
and the concern that the burden would result in the submission of data
of poor quality, we are exempting practitioners who only practice in
practices with fewer than 10 practitioners from the reporting. Based
upon the comments, we believe larger practices are more likely to
currently require practitioners to track all visits and often use CPT
code 99024 to do so. Moreover, larger practices are more likely to have
coding and billing staff that can more easily adapt to this claims-
based requirement. The combination of experience with reporting CPT
code 99024 and the staff and resource base to devote to developing the
infrastructure for such reporting will result in greater accuracy from
such practitioners. By excluding practitioners who only practice in
practices with fewer than 10 practitioners, we estimate that about 45
percent of practitioners will not be required to report. In defining
small practices, we reviewed other programs. We chose 10 practitioners
as the threshold for reporting as practices of this size are large
enough to support coding and billing staff, which will make this
reporting less burdensome. Also, this is the same threshold used by the
value-based modifier program for its phase-in of a new requirement
because of concerns about the burden of small practices.
For this purpose, we define practices as a group of practitioners
whose business or financial operations, clinical facilities, records,
or personnel are shared by two or more practitioners. For the purposes
of this reporting requirement, such practices do not necessarily need
to share the same physical address; for example, if practitioners
practice in separate locations but are part of the same delivery system
that shares business or financial operations, clinical facilities,
records, or personnel, all practitioners in the delivery system would
be included when determining if the practice includes at least 10
practitioners. Because qualified non-physician practitioners may also
furnish procedures with global periods, the exception for reporting
post-operative visits applies only to practices with fewer than ten
physicians and qualified non-physician practitioners regardless of
specialty. We are including all practitioners and specialties in the
count because the exception policy uses practice size as a proxy for
the likely ability of the practice to meet the reporting requirements
without undue administrative burden. We recognize that physicians and
qualified non-physician practitioners furnish services under a variety
of practice arrangements. In determining whether a practitioner
qualifies for the exception based on size of the practice, all
physicians and qualified non-physician practitioners that furnish
services as part of the practice should be included. This would include
all practitioners, regardless of whether they are furnishing services
under an employment model, a partnership model, or an independent
contractor model under which they practice as a group and share
facility and other resources but continue to bill Medicare
independently instead of reassigning benefits. We also recognize that
practice size can fluctuate over the year and anticipate that practices
will determine their eligibility for the exception based

[[Page 80222]]

on their expected staffing. Generally, practitioners in short-term
locum tenens arrangements would not be included in the count of
practitioners. When practitioners are also providing services in
multiple settings, the count may be adjusted to reflect the estimated
proportion of time spent in the group practice and other settings.
Although this policy excludes a significant number of
practitioners, a majority of the global procedures furnished will be
included in the reporting requirements and thus we will have data on a
majority of services.
Several commenters also expressed concern that data from small
practices be included to have complete information. If those practicing
in small practices are motivated to report and either have the
infrastructure to do so in place or the resources to develop such
infrastructure, then, taken together, these attributes would minimize
concerns with accuracy of data from small practices. Accordingly, we
are encouraging, but not requiring, small practices to report the
visits. As we collect data, we will explore mechanisms to appropriately
use the voluntarily submitted claims data. Analysis of this and other
data we are able to procure will allow us to assess whether the number
of post-operative visits varies based upon the size of practice. To the
extent that it does and that we do not have adequate data on the
practice patterns in small practices from voluntarily submitted data
and other sources, we will reconsider for future notice and comment
rulemaking the exemption of practitioners in small practices from the
reporting requirements.
The claims data received from practitioners in these states will
provide more information about the number of visits typically provided
in post-operative periods than is available from any other source.
Through analysis of this data, we hope to learn more about what drives
variations in the delivery of post-operative care. Many of the
characteristics that were suggested by commenters, such as size of
practice, type of practice, geographic, urban/rural, academic, hospital
based, specialty, etc., will be able to be evaluated using the claims
data. Moreover, we hope to be able to stratify the data received based
upon comparisons to the national characteristics so that the submitted
claims data can contribute to improved valuation of PFS services.
In summary, our claims-based data collection policy requires that,
for procedures furnished on or after July 1, 2017, practitioners who
practice in practices that includes of 10 or more practitioners in
Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio,
Oregon, and Rhode Island will be required to report on claims data on
post-operative visits furnished during the global period of a specified
procedure using CPT code 99024. The specified procedures are those that
are furnished by more than 100 practitioners and either are nationally
furnished more than 10,000 times annually or have more than $10 million
in annual allowed charges. The final list of codes subject to required
reporting will be available on the CMS Web site. Although required
reporting begins for global procedures furnished on or after July 1,
2017, we encourage all practitioners to begin reporting for procedures
furnished on or after January 1, 2017, if feasible. Similarly, we
encourage those practicing in practices with fewer than 10
practitioners to report data if they can do so.
(1) Survey of Practitioners
We agreed with commenters on the CY 2016 proposed rule and at the
listening session that we need more information than is currently
provided on claims and that we should utilize a number of different
data sources and collection approaches to collect the data needed to
assess and revalue global surgery services. In addition to the claims-
based reporting, we proposed to survey a large, national sample of
practitioners and their clinical staff in which respondents would
report information about approximately 20 discrete pre-operative and
post-operative visits and other global services like care coordination
and patient training. This sample would be stratified based upon
specialty and geography, as well as by physician volume (procedures
billed) and practice setting. The proposed survey would produce data on
a large sample of pre-operative and post-operative visits and is being
designed so that we could analyze the data collected in conjunction
with the claims-based data that we would be collecting. We expect to
obtain data from approximately 5,000 practitioners.
We noted that, if our proposal was finalized, RAND would develop
and conduct this survey. RAND would also assist us in collecting and
analyzing data for this survey and the claims-based data. While the
primary data collection would be via a survey instrument, semi-
structured interviews would be conducted and direct observations of
post-operative visits would occur in a small number of pilot sites to
inform survey design, validate survey results, and collect information
that is not conducive to survey-based reporting.
Our proposed sampling approach would sample practitioners rather
than specific procedures or visits to streamline survey data collection
and minimize respondent burden. Specifically, we will use a random
sample from a frame of practitioners who billed Medicare for more than
a minimum threshold of surgical procedures with a 10- or 90-day global
period (for example, 200 procedures) in the most recent available prior
year of claims data. The sampling frame would provide responses from
approximately 5,000 practitioners, stratified by specialty, geography,
and practice type. Based upon preliminary analysis, we believe this
number of participants will allow us to collect information on post-
operative care following the full range of CPT level-2 surgical
procedure code groups. For many common types of post-operative visits,
we anticipate a standard deviation of the time distribution at around 9
minutes. To achieve a 95 percent confidence intervals with a width of 2
minutes, we would need 311 reported post-operative visits per
procedure/procedure group. The most comprehensive approach would be to
sample sufficient practitioners to observe 311 post-operative visits
for each HCPCS procedure, but this approach would be cost- and time-
prohibitive. Since post-operative care following similar procedures may
involve similar activities and times even if there are differences in
the number of visits, we proposed to sample differentially by specialty
to maximize our ability to estimate attributes of post-operative care
for the largest range of procedures.
Sample sizes for each specialty will be determined on the basis of
number of procedures billed by the specialty and number of
practitioners billing, assuming a uniform distribution of procedures
across the year, an average of 2 post-operative visits by each patient
and an equal distribution of procedures across practitioners within a
specialty. If the procedure represented only 5 percent of total billed
procedures for the specialty, we could expect only one of 20 visits
sampled and reported by each practitioner would be for the particular
procedure, and thus we would need to sample 311 practitioners within
the specialty to achieve the target precision level on estimated post-
operative visit time.
We propose targeting 311 reporting practitioners from each
specialty which is the only specialty contributing at least 5 percent
of billings for any one

[[Page 80223]]

procedure group code, defined as procedures sharing a CPT level 2
heading. For other specialties, the target will be defined by the
maximum value of 311 divided by the number of specialties contributing
at least 5 percent for any procedure group code for which that
specialty contributes. The target sample size for a specialty will be
capped at 25 percent of the eligible practitioners within the
specialty. For example, if a specialty contributed to two procedure
group codes, one of which had four contributing specialties and the
other had three contributing specialties, the specialty of interest
would have a target of 104 reporting practitioners (which is driven by
the procedure group code that is tied to three specialties). These
guidelines will target at least 311 reporting practitioners for each
procedure group code, and result in a total target sample size of 4,872
providers. A smaller sample size would reduce the precision of
estimates from the survey and more importantly risk missing important
differences in post-operative care for specific specialties or
following different types of surgical procedures. We expect a response
rate in excess of 50 percent. Given this response rate (and some
uncertainty in this response rate estimate), we will need to approach
at least 9,722 practitioners for our target of 4,872 practitioners.
Should the response rate be lower than expected, we will continue to
sample in waves until we reach the target of approximately 4,872
practitioners. Non-response bias will be assessed by comparing
available characteristics of non-respondents (for example, practice
type, geography, procedure volume etc.) to those of respondents.
We did not propose that respondents report on the entire period of
post-operative care for individual patients, as a 90-day follow-up
window (for surgeries currently with a 90-day global period) is too
long to implement practically in this study setting and would be more
burdensome to practitioners. Instead, we proposed to collect
information on a range of different post-operative services resulting
from surgeries furnished by the in-sample practitioner prior to or
during a fixed reporting period.
Practitioners will be asked to describe 20 post-operative visits
furnished to Medicare beneficiaries or other patients during the
reporting period. The information collected through the survey
instrument, which will be developed based upon direct observation and
discussions in a small number of pilot sites, will include contextual
information to describe the background for the post-operative care,
including, for example:
Procedure codes(s) and date of service for procedure upon
which the global period is based.
Procedure place of service.
Whether or not there were complications during or after
the procedure.
The number in sequence of the follow-up visit (for
example, the first visit after the procedure).
The survey instrument will also collect information on the visit in
question including, for example:
Which level of visit using existing billing codes.
Specific face-to-face and non-face-to-face activities
furnished on the day of the visit.
The total time spent on face-to-face and non-face-to-face
activities on the day of the visit.
Direct practice expense items used during the visit, for
example supplies like surgical dressings and clinical staff time.
Finally, the instrument will ask respondents to report other prior
or anticipated care furnished to the patient by the practice outside of
the context of a post-operative visit, for example non-face-to-face
services.
The survey approach will complement the claims data collection by
collecting detailed information on the activities, time, intensity, and
resources involved in delivering global services. The resulting visit-
level survey data would allow us to explore in detail the variation in
activities, time, intensity, and resources associated with global
services within and between physicians and procedures, and would help
to validate the information gathered through claims. A summary of the
work that RAND would be doing is available on the CMS Web site under
downloads for the CY 2017 PFS proposed rule with comment period at
https://www.cms.gov/physicianfeesched/downloads/.
The following is a summary of the comments that we received on our
proposal to conduct a survey of practitioners furnishing 10- and 90-day
global services to obtain information about the face-to-face activities
and other activities included in post-operative care.
Comment: Most commenters were generally supportive of the survey
effort and noted that the provider survey will collect useful
information on the level of visits, as well as important contextual
detail that will not be available from the claims-based reporting. One
commenter stated that a limited approach through surveys of physicians
and practices looking at a targeted selection of services, and using
CPT code 99024 for the claims based component would yield meaningful
and actionable data for the agency and stakeholders.
Response: We agree that the survey portion of the data collection
approach will provide useful information on level and context. The
survey will complement claims-based reporting and will provide us with
important information on non-face-to-face activities and other
activities that are not reported with CPT code 99024.
Comment: One commenter pointed out challenges in survey response
and in estimating time for visits by aggregating practitioner time
estimates for specific activities.
Response: While we have not finalized the design of the survey
instrument, we are aware of challenges in collecting detailed time
estimates for specific activities. We do not intend to sum estimated
times for specific activities to arrive at a total duration for the
visit. We also recognize the challenges related to survey response
rates and are working with our contractor accordingly.
Comment: Several commenters suggested that the survey effort should
not target all 4,200 procedure codes.
Response: The survey component of the data collection effort is not
designed to collect information on visits following all global
procedure codes. Rather, we expect the sample to be stratified by
specialty and to result in a sufficient qualitative data to address key
procedures in each specialty furnishing procedures with global periods.
Comment: Some commenters believed that the purpose of the direct
observation component of the data collection effort was unclear.
Response: The direct observation component will consist of external
observers capturing the activities conducted in a sample of post-
operative visits at a small number of practices. It is designed to
provide additional context to inform future data collection efforts and
to gauge where the practitioner survey does or does not capture the
full range of activities. It is not a data collection activity per se.
After consideration of the comments, we are finalizing our proposal
to conduct a survey of practitioners to gain information on post-
operative activities to supplement our claims-based data collection as
proposed. We expect that the survey will be in the field mid-2017.
(2) Required Participation in Data Collection
Using the authority we are provided under sections 1848(c)(8) and

[[Page 80224]]

1848(c)(2)(M) of the Act, we proposed to require all practitioners who
furnish a 10- or 90-day global service to submit a claim(s) providing
information on all services furnished within the relevant global
service period in the form and manner described in this section of the
final rule, beginning with surgical or procedural services furnished on
or after January 1, 2017. We also proposed to require participation by
practitioners selected for the broad-based survey through which we
proposed to gather additional data needed to value surgical services,
such as the clinical labor and equipment involved that cannot be
efficiently collected on claim (see below).
Given the importance of the proposed survey effort, making sure
that we get valid data is critical. By eliminating the bias that would
be associated with using only data reported voluntarily, we stated that
we expected to get more accurate and representative data. In addition
to the potential bias inherent in voluntary surveys, we expressed
concern that relying on voluntary data reporting would limit the
adequacy of the volume of data we obtain, would require more effort to
recruit participants, and may make it impossible to obtain data for
valuation for CY 2019 as required by the statute.
Based on our previous experience with requesting voluntary
cooperation in data collection activity, voluntary participation poses
a significant challenge in collection and use of data. Specifically,
the Urban Institute's work (under contract with us) to validate work
RVUs by conducting direct observation of the time it took to furnish
certain elements of services paid under the physician fee schedule
provides evidence of this challenge. (See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/RVUs-Validation-Urban-Interim-Report.pdf for an interim report that
describes challenges in securing participation in voluntary data
collection.) Similarly, we routinely request invoices on equipment and
supplies that are used in furnishing PFS services and often receive no
more than one invoice. These experiences support the idea that
mandatory participation in data collection activities is essential if
we are to collect valid and unbiased data.
Section 1848(a)(9) of the Act authorizes us, through rulemaking, to
withhold payment of up to 5 percent of the payment for services on
which the practitioner is required to report under section
1848(c)(8)(B)(i) of the Act until the practitioner has completed the
required reporting. Some commenters opposed the imposition of this
payment consequence for failure to report, and others stated that it
was too large a penalty. While withholding a portion of payment would
encourage practitioners to report the required information, we did not
propose to implement this option for CY 2017. We stated that requiring
physicians to report the information on claims, combined with the
incentive to report complete information so that revaluations of
payment rates for global services are based on accurate data, would
result in compliance with the reporting requirements. However, we noted
that if we find that compliance with required claims-based reporting is
not acceptable, we would consider in future rulemaking imposing up to a
5 percent payment withhold as authorized by the statute.
Consistent with the requirements of section 1848(c)(2)(M) of the
Act, should the data collected under this requirement be used to
determine RVUs, we will disclose the information source and discuss the
use of such information in such determination of relative values
through future notice and comment rulemaking.
The following is a summary of the comments we received on our
proposal to require reporting in the claims-based survey and
participation in the survey.
Comment: Many commenters objected overall to the administrative
burden of our proposal and questioned the need for some of the data we
were proposing to collect, primarily through the claims-based
reporting, and made many recommendations for less burdensome data
collection to achieve our goals. Some objected to any claims-based
reporting at this time. A few recommended a different approach that
involved collecting information from a small number of practices that
agree to participate and that we pay such practices for participation.
However, none recommended that we go forward with data collection on a
totally voluntary basis. Some indicated concern that practitioners
would not provide required information.
Response: We appreciate the many ideas for how to improve our data
collection effort, particularly those that provided information on how
to collect the information that we need while imposing a lower
administrative burden on practitioners.
Comment: A few commenters supported our not proposing to implement
the 5 percent withhold until claims on the post-operative care were
submitted.
Response: We appreciate the support of commenters.
After considering the comments, we are finalizing our proposal to
require participation in the claims-based reporting. It should be
noted, however, due to our modifying the requirement to apply only to
those identified as part of the geographic sample, on selected
procedures, using one code, and exempting those practicing in groups
with fewer than 10 practitioners, as discussed above, the impact of the
requirement is significantly reduced overall, including for the subset
of practitioners who will have to report under the finalized
requirements.
We are not implementing the statutory provision that authorizes a 5
percent withhold of payment for the global services until claims are
filed for the post-operative care, if required. We reiterate that
should we find that compliance with required claims-based reporting
limits confidence in the use of the information for improving the
accuracy of payments for the global codes, we would consider in future
rulemaking imposing up to a 5 percent payment withhold as authorized by
the statute.
(3) Data Collection From Accountable Care Organizations (ACOs)
We are particularly interested in knowing whether physicians and
practices affiliated with ACOs expend greater time and effort in
providing post-operative global services in keeping with their goal of
improving care coordination for their assigned beneficiaries. ACOs are
organizations in which practitioners and hospitals voluntarily come
together to provide high-quality and coordinated care for their
patients. Because such organizations share in the savings realized by
Medicare, their incentive is to minimize post-operative visits while
maintaining high quality post-operative care for patients. In addition,
we believe that such organizations offer us the opportunity to gain
more in-depth information about delivery of surgical services.
We proposed to collect data on the activities and resources
involved in delivering services in and around surgical events in the
ACO context by surveying a small number of ACOs (Pioneer and Next
Generation ACOs). Similar to the approach of the more general
practitioner survey, this effort would begin with an initial phase of
primary data collection using a range of methodologies in a small
number of ACOs; development, piloting, and validation of an additional
survey module specific to ACOs. A survey of practitioners participating
in approximately 4 to 6 ACOs using the

[[Page 80225]]

survey instrument along with the additional ACO-specific module will be
used to collect data from on pre- and post-operative visits.
The following is summary of the comments we received about our
proposal for data ACO data collection.
Comment: Several commenters supported a separate survey of
practitioners participating in ACOs. One commenter agreed with CMS that
this data collection effort may provide a unique and useful perspective
on the matter at hand. Several commenters indicated that there are
likely differences in pre- and post-operative care between
practitioners who do participate in ACOs and those that do not. One
commenter cautioned against extrapolating information gathered from
ACOs to value global surgery services that are provided outside of the
ACO setting because ACOs are structured differently than other practice
settings and data from ACOs may, therefore, be skewed [and] that ACO
participants typically are larger practices and thus would
underrepresent smaller or solo practitioners.
Response: We agree that ACOs may be structured differently than
other practice settings and that these differences may contribute to
variations in the provision of outpatient care. By separately surveying
ACOs we will be able to investigate whether there are differences in
pre- and post-operative care in ACO settings compared to non-ACO
settings.
After consideration of the comments received, we are finalizing our
proposal for data collection in ACOs. We recognize and will continue to
consider the concerns raised by commenters as we implement this
project.
(6) Re-Valuation Based Upon Collected Data
We recognize that the some of the data collection activities being
undertaken vary from how information is currently gathered to support
PFS valuations for global surgery services. However, we believe the
proposed claims-based data collection is generally consistent with how
claims data is reported for other kinds of services paid under the PFS.
We believe that the authority and requirements included in the statute
through the MACRA and PAMA were intended to expand and enhance data
that might be available to enhance the accuracy of PFS payments. In the
proposed rule, we indicated that because these are new approaches to
collecting data and in an area--global surgery--where very little data
has previously been collected, we cannot describe exactly how this
information would be used in valuing services. What is clear is that
the claims-based data would provide information parallel to the kinds
of claims-data used in developing RVUs for other PFS services and that
by collecting these data, we would know far more than we do now about
how post-operative care is delivered and gain insight to support
appropriate packaging and valuation. We would include any revaluation
proposals based on these data in subsequent notice and comment
rulemaking.
Even though we did not make a proposal regarding how future re-
valuations would use the data collected under these proposals, we
received several comments on such revaluations. The following is
summary of the comments we received regarding use of the data we obtain
through this three-pronged data collection activity in future re-
valuations.
Comment: Some commenters stated that the RUC process worked well to
value services and should continue to be used to value these and other
services. Some of these objected to any claims-based data collection
for a variety of reasons including that it was unlikely to provide
valid and reliable data, that the RUC process worked well and should
continue to be used, and the that since other codes would not be valued
on the basis of similar data use of this data would harm the fee
schedule's relativity. Some suggested that we use the data obtained
here to identify misvalued codes and refer them to the RUC for further
evaluation under the usual process. Some commenters suggested that we
not collect any data until we could describe how it would be used.
Response: We believe that the Congress enacted the two data
collection provisions included in the Act to further the accuracy of
PFS rates by having additional data available to the RUC as it makes
recommendations to us and to us to inform our evaluation of those
recommendations. We do not believe this data collection was intended to
replace the RUC or the processes that have been established over the
last two decades for valuing physician services. We agree with
commenters that one way the data might be used is to identify
potentially misvalued codes for the RUC to evaluate. However, we also
stress that we do not agree that the use of claims data to value
services within global surgery packages would be inconsistent with the
valuation of other PFS services. On the contrary, very few other PFS
services include estimated work RVUs based on face-to-face patient
encounters over multiple days or months. Outside of these services,
work RVUs are estimated per patient encounter (or in other cases over
longer periods of time for non-face-to-face work). Therefore, the outer
limit of any misvaluation between the estimated typical and the actual
is the overall value for a single face-to-face service. Under the
global packages, potential misvaluations can range from the difference
between the estimated typical services for a full global period and the
actual services furnished for a full global period for a given patient.
We are not finalizing any provisions regarding valuation of global
surgical services. Instead, such issues will be addressed in future
rulemaking after we collect data and analyze data.

E. Improving Payment Accuracy for Primary Care, Care Management and
Patient-Centered Services

1. Overview
In recent years, we have undertaken ongoing efforts to support
primary care and patient-centered care management within the PFS as
part of HHS' broader efforts to achieve better care, smarter spending
and healthier people through delivery system reform. We have recognized
the need to improve payment accuracy for these services over several
years, especially beginning in the CY 2012 PFS proposed rule (76 FR
42793) and continuing in each subsequent year of rulemaking. In the CY
2012 proposed rule, we acknowledged the limitations of the current code
set that describes evaluation and management (E/M) services within the
PFS. For example, E/M services represent a high proportion of PFS
expenditures, but have not been recently revalued to account for
significant changes in the disease burden of the Medicare patient
population and changes in health care practice that are underway to
meet the current population's health care needs. These trends in the
Medicare population and health care practice have been widely
recognized in the provider community and by health services researchers
and policymakers alike.\1\ We believe the focus of the

[[Page 80226]]

health care system has shifted to delivery system reforms, such as
patient-centered medical homes, clinical practice improvement, and
increased investment in primary and comprehensive care management/
coordination services for chronic and other conditions. This shift
requires more centralized management of patient needs and extensive
care coordination among practitioners and providers, often on a non-
face-to-face basis across an extended period of time. In contrast, the
current CPT code set is designed with an overall orientation to pay for
discrete services and procedural care as opposed to ongoing primary
care, care management and coordination, and cognitive services. It
includes thousands of separately paid, individual codes, most of which
describe highly specialized procedures and diagnostic tests, while
there are relatively few codes that describe care management and
cognitive services. The term ``cognitive services'' refers to the type
of work that is usually classified and described under the current code
set for E/M services, such as the critical thinking involved in data
gathering and analysis, planning, management, decision-making, and
exercising judgment in ambiguous or uncertain situations.\2\ It is
often used to describe PFS services that are not procedural or strictly
diagnostic in nature. Further, in the past, we have not recognized as
separately payable many existing CPT codes that describe care
management and cognitive services, viewing them as bundled and paid as
part of other services including the broadly drawn E/M codes that
describe face-to-face visits billed by physicians and practitioners in
all specialties.
---------------------------------------------------------------------------

\1\ See, for example, https://content.healthaffairs.org/content/25/5/w378.full; https://www.commonwealthfund.org/publications/issue-
briefs/2008/feb/how-disease-burden-influences-medication-patterns-
for-medicare-beneficiaries--implications-for-polic; https://www.hhs.gov/ash/about-ash/multiple-chronic-conditions/;
https://www.nejm.org/doi/full/10.1056/NEJMp1600999#t=article; https://www.pcpcc.org/about; https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-MIPS-and-APMs.html.
\2\ https://www.nejm.org/doi/full/10.1056/NEJMp1600999#t=article.
---------------------------------------------------------------------------

This has resulted in minimal service variation for ongoing primary
care, care management and coordination, and cognitive services relative
to other PFS services, and in potential misvaluation of E/M services
under the PFS (76 FR 42793). Some stakeholders believe that there is
substantial misvaluation of physician work within the PFS, and that the
current service codes fail to capture the range and intensity of
nonprocedural physician activities (E/M services) and the ``cognitive''
work of certain specialties (https://www.nejm.org/doi/full/10.1056/NEJMp1600999#t=article).
Recognizing the inverse for specialties that furnish other kinds of
services, MedPAC has noted that the PFS allows some specialties to more
easily increase the volume of services they provide, and therefore,
their revenue from Medicare relative to other specialties, particularly
those that spend most of their time providing E/M services. (MedPAC
March 2015 Report to the Congress, available at https://www.medpac.gov/-documents-/reports). We agree with this analysis, and we recognize that
the current set of E/M codes limits Medicare's ability under the PFS to
appropriately recognize the relative resource costs of primary care,
care management/coordination and cognitive services relative to
specialized procedures and diagnostic tests.
In recent years, we have been engaged in an ongoing incremental
effort to update and improve the relative value of primary care, care
management/coordination, and cognitive services within the PFS by
identifying gaps in appropriate payment and coding. These efforts
include changes in payment and coding for a broad range of PFS
services. This effort is particularly vital in the context of the
forthcoming transition to the Quality Payment Program that includes the
Merit-Based Incentive Payment System (MIPS) and Alternative Payment
Models (APMs) incentives under the Medicare Access and CHIP
Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted April 16,
2015), since MIPS and many APMs will adopt and build on PFS coding,
RVUs and PFS payment as their foundation.
In CY 2013, we began by focusing on post-discharge care management
and transition of beneficiaries back into the community, establishing
new codes to pay separately for transitional care management (TCM)
services. Next we finalized new coding and separate payment beginning
in CY 2015 for chronic care management (CCM) services provided by
clinical staff. In the CY 2016 PFS proposed rule (80 FR 41708 through
41711), we solicited public comments on three additional policy areas
of consideration: (1) Improving payment for the professional work of
care management services through coding that would more accurately
describe and value the work of primary care and other cognitive
specialties for complex patients (for example, monthly timed services
including care coordination, patient/caregiver education, medication
management, assessment and integration of data, care planning); (2)
establishing separate payment for collaborative care, particularly, how
we might better value and pay for robust inter-professional
consultation between primary care physicians and psychiatrists
(developing codes to describe and provide payment for the evidence-
based psychiatric collaborative care model (CoCM)), and between primary
care physicians and other (non-mental health) specialists; and (3)
assessing whether current PFS payment for CCM services is adequate and
whether we should reduce the administrative burden associated with
furnishing and billing these services.
We received substantial feedback on this comment solicitation,
which we summarized in the CY 2017 PFS proposed rule and used to
develop the following coding and payment proposals for CY 2017 (81 FR
46200 through 46215, and 46263 through 46265):
Separate payment for existing codes describing prolonged
E/M services without direct patient contact by the physician (or other
billing practitioner), and increased payment for prolonged E/M services
with direct patient contact by the physician (or other billing
practitioner) adopting the RUC-recommended values.\3\
---------------------------------------------------------------------------

\3\ ``Without direct patient contact'' and ``with direct patient
contact'' in this sentence are the terms used in the CPT code
descriptor or prefatory language for these prolonged E/M services.
---------------------------------------------------------------------------

New coding and payment mechanisms for behavioral health
integration (BHI) services including substance use disorder treatment,
specifically three codes to describe services furnished as part of the
psychiatric CoCM and one code to address other BHI care models.
Separate payment for complex CCM services, reduced
administrative burden for CCM, and an add-on code to the visit during
which CCM is initiated (the CCM initiating visit) to reflect the work
of the billing practitioner in assessing the beneficiary and
establishing the CCM care plan.
A new code for cognition and functional assessment and
care planning, for treatment of cognitive impairment.
An adjustment to payment for routine visits furnished to
beneficiaries for whom the use of specialized mobility-assistive
technology (such as adjustable height chairs or tables, patient lifts,
and adjustable padded leg supports) is medically necessary.
We noted that the development of coding for these and other kinds
of services across the PFS is typically an iterative process that
responds to changes in medical practice and may be best refined over
several years, with PFS rulemaking and the development of CPT codes as
important parts of that process. We noted with interest that the CPT
Editorial Panel and AMA/RUC restructured the former Chronic Care
Coordination Workgroup to establish a

[[Page 80227]]

new Emerging CPT and RUC Issues Workgroup that we hope will continue to
consider the issues raised in this section of our CY 2017 proposed
rule. At the time of publication of the proposed rule, we were aware
that CPT had approved a code to describe assessment and care planning
for treatment of cognitive impairment; however, it would not be ready
in time for valuation in CY 2017. Therefore, we proposed to make
payment using a G-code (G0505 \4\) for this service in CY 2017. We were
also aware that CPT had approved three codes that describe services
furnished consistent with the psychiatric CoCM, but that they would
also not be ready in time for valuation in CY 2017. We discuss these
services in more detail in the next section of this final rule.
---------------------------------------------------------------------------

\4\ We note that we used placeholder codes (GPPP1, GPPP2, GPPP3,
GPPPX, GPPP6, GPPP7, and GDDD1) in the proposed rule. In order to
avoid confusion, we have replaced those codes with those that have
been finalized as part of the 2017 HCPCS set, even when describing
the language in the proposed rule.
---------------------------------------------------------------------------

To facilitate separate payment for these services furnished to
Medicare beneficiaries during CY 2017, we proposed to make payment
through the use of three G-codes (G0502, G0503, and G0504--see below)
that parallel the new CPT codes, as well as a fourth G-code (G0507--see
below) to describe services furnished using other models of BHI in the
primary care setting. We intended for these to be temporary codes and
would consider whether to adopt and establish values for the new CPT
codes under our standard process, potentially for CY 2018. We
anticipated continuing the multi-year process of implementing
initiatives designed to improve payment for, and recognize long-term
investment in, primary care, care management and cognitive services,
and patient-centered services. While we recognized that there may be
some overlap in the patient populations for the proposed new codes, we
noted that time spent by a practitioner or clinical staff could not be
counted more than once for any code (or assigned to more than one
patient), consistent with PFS coding conventions. We expressed
continued consideration of additional codes for CCM services that would
describe the time of the physician or other billing practitioner. We
also expressed interest in whether there should be changes under the
PFS to reflect additional models of inter-professional collaboration
for health conditions, in addition to those we proposed for BHI.
We proposed to pay under the PFS for services described by new
coding as follows (please note that the descriptions included for
G0502, G0503, and G0504 are from Current Procedural Terminology
(CPT[supreg]) Copyright 2016 American Medical Association (and we
understand from CPT that they will be effective as part of CPT codes
January 1, 2018). All rights reserved):
G0502: Initial psychiatric collaborative care management,
first 70 minutes in the first calendar month of behavioral health care
manager activities, in consultation with a psychiatric consultant, and
directed by the treating physician or other qualified health care
professional, with the following required elements:
++ Outreach to and engagement in treatment of a patient directed by
the treating physician or other qualified health care professional;
++ Initial assessment of the patient, including administration of
validated rating scales, with the development of an individualized
treatment plan;
++ Review by the psychiatric consultant with modifications of the
plan if recommended;
++ Entering patient in a registry and tracking patient follow-up
and progress using the registry, with appropriate documentation, and
participation in weekly caseload consultation with the psychiatric
consultant; and
++ Provision of brief interventions using evidence-based techniques
such as behavioral activation, motivational interviewing, and other
focused treatment strategies.
G0503: Subsequent psychiatric collaborative care
management, first 60 minutes in a subsequent month of behavioral health
care manager activities, in consultation with a psychiatric consultant,
and directed by the treating physician or other qualified health care
professional, with the following required elements:
++ Tracking patient follow-up and progress using the registry, with
appropriate documentation;
++ Participation in weekly caseload consultation with the
psychiatric consultant;
++ Ongoing collaboration with and coordination of the patient's
mental health care with the treating physician or other qualified
health care professional and any other treating mental health
providers;
++ Additional review of progress and recommendations for changes in
treatment, as indicated, including medications, based on
recommendations provided by the psychiatric consultant;
++ Provision of brief interventions using evidence-based techniques
such as behavioral activation, motivational interviewing, and other
focused treatment strategies;
++ Monitoring of patient outcomes using validated rating scales;
and relapse prevention planning with patients as they achieve remission
of symptoms and/or other treatment goals and are prepared for discharge
from active treatment.
G0504: Initial or subsequent psychiatric collaborative
care management, each additional 30 minutes in a calendar month of
behavioral health care manager activities, in consultation with a
psychiatric consultant, and directed by the treating physician or other
qualified health care professional (List separately in addition to code
for primary procedure) (Use G0504 in conjunction with G0502, G0503).
G0507: Care management services for behavioral health
conditions, at least 20 minutes of clinical staff time, directed by a
physician or other qualified health care professional time, per
calendar month.
G0505: Cognition and functional assessment using
standardized instruments with development of recorded care plan for the
patient with cognitive impairment, history obtained from patient and/or
caregiver, by the physician or other qualified health care professional
in office or other outpatient setting or home or domiciliary or rest
home.
G0506: Comprehensive assessment of and care planning by
the physician or other qualified health care professional for patients
requiring chronic care management services, including assessment during
the provision of a face-to-face service (billed separately from monthly
care management services) (Add-on code, list separately in addition to
primary service).
G0501: Resource-intensive services for patients for whom
the use of specialized mobility-assistive technology (such as
adjustable height chairs or tables, patient lifts, and adjustable
padded leg supports) is medically necessary and used during the
provision of an office/outpatient evaluation and management visit (Add-
on code, list separately in addition to primary procedure).
Regarding the majority of these proposals, the public comments were
broadly supportive, some viewing our proposals as a temporary solution
to an underlying need to revalue E/M services, especially outpatient E/
M. Several commenters recommended that CMS utilize the global surgery
data collection effort or another major research initiative to
distinguish and revalue different kinds of E/M work.

[[Page 80228]]

The commenters made recommendations about the scope and definition of
the proposed services, what types of individuals should be able to
provide them, and potential alignment and overlap. The commenters
agreed with the need to increase the relative value of primary care,
care management and other cognitive care under the PFS and minimize
administrative burden for such services, while ensuring value to the
program and beneficiaries. The public comments raise or inform a number
of issues around how to define and pay for care that is collaborative,
integrative or continuous, and we discuss the comments in greater
detail below.
2. Non-Face-to-Face Prolonged Evaluation & Management (E/M) Services
In public comments on the CY 2016 PFS proposed rule, many
commenters recommended that CMS should establish separate payment for
non-face-to-face prolonged E/M service codes that we currently consider
to be ``bundled'' under the PFS (CPT codes 99358, 99359). The CPT
descriptors are:
CPT code 99358 (Prolonged evaluation and management
service before and/or after direct patient care, first hour); and
CPT code 99359 (Prolonged evaluation and management
service before and/or after direct patient care, each additional 30
minutes (List separately in addition to code for prolonged service).
Commenters believed that separate payment for these existing CPT
codes would provide a means for physicians and other billing
practitioners to receive payment that more appropriately accounts for
time that they spend providing non-face-to-face care. We agreed that
these codes would provide a means to recognize the additional resource
costs of physicians and other billing practitioners, when they spend an
extraordinary amount of time outside of an E/M visit performing work
that is related to that visit and does not involve direct patient
contact (such as extensive medical record review, review of diagnostic
test results or other ongoing care management work). We also believed
that doing so in the context of the ongoing changes in health care
practice to meet the current population's health care needs would be
beneficial for Medicare beneficiaries and consistent with our
overarching goals related to patient-centered care.
These non-face-to-face prolonged service codes are broadly
described (although they include only time spent personally by the
physician or other billing practitioner) and have a relatively high
time threshold (the time counted must be an hour or more beyond the
usual service time for the primary or ``companion'' E/M code that is
also billed). They are not reported for time spent in care plan
oversight services or other non-face-to-face services that have more
specific codes and no upper time limit in the CPT code set. We believed
this made these codes sufficiently distinct from the other codes we
proposed for CY 2017 as part of our primary care/cognitive care/care
management initiative described in this section of our final rule.
Accordingly, we proposed to recognize CPT codes 99358 and 99359 for
separate payment under the PFS beginning in CY 2017. We noted that time
could not be counted more than once towards the provision of CPT codes
99358 or 99359 and any other PFS service. We addressed their valuation
in the valuation section of the CY 2017 proposed rule.
Through a drafting error, we stated in the proposed rule that we
would require these services to be furnished on the same day by the
same physician or other billing practitioner as the companion E/M code.
We intended to propose conformity with CPT guidance that requires that
time counted towards the codes describe services furnished during a
single day directly related to a discrete face-to-face service that may
be provided on a different day, provided that the services are directly
related to those furnished in a face-to-face visit.
We also solicited public comment on our interpretation of existing
CPT guidance governing concurrent billing or overlap of CPT codes 99358
and 99359 with complex CCM services (CPT codes 99487 and 99489) and TCM
services (CPT codes 99495 and 99496). Specifically CPT provides, ``Do
not report 99358, 99359 during the same month with 99487-99489. Do not
report 99358, 99359 when performed during the service time of codes
99495 or 99496.'' Complex CCM services and TCM services are similar to
the non-face-to-face prolonged services in that they include
substantial non-face-to-face work by the billing physician or other
practitioner. The TCM and CCM codes similarly focus on a broader
episode of patient care that extends beyond a single day, although they
have a monthly service period and the prolonged service codes do not.
We sought public input on the intersection of the non-face-to-face
prolonged service codes with CCM and TCM services, and with the
proposed add-on code to the CCM initiating visit G0506 (Comprehensive
assessment of and care planning for patients requiring CCM services).
We also solicited comment regarding how distinctions could be made
between time associated with prolonged services and the time bundled
into other E/M services, particularly pre- and post-service times,
which would continue to be bundled with the other E/M service codes.
For all of these services, we expressed concern that there would
potentially be program integrity risks as the same or similar non-face-
to-face activities could be undertaken to meet the billing requirements
for a number of codes. We solicited public comment to help us identify
the full extent of program integrity considerations, as well as options
for mitigating program integrity risks.
Comment: Many commenters recommended that we adopt the CPT coding
provision for CPT codes 99358 and 99359 that allows the prolonged
services to be provided on a different day than the companion E/M code.
At the same time, several commenters indicated that they request
changes to the codes through the established processes of the CPT
Editorial Panel. For example, some commenters suggested that CPT codes
99358 and 99359 should be revised so that they have a limited (calendar
month) service period or measure shorter time increments (15 minutes).
Some commenters recommended that a given physician should not be
allowed to report CPT codes 99358 and 99359 for the same beneficiary
during the same time he or she reported CCM, TCM, or G0506. These
commenters stated that CCM, TCM, and proposed G0506 encompass non-face-
to-face care provided to the beneficiary during a given period of time
that would be duplicated if the physician is also allowed to report CPT
codes 99358 and 99359 during the same time period. Other commenters
stated that it would be unusual for G0506 and non-face-to-face
prolonged services (CPT codes 99358 and 99359) to be reported for
services on the same day, but that both should be allowed if time
thresholds are met. To facilitate determination of whether time
thresholds are met for various potential code combinations, some
commenters recommended that CMS establish a time for G0506 and publish
typical times for the companion codes to the prolonged service codes.
This would enable practitioners to determine when they have exceeded
``usual'' or average times for E/M services and may bill prolonged
services. Some commenters recommended that CMS provide tables

[[Page 80229]]

showing times for E/M visits, CCM, G0506 and prolonged services with
specific clinical examples for concurrent billing.
Some commenters believed there might be some overlap between the
proposed non-face-to-face prolonged service codes and the post-service
work of G0505 (Cognition and functional assessment by the physician or
other qualified health care professional in office or other
outpatient). Some commenters believed there is a discrepancy between
our proposal to allow G0505 to be a companion code to prolonged
services, and CPT's intent that G0505 should only be billed on the same
day as another E/M visit if they are unrelated.
MedPAC commented that the companion E/M codes should be revalued
instead of providing separate payment for prolonged services associated
with the companion codes. However, if we finalize as proposed, MedPAC
recommended that we clarify what situations the prolonged codes are
appropriate for, beyond average times. Another commenter recommended an
alternative policy instead of the non-face-to-face prolonged service
codes, namely several modifiers and add-on codes to E/M services,
associated with increased work RVUs. A typical time for the primary
service would not need to be established. This coding schema would
focus on visits actively treating patients with four or more chronic
conditions; patients with three or more chronic problems introducing an
acute problem during their visit; unexpected abnormal studies; and
electronic communication after visits with the patient, lab, and other
clinicians. One commenter drew a distinction between prolonged service
work and care management services, where care management does not
include extensive review of medical records, review of diagnostic tests
and further discussion with a caregiver.
Response: We appreciate the comments. First, we had intended to
propose to adopt the CPT coding provision for CPT codes 99358 and 99359
that allows the prolonged time to be provided on a different day than
the companion E/M code, along with the rest of the CPT prefatory
language for these codes. Our final policy will adopt the CPT guidance
that allows the prolonged time to be reported for time on a different
day than the companion E/M code, along with the rest of the CPT
prefatory language for CPT codes 99358 and 99359.
Second, the public comments elucidate that it is difficult to
assess potential overlap between prolonged services and many other
codes because the included services, service periods and timeframes are
not aligned. For example, most services paid under the PFS are valued
based on assumptions regarding the typical pre-service, intra-service
and post-service time, but do not have required thresholds for time
spent. It is difficult to distinguish the times associated with these
services from the times for codes that include time requirements in
their descriptor. It is also difficult to distinguish the time and
other work included in codes that generally describe services furnished
during one day (prolonged services and E/M visits) with codes that
describe time and work over substantially different service periods
(such as the calendar month services like CCM or BHI services) or add-
on codes with no pre or post-service time (such as G0506). In addition,
because portions of many services are likely describing work that is
furnished ``incident to'' a physician's or practitioner's services, the
time and effort of the billing practitioner may not be the only
relevant time and effort to consider. Moreover, the comments reflect a
desire and intent on the part of stakeholders to alter the prolonged
service codes in the near future, which would, in turn, alter their
intersection with the codes proposed in this section of our 2017 rule
and many other codes. The public comments also reflect a lack of
consensus regarding appropriate medical practice and reporting patterns
for prolonged services in relation to the services described by the
CCM, TCM, proposed G0505 and proposed G0506 codes.
Having considered this feedback, we have decided to finalize our
proposal for separate payment of the non-face-to-face prolonged service
codes (CPT 99358, 99359) and adopt the CPT code descriptors and
prefatory language for reporting these services. We stress that we
intend these codes to be used to report extended non-face-to-face time
that is spent by the billing physician or other practitioner (not
clinical staff) that is not within the scope of practice of clinical
staff, and that is not adequately identified or valued under existing
codes or the 2017 finalized new codes. We appreciate the commenters'
suggestion to display the typical times associated with relevant
services. We have posted a file that notes the times assumed to be
typical for purposes of PFS rate-setting. That file is available on our
Web site under downloads for the CY 2017 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. We note that
while these typical times are not required to bill the displayed codes,
we would expect that only time spent in excess of these times would be
reported under a non-face-to-face prolonged service code.
Based on our analysis of comments, we do not believe there is
significant overlap between CPT codes 99358 and 99359 and the CCM codes
(CPT 99487, 99489, 99490) or our finalized BHI service codes (G0502,
G0503, G0504, G0507 discussed below). The work of the billing
practitioner in the provision of non-complex CCM and the BHI services
is related to the direction of ongoing care management and coordination
activities of other individuals, compared to the work of 99358 and
99359 which is described as personally performed and directly related
to a face-to-face service. On that basis, we do not believe that there
is significant overlap in the description of services or the valuation.
The potential intersection of CPT codes 99358 and 99359 with the
complex CCM codes is harder to assess because complex CCM explicitly
includes medical decision-making of moderate to high complexity by the
billing practitioner, which is not performed by clinical staff. The
complex CCM codes, however, only measure or count the time of clinical
staff. Similarly, TCM includes moderate to high complexity medical
decision-making during the service period as well as a level 4 or 5
face-to-face visit, even though clinical staff may perform a number of
other aspects of the service. For CY 2017, for administrative
simplicity, we are adopting the CPT provision (and finalizing as
proposed) that complex CCM cannot be reported during the same month as
non-face-to-face prolonged services, CPT codes 99358 and 99359 (by a
single practitioner). Similarly, we are adopting the CPT provision that
non-face-to-face prolonged services, CPT codes 99358 and 99359 may not
be reported when performed during the service time of TCM (CPT codes
99495 and 99496) (by a single practitioner). We interpret the CPT
provision to mean that CPT codes 99358 and 99359 cannot be reported
during the TCM 30-day service period, by the same practitioner who is
reporting the TCM.
Regarding potential intersection of CPT codes 99358 and 99359 with
proposed G0505 (Cognition and functional assessment by the physician or
other qualified health care professional in office or other
outpatient), we are finalizing our proposal that G0505 be designated as
a

[[Page 80230]]

companion or ``base'' E/M code to non-face-to-face prolonged services
(CPT codes 99358 and 99359) (see section II.E.5 for a detailed
discussion of G0505). That is, for CY 2017 CPT codes 99358 and 99359
may be reported with G0505 as the associated companion code, whether
furnished on the same day or a different day. We believe CPT intended
the code on which G0505 is modeled to function like a specific E/M
service, and that while the specificity of the service explicitly
includes care planning unique to the needs of patients with particular
conditions, there may well be circumstances where the pre- or post-time
for a particular beneficiary may be prolonged. In their current form,
the non-face-to-face prolonged service codes exist for the purpose of
providing additional payment to account for the biller's additional
time related to E/M visits. Therefore, we believe the non-face-to-face
prolonged service codes should be reportable when related to E/M
services, including those such as G0505 that describe more specific E/M
work. We look forward to continued feedback on this issue, including
through potential revisions to CPT guidance.
Regarding intersection of CPT codes 99358 and 99359 with G0506, we
note that G0506 is already an add-on code to another E/M service (the
CCM initiating visit, which can be the AWV/IPPE or a qualifying face-
to-face E/M visit). We are providing in section II.E.4.a that at this
time (beginning in CY 2017), G0506 will be a code that is only billable
one time, at the outset of CCM services. We agree with commenters that
it would be unusual for physicians to spend enough time with a given
beneficiary on a given day to warrant reporting all three codes (the
initiating visit code, G0506, and a prolonged service code). We also
believe that a simpler approach is preferable at this time (two related
codes for CCM initiation, instead of possibly three). Therefore our
final policy for CY 2017 is that prolonged services (whether face-to-
face or non-face-to-face) cannot be reported in addition to G0506 in
association with a companion E/M code that also qualifies as the CCM
initiating visit. In association with the CCM initiating visit, a
billing practitioner may choose to report either prolonged services or
G0506 (if requirements to bill both prolonged services and G0506 are
met), but cannot report both a prolonged service code and G0506.
3. Establishing Separate Payment for Behavioral Health Integration
(BHI)
In the CY 2016 PFS final rule with comment period (80 FR 70920), we
stated that we believe the care and management for Medicare
beneficiaries with behavioral health conditions often requires
extensive discussion, information-sharing and planning between a
primary care physician and a specialist. In CY 2016 rulemaking, we
described that in recent years, many randomized controlled trials have
established an evidence base for an approach to caring for patients
with behavioral health conditions called the psychiatric Collaborative
Care Model (CoCM). We sought information to assist us in considering
refinements to coding and payment to address this model in particular.
The psychiatric CoCM is one of many models for behavioral health
integration or BHI, a term that refers broadly to collaborative care
that integrates behavioral health services principally with primary
care, but that may also integrate behavioral health care with inpatient
and other clinical care. BHI is a team-based approach to care that
focuses on integrative treatment of patients with medical and mental or
behavioral health conditions. In the CY 2017 proposed rule (81 FR 46203
through 46205), we proposed four new G-codes for BHI services: Three
describing the psychiatric CoCM specifically, and one generally
describing related models of care.
a. Psychiatric Collaborative Care Model (CoCM)
A specific model for BHI, psychiatric CoCM typically is provided by
a primary care team consisting of a primary care provider and a care
manager who works in collaboration with a psychiatric consultant, such
as a psychiatrist. Care is directed by the primary care team and
includes structured care management with regular assessments of
clinical status using validated tools and modification of treatment as
appropriate. The psychiatric consultant provides regular consultations
to the primary care team to review the clinical status and care of
patients and to make recommendations. As we previously noted, several
resources have been published that describe the psychiatric CoCM in
greater detail and assess the impact of the model, including pieces
from the University of Washington (https://aims.uw.edu/), the Institute
for Clinical and Economic Review (https://icer-review.org/announcements/icer-report-presents-evidence-based-guidance-to-support-integration-of-behavioral-health-into-primary-care/), and the Cochrane Collaboration
(https://www.cochrane.org/CD006525/DEPRESSN_collaborative-care-forpeople-with-depression-and-anxiety). Because this particular kind of
collaborative care model has been tested and documented in medical
literature, in the CY 2016 proposed rule we expressed particular
interest in how coding used to describe PFS services might facilitate
appropriate valuation of the services furnished under this model. We
solicited public comments to assist us in considering refinements to
coding and payment to address this model in particular relative to
current coding and payment policies, as well as information related to
various requirements and aspects of these services.
After consideration of the comments, we proposed in the CY 2017 PFS
proposed rule to begin making separate payment for services furnished
using the psychiatric CoCM, beginning January 1, 2017. We were aware
that the CPT Editorial Panel, recognizing the need for new coding for
services under this model of care, had approved three codes to describe
the psychiatric collaborative care that is consistent with this model,
but the codes would not be ready in time for valuation in CY 2017.
Current CPT coding does not accurately describe or facilitate
appropriate payment for the treatment of Medicare beneficiaries under
this model of care. For example, under current Medicare payment policy,
there is no payment made specifically for regular monitoring of
patients using validated clinical rating scales or for regular
psychiatric caseload review and consultation that does not involve
face-to-face contact with the patient. We believed that these resources
are directly involved in furnishing ongoing care management services to
specific patients with specific needs, but they are not appropriately
recognized under current coding and payment mechanisms. Because PFS
valuation is based on the relative resource costs of the PFS services
furnished to Medicare beneficiaries, we believed that appropriate
coding for these services for CY 2017 will facilitate accurate payment
for these and other PFS services. Therefore, we proposed separate
payment for services under the psychiatric CoCM using three new G-
codes, as detailed below: G0502, G0503, and G0504, which would parallel
the CPT codes that are being created to report these services.
The proposed code descriptors were as follows (from Current
Procedural Terminology (CPT[supreg]) Copyright 2016 American Medical
Association (and we understand from CPT that they will be effective as
part of CPT codes January 1, 2018). All rights reserved):
G0502: Initial psychiatric collaborative care management,
first 70 minutes in the first calendar month of

[[Page 80231]]

behavioral health care manager activities, in consultation with a
psychiatric consultant, and directed by the treating physician or other
qualified health care professional, with the following required
elements:
++ Outreach to and engagement in treatment of a patient directed by
the treating physician or other qualified health care professional;
++ Initial assessment of the patient, including administration of
validated rating scales, with the development of an individualized
treatment plan;
++ Review by the psychiatric consultant with modifications of the
plan if recommended;
++ Entering patient in a registry and tracking patient follow-up
and progress using the registry, with appropriate documentation, and
participation in weekly caseload consultation with the psychiatric
consultant; and
++ Provision of brief interventions using evidence-based techniques
such as behavioral activation, motivational interviewing, and other
focused treatment strategies.
G0503: Subsequent psychiatric collaborative care
management, first 60 minutes in a subsequent month of behavioral health
care manager activities, in consultation with a psychiatric consultant,
and directed by the treating physician or other qualified health care
professional, with the following required elements:
++ Tracking patient follow-up and progress using the registry, with
appropriate documentation;
++ Participation in weekly caseload consultation with the
psychiatric consultant;
++ Ongoing collaboration with and coordination of the patient's
mental health care with the treating physician or other qualified
health care professional and any other treating mental health
providers;
++ Additional review of progress and recommendations for changes in
treatment, as indicated, including medications, based on
recommendations provided by the psychiatric consultant;
++ Provision of brief interventions using evidence-based techniques
such as behavioral activation, motivational interviewing, and other
focused treatment strategies;
++ Monitoring of patient outcomes using validated rating scales;
and relapse prevention planning with patients as they achieve remission
of symptoms and/or other treatment goals and are prepared for discharge
from active treatment.
G0504: Initial or subsequent psychiatric collaborative
care management, each additional 30 minutes in a calendar month of
behavioral health care manager activities, in consultation with a
psychiatric consultant, and directed by the treating physician or other
qualified health care professional (List separately in addition to code
for primary procedure) (Use G0504 in conjunction with G0502, G0503).
We stated that we intend these to be temporary codes and would
consider whether to adopt and establish values for the associated new
CPT codes under our standard process once those codes are active.
We proposed that these services would be furnished under the
direction of a treating physician or other qualified health care
professional during a calendar month. These services would be furnished
when a patient has a diagnosed psychiatric disorder that requires a
behavioral health care assessment; establishing, implementing,
revising, or monitoring a care plan; and provision of brief
interventions. The diagnosis could be either pre-existing or made by
the billing practitioner. These services would be reported by the
treating physician or other qualified health care professional and
include the services of the treating physician or other qualified
health care professional, the behavioral health care manager (see
description below) who would furnish services incident to services of
the treating physician or other qualified health care professional, and
the psychiatric consultant (see description below) whose consultative
services would be furnished incident to services of the treating
physician or other qualified health care professional. We proposed that
beneficiaries who are appropriate candidates for care reported using
the psychiatric CoCM codes could have newly diagnosed conditions, need
help in engaging in treatment, have not responded to standard care
delivered in a non-psychiatric setting, or require further assessment
and engagement prior to consideration of referral to a psychiatric care
setting. Beneficiaries would be treated for an episode of care, defined
as beginning when the behavioral health care manager engages in care of
the beneficiary under the appropriate supervision of the billing
practitioner and ending with:
The attainment of targeted treatment goals, which
typically results in the discontinuation of care management services
and continuation of usual follow-up with the treating physician or
other qualified healthcare professional; or
Failure to attain targeted treatment goals culminating in
referral to a psychiatric care provider for ongoing treatment; or
Lack of continued engagement with no psychiatric
collaborative care management services provided over a consecutive 6-
month calendar period (break in episode).

A new episode of care would start after a break in episode of 6
calendar months or more.
The treating physician or other qualified health care professional
would direct the behavioral health care manager and continue to oversee
the beneficiary's care, including prescribing medications, providing
treatments for medical conditions, and making referrals to specialty
care when needed. Medically necessary E/M and other services could be
reported separately by the treating physician or other qualified health
care professional, or other physicians or practitioners, during the
same calendar month. Time spent by the treating physician or other
qualified health care professional on activities for services reported
separately could not be included in the services reported using G0502,
G0503, and G0504. We proposed that the behavioral health care manager
would be a member of the treating physician or other qualified health
care professional's clinical staff with formal education or specialized
training in behavioral health (which could include a range of
disciplines, for example, social work, nursing, and psychology) who
provides care management services, as well as an assessment of needs,
including the administration of validated rating scales,\5\ the
development of a care plan, provision of brief interventions, ongoing
collaboration with the treating physician or other qualified health
care professional, maintenance of a registry,\6\ all in consultation
with a psychiatric consultant. The behavioral health care manager would
furnish these services both face-to-face and non-face-to-face, and
consult with the psychiatric consultant minimally on a weekly basis. We
proposed that the behavioral health care manager would be on-site at
the location where the treating physician or other qualified health
care professional furnishes services to the beneficiary.
---------------------------------------------------------------------------

\5\ For example, see https://aims.uw.edu/resource-library/measurement-based-treatment-target.
\6\ For example, see https://aims.uw.edu/collaborative-care/implementation-guide/plan-clinical-practice-change/identify-population-based.
---------------------------------------------------------------------------

We proposed that the behavioral health care manager may or may not
be a professional who meets all the requirements to independently
furnish and report services to Medicare. If otherwise eligible, then
that individual

[[Page 80232]]

could report separate services furnished to a beneficiary receiving the
services described by G0502, G0503, G0504, and G0507 in the same
calendar month. These could include: Psychiatric evaluation (90791,
90792), psychotherapy (90832, 90833, 90834, 90836, 90837, 90838),
psychotherapy for crisis (90839, 90840), family psychotherapy (90846,
90847), multiple family group psychotherapy (90849), group
psychotherapy (90853), smoking and tobacco use cessation counseling
(99406, 90407), and alcohol or substance abuse intervention services
(G0396, G0397). Time spent by the behavioral health care manager on
activities for services reported separately could not be included in
the services reported using time applied to G0502, G0503, and G0504.
The psychiatric consultant involved in the ``incident to'' care
furnished under this model would be a medical professional trained in
psychiatry and qualified to prescribe the full range of medications.
The psychiatric consultant would advise and make recommendations, as
needed, for psychiatric and other medical care, including psychiatric
and other medical diagnoses, treatment strategies including appropriate
therapies, medication management, medical management of complications
associated with treatment of psychiatric disorders, and referral for
specialty services, that are communicated to the treating physician or
other qualified health care professional, typically through the
behavioral health care manager. The psychiatric consultant would not
typically see the patient or prescribe medications, except in rare
circumstances, but could and should facilitate a referral to a
psychiatric care provider when clinically indicated.
In the event that the psychiatric consultant furnished services to
the beneficiary directly in the calendar month described by other
codes, such as E/M services or psychiatric evaluation (CPT codes 90791
and 90792), those services could be reported separately by the
psychiatric consultant. Time spent by the psychiatric consultant on
activities for services reported separately could not be included in
the services reported using G0502, G0503, and G0504.
We also noted that, although the psychiatric CoCM has been studied
extensively in the setting of specific behavioral health conditions
(for example, depression), we received persuasive comments in response
to the CY 2016 proposed rule recommending that we not specify
particular diagnoses required for use of the codes for several reasons,
including that: There may be overlap in behavioral health conditions;
there are concerns that there could be modification of diagnoses to fit
within payment rules which could skew the accuracy of submitted
diagnosis code data; and for many patients for whom specialty care is
not available, or who choose for other reasons to remain in primary
care, primary care treatment will be more effective if it is provided
within a model of integrated care that includes care management and
psychiatric consultation.
Comment: The public comments were very supportive of our creation
of the three G-codes for CY 2017 to pay for services furnished using
the psychiatric CoCM. The commenters offered a number of
recommendations regarding valuation of the codes. Some commenters
requested additional codes, sought clarification, or presented
statements in favor of including the services of practitioners other
than psychiatrists, especially psychologists and social workers, within
the proposed codes.
Response: We thank the commenters for their support of coding and
valuation for services furnished using the psychiatric CoCM, and for
their recommendations regarding appropriate valuation. We address the
comments on valuation in section II.L of this final rule. We address
the comments regarding payment for services of psychologists and social
workers below.
Comment: Several commenters expressed concern that making separate
payment for psychiatric CoCM for the treatment of mood disorders might
result in neglecting treatment for other mental health conditions.
Other commenters expressed support for not designating a limited set of
eligible behavioral health diagnoses. One commenter stated that
requiring a diagnosed behavioral health condition might mean that
subclinical issues or undiagnosed behavioral health conditions would be
neglected.
Response: We continue to believe that we should not limit billing
and payment for the psychiatric CoCM codes to a limited set of
behavioral health conditions. As we understand it, the psychiatric CoCM
model of care may be used to treat patients with any behavioral health
condition that is being treated by the billing practitioner, including
substance use disorders. In the Collaborative Care literature reviewed
by the Cochrane Collaboration and others, there is stronger evidence of
effectiveness and cost-effectiveness for certain behavioral disorders,
particularly mood and anxiety disorders, than for others. However, we
continue to receive persuasive comments indicating that the psychiatric
CoCM is recommended for broader incorporation into clinical practice,
and recommending that we not specify the use of the psychiatric CoCM
codes for only particular behavioral health diagnoses. Therefore we are
not limiting billing and payment for the psychiatric CoCM codes to a
specified set of behavioral health conditions.
In response to the public comment regarding whether we should
require a diagnosed psychiatric disorder (as opposed to a subclinical
or undiagnosed condition), we are clarifying that as described, the
services require that there must be a presenting psychiatric or
behavioral health condition(s) that, in the clinical judgment of the
treating physician or other qualified health professional, warrants
``referral'' to the behavioral health care manager for further
assessment and treatment through provision of psychiatric CoCM
services. ``Referral'' is placed in quotes because the behavioral
health care manager may be located in the same practice as the treating
physician or other qualified health professional, who in any event
provides ongoing oversight and continues to treat the beneficiary.
However, the referring diagnosis (or diagnoses) may be either pre-
existing or made by the treating physician or other qualified health
professional, and we are not establishing any specific list of eligible
or included diagnoses or conditions. The treating physician or other
qualified health professional may not be qualified or able to fully
diagnose all relevant psychiatric or behavioral health condition(s)
prior to referring the beneficiary for psychiatric CoCM services. If in
the course of providing psychiatric CoCM services, it becomes clear
that the referring condition(s) or other diagnoses cannot be addressed
by psychiatric CoCM services, then we understand that the beneficiary
should be referred for other psychiatric treatment or should continue
usual follow-up care with the treating practitioner, because the
episode of psychiatric CoCM services ends if there is failure to attain
targeted treatment goals after or despite changes in treatment, as
indicated. Beneficiaries receiving care reported using the psychiatric
CoCM codes may, but are not required to have comorbid chronic or other
medical condition(s) that are being managed by the treating
practitioner.
Comment: Several commenters who supported payment for the proposed
codes for psychiatric CoCM services in primary care settings, raised
questions about whether these codes could be

[[Page 80233]]

used to bill for services furnished in other settings that are not
traditional primary care settings, such as inpatient or long-term care,
oncology practices, or emergency departments. Some of these commenters
recommended additional new codes to pay for services furnished in these
other settings.
Response: The psychiatric CoCM trials and real world implementation
have mainly included primary care practice that broadly includes
pediatrics, obstetrics/gynecology, and geriatrics as well as family
practice and general internal medicine. The psychiatric CoCM has also
been used in cardiology and oncology practice, and we believe it could
be used in various medical specialty settings, as long as the
specialist physician or practitioner is managing the beneficiary's
behavioral health condition(s) as well as other medical conditions (for
example, cancer, status-post acute myocardial infarction and other
conditions where co-morbid depression is common). Accordingly, we are
not limiting the code to reporting by only ``traditional'' primary care
specialties. We believe primary care practitioners will most frequently
perform the services described by the new psychiatric CoCM codes, but
if other specialist practitioners perform these services and meet all
of the requirements to bill the code(s), then they may report the
psychiatric CoCM codes. We are interested in receiving additional, more
specific information from stakeholders regarding which specialties
furnish psychiatric CoCM services. We note that we would generally not
expect psychiatrists to bill the psychiatric CoCM codes, because
psychiatric work is defined as a sub-component of the psychiatric CoCM
codes.
Regarding psychiatric CoCM services furnished to inpatients or
beneficiaries in long-term care settings such as nursing or custodial
care facilities, we note that the forthcoming CPT codes are not limited
to office or other outpatient or domiciliary services. Moreover, our
goal is to separately identify and pay for psychiatric CoCM services
furnished to beneficiaries in any appropriate setting of care, whether
inpatient or outpatient, in recognition of the associated time and
service complexity. Care of beneficiaries who are admitted to a
facility, are in long-term care, or are transitioning among settings
during the month may be more complex than the care of other types of
patients. While there is some overlap between psychiatric CoCM and CCM
services, they are distinct services with differing patient
populations, as discussed elsewhere in this section of our final rule.
Therefore, we have valued the psychiatric CoCM services in both
facility and non-facility settings (see section II.L on valuation). We
are not limiting the time that can be counted towards the monthly time
requirement to bill the psychiatric CoCM code(s) to time that is spent
in the care of an outpatient or a beneficiary residing in the
community. However, we also stress that G0502, G0503 and G0504 can only
be reported by a treating physician or other qualified health care
professional when he or she has directed the psychiatric CoCM service
for the duration of time that he or she is reporting it, and has a
qualifying relationship with individuals providing the service under
his or her direction and control. Also, time and effort that is spent
managing care transitions for CCM or TCM patients and that is counted
towards reporting TCM or CCM services, cannot also be counted towards
reporting any transitional care management activities reported under a
BHI service code(s), either the psychiatric CoCM codes or the code
describing other BHI services. We welcome additional input from
stakeholders regarding appropriate (or inappropriate) sites of service
for G0502, G0503 and G0504.
We note that for CY 2017, the facility PE RVU for psychiatric CoCM
services will include the indirect PE allocated based on the work RVUs,
but no direct PE (which is explicitly comprised of other labor,
equipment and supplies). This is because historically, the PFS facility
rate for a given professional service assumes that the billing
practitioner is not bearing a significant resource cost in labor by
other individuals, equipment or supplies. We generally assume that
those costs are instead borne by the facility, and are adequately
accounted for in a separate payment made to the facility to account for
these costs and other costs incurred by the facility for the
beneficiary's facility stay. For BHI services and similar care
management services such as CCM, we have been considering whether this
approach to PFS valuation is optimal because the PFS service, in
significant part, may be provided by the behavioral health care
manager, clinical staff, or even other physicians under the employment
of the billing practitioner or under contract to the billing
practitioner. These individuals may provide much of the PFS service
remotely, and are not necessarily employees or staff of the facility.
Indeed, the BHI services are defined in terms of activities performed
by individual(s) other than the billing practitioner and who may not be
affiliated with or located within the facility, even though as we
discuss below the billing practitioner must also perform certain work.
For this type of PFS service, there may be more direct practice expense
borne by the billing practitioner even though the beneficiary is
located, for part or all of the month, in a facility receiving
institutional payment. We plan to consider these issues further in the
future.
Comment: One specialty association supported the proposed
psychiatric CoCM codes, noting that although few of their members would
use these codes, they set an important precedent to recognize
interdisciplinary care that requires significant non-face-to-face work.
This commenter anticipated that similar code series may be developed in
the future to describe complex management in other specialties
including neurology, and supported the adoption of language approved at
CPT that carefully defined the roles of multiple professionals. Other
commenters similarly expressed support for separate payment for
additional collaborative care services, including inter-professional
consultation in the treatment of other illnesses such as cancer or
multiple sclerosis.
Response: We continue to be interested in new coding that describes
integrative, collaborative or consultative care among specialties other
than primary care and behavioral health/psychiatry. We are especially
interested in new coding that describes such care in sufficient detail
that distinguishes it from existing service codes, and that would
further the appropriate valuation of cognitive services. We will
continue to follow any new coding proposals at CPT relevant for the
Medicare population. We note that we have followed CPT's lead in
finalizing proposed code G0505 for cognitive impairment assessment and
care planning (see section II.E.5) as well as for psychiatric CoCM
services. BHI is a unique type of service that we believe until now has
not been well identified nor appropriately valued under existing codes.
BHI is not comprised of mere consultation among professionals and has a
unique evidence base, in addition to being recently addressed by
forthcoming CPT coding. In addition, given the shortage of available
psychiatric and other mental health professionals in many parts of the
country, we believe it is important to identify and make accurate
payment for models of care that facilitate access to psychiatric and
other behavioral health specialty care through innovations in medical
practice, like the ones described by these codes.

[[Page 80234]]

Comment: One commenter asked CMS to clarify inclusion of nurse
practitioners who are primary care practitioners and, in the specialty
of psychiatry, psychiatric nurse practitioners who can perform
psychiatric evaluations and treat psychiatric problems.
Response: Nurse practitioners are authorized to independently bill
Medicare for their services, and can also bill Medicare for services
furnished incident to their services. Therefore, nurse practitioners
who furnish the psychiatric CoCM services as described may bill for the
psychiatric CoCM codes. Nurse practitioners who meet our final
qualifications to serve as the behavioral health care manager may
provide the behavioral health care manager services incident to the
services of another (billing) practitioner. Nurse practitioners who
meet all of our final requirements to serve as the psychiatric
consultant may provide the psychiatric consultant services incident to
the services of the billing practitioner.
Comment: Regarding the care planning requirements for psychiatric
CoCM services, some commenters noted that there is not necessarily
value in accumulating or enumerating a number of different types of
care plans addressing different aspects of the beneficiary's problems,
such as a behavioral or psychiatric care plan, a CCM care plan, and a
cognitive impairment care plan (see G0505 in section II.E.5).
Response: While the proposed descriptors for the psychiatric CoCM
services referred to an ``individualized treatment plan,'' not a ``care
plan,'' we proposed in addition that the behavioral health care manager
would ``develop a care plan.'' While any care planning should take into
account the whole patient, our intent is that the care planning
included in the CCM coding (and G0506, the CCM initiating visit add-on
code) will be the most comprehensive in nature, addressing all health
issues with particular focus on the multiple chronic conditions being
managed by the billing practitioner. In that sense, the CCM care plan
is an integrative care plan incorporating more comprehensive health
information on all of the beneficiary's health issues, or reconciling
care plans of other practitioners. In contrast, the BHI care planning
will focus on behavioral health or psychiatric issues, in particular,
just as cognitive impairment care planning will focus on cognitive
impairment issues, in particular (see section II.E.5). We are not
requiring the psychiatric CoCM treating practitioner or behavioral
health consultant to perform care planning that incorporates
comprehensive health information on all of the beneficiary's health
issues or reconciles the care plans of other practitioners, as would be
expected for CCM care planning.
We understand that adoption of EHRs may be lower among behavioral
health practitioners \7\ and note that resources are available to help
inform how care plans can support team-based care and BHI.\8\ Our
understanding from the public comments last year and subsequent
discussions with experts on the psychiatric CoCM model of care, is that
no specific electronic technology or format is necessary or
indispensable to carry out the psychiatric CoCM model of care, or
perform the services included in the codes we are creating to describe
the services furnished using that model. We believe the format of the
behavioral health care plan (or any care plan) is less important than
having a process whereby feedback and expertise from all relevant
practitioners and providers, whether internal or external to the
billing practice, are integrated into the beneficiary's treatment plan
and goals; that this plan be regularly assessed and revisited by the
practitioner who is assuming an overall care management role for the
beneficiary in a given month; that the patient is engaged in the care
planning process; and that the care planning be documented in the
medical record (as with any required element of any PFS service). We
are revising the requirement for care planning by the behavioral health
care manager accordingly, that he or she will perform ``behavioral
health care planning in relation to behavioral/psychiatric health
problems, including revision for patients who are not progressing or
whose status changes.''
---------------------------------------------------------------------------

\7\ See for instance https://dashboard.healthit.gov/quickstats/pages/physician-ehr-adoption-trends.php and https://www.thenationalcouncil.org/wp-content/uploads/2012/10/HIT-Survey-Full-Report.pdf.
\8\ For instance, AHRQ has a variety of resources on how shared
care plans can support team-based care and behavioral health
integration at https://integrationacademy.ahrq.gov/playbook/develop-shared-care-plan.
---------------------------------------------------------------------------

Comment: A number of commenters recommended that we should not
require the behavioral health care manager for the psychiatric CoCM
services to be located on site within the primary care practice. The
commenters noted that in some settings, particularly rural areas or
smaller practices, this may be especially important. Some commenters
assumed that there is also a behavioral health care manager for G0507
(discussed below). These commenters compared BHI services (the
psychiatric CoCM services and G0507) to CCM and recommended that CMS
adopt the same requirements for all the BHI codes as for CCM, regarding
supervision, location of a behavioral health care manager, and third
party outsourcing.
Response: For the psychiatric CoCM services, we proposed that the
behavioral health care manager would be a member of the treating
physician or other qualified health care professional's clinical staff,
and would be required to be located on site but able to work under
general supervision. In addition, we proposed that the behavioral
health care manager provides his or her services both face-to-face and
non-face-to-face. We believed that services provided using the
psychiatric CoCM model of care commonly involve face-to-face
interaction between the behavioral health care manager and the
beneficiary on appropriate occasions, such as the outset of services (a
``warm hand-off'' from the treating physician or other qualified health
care professional). In addition, whether face-to-face or non-face-to-
face, many of the included behavioral health care manager duties could
be performed while the treating practitioner is not in the office and
could be performed after hours. We note that the behavioral health care
manager duties are listed in full above, and include care management
services, as well as an assessment of needs, including the
administration of validated rating scales, behavioral health care
planning, provision of brief interventions, ongoing collaboration with
the treating physician or other qualified health care professional, and
maintenance of a registry, all in consultation with a psychiatric
consultant.
The delivery of the psychiatric CoCM depends, in part, on
continuity of care between a given patient and the assigned behavioral
health care manager. Also it requires collaboration, integration and
ongoing data flow between the behavioral health care manager and the
treating practitioner the behavioral health care manager is supporting,
as well as with the psychiatric consultant who is usually remotely
located under the psychiatric CoCM model of care. As previously
discussed, the psychiatric CoCM is an integrative model of care, and in
considering our proposal we were concerned that allowing the behavioral
health care manager to be located remotely would compromise their
ability to collaborate, communicate, and timely treat and share
information with the beneficiary and the rest of the care team. We are
aware of many care

[[Page 80235]]

management companies and health information technology companies that
may seek to provide remote care management and related services under
all of the new BHI codes, as they have for CCM and similar services
recently adopted under the PFS. We received public comments from
several such stakeholders that indicated an interest in the provision
of BHI services and related health information technology. We
understand that there have been successful implementations (positive
randomized controlled trials) of the psychiatric CoCM using remote call
centers; however, in these implementations, call center staff were not
randomly rotated among patients and there was ongoing data flow and
connectivity between the behavioral health care manager and the other
members of the care team, as well as the patient. Moreover, the
behavioral health care manager would presumably have to be on site at
least some of the time (even if under general supervision), in order to
provide some of their services in-person with the beneficiary.
The fact that we proposed and are finalizing general supervision
for the psychiatric CoCM codes as we did for CCM services (see section
II.E.3.b) does not mean that general supervision alone suffices to meet
the requirements of the psychiatric CoCM for continuity, collaboration
and integration among the care team members, including the beneficiary.
General supervision means that the service is furnished under the
overall direction and control of the practitioner billing the service,
but without the presence of the practitioner being required during the
performance of the service. This definition does not directly govern
where individual(s) providing the service on an incident to basis are
located, whether on site or remote. Rather, it governs the location and
informs the involvement of the billing practitioner.
For payment purposes, we are assigning general supervision to the
psychiatric CoCM codes because we do not believe it is clinically
necessary that the professionals on the team who provide services other
than the treating practitioner (namely, the behavioral health care
manager and the psychiatric consultant) must have the billing
practitioner immediately available to them at all times, as would be
required under a higher level of supervision. However, general
supervision sets the minimum standard for supervision and does not, by
itself, meet the requirements we are setting for billing new codes
G0502, G0503 and G0504. While certain aspects of psychiatric CoCM
services might be furnished under general supervision, we do not
believe the general supervision requirement adequately describes the
nature of the relationship and interactions of the respective team
members for services furnished using the psychiatric CoCM or the codes
we are creating to describe those services. Moreover it only directly
addresses the physical location of the billing practitioner, not the
behavioral health care manager, necessarily.
After considering the public comments, we are not finalizing our
proposal that the behavioral health care manager must be a member of
the treating physician or other qualified health care professional's
clinical staff. As some of the psychiatric CoCM services can be
contracted out to a third party (subject to rules discussed below), the
contracted individuals are not necessarily employees of the treating
practitioner.
Regarding the face-to-face provision of services by the behavioral
health care manager, we are requiring that the behavioral health care
manager must be available to provide services on a face-to-face basis,
but not that face-to-face services must be provided. We are not
finalizing the proposed requirement that the behavioral health care
manager must be located on site, in order to allow for after-hours or
appropriate remote provision of services. However, to ensure clinical
integration with the treating practitioner and familiarity and
continuity with the beneficiary, which are characteristic of services
furnished under the psychiatric CoCM model of care, we are requiring
that the behavioral health care manager must have a collaborative,
integrated relationship with the rest of the care team members, and be
able to perform all of the required elements of the psychiatric CoCM
services delineated for the behavioral health care manager. The
behavioral health care manager must have the ability to engage the
beneficiary outside of regular clinic hours as necessary to perform
their duties under the CoCM model, and have a continuous relationship
with the beneficiary. This does not mean the behavioral health care
manager is necessarily an employee of or always physically located
within the practice, nor does it require provision of behavioral health
care manager services to the beneficiary on site. The behavioral health
care manager may provide his or her services from a remote location
that is remote from the billing practitioner or remote from the
beneficiary, subject to incident to rules and regulations in 42 CFR
410.26, if he or she has a qualifying relationship with the rest of the
care team including the beneficiary, and is available to provide
services face-to-face.
We will monitor this issue going forward, not just for the
psychiatric CoCM but also for the general BHI service code (G0507) we
are finalizing, as well as for TCM and CCM services. As we discuss in
the final rule section on CCM below, we are continuing to consider
whether outsourcing certain aspects of these services to a third party
fragments care, leads to insufficient involvement and oversight of the
billing practitioner or results in services that do not actually
represent or facilitate continuous, seamless transitional care and
other required aspects of these services. We will continue to consider
how to best define the continuity of care that is required for services
furnished and billed under all of these codes, and whether arrangements
for remote provision of services whether by a case management company
or another entity increases rather than reduces service fragmentation.
Advances in health information technology provide opportunities for
remote connectivity and interoperability that may assist and be useful,
if not necessary, for reducing care fragmentation. However, remote
provision of services by entities having only a loose association with
the treating practitioner can detract from continuous, patient-centered
care, whether or not those entities employ certified or other
electronic technology.
We note that while time spent by the treating practitioner is not
explicitly counted for in codes G0502, G0503 and G0504, these codes are
valued to include work performed directly by the treating practitioner.
The treating practitioner directs the behavioral health care manager
and continues to oversee the patient's care, including prescribing
medications, providing treatments for medical conditions, and making
referrals to specialty care when needed. We are finalizing as proposed
that some of these services may be separately billable. However, we
wish to emphasize that the treating practitioner must remain involved
in ongoing oversight, management, collaboration and reassessment as
appropriate to bill the psychiatric CoCM codes.
Comment: We received a number of comments requesting that we allow
or recognize pharmacists, especially neurologic or psychiatric
pharmacists, or doctoral-level clinical psychologists to serve as the
psychiatric consultant. Some commenters were concerned that CMS is
advocating pharmacotherapy over psychotherapy by requiring a
psychiatric consultant who can prescribe medication.

[[Page 80236]]

Response: We agree with the commenters that there are multiple
types of indicated treatment for behavioral health conditions,
including psychotherapy and other psychosocial interventions as well as
pharmacotherapy that are available and should be offered to
beneficiaries receiving psychiatric CoCM services. Our intent is not to
inappropriately steer beneficiaries into medication-based treatment,
but rather that the psychiatric consultant be able to present and
recommend the full range of treatment options including but not limited
to medications, and to advise regarding any medications the beneficiary
chooses to take. Under the psychiatric CoCM, the psychiatric consultant
must be able to prescribe medication. As we discuss in section II.L on
valuation of G0502, G0503 and G0504, we agree with the commenters who
stated that the role of the psychiatric consultant under these codes is
primarily evaluation and management, which is not within the scope of
pharmacists or clinical psychologists under Medicare rules. Therefore,
we are finalizing the role and qualifications of the psychiatric
consultant as proposed. The general BHI code (G0507), which we are
finalizing, was intended and may be used to report other models of
care, where the beneficiary may not receive E/M services from the
consultant and the consultant may only be authorized to provide
psychotherapy or consultation regarding medications (see section
II.E.3.b).
Comment: We received a number of comments recommending various
types of professionals as qualified to serve as the behavioral health
care manager, such as licensed clinical social workers (LCSWs) and
psychologists.
Response: Unlike CCM and the general BHI service (code G0507), the
psychiatric CoCM codes are used to report time that is spent in
specified activities performed by a behavioral health care manager
having formal education or specialized training in those activities,
whether or not the behavioral health care manager is eligible to
directly bill Medicare for other services. The behavioral health care
manager may or may not be a professional who meets all the requirements
to independently furnish and report services to Medicare. The
behavioral health care manager must also meet any applicable licensure
and state law requirements, which is required under 42 CFR 410.26 for
all services provided under the PFS. LCSWs would meet these
requirements, as would qualified registered nurses, clinical
psychologists and other qualified clinical staff. Time spent by
administrative or clerical staff cannot be counted towards the time
required to bill G0502, G0503 or G0504.
Evaluation and management services (such as face-to-face E/M
visits) may be separately billed during the service period or on the
same day as the psychiatric CoCM services, provided time is not counted
twice towards the same code.
b. General Behavioral Health Integration (BHI)
We recognize that the psychiatric CoCM is prescriptive and that
much of its demonstrated success may be attributable to adherence to a
set of elements and guidelines of care. We are finalizing the code set
discussed above to pay accurately for care furnished using this
specific model of care, given its widespread adoption and recognized
effectiveness. However, we note that PFS coding, in general, does not
dictate how physicians practice medicine and believe that it should,
instead, reflect the practice of medicine. We also recognize that there
are primary care practices that are incurring, or may incur, resource
costs inherent to treatment of patients with similar conditions based
on BHI models of care other than the psychiatric CoCM that may benefit
beneficiaries with behavioral health conditions (see, for example, the
approaches described at https://www.integration.samhsa.gov/integrated-care-models). There are a variety of care models ranging from
behavioral health professionals embedded within a primary care office
for same-day treatment, to remote consultation, to assessment-and-
referral (see, for example, https://www.commonwealthfund.org/publications/newsletters/quality-matters/2014/august-september/profiles; and https://www.integration.samhsa.gov/integrated-care-models). These models of care have tended to arise from clinical
practice as opposed to the research environment (https://psychnews.psychiatryonline.org/doi/full/10.1176/appi.pn.2014.10b25),
and include resource costs that differ in various respects from those
associated with the psychiatric CoCM.
To recognize the resource costs associated with furnishing such BHI
services to Medicare beneficiaries, we also proposed to make payment
using a new G-code that describes care management for beneficiaries
with behavioral health conditions under other models of care. We
believe that the resources associated with such care are not currently
adequately recognized under the PFS. The proposed code was G0507 (Care
management services for behavioral health conditions, at least 20
minutes of clinical staff time, directed by a physician or other
qualified health care professional, per calendar month). We noted that
we would expect this code to be refined over time as we receive more
information about other BHI models being used and how they are
implemented.
We sought stakeholder input on whether we should consider different
increments of time for this code, such as a base code plus an add-on
code comprised of additional 20 minute increments. We recognized that
BHI services furnished under the proposed code may range in resource
costs. We believed that appropriate payment for these services would
further the refinement and implementation of BHI models of care, and
that having utilization data would inform future refinement of the
proposed code's valuation.
Comment: The commenters were supportive of new coding to support
payment for other BHI models of care. They believed G0507 could be used
by some smaller or medium sized practices who could not conform to the
strict parameters of the psychiatric CoCM but provide very similar
services. They also stated that G0507 would be appropriate to report
services furnished under other BHI models of care that may not require
psychiatric services. We received a few comments describing particular
models of care in great detail; a few commenters referenced the
Veterans' Administration BHI care models, the Primary Care Behavioral
Health/Behavioral Health Consultation (PCBH/BHC) Model, or general
models in place within other health care systems. However, there was
consensus among the commenters that another code(s) in addition to the
psychiatric CoCM codes would be useful to collect information on how
other behavioral health care models are being used and implemented.
Many commenters recommended that CMS provide more of a framework or
description of included services and provider types without being
unduly burdensome. Some commenters recommended service elements similar
to the CCM service elements (continuity of care with a designated
member of the care team; a written care plan; a comprehensive
assessment of behavioral health or psychiatric and other medical
conditions as well as any functional and psychosocial needs, updated as
necessary; routine evaluation of patient progress using a tracking
system; services should be documented in the medical record and
available to other treating professionals). These

[[Page 80237]]

commenters recommended that eligible patients should have a diagnosed
psychiatric or substance use disorder that requires care management
services. Several commenters recommended that BHI payments be tied to
the use of behavioral health assessment tools for screening and
collection of treatment outcomes throughout the sessions of care in
primary care. These commenters believed this would better position
behavioral health to benefit from the movement toward value-based
payment in the future. Some commenters assumed there is a designated
behavioral health care manager for the service described by G0507, and
recommended that we adopt similar rules for this care manager as apply
for clinical staff providing CCM services.
Response: We continue to believe that another code, or set of BHI
codes, in addition to the psychiatric CoCM code set would be useful to
pay appropriately for BHI services furnished to Medicare beneficiaries.
We also believe that such payment could facilitate our ability to
identify and collect data regarding similar or related BHI service
models. We agree with the commenters that we should provide more
specificity around the services eligible for reporting under this other
code(s). One way to do this would be to create codes with tiered times.
Some commenters supported such an approach, while others believed it
would be premature. At this time, we are not creating multiple levels
of codes distinguishing levels of general BHI services using time or
any other metric, but we may reconsider this in the future (also see
section II.L on G0507 valuation).
Regarding included elements of the general BHI service (G0507), we
agree with the commenters that we should be more specific in our
definition of this service. We wish to provide greater specificity
without being overly prescriptive, since a range of activities may be
included in BHI models of care other than the psychiatric CoCM. We
believe we should include a core set of service elements that are
similar to core elements of the psychiatric CoCM, especially a
systematic process for initial assessment and routine follow up
evaluation, revising the treatment approach or methods for patients who
are not progressing or whose status changes; facilitating and
coordinating behavioral health expertise and treatment; and designating
a member of the care team with whom the beneficiary has a continuous
relationship. We may revisit the included services in future years, but
for CY 2017 the required service elements for the general BHI service
(G0507) will be:
Initial assessment or follow-up monitoring, including the
use of applicable validated rating scales;
Behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are
not progressing or whose status changes;
Facilitating and coordinating treatment such as
psychotherapy, pharmacotherapy, counseling and/or psychiatric
consultation; and
Continuity of care with a designated member of the care
team.
Accordingly, the final code descriptor will be, G0507: Care
management services for behavioral health conditions, at least 20
minutes of clinical staff time, directed by a physician or other
qualified health care professional, per calendar month, with the
following required elements:
Initial assessment or follow-up monitoring, including the
use of applicable validated rating scales;
Behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are
not progressing or whose status changes;
Facilitating and coordinating treatment such as
psychotherapy, pharmacotherapy, counseling and/or psychiatric
consultation; and
Continuity of care with a designated member of the care
team.
We are aware of a number of validated rating scales that are
available for use for a number of conditions addressed by BHI models of
care, such as those described by the Kennedy Forum (see https://thekennedyforum-dot-org.s3.amazonaws.com/documents/MBC_supplement.pdf).
We are requiring the use of such scales when applicable to the
condition(s) that are being treated. Medication Assisted Treatment
(MAT) may be a treatment that is facilitated under the facilitating
treatment service element.
Regarding diagnosis, we believe we should specify similar
diagnostic criteria for G0507 and the psychiatric CoCM services (G0502,
G0503 and G0504). Accordingly we are providing that beneficiaries who
are appropriate candidates for services billed under G0507 will have an
identified psychiatric or behavioral health condition(s) that requires
a behavioral health care assessment, behavioral health care planning,
and provision of interventions. Eligible beneficiaries must present
with a condition(s) that in the treating practitioner's clinical
judgment, warrants the services included in G0507. The presenting
condition(s) may be pre-existing or newly diagnosed by the treating
practitioner, and may be refined as treatment progresses. Beneficiaries
receiving services reported under G0507 may, but are not required to
have comorbid chronic or other medical condition(s) that are being
managed by the treating practitioner. We are not limiting billing and
payment for G0507 to a specified set of behavioral health conditions,
because there may be overlap in behavioral health conditions; if we
specified only certain diagnoses, practitioners might modify diagnoses
to fit within payment rules; and for many beneficiaries for whom
specialty care is not available, or who choose for other reasons to
remain within primary care, their behavioral health condition(s) can be
addressed using a model of integrated care.
Regarding rules for clinical staff, we are clarifying that services
included in the code G0507 may be provided directly by the treating
practitioner or provided by other qualifying individuals (whom we term
``clinical staff'') under his or her direction, during the calendar
month service period. Unlike the psychiatric CoCM codes, for G0507
there is not necessarily a specific individual designated as a
``behavioral health care manager'' with formal or specialized education
in providing the services (although there could be). Similarly, there
is not necessarily a psychiatric or other behavioral health specialist
consultant (although there could be), and we note that G0507 is not
valued to explicitly account for such a consultant. We will apply the
same definition of the term ``clinical staff'' that we have applied for
CCM to G0507, namely, the CPT definition of this term, subject to the
incident to rules and regulations and applicable state law, licensure
and scope of practice at 42 CFR 410.26. For G0507, then, we note that
the term ``clinical staff'' will encompass or include a psychiatric or
other behavioral health specialist consultant, if the treating
practitioner obtains consultative expertise. Clinical staff that
provide included services do not have to be employed by the treating
practitioner or located on site, necessarily, and may or may not be a
professional who is permitted to independently furnish and report
services to Medicare. Time spent by administrative or clerical staff
cannot be counted towards the time required to bill G0507.
G0507 is valued to include minimal work by the treating
practitioner; the bulk of the valuation is based on clinical staff time
(see section II.L on valuation). However, we want to emphasize that the

[[Page 80238]]

treating practitioner must direct the service, continue to oversee the
beneficiary's care, and perform ongoing management, collaboration and
reassessment. If the service (or part thereof) is provided incident to
the treating practitioner's services, whether on site or remotely, the
clinical staff providing services must have a collaborative, integrated
relationship with the treating practitioner. They must also have a
continuous relationship with the beneficiary.
Evaluation and management services, such as face-to-face E/M
visits, may be separately billed during the service period or on the
same day as G0507, provided time is not counted twice towards the same
code.
For payment purposes, we are categorizing this service as a
designated care management service assigned general supervision for
purposes of ``incident to'' billing, because we do not believe it is
clinically necessary for the individuals on the team who provide
services other than the treating practitioner (namely, clinical staff)
to have the treating practitioner immediately available to them at all
times, as would be required under a higher level of supervision.
However, general supervision sets the minimum standard for supervision
and does not, by itself, meet the requirements we are setting for
billing new code G0507. While certain aspects of G0507 might be
furnished under general supervision, we do not believe the general
supervision requirement adequately describes the nature of the
relationship and interactions of the respective team members for
services furnished using BHI models of care or the codes we are
creating to describe those services. Moreover the general supervision
requirement only directly addresses the physical location of the
treating practitioner, not the location of clinical staff, necessarily.
Comment: Regarding behavioral health care planning, some commenters
noted that there is not necessarily value in accumulating or
enumerating a number of different types of care plans addressing
different aspects of the beneficiary's problems, such as a behavioral
or psychiatric care plan, a CCM care plan, and a cognitive impairment
care plan (see G0505 in section II.E.5).
Response: While any care planning should take into account the
whole patient, our intent is that the care planning included in the CCM
coding (and G0506, the CCM initiating visit add-on code) will be the
most comprehensive in nature, addressing all health issues with
particular focus on the multiple chronic conditions being managed by
the treating practitioner. In contrast, the BHI care planning will
focus on behavioral health or psychiatric issues, in particular, just
as the cognitive impairment care planning will focus on cognitive
impairment issues, in particular (see section II.E.5. of this final
rule).
However, we understand that adoption of EHRs may be lower among
behavioral health practitioners \9\ and note that resources are
available to help inform how care plans can support team-based care and
BHI.\10\ While we understand that practitioners, in general, are
exploring a wide variety of innovative approaches and tools that
facilitate care plan integration across clinical disciplines, at this
time, there may not be sufficient adoption of interoperable health IT
interoperability among all practitioners and providers treating a given
beneficiary to necessarily have a single, master care plan that
adequately addresses the progress of the beneficiary in relation to all
of these issues. In general, practitioners are encouraged to pursue
approaches that integrate health information from multiple sources into
a single care plan, but we understand that practitioners may need to
create separate documents or the relevant care planning may be
documented in another format within the medical record.
---------------------------------------------------------------------------

\9\ See for instance https://dashboard.healthit.gov/quickstats/pages/physician-ehr-adoption-trends.php and https://www.thenationalcouncil.org/wp-content/uploads/2012/10/HIT-Survey-Full-Report.pdf.
\10\ For instance, AHRQ has a variety of resources on how shared
care plans can support team-based care and behavioral health
integration at https://integrationacademy.ahrq.gov/playbook/develop-shared-care-plan.
---------------------------------------------------------------------------

We believe the format of the care plan(s) is less important than
having a process whereby feedback and expertise from all relevant
practitioners and providers, whether internal or external to the
billing practice, are integrated into the beneficiary's treatment plan
and goals; that this plan be regularly assessed and revisited by the
practitioner who is assuming an overall care management role for the
beneficiary in a given month; that the patient is engaged in the care
planning process; and that the care planning be documented in the
medical record (as with any required element of any PFS service). We
have framed the care planning service element for G0507 accordingly,
``Behavioral health care planning in relation to behavioral/psychiatric
health problems, including revision for patients who are not
progressing or whose status changes.''
Comment: We received a few comments recommending codes in addition
to the psychiatric CoCM codes that would pay for similar services to
inpatients, or for behavioral health services by psychologists to
psychologically and medically complex patients in skilled nursing
facilities (SNF) and nursing homes. Some of these commenters stated
that in SNF and long-term care settings, psychologists work closely
with primary care physicians, psychiatrists, nurses, and other
consultants to improve outcomes by reducing inappropriate use or dosing
of psychotropic medications, improving activities of daily living, and
preventing avoidable admissions/falls. These commenters stated that
many health systems employ psychologists as BHI team leaders or
coordinators, and sought clarification on how psychologist-led teams
would operationalize the new BHI codes. These commenters believe that
psychology training provides unique skills in facilitating
interdisciplinary teams. While they acknowledged that psychologists are
not qualified to perform the full range of BHI services and
interventions, they believed psychologists should be able to separately
report and bill for care coordination and BHI initiation activities.
We received similar comments supporting the addition of psychiatric
collaborative care services to the PFS, and other evidence-based models
in a variety of primary care-based treatment settings. However, these
commenters supported the inclusion of social workers at all levels of
licensures as reimbursable providers of these services.
Response: We appreciate the commenters' descriptions of some
particular working models of care, and we welcome additional
information in this regard. We continue to believe it would be
appropriate to have new coding for a range of BHI care models
applicable to inpatient as well as outpatient and facility settings.
Our goal in separately identifying and paying for BHI services is to
prioritize accurate payment for these services, in recognition of the
associated time and complexity of the services. We agree that
beneficiaries who are admitted to a facility, are in long-term care, or
are transitioning among settings during the month are likely to be more
complex than other types of patients, and to warrant more- not less-
BHI services. Therefore, we have valued G0507 in both facility and non-
facility settings (see section II.L on valuation). We are not limiting
the time that can be counted towards the monthly time

[[Page 80239]]

requirement to bill G0507 to time that is spent in the care of an
outpatient or a beneficiary residing in the community. As we provide
for the psychiatric CoCM services, G0507 may be reported by specialties
that are not ``traditional'' primary care specialties, if such
specialists furnish the included services. However, we stress that
G0507 can only be reported by a treating physician or other qualified
health care professional when he or she has directed the BHI service
for the duration of time that he or she is reporting it, and has a
qualifying relationship with individuals providing the service under
his or her direction and control. Also, time and effort that is spent
managing care transitions for CCM or TCM patients and that is counted
towards reporting TCM or CCM services, cannot also be counted towards
reporting any transitional care management activities reported under a
BHI service code(s). We welcome additional input from stakeholders
regarding appropriate (or inappropriate) settings of service for G0507.
Since the BHI initiating visit that is required to bill G0507 is
not within the scope of practice of a psychologist or social worker
(see below), psychologists and social workers will not be able to
report G0507 directly (although a psychiatrist may be able to do so).
Psychologists and social workers may provide care management services
included in G0507 incident to the services of another (billing)
practitioner. They may also provide services that are separately
billable during the service period. We appreciate the commenters'
support for team-based care, and we recognize the substantial role of
various types of mental health professionals within a primary care
team. We are interested in receiving additional input from stakeholders
as to whether and why behavioral health care management services by a
social worker, psychologist or similarly qualified professional should
be reportable in its own right, rather than incident to the services of
a practitioner authorized to bill Medicare for a BHI initiating visit.
Consistent with our recent approaches to making proposals under PFS
notice and comment rulemaking, we could consider adopting new coding
under a different construct that was not defined as BHI, if
stakeholders provided sufficient input on how to design, define and
value the services. We would also consider such changes if adopted by
the CPT Editorial Panel, per our usual process. BHI integrates
behavioral health expertise into evaluation and management care.
Therefore G0507 is designed to include services that require the
oversight and involvement of a practitioner who can perform evaluation
and management services, including facilitation of any needed
pharmacotherapy, referral for specialty care, and overall management of
the beneficiary's treatment in relation to primary care treatment. We
note that G0507 would not be independently billed by psychologists or
social workers, though from our understanding of various models of BHI,
these professionals seem likely to be participants in team-based care
for beneficiaries receiving these services.
c. BHI Initiating Visit
Similar to CCM services (see section II.E.4), we proposed to
require an initiating visit for all of the BHI codes (G0502, G0503,
G0504 and G0507) that would be billable separate from the BHI services
themselves. We proposed that the same services that can serve as the
initiating visit for CCM services (see section II.E.4.a. of this final
rule) could serve as the initiating visit for the proposed BHI codes.
The initiating visit would establish the beneficiary's relationship
with the billing practitioner (most aspects of the BHI services would
be furnished incident to the billing practitioner's professional
services), ensure the billing practitioner assesses the beneficiary
prior to initiating care management processes, and provide an
opportunity to obtain beneficiary consent (discussed below). We
solicited public comment on the types of services that are appropriate
for an initiating visit for the BHI codes, and within what timeframe
the initiating visit should be conducted prior to furnishing BHI
services.
Comment: The commenters were largely supportive of our proposal to
allow the same services to qualify for the initiating visit to CCM as
for the initiating visit to BHI services. We received a few comments
stating that in addition to the qualifying E/M services (or an AWV or
IPPE), initiating services should include in-depth psychological
evaluations delivered by a psychologist including CPT codes 90791,
96116 or 96118 which, in turn, include care plan development. These
commenters agreed that psychologists cannot personally furnish all BHI
services (for example, medication reconciliation), but believe
psychologists effectively coordinate care and perform other aspects of
BHI services as part of a team under current practice models. They
believe this approach would be particularly effective for reducing
inappropriate use or dosing of psychotropic medications in elderly and
complex patients, improving activities of daily living, and preventing
avoidable admissions and falls.
Response: We appreciate the commenters' feedback. We agree that
psychologists would be qualified to perform care coordination that is
included in the psychiatric CoCM codes (G0502, G0503 and G0504) and the
general BHI code (G0507) under the direction of a physician or other
qualified health care professional. In addition, beneficiaries
receiving BHI services under any of those codes may be referred to
psychologists for psychotherapy or other services that are separately
billable and within the scope of practice of psychologists, as
discussed elsewhere in this section of our final rule. However many
commenters acknowledged, and we agree, that a BHI initiating visit is
necessary. The initiating visit is not, in its entirety, within the
scope of psychologist practice. Therefore, we are finalizing our
proposal that the same services that qualify as the initiating visit
for CCM will also qualify as initiating services for BHI, and they do
not include in-depth psychological evaluation by a psychologist. Also,
we will require an initiating visit for BHI only for new patients or
beneficiaries not seen within a year of commencement of BHI services
(the same requirement we are finalizing for CCM, see section II.E.4.a).
As more experience is gained with the psychiatric CoCM services and
other models of BHI care, we may reassess these provisions.
As discussed above, we are interested in receiving input from
stakeholders regarding circumstances other than BHI in which behavioral
health care management services by a psychologist, social worker or
similarly qualified professional should be reportable in its own right,
rather than incident to the services of a practitioner authorized to
bill Medicare for a BHI initiating visit.
Comment: Some commenters recommended that CMS establish an add-on
code to the initiating visit for BHI services, parallel to G0506 (the
proposed add-on code for the CCM initiating visit).
Response: We do not believe we have enough information about
practice patterns at this time to create an add-on code to the BHI
initiating visit, and we did not propose such a code. We may re-examine
this issue in the future.
d. Beneficiary Consent for BHI Services
Commenters to the CY 2016 PFS proposed rule indicated that they did
not believe a specific patient consent for BHI services is necessary
and indicated that requiring special informed consent

[[Page 80240]]

for these services may reduce access due to stigma associated with
behavioral health conditions. Instead, the commenters recommended
requiring a more general consent prior to initiating these services
whereby the beneficiary gives the initiating physician or practitioner
permission to consult with relevant specialists, which would include
conferring with a psychiatric consultant. Accordingly, we proposed to
require a general beneficiary consent to consult with relevant
specialists prior to initiating these services, recognizing that
applicable rules continue to apply regarding privacy. The proposed
general consent would encompass conferring with a psychiatric
consultant when furnishing the psychiatric CoCM codes (G0502, G0503,
and G0504) or the proposed broader BHI code (G0507). Similar to the
proposed beneficiary consent process for CCM services, we proposed that
the billing practitioner must document in the beneficiary's medical
record that the beneficiary's consent was obtained to consult with
relevant specialists including a psychiatric consultant, and that, as
part of the consent, the beneficiary is informed that there is
beneficiary cost-sharing, including potential deductible and
coinsurance amounts, for both in-person and non-face-to-face services
that are provided. We solicited stakeholder comments on this proposal.
We recognized that special informed consent could also be helpful
in cases when a particular service is limited to being billed by a
single practitioner for a particular beneficiary. We did not believe
that there are circumstances where it would reasonable for multiple
practitioners to be reporting these codes during the same month.
However, we did not propose a formal limit at this time. We solicited
comment on whether such a limitation would be beneficial or whether
there are circumstances under which a beneficiary might reasonably
receive BHI services from more than one practitioner during a given
month.
Comment: The commenters were largely supportive of our proposal
regarding BHI consent, some noting that physician-to-physician
communication as well as communication within treatment teams happens
routinely, without an extra layer of formal written consent, for other
medical conditions. A few commenters intimated that CMS might pursue a
single broad consent that could be used across care management
services; for example, applying for both CCM and BHI. We did not
receive any public comments delineating the circumstances under which
it would be appropriate to bill for services furnished using more than
one BHI service model per month, or appropriate for more than one
practitioner (whether in the same practice or different practices) to
bill for services furnished in a BHI care model per month.
Response: We agree with the commenters that physician-to-physician
communication as well as communication within treatment teams happens
routinely, without an extra layer of formal written consent, for other
medical conditions. However there are particular privacy concerns
addressed by other rules and regulations for some behavioral health or
substance use care. Also we are concerned that beneficiaries should not
incur unexpected expenses for care that is largely, or in significant
part, non-face-to-face in nature. Finally, there are issues to
consider, that we considered for CCM, regarding prevention of
duplicative practitioner billing, and whether BHI services can actually
be furnished under the direction and control of any given practitioner
if for a given service period, more than one practitioner is furnishing
BHI services and billing them.
The public comments were supportive of our proposal for a broad
consent that could be verbally obtained but must be documented in the
medical record, and we are finalizing as proposed. At this time, we do
not believe a single consent process for both BHI and CCM is advisable.
It is not clear how frequently BHI and CCM would or should be furnished
concurrently. BHI and CCM are distinct, separate services, having
significant differences in time thresholds, the nature of the services,
types of individuals providing the services, and payment and cost
sharing amounts. Therefore, at this time, we are maintaining separate
consent processes for CCM and BHI, as provided in the respective
sections of this final rule. Also, as discussed in section II.E.4 on
CCM, CCM and BHI may be billed during the same service period.
It remains unclear whether it would be reasonable and necessary for
more than one practitioner (whether in the same practice or different
practices) to bill BHI services for a given beneficiary for a given
service period, given the lack of public response and input on this
issue. It may depend on the conditions(s) being treated and whether
specialty care, other than psychiatric or behavioral health specialty
care, and primary care are both involved. We are not proposing a formal
limit at this time, but we stress that BHI services can only be
reported by a treating physician or other qualified health care
professional when he or she has obtained the required beneficiary
consent, directed the BHI services he or she reports for the duration
of time reported, and has a qualifying relationship with individuals
providing the reported services under his or her direction and control.
We would not expect a single practitioner to furnish care to a given
beneficiary under more than one BHI model of care during a given month.
Therefore a single practitioner must choose whether to report
psychiatric CoCM code(s) (G0502, G0503, and G0504 as applicable) or the
general BHI code (G0507) for a given month for a given beneficiary. We
remind stakeholders that time cannot be counted more than once towards
any code(s), all services must be medically reasonable and necessary,
and that beneficiary cost sharing and advance consent apply. We will be
monitoring the claims data and studying the utilization patterns. We
will continue to assess appropriate reporting patterns, and we expect
that potential coding changes by the CPT Editorial Panel may inform
this issue.
Comment: We received a number of comments recommending that cost
sharing be removed for all care management services, whether through
legislative change, demonstration, waiver safe harbor, or designation
as preventive services.
Response: We appreciate commenters' concerns and recognize many of
the challenges associated with patient cost-sharing for these kinds of
services. At this time, we do not have authority to waive cost sharing
for the BHI or other care management services. We appreciate the
commenters' acknowledgement of our current limitations and we will
continue to consider this issue.
e. Summary of Final BHI Policies
Beginning in CY 2017, we are providing separate payment for a range
of BHI services. Specifically, we are providing payment for psychiatric
CoCM services under the following codes:
G0502: Initial psychiatric collaborative care management,
first 70 minutes in the first calendar month of behavioral health care
manager activities, in consultation with a psychiatric consultant, and
directed by the treating physician or other qualified health care
professional, with the following required elements:
++ Outreach to and engagement in treatment of a patient directed by
the treating physician or other qualified health care professional;
++ Initial assessment of the patient, including administration of
validated rating scales, with the development of an individualized
treatment plan;

[[Page 80241]]

++ Review by the psychiatric consultant with modifications of the
plan if recommended;
++ Entering patient in a registry and tracking patient follow-up
and progress using the registry, with appropriate documentation, and
participation in weekly caseload consultation with the psychiatric
consultant; and
++ Provision of brief interventions using evidence-based techniques
such as behavioral activation, motivational interviewing, and other
focused treatment strategies.
G0503: Subsequent psychiatric collaborative care
management, first 60 minutes in a subsequent month of behavioral health
care manager activities, in consultation with a psychiatric consultant,
and directed by the treating physician or other qualified health care
professional, with the following required elements:
++ Tracking patient follow-up and progress using the registry, with
appropriate documentation;
++ Participation in weekly caseload consultation with the
psychiatric consultant;
++ Ongoing collaboration with and coordination of the patient's
mental health care with the treating physician or other qualified
health care professional and any other treating mental health
providers;
++ Additional review of progress and recommendations for changes in
treatment, as indicated, including medications, based on
recommendations provided by the psychiatric consultant;
++ Provision of brief interventions using evidence-based techniques
such as behavioral activation, motivational interviewing, and other
focused treatment strategies;
++ Monitoring of patient outcomes using validated rating scales;
and relapse prevention planning with patients as they achieve remission
of symptoms and/or other treatment goals and are prepared for discharge
from active treatment.
G0504: Initial or subsequent psychiatric collaborative
care management, each additional 30 minutes in a calendar month of
behavioral health care manager activities, in consultation with a
psychiatric consultant, and directed by the treating physician or other
qualified health care professional (List separately in addition to code
for primary procedure) (Use G0504 in conjunction with G0502, G0503).
These psychiatric CoCM services are reported by the treating
physician or other qualified health care professional for services
furnished during a calendar month service period. These services may be
furnished when a beneficiary has a psychiatric or behavioral health
condition(s) that in the treating physician or other qualified health
care professional's clinical judgment, requires a behavioral health
care assessment; establishing, implementing, revising, or monitoring a
care plan; and provision of brief interventions. The diagnosis or
diagnoses may be pre-existing or made by the treating physician or
other qualified health care professional, and may be refined over time.
The psychiatric CoCM services may be furnished to beneficiaries with
any psychiatric or behavioral health condition(s) that is being treated
by the physician or other qualified health care professional, including
substance use disorders. Beneficiaries receiving psychiatric CoCM
services may, but are not required to have comorbid chronic or other
medical condition(s) that are being managed by the treating
practitioner.
Psychiatric CoCM services include the services of the treating
physician or other qualified health care professional, the behavioral
health care manager (see description below) who provides services
incident to services of the treating physician or other qualified
health care professional, and the psychiatric consultant (see
description below) whose consultative services are furnished incident
to services of the treating physician or other qualified health care
professional. Time spent by administrative or clerical staff cannot be
counted towards the time required to bill the psychiatric CoCM service
codes.
Beneficiaries receiving psychiatric CoCM services may have newly
diagnosed conditions, need help in engaging in treatment, have not
responded to standard care delivered in a non-psychiatric setting, or
require further assessment and engagement prior to consideration of
referral to a psychiatric care setting. Beneficiaries are treated for
an episode of care, defined as beginning when the behavioral health
care manager engages in care of the beneficiary under the appropriate
supervision of the billing practitioner and ending with:
The attainment of targeted treatment goals, which
typically results in the discontinuation of care management services
and continuation of usual follow-up with the treating physician or
other qualified healthcare professional; or
Failure to attain targeted treatment goals culminating in
referral to a psychiatric care provider for ongoing treatment; or
Lack of continued engagement with no psychiatric
collaborative care management services provided over a consecutive 6-
month calendar period (break in episode).

A new episode of care will start after a break in episode of 6 calendar
months or more.
The treating physician or other qualified health care professional
directs the behavioral health care manager and continues to oversee the
beneficiary's care, including prescribing medications, providing
treatments for medical conditions, and making referrals to specialty
care when needed. The treating physician or other qualified health care
professional must remain involved in ongoing oversight, management,
collaboration and reassessment as appropriate to bill the psychiatric
CoCM codes.
The behavioral health care manager has formal education or
specialized training in behavioral health (which could include a range
of disciplines, for example, social work, nursing, and psychology). The
behavioral health care manager provides care management services, as
well as an assessment of needs, including the administration of
validated rating scales; \11\ behavioral health care planning in
relation to behavioral/psychiatric health problems, including revision
for patients who are not progressing or whose status changes; provision
of brief interventions; ongoing collaboration with the treating
physician or other qualified health care professional; maintenance of a
registry; \12\ all in consultation with the psychiatric consultant. The
behavioral health care manager is available to provide these services
face-to-face and non-face-to-face, and consults with the psychiatric
consultant minimally on a weekly basis.
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\11\ For example, see https://aims.uw.edu/resource-library/measurement-based-treatment-target.
\12\ For example, see https://aims.uw.edu/collaborative-care/implementation-guide/plan-clinical-practice-change/identify-population-based.
---------------------------------------------------------------------------

The behavioral health care manager must have a collaborative,
integrated relationship with the rest of the care team members, and be
able to perform all of the required elements of the service delineated
for the behavioral health care manager. The behavioral health care
manager must have the ability to engage the beneficiary outside of
regular clinic hours as necessary to perform the behavioral health care
manager's duties under the psychiatric CoCM model, and must have a
continuous relationship with the beneficiary. The behavioral health
care manager may or may not be a

[[Page 80242]]

professional who meets all the requirements to independently furnish
and report services to Medicare. The behavioral health care manager is
subject to the incident to rules and regulations and applicable state
law, licensure and scope of practice (see 42 CFR 410.26).
The psychiatric consultant is a medical professional trained in
psychiatry and qualified to prescribe the full range of medications.
The psychiatric consultant advises and makes recommendations, as
needed, for psychiatric and other medical care, including psychiatric
and other medical diagnoses, treatment strategies including appropriate
therapies, medication management, medical management of complications
associated with treatment of psychiatric disorders, and referral for
specialty services, that are communicated to the treating physician or
other qualified health care professional, typically through the
behavioral health care manager. The psychiatric consultant does not
typically see the beneficiary or prescribe medications, except in rare
circumstances, but can and should facilitate referral for direct
provision of psychiatric care when clinically indicated. The
psychiatric consultant is subject to the incident to rules and
regulations and applicable state law, licensure and scope of practice
(see 42 CFR 410.26).
Beginning in CY 2017, we are providing separate payment for BHI
services furnished under models of care other than the psychiatric CoCM
model, under HCPCS code G0507: Care management services for behavioral
health conditions, at least 20 minutes of clinical staff time, directed
by a physician or other qualified health care professional, per
calendar month, with the following required elements:
Initial assessment or follow-up monitoring, including the
use of applicable validated rating scales;
Behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are
not progressing or whose status changes;
Facilitating and coordinating treatment such as
psychotherapy, pharmacotherapy, counseling and/or psychiatric
consultation; and
Continuity of care with a designated member of the care
team.
G0507 is reported by the treating physician or other qualified
health care professional for services furnished during a calendar month
service period. This service may be furnished when the beneficiary has
a psychiatric or behavioral health condition(s) that in the treating
physician or other qualified health care professional's clinical
judgment, requires a behavioral health care assessment, behavioral
health care planning, and provision of interventions. The presenting
condition(s) may be pre-existing or newly diagnosed by the treating
physician or other qualified health care professional, and may be
refined over time. Beneficiaries receiving services reported under
G0507 may have any psychiatric or behavioral health condition(s) that
is being treated by the physician or other qualified health care
professional, including substance use disorders. Beneficiaries
receiving services reported under G0507 may, but are not required to
have comorbid chronic or other medical condition(s) that are being
managed by the treating practitioner.
Services reported under G0507 may be provided directly by the
treating physician or other qualified health care professional, or
provided by clinical staff under his or her direction, during a
calendar month service period. For G0507, there is not necessarily a
specific individual designated as a ``behavioral health care manager''
with formal or specialized education in providing the services
(although there could be). Similarly, there is not necessarily a
psychiatric or other behavioral health specialist consultant (although
there could be) and we note that G0507 is not valued to explicitly
account for expert consultation. For G0507, the term ``clinical staff''
means the CPT definition of this term, subject to the incident to rules
and regulations and applicable state law, licensure and scope of
practice at 42 CFR 410.26. For G0507, then, we note that the term
``clinical staff'' will encompass or include any psychiatric or other
behavioral health specialist consultant that may provide consultative
services. Clinical staff providing services are not required to be
employed by the treating practitioner or located on site, and these
individuals may or may not be a professional permitted to independently
furnish and report services to Medicare. Time spent by administrative
or clerical staff cannot be counted towards the time required to report
G0507. We emphasize that the physician or other qualified health care
professional must direct the service, continue to oversee the
beneficiary's care, and perform ongoing management, collaboration and
reassessment. If the service (or part thereof) is provided incident to
services of the treating practitioner, whether on site or remotely, the
clinical staff providing services must have a collaborative, integrated
relationship with the treating practitioner. They must also have a
continuous relationship with the beneficiary.
For all of the BHI service codes (G0502, G0503, G0504 and G0507),
we are requiring an initiating visit that is billable separate from the
BHI services themselves. The same services that qualify as initiating
visits for CCM services can serve as the initiating visit for BHI
services (certain face-to-face E/M services including the face-to-face
visit required for TCM services, and the AWV or IPPE). The BHI
initiating visit establishes the beneficiary's relationship with the
treating practitioner (BHI services may be furnished incident to the
treating practitioner's professional services); ensures that the
treating practitioner assesses the beneficiary prior to initiating care
management processes; and provides an opportunity to obtain beneficiary
consent (consent may also be obtained outside of the BHI initiating
visit, as long as it is obtained prior to commencement of BHI
services).
For all of the BHI service codes, we are also requiring prior
beneficiary consent, recognizing that applicable rules continue to
apply regarding privacy. The consent will include permission to consult
with relevant specialists including a psychiatric consultant, and
inform the beneficiary that cost sharing will apply to in-person and
non-face-to-face services provided. Consent may be verbal (written
consent is not required) but must be documented in the medical record.
For payment purposes, we are assigning general supervision to all
of the BHI service codes (G0502, G0503, G0504 and G0507). However we
note that general supervision does not, by itself, comprise a
qualifying relationship between the treating practitioner and other
individuals providing BHI services under the incident to relationship.
Also we note that we valued BHI services in both facility and non-
facility settings. BHI services may be furnished to beneficiaries in
any setting of care. Time that is spent furnishing BHI services to a
beneficiary who is an inpatient or in any other facility setting during
service provision or for any part of the service period may be counted
towards reporting a BHI code(s). We refer the reader to our discussion
above on this matter, as well as reporting by specialty, intersection
with other services, and potential reporting by more than one
practitioner for a given beneficiary within a service period. A single
practitioner must choose whether to report psychiatric CoCM code(s)
(G0502, G0503, and

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G0504 as applicable) or the general BHI code (G0507) for a given month
(service period) for a given beneficiary.
4. Reducing Administrative Burden and Improving Payment Accuracy for
Chronic Care Management (CCM) Services
Beginning in CY 2015, we implemented separate payment for CCM
services under CPT code 99490 (Chronic care management services, at
least 20 minutes of clinical staff time directed by a physician or
other qualified health professional, per calendar month, with the
following required elements:
Multiple (two or more) chronic conditions expected to last
at least 12 months, or until the death of the patient;
Chronic conditions place the patient at significant risk
of death, acute exacerbation/decompensation, or functional decline;
Comprehensive care plan established, implemented, revised,
or monitored).
In the CY 2015 final rule with comment period, we finalized a
proposal to make separate payment for CCM services as one initiative in
a series of initiatives designed to improve payment for, and encourage
long-term investment in, care management services (79 FR 67715). In
particular, we sought to address an issue raised to us by the physician
community, which stated that the care management included in many of
the existing E/M services, such as office visits, does not adequately
describe the typical non-face-to-face care management work required by
certain categories of beneficiaries (78 FR 43337). We began to re-
examine how Medicare should pay under the PFS for non-face-to-face care
management services that were bundled into the PFS payment for face-to-
face E/M visits, being included in the pre- and post-encounter work (78
FR 43337). In proposing separate payment for CCM, we acknowledged that,
even though we had previously considered non-face-to-face care
management services as bundled into the payment for face-to-face E/M
visits, the E/M office/outpatient visit CPT codes may not reflect all
the services and resources required to furnish comprehensive,
coordinated care management for certain categories of beneficiaries. We
stated that we believed that the resources required to furnish complex
chronic care management services to beneficiaries with multiple (that
is, two or more) chronic conditions were not adequately reflected in
the existing E/M codes. Medical practice and patient complexity
required physicians, other practitioners and their clinical staff to
spend increasing amounts of time and effort managing the care of
comorbid beneficiaries outside of face-to-face E/M visits, for example,
complex and multidisciplinary care modalities that involve regular
physician development and/or revision of care plans; subsequent report
of patient status; review of laboratory and other studies;
communication with other health care professionals not employed in the
same practice who are involved in the patient's care; integration of
new information into the care plan; and/or adjustments of medical
therapy.
Therefore, in the CY 2014 PFS final rule with comment period, we
established a separate payment under the PFS for CPT code 99490 (78 FR
43341 through 43342). We sought to include a relatively broad eligible
patient population within the code descriptor, established a moderate
payment amount, and established bundled payment for concurrently new
CPT codes that were reserved for beneficiaries requiring ``complex''
CCM services (base CPT code 99487 and its add-on code 99489) (79 FR
67716 through 67719). We stated that we would evaluate the services
reported under CPT code 99490 to assess whether the service is targeted
to the right population and whether the payment amount is appropriate
(79 FR 67719). We remind stakeholders that CMS did not limit the
eligible population to any particular list of chronic conditions other
than the language in the CPT code descriptor. Accordingly, one or more
of the chronic conditions being managed through CCM services could be
chronic mental health or behavioral health conditions or chronic
cognitive disorders, as long as the chronic conditions meet the
eligibility language in the CPT code descriptor for CCM services and
the billing practitioner meets all of Medicare's requirements to bill
the code including comprehensive, patient-centered care planning for
all health conditions.
In finalizing separate payment for CPT code 99490, we considered
whether we should develop standards to ensure that physicians and other
practitioners billing the service would have the capability to fully
furnish the service (79 FR 67721). We sought to make certain that the
newly payable PFS code(s) would provide beneficiary access to
appropriate care management services that are characteristic of
advanced primary care, such as continuity of care; patient support for
chronic diseases to achieve health goals; 24/7 patient access to care
and health information; receipt of preventive care; patient, family and
caregiver engagement; and timely coordination of care through
electronic health information exchange. Accordingly, we established a
set of scope of service elements and payment rules in addition to or in
lieu of those established in CPT guidance (in the CPT code descriptor
and CPT prefatory language), that the physician or nonphysician
practitioner must satisfy to fully furnish CCM services and report CPT
code 99490 (78 FR 74414 through 74427, 79 FR 67715 through 67730, and
80 FR 14854). We established requirements to furnish a preceding
qualifying visit, obtain advance written beneficiary consent, use
certified electronic health record (EHR) technology to furnish certain
elements of the service, share the care plan and clinical summaries
electronically, document specified activities, and other items
summarized in Table 11 of our CY 2017 proposed rule. For the CCM
service elements for which we required use of a certified EHR, the
billing practitioner must use, at a minimum, technology meeting the
edition(s) of certification criteria that is acceptable for purposes of
the EHR Incentive Programs as of December 31st of the calendar year
preceding each PFS payment year. (For the CY 2017 PFS payment year,
this would mean technology meeting the 2014 edition of certification
criteria).
These elements and requirements for separately payable CCM services
are extensive and generally exceed those required for payment of codes
describing procedures, diagnostic tests, or other E/M services under
the PFS. In addition, both CPT guidance and Medicare rules specify that
only a single practitioner who assumes the care management role for a
given beneficiary can bill CPT code 99490 per service period (calendar
month). Because the new CCM service closely overlapped with several
Medicare demonstration models of advanced primary care (the Multi-Payer
Advanced Primary Care Practice (MAPCP) demonstration and the
Comprehensive Primary Care Initiative (CPCI)), we provided that
practitioners participating in one of these two initiatives could not
be paid for CCM services furnished to a beneficiary attributed by the
initiative to their practice (79 FR 67729).
Given the non-face-to-face nature of CCM services, we also sought
to ensure that beneficiaries would receive advance notice that Part B
cost sharing applies since we currently have no legislative authority
to ``waive'' cost sharing for this service. Also since only one
practitioner can bill for CCM each service period, we believed the

[[Page 80244]]

beneficiary notice requirement would help prevent duplicate payment to
multiple practitioners.
Since the establishment of CPT code 99490 for separate payment of
CCM services, in a number of forums and in public comments to the CY
2016 PFS final rule (80 FR 70921), many practitioners have stated that
the service elements and billing requirements are burdensome, redundant
and prevent them from being able to provide the services to
beneficiaries who could benefit from them. Stakeholders have stated
that CPT code 99490 is underutilized because it is underpaid relative
to the resources involved in furnishing the services, especially given
the extensive Medicare rules for payment, and they have suggested a
number of potential changes to our current payment rules. Stakeholders
continue to believe that many of the CCM payment rules are duplicative,
and to recommend that we reduce the rules and expand CCM coding and
payment to distinguish among different levels of patient complexity. We
also note that section 103 of the MACRA requires CMS to assess and
report to Congress (no later than December 31, 2017) on access to CCM
services by underserved rural and racial and ethnic minority
populations and to conduct an outreach/education campaign that is
underway.
The professional claims data for CPT code 99490 show that
utilization is steadily increasing but may remain low considering the
number of eligible Medicare beneficiaries. To date, approximately
513,000 unique Medicare beneficiaries received the service an average
of four times each, totaling $93 million in total payments. Since CPT
code 99490 describes a minimum of 20 minutes of clinical staff time
spent furnishing CCM services during a month and does not have an upper
time limit, and since we currently do not separately pay the other
codes in the CCM family of CPT codes (which would provide us with
utilization data on the number of patients requiring longer service
times during a billing period), we do not know how often beneficiaries
required more than 20 minutes of CCM services per month. We also do not
know their complexity relative to one another, other than meeting the
acuity criteria in the CPT code descriptor. Initial information from
practitioner interviews conducted as part of our CCM evaluation efforts
indicates that practitioners overwhelmingly meet and exceed the 20-
minute threshold time for billing CCM. Typically, these practitioners
reported spending between 45 minutes and an hour per month on CCM
services for each patient, with times ranging between 20 minutes and
several hours per month. CCM beneficiaries tend to exhibit a higher
disease burden, are more likely to be dually eligible for Medicare and
Medicaid, and are older than the general Medicare fee-for-service
population.\13\ However, absent multiple levels of CCM coding, we do
not have comprehensive data on the relative complexity of the CCM
services furnished to beneficiaries.
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\13\ Schurrer, John, and Rena Rudavsky. ``Evaluation of the
Diffusion and Impact of the Chronic Care Management (CCM) Fees:
Third Quarterly Report.'' Report submitted to the Center for
Medicare and Medicaid Innovation. Washington, DC: Mathematica Policy
Research, May 6, 2016.
---------------------------------------------------------------------------

In light of this stakeholder feedback and our mandate under MACRA
section 103 to encourage and report on access to CCM services, we
proposed several changes in the payment rules for CCM services. Our
primary goal, and our statutory mandate, is to pay as accurately as
possible for services furnished to Medicare beneficiaries based on the
relative resources required to furnish PFS services, including CCM
services. In so doing, we also expect to facilitate beneficiaries'
access to reasonable and necessary CCM services that improve health
outcomes. First, for CY 2017 we proposed to more appropriately
recognize and pay for the other codes in the CPT family of CCM services
(CPT codes 99487 and 99489 describing complex CCM), consistent with our
general practice to price services according to their relative ranking
within a given family of services. We direct the reader to section II.L
of this final rule for a discussion of valuation for base CPT code
99487 and its add-on CPT code 99489. The CPT code descriptors are:
CPT code 99487--Complex chronic care management services,
with the following required elements:
++ Multiple (two or more) chronic conditions expected to last at
least 12 months, or until the death of the patient;
++ Chronic conditions place the patient at significant risk of
death, acute exacerbation/decompensation, or functional decline;
++ Establishment or substantial revision of a comprehensive care
plan;
++ Moderate or high complexity medical decision making;
++ 60 minutes of clinical staff time directed by a physician or
other qualified health care professional, per calendar month.
CPT code 99489--Each additional 30 minutes of clinical
staff time directed by a physician or other qualified health care
professional, per calendar month (List separately in addition to code
for primary procedure).
As CPT provides, less than 60 minutes of clinical staff time in the
service period could not be reported separately, and similarly, less
than 30 minutes in addition to the first 60 minutes of complex CCM in a
service period could not be reported. We would require 60 minutes of
services for reporting CPT code 99487 and 30 additional minutes for
each unit of CPT code 99489.
We proposed to adopt the CPT provision that CPT codes 99487, 99489
and 99490 may only be reported once per service period (calendar month)
and only by the single practitioner who assumes the care management
role with a particular beneficiary for the service period. That is, a
given beneficiary would be classified as eligible to receive either
complex or non-complex CCM during a given service period, not both, and
only one professional claim could be submitted to the PFS for CCM for
that service period by one practitioner.
Comment: Several commenters were supportive of separate payment for
complex CCM services.
Response: We thank the commenters for their support and are
finalizing separate payment for CPT codes 99487 and 99489 as proposed.
As finalized, these separate payments for complex CCM services will
support care management for the most complex and time-consuming cases
of beneficiaries with multiple chronic conditions.
Except for differences in the CPT code descriptors, we proposed to
require the same CCM service elements for CPT codes 99487, 99489 and
99490. In other words, all the requirements in Table 11 of our proposed
rule would apply, whether the code being billed for the service period
is CPT code 99487 (plus CPT code 99489, if applicable) or CPT code
99490. These three codes would differ in the amount of clinical staff
service time provided; the complexity of medical decision-making as
defined in the E/M guidelines (determined by the problems addressed by
the reporting practitioner during the month); and the nature of care
planning that was performed (establishment or substantial revision of
the care plan for complex CCM versus establishment, implementation,
revision or monitoring of the care plan for non-complex CCM). Billing
practitioners could consider identifying beneficiaries who require
complex CCM services using criteria suggested in CPT guidance (such as
number of illnesses, number of medications or repeat admissions or
emergency department visits) or the profile of typical patients in the
CPT

[[Page 80245]]

prefatory language, but these would not comprise Medicare conditions of
eligibility for complex CCM.
We proposed several changes to our current scope of service
elements for CCM, and proposed that the same scope of service elements,
as amended, would apply to all codes used to report CCM services
beginning in 2017 (i.e., CPT codes 99487, 99489 and 99490). In
particular, we proposed changes in the requirements for the initiating
visit, 24/7 access to care and continuity of care, format and sharing
of the care plan and clinical summaries, beneficiary receipt of the
care plan, beneficiary consent and documentation.
Comment: Commenters were broadly supportive of these proposals. We
received several comments recommending changes to the scope of service
for non-complex CCM that might improve the distinction between non-
complex and complex CCM and inform which ``level'' of service a given
beneficiary is eligible for. For example, these commenters suggested
changes to the time included in the code descriptor to reflect two or
more time increments for CPT code 99490 using add-on codes, or
retaining the current low time threshold while allowing practitioners
to choose among certain service elements. Some commenters do not
believe CPT code 99490 is intended for beneficiaries who require all
the current service elements in a given month, and that only a more
limited set of elements is medically necessary for the non-complex
population.
Response: We appreciate the commenters' recommendations about how
we might better distinguish complex CCM services from non-complex CCM
services. The CPT Editorial Panel currently maintains the coding for
CCM services. Further changes in codes and/or descriptors may be
appropriately addressed by CPT and in subsequent PFS rulemaking.
a. CCM Initiating Visit & Add-On Code (G0506)
As provided in the CY 2014 PFS final rule with comment period (78
FR 74425) and subregulatory guidance (available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Payment_for_CCM_Services_FAQ.pdf), CCM must be initiated by the billing
practitioner during a ``comprehensive'' E/M visit, AWV or IPPE. This
face-to-face, initiating visit is not part of the CCM service and can
be separately billed to the PFS, but is required before CCM services
can be provided directly or under other arrangements. The billing
practitioner must discuss CCM with the patient at this visit. While
informed patient consent does not have to be obtained during this
visit, the visit is an opportunity to obtain the required consent. The
face-to-face visit included in transitional care management (TCM)
services (CPT codes 99495 and 99496) qualifies as a ``comprehensive''
visit for CCM initiation. Levels 2 through 5 E/M visits (CPT codes
99212 through 99215) also qualify; CMS does not require the practice to
initiate CCM during a level 4 or 5 E/M visit. However, CPT codes that
do not involve a face-to-face visit by the billing practitioner or are
not separately payable by Medicare (such as CPT code 99211,
anticoagulant management, online services, telephone and other E/M
services) do not qualify as initiating visits. If the practitioner
furnishes a ``comprehensive'' E/M, AWV, or IPPE and does not discuss
CCM with the patient at that visit, that visit cannot count as the
initiating visit for CCM.
We continued to believe that we should require an initiating visit
in advance of furnishing CCM services, separate from the services
themselves, because a face-to-face visit establishes the beneficiary's
relationship with the billing practitioner and most aspects of the CCM
services are furnished incident to the billing practitioner's
professional services. The initiating visit also ensures collection of
comprehensive health information to inform the care plan. We continued
to believe that the types of face-to-face services that qualify as an
initiating visit for CCM are appropriate. We did not propose to change
the kinds of visits that can qualify as initiating CCM visits. However,
we proposed to require the initiating visit only for new patients or
patients not seen within one year instead of for all beneficiaries
receiving CCM services. We believed this would allow practitioners with
existing relationships with patients who have been seen relatively
recently to initiate CCM services without furnishing a potentially
unnecessary E/M visit. We solicited public comment on whether a period
of time shorter than one year would be more appropriate.
Comment: The commenters were generally supportive of requiring the
CCM initiating visit only for beneficiaries who are new patients or
have not been seen in a year. A few commenters suggested a 6-month
timeframe, or adopting one year and reconsidering as we gain more
experience with CCM. Some commenters misinterpreted our proposal as
requiring face-to-face visits every year to periodically reassess the
beneficiary or the appropriateness of CCM services. Some recommended a
similar coding structure for specialists managing a single condition,
in place of prolonged services, or for BHI services.
Response: Our intent was to revise the timeframe for the single CCM
initiating visit that is required at the outset of services. We did not
propose subsequent ``re-initiation'' of CCM services or face-to-face
reassessment within a given timeframe. We discuss further below that we
have some concerns about how to ensure that the billing practitioner
remains involved in the beneficiary's care and continually reassesses
the beneficiary's care, but at this time we do not believe we should
require subsequent face-to-face visits within certain timeframes to
address those concerns.
We believe that the proposed one-year timeframe for the single, CCM
initiating visit is appropriate for CY 2017, so we are finalizing as
proposed. We will require the CCM initiating visit only for new
patients or patients not seen within the year prior to commencement of
CCM (instead of for all beneficiaries receiving CCM services). We will
continue to consider in future years whether a different timeframe is
warranted. The goal of our final policy is to allow practitioners with
existing relationships with beneficiaries who have been seen relatively
recently to initiate CCM services (for the first time) without
furnishing a potentially unnecessary E/M visit. Regarding subsequent
visits (after CCM services begin), practitioners are already permitted
to furnish and separately bill subsequent E/M visits (or AWVs) for
beneficiaries receiving CCM services. If a face-to-face reassessment is
reasonable and necessary and furnished by the billing practitioner,
then he or she may bill an appropriate code describing the face-to-face
assessment of a beneficiary to whom they have previously furnished CCM
services.
We also proposed for CY 2017 to create a new add-on G-code that
would improve payment for services that qualify as initiating visits
for CCM services. The code would be billable for beneficiaries who
require extensive face-to-face assessment and care planning by the
billing practitioner (as opposed to clinical staff), through an add-on
code to the initiating visit, G0506 (Comprehensive assessment of and
care planning by the physician or other qualified health care
professional for patients requiring chronic care management services
(billed separately from monthly care management services) (Add-on code,
list separately in addition to primary service)).
We proposed that when the billing practitioner initiating CCM
personally

[[Page 80246]]

performs extensive assessment and care planning outside of the usual
effort described by the billed E/M code (or AWV or IPPE code), the
practitioner could bill G0506 in addition to the E/M code for the
initiating visit (or in addition to the AWV or IPPE), and in addition
to the CCM CPT code 99490 (or proposed 99487 and 99489) if all
requirements to bill for CCM services are also met. We proposed
valuation for G0506 in a separate section of our proposed rule.
The code G0506 would account specifically for additional work of
the billing practitioner in personally performing a face-to-face
assessment of a beneficiary requiring CCM services, and personally
performing CCM care planning (the care planning could be face-to-face
and/or non-face-to-face) that is not already reflected in the
initiating visit itself (nor in the monthly CCM service code). We
believed G0506 might be particularly appropriate to bill when the
initiating visit is a less complex visit (such as a level 2 or 3 E/M
visit), although G0506 could be billed along with higher level visits
if the billing practitioner's effort and time exceeded the usual effort
described by the initiating visit code. It could also be appropriate to
bill G0506 when the initiating visit addresses problems unrelated to
CCM, and the billing practitioner does not consider the CCM-related
work he or she performs in determining what level of initiating visit
to bill. We believed that this proposal would more appropriately
recognize the relative resource costs for the work of the billing
practitioner in initiating CCM services, specifically for extensive
work assessing the beneficiary and establishing the CCM care plan that
is reasonable and necessary, and that is not accounted for in the
billed initiating visit or in the unit of the CCM service itself that
is billed for a given service period. In addition, we believed this
proposal would help ensure that the billing practitioner personally
performs and meaningfully contributes to the establishment of the CCM
care plan when the patient's complexity warrants it.
Comment: Several commenters were supportive of the add-on code
(G0506) to the CCM initiating visit to describe physician assessment
and care planning for patients requiring CCM services. Some commenters
raised questions about whether G0506 should be a one-time service or
could also be billed as an add-on code to subsequent reassessments by
the billing practitioner (whether E/M visits or subsequent AWVs).
Response: At this time, we do not believe we should permit billing
of G0506 more than once by the billing practitioner for a given
beneficiary. G0506 was proposed as an add-on code to the single
initiating visit, to help ensure the billing practitioner's assessment
and involvement at the outset of CCM services. At this time there are
no requirements for the billing practitioner to ``re-initiate'' CCM
services; therefore we do not believe we should create an add-on code
for a CCM ``re-initiation'' service. We would have to define ``re-
initiation'' and develop rules regarding when subsequent E/M visits or
AWVs are related to the performance of CCM. We do not believe
beneficiaries would understand why they are incurring additional cost
sharing for an add-on code to a ``re-initiation'' visit that has not
been required or defined by CMS.
As we stated in the CY 2017 proposed rule, we were very interested
in coding that was presented to the CPT Editorial Panel, but not
adopted, to create code(s) that would separately identify and account
for monthly CCM work by the billing practitioner. Such coding may be a
better means of separately identifying and valuing the subsequent work
of the billing practitioner after CCM is initiated. We want to
establish policies that help ensure that the billing practitioner is
not merely handing the beneficiary off to a remote care manager under
general supervision while no longer remaining involved in their care.
We believe that the practitioner billing CCM services should be
actively re-assessing the beneficiary's chronic conditions, reviewing
whether treatment goals are being met, updating the care plan,
performing any medical decision-making that is not within the scope of
practice of clinical staff, performing any necessary face-to-face care,
and performing other related work. However, it would be more
straightforward to separately identify this CCM-related work under
code(s) that in their own right describe it, instead of add-on codes to
very broadly drawn E/M codes where it becomes difficult to assess the
relationship between the two services. Also for beneficiaries receiving
complex CCM, some of this work is explicitly included in the complex
CCM service codes (i.e., medical decision-making of moderate to high
complexity). Therefore, at this time, G0506 will only serve as an add-
on code to describe work performed by the billing practitioner once, in
conjunction with the start or initiation of CCM services.
We note that despite the role of the billing practitioner in the
initiation and provision of CCM services provided by clinical staff,
non-complex CCM (CPT code 99490) is described based on the time spent
by clinical staff. Complex CCM (CPT codes 99487 and 99489) similarly
counts only clinical staff time, although it also includes complex
medical decision-making by the billing practitioner. This raises issues
regarding appropriate valuation in the facility setting that we will
continue to consider in future rulemaking. The facility PE RVU for CCM
includes indirect PE (which is an allocation based on physician work),
but no direct PE (which would be comprised of other labor, supplies and
equipment). This is because historically, the PFS facility rate assumes
that the billing practitioner is not bearing a significant resource
cost in labor by other individuals, equipment or supplies. Medicare
assumes that those costs are instead borne by the facility and
adequately accounted for in a separate payment made to the facility.
The PFS non-facility rate generally does include such costs, assuming
that the billing practitioner bears the resource costs in clinical and
other staff labor, supplies and equipment.
For CCM, we have been considering whether this approach to
valuation remains appropriate, because the service, in whole or in
significant part, is provided by clinical staff under the direction of
the billing practitioner. These individuals may provide the service or
part thereof remotely, and are not necessarily employees or staff of
the facility. Under this construct, there may be more direct practice
expense borne by the billing practitioner that should be separately
identified and valued over and above any institutional payment to the
facility for its staff and infrastructure. We plan to explore these
issues in future rulemaking and consider other approaches to valuation
that would recognize the accurate relative resource costs to the
billing practitioner for CCM and similar services furnished to
beneficiaries who remain or reside in a facility setting during some or
all of the service period.
Consistent with general coding guidance, we proposed that the work
that is reported under G0506 (including time) could not also be
reported under or counted towards the reporting of any other billed
code, including any of the monthly CCM services codes. The care plan
that the practitioner must create to bill G0506 would be subject to the
same requirements as the care plan included in the monthly CCM
services, namely, it must be an electronic patient-centered care plan
based on a physical, mental, cognitive, psychosocial, functional and
environmental (re)assessment and an

[[Page 80247]]

inventory of resources and supports; a comprehensive care plan for all
health issues. This would distinguish it from the more limited care
planning included in the BHI codes G0502, G0503, G0504 or G0507 which
focus on behavioral health issues, or the care planning included in
G0505 which focuses on cognitive status. We sought public input on
potential overlap among these codes and further clinical input as to
how the assessments and care planning that is included in them would
differ.
We received a number of comments regarding the relationship between
proposed G0506, G0505 (Cognition and functional assessment by the
physician or other qualified health care professional in office or
other outpatient), prolonged non-face-to-face services, and BHI. We
address these comments in the sections of this final rule regarding
G0505, prolonged non-face-to-face services and BHI services (sections
II.E.5, II.E.2 and II.E.3). In brief, we are not allowing G0506 and
G0505 to be billed the same day (by a single practitioner). G0506 will
not be an add-on code for the BHI initiating visit or BHI services.
G0506 will be a one-time service code for CCM initiation, and the
billing practitioner must choose whether to report either G0506 or
prolonged services in association with CCM initiation (if requirements
to bill both are met).
The CCM and BHI service codes differ substantially in potential
diagnosis and comorbidity, the expected duration of the condition(s)
being treated, the kind of care planning performed (comprehensive care
planning versus care planning focused on behavioral/mental health
issues), service elements and who performs them, and the interventions
the beneficiary needs and receives apart from the CCM and BHI services
themselves. The BHI codes include a more focused process than CCM for
the clinical integration of primary care and behavioral health/
psychiatric care, and for continual reassessment and treatment
progression to a target or goal outcome that is specific to mental and
behavioral health or substance abuse issues. However there is no
explicit BHI service element for managing care transitions or
systematic assessment of receipt of preventive services; there is no
requirement to perform comprehensive care planning for all health
issues (not just behavioral health issues); and there are different
emphases on medication management or medication reconciliation, if
applicable. In deciding which code(s) to report for services furnished
to a beneficiary who is eligible for both CCM and BHI services,
practitioners should consider which service elements were furnished
during the service period, who provided them, how much time was spent,
and should select the code(s) that most accurately and specifically
identifies the services furnished without duplicative time counting.
Practitioners should generally select the more specific code(s) when an
alternative code(s) potentially includes the services provided. We are
not precluding use of the CCM codes to report, or count, behavioral
health care management if it is provided as part of a broader CCM
service by a practitioner who is comprehensively overseeing all of the
beneficiary's health issues, even if there are no imminent non-
behavioral health needs. However, such behavioral care management
activities could not also be counted towards reporting a BHI code(s).
If a BHI service code more specifically describes the service furnished
(service time and other relevant aspects of the service being equal),
or if there is no focus on the health of the beneficiary outside of a
narrower set of behavioral health issues, then it is more appropriate
to report the BHI code(s) than the CCM code(s). Similarly, it may be
more appropriate for certain specialists to bill BHI services than CCM
services, since specialists are more likely to be managing the
beneficiary's behavioral health needs in relation to a narrow subset of
medical condition(s). CCM and BHI services can only be billed the same
month for the same beneficiary if all the requirements to bill each
service are separately met. We will monitor the claims data, and we
welcome further stakeholder input to inform appropriate reporting
rules.
b. 24/7 Access to Care, Continuity of Care, Care Plan and Managing
Transitions
We proposed several revisions to the scope of service elements of
24/7 Access to Care, Continuity of Care, Care Plan and Managing
Transitions. We continued to believe these elements are important
aspects of CCM services, but that we should reduce the requirements for
the use of specified electronic health information technology (IT) in
their provision. In sum, we proposed to retain a core requirement to
use a certified electronic health record (EHR), but allow fax to count
for electronic transmission of clinical summaries and the care plan; no
longer require access to the electronic care plan outside of normal
business hours to those providing CCM services; and remove standards
for clinical summaries in managing care transitions.
We sought to improve alignment with CPT provisions by removing the
requirement for the care plan to be available remotely to individuals
providing CCM services after hours. Studies have shown that after-hours
care is best implemented as part of a larger practice approach to
access and continuity (see for example, the peer-review article
available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/).
There is substantial local variation in how 24/7 access and continuity
of care are achieved, depending on the contractual relationships among
practitioners and providers in a particular geographic area and other
factors. Care models include various contractual relationships between
physician practices and after-hours clinics, urgent care centers and
emergency departments; extended primary care office hours; physician
call-sharing; telephone triage systems; and health information
technology such as shared EHRs and systematic notification procedures
(https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/). Some or all of
these may be used to provide access to urgent care on a 24/7 basis
while maintaining information continuity between providers.
We recognized that some models of care require more significant
investment in practice infrastructure than others, for example
resources in staffing or health information technology. In addition, we
believed there is room to reduce the administrative complexity of our
current payment rules for CCM services to accommodate a range of
potential care models. In re-examining what should be included in the
CCM scope of service elements for 24/7 Access to Care and Continuity of
Care, we believed the CPT language adequately and more appropriately
describes the services that should, at a minimum, be included in these
service elements. Therefore, we proposed to adopt the CPT language for
these two elements. For 24/7 Access to Care, the scope of service
element would be to provide 24/7 access to physicians or other
qualified health care professionals or clinical staff including
providing patients/caregivers with a means to make contact with health
care professionals in the practice to address urgent needs regardless
of the time of day or day of week. We believed the CPT language more
accurately reflects the potential role of clinical staff or call-
sharing services in addressing after-hours care needs than our current
language does. In addition, the 24/7 access would be for ``urgent''
needs

[[Page 80248]]

rather than ``urgent chronic care needs,'' because we believed after-
hours services typically would and should address any urgent needs and
not only those explicitly related to the beneficiary's chronic
conditions.
We recognized that health information systems that include remote
access to the care plan or the full EHR after hours, or a feedback loop
that communicates back to the primary care physician and others
involved in the beneficiary's care regarding after-hours care or advice
provided, are extremely helpful (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/#CR25). They help ensure that the beneficiary
receives necessary follow up, particularly if he or she is referred to
the emergency department, and follow up after an emergency department
visit is required under the CCM element of Management of Care
Transitions. Accordingly, we continued to support and encourage the use
of interoperable EHRs or remote access to the care plan in providing
the CCM service elements of 24/7 Access to Care, Continuity of Care,
and Management of Care Transitions. However, adoption of such
technology would be optimal not only for CCM services, but also for a
number of other PFS services and procedures (including various other
care management services), and we have not required adoption of any
certified or non-certified health information technology as a condition
of payment for any other PFS service. We noted that there are
incentives under other Medicare programs to adopt such information
technology, and were concerned that imposing too many EHR-related
requirements at the service level as a condition of PFS payment could
create disparities between these services and others under the fee
schedule. Lastly, we recognized that not all after-hours care warrants
follow-up or a feedback loop with the practitioner managing the
beneficiary's care overall, and that under particular circumstances
feedback loops can be achieved through oral, telephone or other less
sophisticated communication methods. Therefore, we proposed to remove
the requirement that the individuals providing CCM after hours must
have access to the electronic care plan.
This proposal reflected our understanding that flexibility in how
practices can provide the requisite 24/7 access to care, as well as
continuity of care and management of care transitions, for their CCM
patients could facilitate appropriate access to these services for
Medicare beneficiaries. This proposal was not intended to undermine the
significance of standardized communication methods as part of effective
care. Instead, we recognized that other CMS initiatives (such as MIPS
and APMs under the Quality Payment Program) may be better mechanisms to
incentivize increased interoperability of health information systems
than conditions of payment assigned to particular services under the
PFS. We also anticipated that improved accuracy of payment for care
management services and reduced administrative burden associated with
billing for them would contribute to practitioners' capacity to invest
in the best tools for managing the care of Medicare beneficiaries.
For Continuity of Care, we currently require the ability to obtain
successive routine appointments ``with the practitioner or a designated
member of the care team,'' while CPT only references successive routine
appointments ``with a designated member of the care team.'' We do not
believe there is any practical difference between these two phrases and
therefore proposed to omit the words ``practitioner or'' from our
requirement. The billing practitioner is a member of the CCM care team,
so the CPT language already allows for successive routine appointments
either with the billing practitioner or another appropriate member of
the CCM care team.
Based on review of extensive public comment and stakeholder
feedback, we had also come to believe that we should not require
individuals providing the beneficiary with the required 24/7 access to
care for urgent needs to have access to the care plan as a condition of
CCM payment. As discussed above, we believed that in general, provision
of effective after-hours care of the beneficiary would require access
to the care plan, if not the full EHR. However, we have heard from
rural and other practices that remote access to the care plan is not
always necessary or possible because urgent care needs after-hours are
often referred to a practitioner or care team member who established
the care plan or is familiar with the beneficiary. In some instances,
the care plan does not need to be available to address urgent patient
needs after business hours. In addition, we have not required the use
of any certified or non-certified health information technology in the
provision of any other PFS services (including various other care
management services). We were concerned that imposing EHR-related
requirements at the service level as a condition of PFS payment could
distort the relative valuation of services priced under the fee
schedule. Therefore, we proposed to change the CCM service element to
require timely electronic sharing of care plan information within and
outside the billing practice, but not necessarily on a 24/7 basis, and
to allow transmission of the care plan by fax.
We acknowledged that it is best for practitioners and providers to
have access to care plan information any time they are providing
services to beneficiaries who require CCM services. This proposal was
not intended to undermine the significance of electronic communication
methods other than fax transmission in providing effective, continuous
care. On the contrary, we believed that fax transmission, while
commonly used, is much less efficient and secure than other methods of
communicating patient health information, and we encouraged
practitioners to adopt and use electronic technologies other than fax
for transmission and exchange of the CCM care plan. We continued to
believe the best means of exchange of all relevant patient health
information is through standardized electronic means. However, we
recognized that other CMS initiatives (such as MIPS and APMs under the
Quality Payment Program) may be better mechanisms to incentivize
increased interoperability of health information systems than
conditions of payment assigned to particular services under the PFS. We
believed our proposal would still allow timely availability of health
information within and outside the practice for purposes of providing
CCM, and would simplify the rules governing provision of the service
and improve access to the service. The proposed revisions would better
align the service with appropriate CPT prefatory language, which may
reduce unnecessary administrative complexity for practitioners in
navigating the differences between CPT guidance and Medicare rules.
The CCM scope of service element Management of Care Transitions
includes a requirement for the creation and electronic transmission and
exchange of continuity of care documents referred to as ``clinical
summaries'' (see Table 11 of the CY 2017 PFS proposed rule). We
patterned our requirements regarding clinical summaries after the EHR
Incentive Program requirement that an eligible professional who
transitions their patient to another setting of care or provider of
care, or refers their patient to another provider of care, should
provide a summary care record for each transition of care or referral.
This clinical summary includes demographics, the medication list,
medication allergy list, problem list, and a number of other data
elements if the

[[Page 80249]]

practitioner knows them. As a condition of CCM payment, we required
standardized content for clinical summaries (that they must be created/
formatted according to certified EHR technology). For the exchange/
transport function, we did not require the use of a specific tool or
service to exchange/transmit clinical summaries, as long as they are
transmitted electronically (this can include fax only when the
receiving practitioner or provider can only receive by fax).
Based on review of extensive public comment and stakeholder
feedback, we had come to believe that we should not require the use of
any specific electronic technology in managing a beneficiary's care
transitions as a condition of payment for CCM services. Instead, we
proposed more simply to require the billing practitioner to create and
exchange/transmit continuity of care document(s) timely with other
practitioners and providers. To avoid confusion with the requirements
of the EHR Incentive Programs, and since we would no longer require
standardized content for the CCM continuity of care document(s), we
would refer to them as continuity of care documents instead of clinical
summaries. We would no longer specify how the billing practitioner must
transport or exchange these document(s), as long as it is done timely
and consistent with the Care Transitions Management scope of service
element. We welcomed public input on how we should refer to these
document(s), noting that CPT does not provide model language specific
to CCM services. The proposed term ``continuity of care document(s)''
draws on CPT prefatory language for TCM services, which CPT provides
may include ``obtaining and reviewing the discharge information (for
example, discharge summary, as available, or continuity of care
document).''
Again, this proposal was not intended to undermine the significance
of a standardized, electronic format and means of exchange (other than
fax) of all relevant patient health information, for achieving timely,
seamless care across settings especially after discharge from a
facility. On the contrary, we believed that fax transmission, while
commonly used, is much less efficient and secure than other methods of
communicating patient health information, and we encourage
practitioners to adopt and use electronic technologies other than fax
for transmission and exchange of continuity of care documents in
providing CCM services. We continued to believe the best means of
exchange of all relevant patient health information is through
standardized electronic means. However, as we discussed above regarding
the CCM care plan, we have not applied similar requirements to other
PFS services specifically (including various other care management
services) and had concerns about how doing so may create disparities
between these services and others under the PFS. We also recognized
that other CMS initiatives (such as MIPS and APMs under the Quality
Payment Program) may be better mechanisms to incentivize increased
interoperability of health information systems than conditions of
payment assigned to particular services under the PFS.
Comment: Most of the commenters supported our proposed revisions to
the health IT use requirements for billing the CCM code. They shared
CMS' goal of interoperability but believed the changes were necessary
to improve CCM uptake. Some commenters favored hardship exceptions or
rural or small practice exceptions instead of changes to the current
requirements that would apply to all practitioners alike. Some
commenters expressed particular concern about relaxing the current
rules in instances where CCM outsourcing reduces clinical integration.
These commenters noted that CCM is commonly outsourced to third party
companies that provide remote care management services (including after
hours) via telephone and online contact only, using staff who have no
established relationship with the beneficiary or other members of the
care team and have no interaction with the office staff and physicians
other than electronic communication. These commenters were concerned
that our proposed changes to the health IT requirements for CCM payment
would result in little to no oversight or guidance of the third party,
and recommended that CMS make the proposed changes cautiously. One of
these commenters recommended in addition that CMS should seek to
increase access to CCM services and reduce administrative burden by
pursuing alignment between the provision of CCM and other programs and
incentives, such as the Quality Payment Program. Other commenters
recommended further reduction in payment rules, such as removing all
requirements to use a certified EHR, or movement away from timed codes
that require documentation in short time increments and disrupt
workflow.
Response: We continue to believe that other Medicare initiatives
and programs (such as MIPS and APMs under the Quality Payment Program)
are better suited to advance use of interoperable health IT systems
than establishing code-level conditions of payment, unique to CCM or
other primary care or cognitive services. We also believe that a
hardship, rural or small practice exception would greatly increase
rather than decrease administrative complexity for practitioners and
CMS, and CCM uptake has been relatively high among solo practices. We
believe that reducing code-level conditions of payment is necessary to
improve beneficiary access to appropriate CCM services. Therefore, we
are finalizing revisions to the CCM scope of service elements as
proposed.
However, we appreciate the commenters' feedback that relaxing the
health IT use requirements may be of particular concern in situations
where CCM is outsourced to a third party, reducing clinical
integration. As we discuss in the section of this final rule on BHI
services (section II.E.3.b), health IT holds significant promise for
remote connectivity and interoperability that may assist and be useful
(if not necessary) for reducing care fragmentation. However, we agree
that remote provision of services by entities having only a loose
association with the treating practitioner can detract from continuous,
patient-centered care, whether or not those entities employ certified
or other electronic technology. We will continue to consider the
potential impacts of remote provision of CCM and similar types of
services by third parties. We wish to emphasize for CCM, as we did for
BHI services, that while the CCM codes do not explicitly count time
spent by the billing practitioner, they are valued to include work
performed by the billing practitioner, especially complex CCM. We
emphasize that the practitioner billing for CCM must remain involved in
ongoing oversight, management, collaboration and reassessment as
appropriate to bill CCM services. If there is little oversight by the
billing practitioner or a lack of clinical integration between a third
party providing CCM and the billing practitioner, we do not believe
that the CCM service elements are actually being furnished and
therefore, in such cases, the practitioner should not bill for CCM.
Finally, we note that activities undertaken as part of
participation in MIPS or an APM under the Quality Payment Program may
support the ability of a practitioner to meet our final requirements
for the continuity of care document(s) and the electronic care plan.
Comment: Several commenters recommended that we define the proposed
term ``timely'' for the creation and transmission of care plan and care

[[Page 80250]]

transitions health information. Several commenters believed that
``timely'' implies a time period of 30 to 90 days, or believed some
third party vendors would interpret the term in this manner.
Response: Our proposal of the term ``timely'' originated from the
use of this term in the CPT prefatory language for Care Management
services, which includes, for example, ``provide timely access and
management for follow-up after an emergency department visit'' and
``timely access to clinical information.'' We do not believe we should
specify a timeframe, because it would vary for individual patients and
CCM service elements, we are not aware of any clinical standards
referencing specific times, and we are seeking to allow appropriate
flexibility in how CCM is furnished. We note that dictionary meanings
of the term ``timely'' include quickly; soon; promptly; occurring at a
suitable time; done or occurring at a favorable or useful time;
opportune. ``Timely'' does not necessarily imply speed, and means doing
something at the most appropriate moment. Therefore we believe
``timely'' is an appropriate term to use to govern how quickly the
health information in question is transmitted or available. We note
that even the current requirements for use of specific electronic
technology do not necessarily impact how quickly the health information
in question is used to inform care, and addition of the word ``timely''
implies more regarding actual use of the information. We are monitoring
CCM uptake and diffusion through claims analysis and are pursuing
claims-based outcomes analyses, to help inform whether the service is
being provided as intended and improving health outcomes. We believe
these evaluation activities will help us assess moving forward whether
health information is being shared or made available timely enough
under our revised CCM payment policies.
As we stated in the CY 2017 proposed rule, the policy changes for
CCM health IT use are not intended to undermine the importance of
interoperability or electronic data exchange. These changes are driven
by concerns that we have not applied similar requirements to other PFS
services specifically, including various other care management
services, and that such requirements create disparities between CCM
services and other PFS services. We believe that other CMS initiatives
may be better mechanisms to incentivize increased use and
interoperability of health information systems than conditions of
payment assigned to particular services under the PFS. We anticipate
that these CCM policy changes will improve practitioners' capacity to
invest in the best tools for managing the care of Medicare
beneficiaries.
c. Beneficiary Receipt of Care Plan
We proposed to simplify the current requirement to provide the
beneficiary with a written or electronic copy of the care plan, by
instead adopting the CPT language specifying more simply that a copy of
the care plan must be given to the patient or caregiver. While we
believe beneficiaries should and must be provided a copy of the care
plan, and that practitioners may choose to provide the care plan in
hard copy or electronic form in accordance with patient preferences, we
do not believe it is necessary to specify the format of the care plan
that must be provided as a condition of CCM payment. Additionally, we
recognize that there may be times that sharing the care plan with the
caregiver (in a manner consistent with applicable privacy and security
rules and regulations) may be appropriate.
Comment: The commenters who provided comments on this particular
proposal were supportive of it. In particular, several commenters
expressed appreciation for appropriate inclusion of caregivers.
Response: We thank the commenters for their support and are
finalizing as proposed.
d. Beneficiary Consent
We continue to believe that obtaining advance beneficiary consent
to receive CCM services is important to ensure the beneficiary is
informed, educated about CCM services, and is aware of applicable cost
sharing. We also believe that querying the beneficiary about whether
another practitioner is already providing CCM services helps to reduce
the potential for duplicate provision or billing of the services.
However, we believe the consent process could be simplified, and that
it should be left to the practitioner and the beneficiary to decide the
best way to establish consent. Therefore, we proposed to continue to
require billing practitioners to inform the beneficiary of the
currently required information (that is, inform the beneficiary of the
availability of CCM services; inform the beneficiary that only one
practitioner can furnish and be paid for these services during a
calendar month; and inform the beneficiary of the right to stop the CCM
services at any time (effective at the end of the calendar month)).
However, we proposed to specify that the practitioner could document in
the beneficiary's medical record that this information was explained
and note whether the beneficiary accepted or declined CCM services
instead of obtaining a written agreement.
We also proposed to remove the language requiring beneficiary
authorization for the electronic communication of his or her medical
information with other treating providers as a condition of payment for
CCM services, because under federal regulations that implement the
Health Insurance Portability and Accountability Act (HIPAA) Privacy
Rule (45 CFR 164.506), a covered entity is permitted to use or disclose
protected health information for purposes of treatment without patient
authorization. Moreover, if such disclosure is electronic, the HIPAA
Security Rule requires secure transmission (45 CFR 164.312(e)). In
previous regulations we have reminded practitioners that for all
electronic sharing of beneficiary information in the provision of CCM
services, HIPAA Privacy and Security Rule standards apply in the usual
manner (79 FR 67728).
Comment: The commenters were largely supportive of our proposed
policy changes. The commenters were supportive of verbal instead of
written beneficiary consent if a clear requirement remains to
transparently inform the beneficiary about the nature and benefit of
the services, applicable cost sharing, and document that this
information was conveyed; current written agreements qualify; and
practitioners can elect to obtain written consent. Some commenters
believed that obtaining written consent might be preferable as a means
of resolving who is eligible for payment, if more than one practitioner
bills. A few commenters suggested CMS require written educational
materials about CCM, or conduct beneficiary outreach and education.
Response: We appreciate the commenters' support and
recommendations. We are finalizing changes to the beneficiary consent
requirements as proposed and clarifying that a clear requirement
remains to transparently inform the beneficiary about the nature and
benefit of the services, applicable cost sharing, and to document that
this information was conveyed. The final beneficiary consent
requirements do not affect any written agreements that are already in
place for CCM services, and we note that practitioners can still elect
to obtain written consent rather than verbal consent.
e. Documentation
We have heard from practitioners that the requirements to document
certain

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information in a certified EHR format are redundant because the CCM
billing rules already require documentation of core clinical
information in a certified EHR format. Specifically, we already require
structured recording of demographics, problems, medications and
medication allergies, and the creation of a clinical summary record,
using a qualifying certified EHR; and that a full list of problems,
medications and medication allergies in the EHR must inform the care
plan, care coordination and ongoing clinical care. Therefore, we
proposed to no longer specify the use of a qualifying certified EHR to
document communication to and from home- and community-based providers
regarding the patient's psychosocial needs and functional deficits and
to document beneficiary consent. We would continue to require
documentation in the medical record of beneficiary consent (discussed
above) and of communication to and from home- and community-based
providers regarding the patient's psychosocial needs and functional
deficits.
Comment: Many commenters were supportive of these proposals.
Response: We thank the commenters for their support and are
finalizing changes to the documentation requirements as proposed. We
continue to encourage practitioners to utilize health IT solutions for
obtaining and documenting health information from sources external to
their practice, noting that the 2015 edition of ONC certification
criteria (see 80 FR 62601) includes criteria which specifically relate
to obtaining information from non-clinical sources and the capture of
structured data relating to social, psychological, and behavioral
attributes.
f. Summary of Final CCM Policies
We are finalizing changes to the CCM scope of service elements
discussed above that will apply for both complex and non-complex CCM
services beginning in CY 2017. The final CY 2017 service elements for
CCM are summarized in Table 11. We believe these changes will retain
elements of the CCM service that are characteristic of the changes in
medical practice toward advanced primary care, while eliminating
redundancy, simplifying provision of the services, and improving access
to the services. For payment of complex CCM services beginning in CY
2017, we are adopting the CPT code descriptors for CPT codes 99487 and
99489 as well as the service elements in Table 11. We are providing
separate payment for complex CCM (CPT 99487, 99489) using the RUC-
recommended payment inputs for those services. We may reconsider the
role of health information technology in CCM service provision in
future years. We anticipate that improved accuracy of payment for CCM
services, and reduced administrative burden associated with billing CCM
services, will contribute to practitioners' capacity to invest in the
best tools for managing the care of Medicare beneficiaries.

Table 11--Summary of CY 2017 Chronic Care Management Service Elements
and Billing Requirements
------------------------------------------------------------------------

------------------------------------------------------------------------
Initiating Visit--Initiation during an AWV, IPPE, or face-to-face E/M
visit (Level 4 or 5 visit not required), for new patients or patients
not seen within 1 year prior to the commencement of chronic care
management (CCM) services............................................
Structured Recording of Patient Information Using Certified EHR
Technology--Structured recording of demographics, problems,
medications and medication allergies using certified EHR technology.
A full list of problems, medications and medication allergies in the
EHR must inform the care plan, care coordination and ongoing clinical
care.................................................................
24/7 Access & Continuity of Care:
Provide 24/7 access to physicians or other qualified
health care professionals or clinical staff including providing
patients/caregivers with a means to make contact with health care
professionals in the practice to address urgent needs regardless
of the time of day or day of week................................
Continuity of care with a designated member of the care
team with whom the beneficiary is able to schedule successive
routine appointments.............................................
Comprehensive Care Management--Care management for chronic conditions
including systematic assessment of the beneficiary's medical,
functional, and psychosocial needs; system-based approaches to ensure
timely receipt of all recommended preventive care services;
medication reconciliation with review of adherence and potential
interactions; and oversight of beneficiary self-management of
medications..........................................................
Comprehensive Care Plan:
Creation, revision and/or monitoring (as per code
descriptors) of an electronic patient-centered care plan based on
a physical, mental, cognitive, psychosocial, functional and
environmental (re)assessment and an inventory of resources and
supports; a comprehensive care plan for all health issues........
Must at least electronically capture care plan
information, and make this information available timely within
and outside the billing practice as appropriate. Share care plan
information electronically (can include fax) and timely within
and outside the billing practice to individuals involved in the
beneficiary's care...............................................
A copy of the plan of care must be given to the patient
and/or caregiver.................................................
Management of Care Transitions:
Management of care transitions between and among health
care providers and settings, including referrals to other
clinicians; follow-up after an emergency department visit; and
follow-up after discharges from hospitals, skilled nursing
facilities or other health care facilities.......................
Create and exchange/transmit continuity of care
document(s) timely with other practitioners and providers........
Home- and Community-Based Care Coordination:
Coordination with home and community based clinical
service providers................................................
Communication to and from home- and community-based
providers regarding the patient's psychosocial needs and
functional deficits must be documented in the patient's medical
record...........................................................
Enhanced Communication Opportunities--Enhanced opportunities for the
beneficiary and any caregiver to communicate with the practitioner
regarding the beneficiary's care through not only telephone access,
but also through the use of secure messaging, Internet, or other
asynchronous non-face-to-face consultation methods...................
Beneficiary Consent:
Inform the beneficiary of the availability of CCM
services; that only one practitioner can furnish and be paid for
these services during a calendar month; and of their right to
stop the CCM services at any time (effective at the end of the
calendar month)..................................................
Document in the beneficiary's medical record that the
required information was explained and whether the beneficiary
accepted or declined the services................................
Medical Decision-Making--Complex CCM services require and include
medical decision-making of moderate to high complexity (by the
physician or other billing practitioner).............................
------------------------------------------------------------------------

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5. Assessment and Care Planning for Patients with Cognitive Impairment
(GPPP6)
For CY 2017 we proposed a G-code that would provide separate
payment to recognize the work of a physician (or other appropriate
billing practitioner) in assessing and creating a care plan for
beneficiaries with cognitive impairment, such as from Alzheimer's
disease or dementia, at any stage of impairment, G0505 (Cognition and
functional assessment using standardized instruments with development
of recorded care plan for the patient with cognitive impairment,
history obtained from patient and/or caregiver, in office or other
outpatient setting or home or domiciliary or rest home). We understand
that a similar code was recently approved by the CPT Editorial Panel
and is scheduled to be included in the CY 2018 CPT code set. We
intended for G0505 to be a temporary code, perhaps for only one year,
to be replaced by the CPT code in CT 2018. We will consider whether to
adopt and establish relative value units for the new CPT code under our
standard process, presumably for CY 2018.
We reviewed the list of service elements that were considered by
the CPT Editorial Panel, and proposed the following as required service
elements of G0505:
Cognition-focused evaluation including a pertinent history
and examination.
Medical decision making of moderate or high complexity
(defined by the E/M guidelines).
Functional assessment (for example, Basic and Instrumental
Activities of Daily Living), including decision-making capacity.
Use of standardized instruments to stage dementia.
Medication reconciliation and review for high-risk
medications, if applicable.
Evaluation for neuropsychiatric and behavioral symptoms,
including depression, including use of standardized instrument(s).
Evaluation of safety (for example, home), including motor
vehicle operation, if applicable.
Identification of caregiver(s), caregiver knowledge,
caregiver needs, social supports, and the willingness of caregiver to
take on caregiving tasks.
Advance care planning and addressing palliative care
needs, if applicable and consistent with beneficiary preference.
Creation of a care plan, including initial plans to
address any neuropsychiatric symptoms and referral to community
resources as needed (for example, adult day programs, support groups);
care plan shared with the patient and/or caregiver with initial
education and support.
The proposed valuation of G0505 (discussed in section II.E.1)
assumed that this code would include services that are personally
performed by the physician (or other appropriate billing practitioner,
such as a nurse practitioner or physician assistant) and would
significantly overlap with services described by certain E/M visit
codes, advance care planning services, and certain psychological or
psychiatric service codes that are currently separately payable under
the PFS. Accordingly, we proposed that G0505 must be furnished by the
physician (or other appropriate billing practitioner) and could not be
billed on the same date of service as CPT codes 90785 (Psytx complex
interactive), 90791 (Psych diagnostic evaluation), 90792 (Psych diag
eval w/med srvcs), 96103 (Psycho testing admin by comp), 96120
(Neuropsych tst admin w/comp), 96127 (Brief emotional/behav assmt),
99201-99215 (Office/outpatient visits new), 99324-99337 (Domicil/r-home
visits new pat), 99341-99350 (Home visits new patient), 99366-99368
(Team conf w/pat by hc prof), 99497 (Advncd care plan 30 min), 99498
(Advncd care plan addl 30 min)), since these codes all reflect face-to-
face services furnished by the physician or other billing practitioner
for related separately billable services that overlap substantially
with G0505. In addition, we proposed to prohibit billing of G0505 with
other care planning services, such as care plan oversight services (CPT
code 99374), home health care and hospice supervision (G0181, G0182),
or our proposed add-on code for comprehensive assessment and care
planning by the billing practitioner for patients requiring CCM
services (GPPP7). We solicited comment on whether there are
circumstances where multiple care planning codes could be furnished
without significant overlap. We proposed to specify that G0505 may
serve as a companion or primary E/M code to the prolonged service codes
(those that are currently separately paid, and those we proposed to
separately pay beginning in 2017), but were interested in public input
on whether there is any overlap among these services. We solicited
comment on how to best delineate the post-service work for G0505 from
the work necessary to provide the prolonged services code.
We did not believe the services described by G0505 would
significantly overlap with proposed or current medically necessary CCM
services (CPT codes 99487, 99489, 99490); TCM services (CPT codes
99495, 99496); or the proposed behavioral health integration service
codes (HCPCS codes GPPP1, GPPP2, GPPP3, GPPPX). Therefore, we proposed
that G0505 could be billed on the same date-of-service or within the
same service period as these codes (CPT codes 99487, 99489, 99490,
99495, 99496, and HCPCS codes GPPP1, GPPP2, GPPP3, and GPPPX). There
may be overlap in the patient population eligible to receive these
services and the population eligible to receive the services described
by G0505, but we believed there would be sufficient differences in the
nature and extent of the assessments, interventions and care planning,
as well as the qualifications of individuals providing the services, to
allow concurrent billing for services that are medically reasonable and
necessary. We solicited public comment on potential overlap between
G0505 and other codes currently paid under the PFS, as well as the
other primary care/cognitive services addressed in this section of the
final rule.
Comment: Many commenters were supportive of the proposal, including
the provisions regarding scope of service elements, conditions of
payment, and overlap with other services under the PFS.
Response: We thank commenters for their support of the proposed
scope of service, conditions of payment, and overlap with other
services under the PFS for G0505. We believe that by improving payment
accuracy by paying separately for this service, practitioners will be
able to accurately assess patients for cognitive impairment,
particularly in early stages.
Comment: We received numerous comments stating that assessment and
staging for dementia is very sensitive and should only be conducted by
neuropsychologists, who would be unable to bill G0505. Commenters were
concerned that untrained professionals conducting assessments for
dementia would lead to errors in diagnosis and inappropriate treatment.
Commenters encouraged CMS to not finalize this code and maintain the
current coding for psychological and neuropsychological assessment or
suggested that CMS remove the bullet points associated with medication
management or medical decision making so that G0505 could be billed by
psychologists.
Response: While we acknowledge and support the work of
psychologists and neuropsychologists in the care of Medicare
beneficiaries, we continue to

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believe that this code describes a distinct PFS service that may be
reasonable and necessary in the diagnosis and treatment of a
beneficiary's illness. We remind interested stakeholders that we
routinely examine the valuation and coding for existing services under
the potentially misvalued code initiative, and that there is a the
process for public nomination of particular codes. If stakeholders have
information to suggest that the current coding for neuropsychological
and psychological testing is inaccurate, we welcome nominations under
the established process.
Comment: A few commenters encouraged CMS to avoid adopting scope of
service elements that are exhaustive as these may create barriers to
utilization, while other commenters made the following recommendations
regarding the scope of service provisions:
Expand scope of service elements related to medication
management.
Include occupational therapy in the scope of service
element pertaining to community resources.
Rewrite ``Creation of a care plan, including initial plans
to address any neuropsychiatric symptoms and referral to community
resources as needed (for example, adult day programs, support groups);
care plan shared with the patient and/or caregiver with initial
education and support'' to include ``identification of caregiver(s),
caregiver knowledge, caregiver needs, social supports, and the
willingness and availability of caregiver to voluntarily take on
caregiving tasks.''
Make sure that non-paid or informal caregivers are
included in care planning and provide resources and support for care
givers so as to improve care givers ability to provide care for the
beneficiary.
Require the inclusion of caregiver names in care plan and
patients medical record, require that caregivers be assessed for stress
and depressive symptoms, as well as care giver skill and education
needs.
State that consultations with the caregiver are
permissible under HIPAA and that such conversations may be necessary in
the development of a care plan.
Specify that any advance care planning is consistent with
beneficiary preference and addresses any palliative care needs of the
patient, and include establishment of durable power of attorney.
Clarify that diagnosis of dementia is not part of the
scope of service by deleting ``cognition focused evaluation including
pertinent history'' from the scope of service.
Clarify that ``functional assessment'' is separate from
decision making assessments, and that this is a non-legal assessment of
competency.
Stipulate that other decision makers should be identified.
Consider deleting ``use of standardized instruments to
stage dementia'' because the care plan is the most important aspect of
the service and many standardized instruments are not very effective at
staging.
Clarify that the care plan address both medical and non-
medical issues, and includes follow-up scheduling for monitoring and
evaluation.
Provide a copy of the written care plan to the patient.
Refer to the care plan as a ``person-centered care plan.''
Include evaluation of medical problems including review of
lab or imaging tests, review of co-morbidities, especially those which
are dependent on self-care, evaluation the risk of falls and
recommendations for fall prevention, evaluation of possible elder
abuse, and documentation of financial issues, as part of the scope of
service.
Response: We appreciate the information provided by commenters on
the best practices associated with furnishing this service and would
encourage stakeholders to adopt any or all of these scope of service
provisions, such as the inclusion of caregivers in care planning. The
scope of service for assessment and care planning service for patients
with cognitive impairment does not prohibit stakeholders from adopting
any additional scope of service provisions which may be beneficial for
the treatment of the patient. However, we do not believe that the
ability to fully furnish this service and establish an appropriate
value for it is contingent on meeting such conditions. Therefore, we do
not believe they should be added to the scope of service. We concur
with commenters on the necessity of avoiding the imposition of overly
burdensome restrictions within the scope of service.
Comment: Some commenters requested that CMS clarify that not all
elements in the scope of service need to be provided by the billing
practitioner and many can be provided by others incident to the billing
practitioner's services. One commenter stated that there are
circumstances where the best practitioner to provide a specific service
element does not work in the same practice as the billing practitioner,
and therefore the billing practitioner should be able to contract out
for provision of some aspects, provided that the billing practitioner
remain in oversight. Other commenters stated that CMS should make G0505
billable by other practitioners, such as occupational therapists, or
community based entities.
Response: G0505 is a service that includes central elements, which
must be performed by the billing practitioner subject to established E/
M guidelines. Only those practitioners eligible to report E/M services
should report this service. Outside of the specified elements, the
regular incident-to rules apply consistent with other E/M services. We
believe that physicians and eligible non-physician practitioners, such
as a nurse practitioners and physician assistants should exclusively
bill for this code.
Comment: Many commenters suggested that CMS expand HCPCS code G0505
or pay separately for similar services furnished to patients with other
advanced or life threatening illnesses.
Response: We appreciate the comments on other conditions that could
benefit from assessment and care planning and will consider these for
future rulemaking. We are finalizing the G0505 code to pay separately
for the assessment and care plan creation for beneficiaries with
cognitive impairment, such as from Alzheimer's disease or dementia, at
any stage of impairment.
Comment: Commenters provided many examples of how CMS could develop
appropriate quality and outreach measures to ensure appropriate
utilization of G0505. Commenters encouraged CMS to closely monitor use
of G0505 for a few years following implementation, so as to ascertain
whether patient eligibility is an issue in uptake for the code.
Response: We appreciate the information on quality and outreach
measures. CMS is engaged in the use of measures to improve quality and
access to care. CMS intends to monitor utilization and will consider
how conditions of payment align with best practices and quality
measures.
Comment: One commenter urged CMS to make the proposed coding and
payment changes available to physicians in total cost of care models,
such as ACOs and bundled payment programs.
Response: Our proposal relates only to payment for services under
the Medicare PFS. We note that the codes and payment amounts that we
finalize for services will be available for billing and payment under
the PFS for CY 2017. In general, we do not address in this final rule,
and instead defer to the policies regarding billing and payment for
these services that are applicable within individual Center for
Medicare &

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Medicaid Innovation models and other programs. However, as our policies
regarding payment for new primary care codes are applicable beginning
in CY 2017, we note that models may need to update their policies to
prevent potential duplication of payment between the PFS and the
models. For example, where CCM services have been excluded from
separate payment under existing models, newly established care
management services (including complex CCM, psychiatric CoCM, and BHI)
may likewise be excluded.
Comment: One commenter stated that many small practices do not have
the infrastructure to support a multi-disciplinary team of
practitioners and urged CMS to allow flexibility for solo and small
group practices to share resources. The commenter also suggested that
CMS offer a one-time incentive for practices to integrate service
elements into workflow. Response: In general, the coding under the PFS
is intended to describe services as they are furnished and are valued
using typical resource costs. We appreciate the concern of commenters
regarding access, and we are eager to hear from stakeholders regarding
concerns related to access for these and other PFS services.
6. Improving Payment Accuracy for Care of People With Disabilities
(GDDD1)
We estimate that about 7 percent of all Medicare beneficiaries have
a potentially disabling mobility-related diagnosis (the Medicare-only
prevalence is 5.5 percent and the prevalence for Medicare-Medicaid dual
eligible beneficiaries is 11 percent), using 2010 Medicare (and for
dual eligible beneficiaries, Medicaid) claims data.
When a beneficiary with a mobility-related disability goes to a
physician or other practitioner's office for an E/M visit, the
resources associated with providing the visit can exceed the resources
required for the typical E/M visit. An E/M visit for a patient with a
mobility-related disability can require more physician and clinical
staff time to provide appropriate care because the patient may require
skilled assistance throughout the visit to carefully move and adjust
his/her body. Furthermore, an E/M visit for a patient with a mobility-
related disability commonly requires specialized equipment such as a
wheel chair accessible scale, floor and overhead lifts, a movable exam
table, padded leg supports, a stretcher and transfer board. The current
E/M visit payment rates, based on an assumption of ``typical''
resources involved in furnishing an E/M visit to a ``typical'' patient,
do not accurately reflect these additional resources associated with
furnishing appropriate care to many beneficiaries with mobility-related
disabilities.
When furnishing E/M services to beneficiaries with mobility-related
disabilities, practitioners face difficult choices in deciding whether
to take the extra time necessary and invest in the required specialized
equipment for these visits even though the payment rate for the service
does not account for either expense; potentially providing less than
optimal care for a beneficiary whose needs exceed the standard
appointment block of time in the standard equipped exam room reflected
in the current E/M visit payment rate; or declining to accept
appointments altogether for beneficiaries who require additional time
and specialized equipment.
Each of these scenarios is potentially problematic. The first two
scenarios suggest that the quality of care for this beneficiary
population might be compromised by assumptions under the PFS regarding
relative resource costs in furnishing services to this population. The
third scenario reflects an obvious access problem for these
beneficiaries. To improve payment accuracy and help ameliorate
potential disparity in access and quality for beneficiaries with
mobility-related disabilities, we proposed to create a new add-on G-
code, effective for CY 2017, to describe the additional services
furnished in conjunction with E/M services to beneficiaries with
disabilities that impair their mobility:
G0501: Resource-intensive services for patients for whom the use of
specialized mobility-assistive technology (such as adjustable height
chairs or tables, patient lifts, and adjustable padded leg supports) is
medically necessary and used during the provision of an office/
outpatient evaluation and management service visit (Add-on code, list
separately in addition to primary procedure).
Effective January 1, 2017, we proposed that this add-on code could
be billed with new and established patient office/outpatient E/M codes
(CPT codes 99201 through 99205, and 99212 through 99215), as well as
transitional care management codes (CPT codes 99495 and 99496), when
the additional resources described by the code are medically necessary
and used in the provision of care. In addition to seeking comment on
this proposal, we are also sought comment on other HCPCS codes that may
be appropriate base codes for this proposed add-on code, including
those describing preventive visits and services. We reminded potential
commenters that the rationale for this proposal is based in large part
on the broad use and lack of granularity in coding for E/M services
relative to other PFS services in conjunction with the additional
resources used.
We received many thoughtful comments on this proposal and thank
commenters for their input. Comments received are summarized below.
Comment: Most commenters agreed with the proposed rule's statement
of disability disparities and discussed a variety challenges that
individuals with disabilities face in accessing the health care system.
Several of these commenters cited evidence of existing challenges for
individuals with mobility-related disabilities, including a lack of
physically accessible equipment within physician offices, barriers to
communication, and a lack of existing tools to recognize, track, and
consistently meet specialized needs. Commenters applauded CMS for
offering a concrete proposal with significant funding to meaningfully
address this problem and noted that 26 years after passage of the
Americans with Disabilities Act, it is alarming that physical and
communication barriers in physicians' and other health care
professionals' offices still exist across the country. However, some
commenters suggested that the root cause and scope of these issues are
not well characterized, and suggested that CMS work with stakeholders
to conduct additional studies and gain information as to the underlying
reasons for barriers to access to care and lower quality scores on
certain measures.
Generally, commenters noted that they appreciate CMS' efforts to
address health disparities based on disability, and some then supported
this proposal as a first step in providing medically necessary services
to patients with disabilities, while others recommended that CMS not
finalize the proposal and raised legal, access, and equity concerns.
Response: We agree with commenters that individuals with
disabilities face additional barriers to access health care, an issue
that contributes to widespread disparities in outcomes. We also agree
with commenters that the underlying reasons for these disparities are
multifaceted and can include payment challenges, physical accessibility
and communication barriers, a lack of awareness among health care
providers in assessing and fully addressing the needs and preferences
of people with disabilities, and others issues. As a result of all
these factors, individuals with disabilities can face challenges in
scheduling appointments, and in

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finding and maintaining a primary care provider, an essential
foundation for accessing the health system.
Although there was near universal agreement among commenters
regarding problems in health care disparities and barriers to access
among individuals with disabilities, there was disagreement about
whether establishing payment for code G0501 as proposed was a good
solution to help solve these problems. While we believe that improving
the payment accuracy of physicians' services is necessary and
appropriate, and can help to address the underlying access issues for
individuals with disabilities, we also acknowledge that implementation
of new or revised payments can result in unanticipated, and potentially
undesirable, consequences. Before implementing payment for code G0501,
we plan to further analyze and address the concerns raised by
commenters. As such, we are not finalizing payment for code G0501 at
this time. We appreciate commenters' insights, and our commitment to
promoting better primary care for people with disabilities remains
strong. Over the next 6 months we will engage with interested
beneficiaries, advocates, and practitioners to continue to explore
improvements in payment accuracy for care of people with disabilities.
We intend to discuss this issue again in future rulemaking.
While we are not finalizing separate payment for code G0501 for CY
2017, we are including the code in the CY 2017 code set as G0501. The
HCPCS code G0501 will not be payable under the Medicare PFS for CY
2017, though practitioners will be able to report the code, should they
be inclined to do so.
a. Soliciting Comment on Other Coding Changes To Improve Payment
Accuracy for Care of People With Disabilities
When furnishing care to a beneficiary with a mobility-related
disability, the current E/M visit payment rates may not fully reflect
the associated resource costs that are being incurred by practitioners.
We recognize that there are other populations for which payment
adjustment may be appropriate. Our proposal regarding beneficiaries
with mobility-related disabilities reflected the discrete nature of the
additional resource costs for this population, the clear lack of
differentiation in resource costs regarding particular kinds of
frequently-furnished services, and the broad recognition of access
problems. We recognize that some physician practices may frequently
furnish services to particular populations for which the relative
resource costs are similarly systemically undervalued and we sought
comment regarding other circumstances where these dynamics can be
discretely observed.
Comment: Multiple commenters suggested additional coding changes to
improve payment accuracy for services for people with disabilities.
Several commenters requested that CMS broaden the scope of G0501 and
the codes with which it may be billed, for example by allowing G0501 to
be billed with preventive services, such as the Initial Preventive
Physical Examination (IPPE) or ``Welcome to Medicare Visit'', the
Annual Wellness Visit, or other preventive services including those
that have been assigned a grade of A or B by the United States
Preventive Services Task Force. One commenter suggested that CMS also
establish payment for a lower-level, lower payment add-on code for use
with patients with a mobility-related disability that may not require
the use of specialized equipment. Commenters also suggested that CMS
establish certain forms of physician payment incentives, which might
more effectively address the accessibility needs of individuals with
disabilities and ultimately reduce healthcare disparities.
Specifically, one commenter suggested CMS incentivize physicians to
establish record-keeping to inquire into patients' accessibility and
accommodation needs, record the needs of their patients, and take
action to meet those needs over time.
Response: We thank commenters for their thoughtful responses. We
reiterate our commitment to addressing disparities for individuals with
disabilities and advancing health equity, and will continue to explore
and revisit potential solutions for overcoming these significant
challenges, including the appropriate changes in payment.
7. Regulation Text
Our current regulations in 42 CFR 410.26(b) provide for an
exception to assign general supervision to CCM services (and similarly,
for the non-face-to-face portion of TCM services), because these are
generally non-face-to-face care management/care coordination services
that would commonly be provided by clinical staff when the billing
practitioner (who is also the supervising practitioner) is not
physically present; and the CPT codes are comprised solely (or in
significant part) of non-face-to-face services provided by clinical
staff. A number of codes that we proposed to establish for separate
payment in CY 2017 under our initiative to improve payment accuracy for
primary care and care management are similar to CCM services, in that a
critical element of the services is non-face-to-face care management/
care coordination services provided by clinical staff or other
qualified individuals when the billing practitioner may not be
physically present. Accordingly, we proposed to amend 42 CFR
410.26(a)(3) and 410.26(b) to better define general supervision and to
assign general supervision not only to CCM services and the non-face-
to-face portion of TCM services, but also to proposed codes G0502,
G0503, G0504, G0507, CPT code 99487, and CPT code 99489. Instead of
adding each of these proposed codes assigned general supervision to the
regulation text on an individual basis, we proposed to revise our
regulation under 42 CFR 410.26(b)(1) to assign general supervision to
the non-face-to-face portion of designated care management services,
and we would designate the applicable services through notice and
comment rulemaking.
We did not receive any public comments on our proposed regulation
text. However we received a number of comments regarding a related
proposal to require behavioral health care managers to be located on
site. Also for psychiatric CoCM services (G0502, G0503 and G0504), we
are finalizing a requirement that the behavioral health care manager is
available to perform his or her duties face-to-face and non-face-to-
face with the beneficiary. We address these issues at length in the BHI
section of this final rule (section II.E.3). Since we are assigning
general supervision to psychiatric CoCM behavioral health care manager
services that may be provided face-to-face with the beneficiary, we are
omitting the phrase ``non-face-to-face portion of'' in ``the non-face-
to-face portion of designated care management services.'' Accordingly,
the final amended regulation text in 42 CFR 410.26(b) assigns general
supervision to ``designated care management services'' that we will
designate through notice and comment rulemaking. The services that we
are newly designating (finalizing) for general supervision in this
final rule are G0502, G0503, G0504, G0507, CPT code 99487 and CPT code
99489. We had initially proposed adding a cross-reference to the
existing definition of ``general supervision'' in current regulations
at Sec. 410.32(b)(3)(i), but to better describe general supervision in
the context of these services, we are specifying at Sec. 410.26(a)(3)
that general supervision means the service is furnished under the
physician's (or other practitioner's)

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overall direction and control, but the physician's (or other
practitioner's) presence is not required during the performance of the
service. At Sec. 410.26(b)(5), we specify that, in general, services
and supplies must be furnished under the direct supervision of the
physician (or other practitioner). Designated care management services
can be furnished under general supervision of the physician (or other
practitioner) when these services or supplies are provided incident to
the services of a physician (or other practitioner). The physician (or
other practitioner) supervising the auxiliary personnel need not be the
same physician (or other practitioner) who is treating the patient more
broadly. However, only the supervising physician (or other
practitioner) may bill Medicare for incident to services.
8. CCM Requirements for Rural Health Clinics (RHCs) and Federally
Qualified Health Centers (FQHCs).
RHCs and FQHCs have been authorized to bill for CCM services since
January 1, 2016, and are paid based on the Medicare PFS national
average non-facility payment rate when CPT code 99490 is billed alone
or with other payable services on a RHC or FQHC claim. The RHC and FQHC
requirements for billing CCM services have generally followed the
requirements for practitioners billing under the PFS, with some
adaptations based on the RHC and FQHC payment methodologies.
To assure that CCM requirements for RHCs and FQHCs are not more
burdensome than those for practitioners billing under the PFS, we
proposed revisions for CCM services furnished by RHCs and FQHCs similar
to the revisions proposed under the section above entitled, ``Reducing
Administrative Burden and Improving Payment Accuracy for Chronic Care
Management (CCM) Services'' for RHCs and FQHCs. Specifically, we
proposed to:
Require that CCM be initiated during an AWV, IPPE, or
comprehensive E/M visit only for new patients or patients not seen
within one year. This would replace the requirement that CCM could only
be initiated during an AWV, IPPE, or comprehensive E/M visit where CCM
services were discussed.
Require 24/7 access to a RHC or FQHC practitioner or
auxiliary personnel with a means to make contact with a RHC or FQHC
practitioner to address urgent health care needs regardless of the time
of day or day of week. This would replace the requirement that CCM
services be available 24/7 with health care practitioners in the RHC or
FQHC who have access to the patient's electronic care plan to address
his or her urgent chronic care needs, regardless of the time of day or
day of the week.
Require timely electronic sharing of care plan information
within and outside the RHC or FQHC, but not necessarily on a 24/7
basis, and expands the circumstances under which transmission of the
care plan by fax is allowed. This would replace the requirement that
the electronic care plan be available on a 24/7 basis to all
practitioners within the RHC or FQHC whose time counts towards the time
requirement for the practice to bill the CCM code, and removes the
restriction on allowing the care plan to be faxed only when the
receiving practitioner or provider can only receive clinical summaries
by fax.
Require that in managing care transitions, the RHC or FQHC
creates, exchanges, and transmits continuity of care document(s) in a
timely manner with other practitioners and providers. This would
replace the requirements that clinical summaries must be created and
formatted according to certified EHR technology, and the requirement
for electronic exchange of clinical summaries by a means other than
fax.
Require that a copy of the care plan be given to the
patient or caregiver. This would remove the description of the format
(written or electronic) and allows the care plan to be provided to the
caregiver when appropriate (and in a manner consistent with applicable
privacy and security rules and regulations).
Require that the RHC or FQHC practitioner documents in the
beneficiary's medical record that all the elements of beneficiary
consent (for example, that the beneficiary was informed of the
availability of CCM services; only one practitioner can furnish and be
paid for these services during a calendar month; the beneficiary may
stop the CCM services at any time, effective at the end of the calendar
month, etc.) were provided, and whether the beneficiary accepted or
declined CCM services. This would replace the requirement that RHCs and
FQHCs obtain a written agreement that these elements were discussed,
and removes the requirement that the beneficiary provide authorization
for the electronic communication of his or her medical information with
other treating providers as a condition of payment for CCM services.
Require that communication to and from home- and
community-based providers regarding the patient's psychosocial needs
and functional deficits be documented in the patient's medical record.
This would replace the requirement to document this patient health
information in a certified EHR format.
We noted that we did not propose an additional payment adjustment
for patients who require extensive assessment and care planning as part
of the initiating visit, as payments for RHC and FQHC services are not
adjusted for length or complexity of the visit.
We stated that we believe these proposed changes would keep the CCM
requirements for RHCs and FQHCs consistent with the CCM requirements
for practitioners billing under the PFS, simplify the provision of CCM
services by RHCs and FQHCs, and improve access to these services
without compromising quality of care, beneficiary privacy, or advance
notice and consent.
We received 31 comments on the proposed revisions to the CCM
requirements for RHCs and FQHCs. The following is a summary of the
comments we received:
Comment: Commenters stated that they support CMS's efforts to
ensure that CCM requirements for RHCs and FQHCs are not more burdensome
than those for practitioners billing under the Medicare PFS.
Response: We appreciate the support of the commenters.
Comment: One commenter sought clarification on the requirements for
initiating CCM with patients that have been seen in the RHC within the
past year. The commenter asked if CCM could be initiated if the patient
had any type of visit within the past year, or if the visit within the
past year had to be an AWV, IPPE, or comprehensive E/M visit.
Response: To initiate CCM with a patient that has been seen in the
RHC or FQHC within the past year, an AWV, IPPE, or comprehensive E/M
visit must have taken place within the past year in the RHC or FQHC
that is billing for the CCM service. No other type of visit would meet
the requirement for initiating CCM services.
Comment: A few commenters were concerned that RHCs and FQHCs were
charging beneficiaries for coinsurance for non-face-to-face services,
and recommended that the copayment be waived or that CMS pursue waivers
of cost-sharing for care coordination codes. One of these commenters
stated that patients are often unwilling to pay the patient share of
the CCM services since rural providers often have already been

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providing similar services without additional cost to the patients.
Response: As previously stated, we do not have the authority to
waive the copayment requirements for CCM services. While many
practitioners, including those in rural areas, have always provided
some care management services, we believe that payment for CCM services
will enable many RHCs and FQHCs to furnish comprehensive and systematic
care coordination services that were previously unavailable or only
sporadically offered.
Comment: A commenter asked for clarification on how claims for
patients in RHCs and FQHCs with pre-existing care management plans
should be handled, and suggested that CMS permit claims for services
for these patients.
Response: We are not entirely clear what this commenter is
suggesting. RHCs and FQHCs that bill for CCM services must develop a
comprehensive care plan that includes all the elements previously
described and also listed in Table 11. When all the requirements for
furnishing CCM services are met, including the development of the
comprehensive care plan, the RHC or FQHC would submit a claim for CCM
payment using CPT code 99490. Only the time spent furnishing CCM
services after CCM is initiated with the patient is counted toward the
minimum 20 minutes required for CCM billing. There is no additional
payment for a pre-existing care plan, and if a comprehensive care plan
that meets the CCM requirements was developed before the initiation of
CCM services, the time spent developing the plan would not be counted
toward the 20 minute minimum requirement.
Comment: A few commenters requested clarification on whether RHCs
and FQHCs could bill the new CCM codes for either complex CCM services
(CPT 99487 and 99489) or the separately billable comprehensive CCM
assessment and care planning (G0506).
Response: As we noted in the proposed rule, we did not propose to
adopt codes to provide for an additional payment for patients who
require extensive assessment or care planning because payments for RHC
and FQHC services are not adjusted for the length or complexity of the
visit. Therefore, the codes identified by the commenters are not
separately billable by an RHC or FQHC.
Comment: A few commenters recommended that CMS allow RHCs and FQHCs
to bill for the new CCM codes, and to allow safety net providers to
bill for preventive services in addition to the all-inclusive rate for
RHCs and the PPS rate for FQHCs. The commenters stated that the payment
structure for RHCs and FQHCs are a disincentive to provide preventative
services in addition to E/M services at the same visit.
Response: RHCs and FQHCs are paid for CCM services when CPT code
99490 is billed either alone or with other payable services on a RHC or
FQHC claim. The RHC and FQHC payment structures and payment for
preventive services is outside the scope of this final rule.
Comment: Several commenters recommended that CMS provide separate
payment for psychiatric collaborative care management services
furnished in RHCs and FQHCs, including CPT codes G0502, G0503, G0504
and G0507. The commenters stated that allowing RHCs and FQHCs to bill
for these services will ensure that their patients who have been
diagnosed with a mental health or substance use disorder have access to
high-quality care tailored to their individual condition and
circumstances.
Response: To be eligible for CCM services, a Medicare beneficiary
must have two or more chronic conditions that are expected to last at
least 12 months (or until the death of the patient), and place the
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline. While CCM is typically
associated with primary care conditions, patient eligibility is
determined by the RHC or FQHC practitioner, and mental health
conditions are not excluded. We invite comments on whether an
additional code specifically for mental health conditions is necessary
for RHCs and FQHCs that want to include beneficiaries with mental
health conditions in their CCM services.
After considering the comments, we are finalizing as proposed the
revisions to the requirements for CCM services furnished by RHCs and
FQHCs.

F. Improving Payment Accuracy for Services: Diabetes Self-Management
Training (DSMT)

Section 1861(s)(2)(S) of the Act specifies that medical and other
health services include DSMT services as defined in section 1861(qq) of
the Act. DSMT services are intended to educate beneficiaries in the
successful self-management of diabetes. DSMT includes, as applicable,
instructions in self-monitoring of blood glucose; education about diet
and exercise; an insulin treatment plan developed specifically for the
patient who is insulin-dependent; and motivation for patients to use
the new skills for self-management (see 42 CFR 410.144(a)(5)). DSMT
services are reported under HCPCS codes G0108 (Diabetes outpatient
self-management training services, individual, per 30 minutes) and
G0109 (Diabetes outpatient self- management training services, group
session (2 or more), per 30 minutes). The benefit, as specified at 42
CFR 410.141, consists of 1 hour of individual and 9 hours of group
training unless special circumstances warrant more individual training
or no group session is available within 2 months of the date the
training is ordered.
Section 1861(qq) of the Act specifies that DMST services are
furnished by a certified provider, defined as a physician or other
individual or entity that also provides, in addition to DSMT, other
items or services for which payment may be made under Medicare. The
physician, individual or entity that furnishes the training also must
meet certain quality standards. The physician, individual or entity can
meet standards established by us or standards originally established by
the National Diabetes Advisory Board and subsequently revised by
organizations who participated in their establishment, or can be
recognized by an organization that represents individuals with diabetes
as meeting standards for furnishing the services.
We require that all those who furnish DSMT services be accredited
as meeting quality standards by a CMS-approved national accreditation
organization (NAO). In accordance with Sec. 410.144, a CMS-approved
NAO may accredit an individual, physician or entity to meet one of
three sets of DSMT quality standards: CMS quality standards; the
National Standards for Diabetes Self-Management Education Programs
(National Standards); or the standards of an NAO that represents
individuals with diabetes that meet or exceed our quality standards.
Currently, we recognize the American Diabetes Association and the
American Association of Diabetes Educators as approved NAOs, both of
whom follow National Standards. Medicare payment for outpatient DSMT
services is made in accordance with 42 CFR 414.63.
An article titled ``Use of Medicare's Diabetes Self-Management
Training Benefit'' was published in Health Education Behavior on
January 23, 2015. The article noted that only 5 percent of Medicare
beneficiaries with newly diagnosed diabetes used DSMT services. The
article recommended that future research identify barriers to DSMT
access.
In the CY 2017 PFS proposed rule (81 FR 45215), we identified
issues that the

[[Page 80258]]

DSMT community had brought to our attention which may contribute to the
low utilization of these services, and indicated that we plan to
address and clarify those issues through Medicare program instructions
as appropriate. We also solicited public comment as to other access
barriers--including whether Medicare payment for these services is
accurate--to help us identify and address them. We appreciate the many
comments regarding many issues in response to our solicitation.
Comment: Many commenters stated that the payment rates were too low
but did not suggest specific changes in the inputs used to develop
payment rates under the PFS for particular services (specifically, work
RVUs and direct PE inputs). We also received additional comments
identifying multiple other possible barriers to access. These
commenters' recommendations primarily addressed issues related to
regulatory and statutory DSMT requirements, such as: (a) Expanding of
the definition of diabetes to include hemoglobin A1C as one of the
criteria for diagnosing diabetes; (b) modifying the definition of
certified provider to include the certified diabetes educator (CDE) to
permit them to bill for DSMT; (c) allowing physicians and NPPs, other
than the one treating the beneficiary's diabetes, as required by
regulation, to order DSMT services; and, (d) eliminating the copays and
deductible for DSMT services.
Response: We appreciate the comments received and will consider
changes in valuation of these services and other regulatory issues
raised by commenters for future rulemaking. We also appreciate
commenters' feedback on several subregulatory guidelines and other
operational issues that we will consider addressing outside of
rulemaking.

G. Target for Relative Value Adjustments for Misvalued Services

Section 1848(c)(2)(O) of the Act establishes an annual target for
reductions in PFS expenditures resulting from adjustments to relative
values of misvalued codes. Under section 1848(c)(2)(O)(ii) of the Act,
if the estimated net reduction in expenditures for a year as a result
of adjustments to the relative values for misvalued codes is equal to
or greater than the target for that year, reduced expenditures
attributable to such adjustments shall be redistributed in a budget-
neutral manner within the PFS in accordance with the existing budget
neutrality requirement under section 1848(c)(2)(B)(ii)(II) of the Act.
The provision also specifies that the amount by which such reduced
expenditures exceeds the target for a given year shall be treated as a
net reduction in expenditures for the succeeding year, for purposes of
determining whether the target has been met for that subsequent year.
Section 1848(c)(2)(O)(iv) of the Act defines a target recapture amount
as the difference between the target for the year and the estimated net
reduction in expenditures under the PFS resulting from adjustments to
RVUs for misvalued codes. Section 1848(c)(2)(O)(iii) of the Act
specifies that, if the estimated net reduction in PFS expenditures for
the year is less than the target for the year, an amount equal to the
target recapture amount shall not be taken into account when applying
the budget neutrality requirements specified in section
1848(c)(2)(B)(ii)(II) of the Act. Under section 1848(c)(2)(O)(v) of the
Act, the target that applies to calendar years (CYs) 2017 and 2018 is
calculated as 0.5 percent of the estimated amount of expenditures under
the PFS for the year.
In CY 2016 PFS rulemaking, we proposed and finalized a methodology
to implement this statutory provision.
Because the annual target is calculated by measuring changes from
one year to the next, for CY 2016, we considered how to account for
changes in values that are best measured over 3 years, instead of 2
years. As we described in the CY 2016 final rule with comment period
(80 FR 70932), our general valuation process for potentially misvalued,
new, and revised codes was to establish values on an interim final
basis for a year in the PFS final rule with comment period. Then,
during the 60-day period following the publication of the final rule
with comment period, we would accept public comment about those
valuations. In the final rule with comment period for the subsequent
year, we would consider and respond to public comments received on the
interim final values, and make any appropriate adjustments to values
based on those comments. Under that process for revaluing new, revised,
and misvalued codes, we believe the overall change in valuation for
many codes would best be measured across values for 3 years: between
the original value in the first year; the interim final value in the
second year; and the finalized value in the third year. However, the
target calculation for a year would only be comparing changes in RVUs
between 2 years and not among 3 years, so the contribution of a
particular change towards the target for any single year would be
measured against only the preceding year without regard to the overall
change that takes place over 3 years.
For recent years, interim final values for misvalued codes (year 2)
have generally reflected reductions relative to original values (year
1), and for most codes, the interim final values (year 2) are
maintained and finalized (year 3). However, when values for particular
codes have changed between the interim final (year 2) and final values
(year 3) based on public comment, the general tendency has been that
codes increase in the final value (year 3) relative to the interim
final value (year 2), even in cases where the final value (year 3)
represents a decrease from the original value (year 1). Therefore, for
these codes, the year 2 changes compared to year 1 would risk over-
representing the overall reduction, while the year 3 to year 2 changes
would represent an increase in value. We noted that if there were
similar targets in every PFS year, and a similar number of misvalued
code changes made on an interim final basis, the incongruence in
measuring what is really a 3-year change in 2-year increments might not
be particularly problematic since each year's calculation would
presumably include a similar number of codes measured between years 1
and 2 and years 2 and 3.
However, including changes that take place over 3 years generated
challenges in calculating the target for CY 2016. Because there was no
target for CY 2015, any reductions that occurred on an interim final
basis for CY 2015 were not counted toward achievement of a target. If
we had then included any upward adjustments made to these codes based
on public comment as ``misvalued code'' changes for CY 2016, we would
effectively be counting the service-level increases for 2016 (year 3)
relative to 2015 (year 2) against achievement of the target without any
consideration to the service-level changes relative to 2014 (year 1),
even in cases where the overall change in valuation was negative.
Therefore, we proposed and finalized the decision to exclude code-
level input changes for CY 2015 interim final values from the
calculation of the CY 2016 misvalued code target since the misvalued
change occurred over multiple years, including years not applicable to
the misvalued code target provision.
For the CY 2017 final rule, we will be finalizing values (year 3)
for codes that were interim final in CY 2016 (year 2). Unlike codes
that were interim final for CY 2015, the codes that are interim final
for CY 2016 were included as misvalued codes and will fall within the
range of years for which the misvalued code target provision applies.
Thus, overall changes in values for these codes would

[[Page 80259]]

be measured in the target across 3 full years: The original value in
the first year (CY 2015); the interim final value in the second year
(CY 2016); and the finalized value in the third year (CY 2017). The
changes in valuation for these CY 2016 interim final codes were
previously measured and counted towards the target during their initial
change in valuation between years 1 and 2.
As such, we proposed to include changes in values of the CY 2016
interim final codes toward the CY 2017 misvalued code target. We
believe that this is consistent with the approach that we finalized in
the CY 2016 PFS final rule with comment period. The changes in values
of CY 2015 interim final codes were not counted towards the misvalued
code target in CY 2016 since the valuation change occurred over
multiple years, including years not applicable to the misvalued code
target provision. However, both of the changes in valuation for the CY
2016 interim final codes, from year 1 to year 2 (CY 2015 to CY 2016)
and from year 2 to year 3 (CY 2016 to CY 2017), have taken place during
years that occur within the misvalued code target provision. We
therefore believe that any adjustments made to these codes based on
public comment should be considered towards the achievement of the
target for CY 2017, just as any changes in valuation for these same CY
2016 interim final codes previously counted towards the achievement of
the target for CY 2016.
We solicited comments regarding this proposal. We also reminded
commenters that we revised our process for revaluing new, revised and
misvalued codes so that we will be proposing and finalizing values for
most of the misvalued codes during a single calendar year. After this
year, there will be far fewer instances of interim final codes and
changes that are best measured over 3 years.
We refer readers to the regulatory impact analysis section of this
final rule for the net reduction in expenditures relative to the 0.5
percent target for CY 2017, and the resulting adjustment required to be
made to the conversion factor. Additionally, we refer readers to the
public use file that provides a comprehensive description of how the
target is calculated, as well as the estimated impact by code family on
the CMS Web site under the supporting data files for the CY 2017 PFS
final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
The following is summary of the comments we received regarding the
target for relative value adjustments for misvalued services.
Comment: Several commenters expressed support for the CMS estimate
that there would be no target recapture amount by which to reduce
payments made under the PFS in CY 2017.
Response: We appreciate the comments. We remind stakeholders that
the final determination of the target recapture amount is based on
finalized RVUs for the relevant codes. We refer readers to the
regulatory impact analysis section of this final rule for the net
reduction in expenditures relative to the 0.5 percent target for CY
2017, and the resulting adjustment that is required to be made to the
conversion factor.
Comment: One commenter urged CMS to broaden its approach to
counting misvalued code payment adjustments in the final rule. The
commenter stated that CMS was taking a narrow approach to the misvalued
code target.
Response: We finalized our methodology for calculating the
estimated net reduction relative to the misvalued code target in the CY
2016 final rule with comment period (80 FR 70921-70927). For CY 2017,
we proposed a modification to that methodology that only addressed how
changes to interim final codes would be addressed when both first and
second year changes could be counted towards a misvalued code target
since CY 2017 is the first year for that circumstance. We did not make
a proposal on the more general issue of the methodology used to
calculate the net reductions for the misvalued code target, which, as
noted above, was finalized in the CY 2016 PFS final rule with comment
period.
We did not receive any public comments on our proposal to include
changes in values of the CY 2016 interim final codes toward the CY 2017
misvalued code target.
After consideration of comments received, we are finalizing our
proposal to count any adjustments to interim final codes towards the
misvalued code target when both first and second year changes can be
counted towards a misvalued codes target.

H. Phase-In of Significant RVU Reductions

Section 1848(c)(7) of the Act specifies that for services that are
not new or revised codes, if the total RVUs for a service for a year
would otherwise be decreased by an estimated 20 percent or more as
compared to the total RVUs for the previous year, the applicable
adjustments in work, PE, and MP RVUs shall be phased in over a 2-year
period. In the CY 2016 PFS rulemaking, we proposed and finalized a
methodology to implement this statutory provision. To determine which
services are described by new or revised codes for purposes of the
phase-in provision, we apply the phase-in to all services that are
described by the same, unrevised code in both the current and update
year, and exclude codes that describe different services in the current
and update year.
Because the phase-in of significant reductions in RVUs falls within
the budget neutrality requirements specified in section
1848(c)(2)(B)(ii)(II) of the Act, we estimate the total RVUs for a
service prior to the budget-neutrality redistributions that result from
implementing phase-in values. In implementing the phase-in, we consider
a 19 percent reduction as the maximum 1-year reduction for any service
not described by a new or revised code. This approach limits the year
one reduction for the service to the maximum allowed amount (that is,
19 percent), and then phases in the remainder of the reduction.
The statute provides that the applicable adjustments in work, PE,
and MP RVUs shall be phased in over a 2-year period when the RVU
reduction for a code for a year is estimated to be equal to or greater
than 20 percent. Since CY 2016 was the first year in which we applied
the phase-in transition, CY 2017 will be the first year in which a
single code could be subject to RVU reductions greater than 20 percent
for 2 consecutive years.
Under our finalized policy, the only codes that are not subject to
the phase-in are those that are new or revised, which we defined as
those services that are not described by the same, unrevised code in
both the current and update year, or by the same codes that describe
different services in the current and update year. Since CY 2016 was
the first year for which the phase-in provision applied, we did not
address how we would handle codes with values that had been partially
phased in during the first year, but that have a remaining phase-in
reduction of 20 percent or greater.
The significant majority of codes with reductions in RVUs that are
greater than 20 percent in year one would not be likely to meet the 20
percent threshold in a consecutive year. However, in a few cases,
significant changes (for example, in the input costs included in the
valuation of a service) could produce reductions of 20 percent or
greater in consecutive years.
As stated in the CY 2017 PFS proposed rule, we believed that a
consistent methodology regarding the phase-in transition should be
applied to these cases. We proposed to reconsider

[[Page 80260]]

in each year, for all codes that are not new or revised codes and
including codes that were assigned a phase-in value in the previous
year, whether the total RVUs for the service would otherwise be
decreased by an estimated 20 percent or more as compared to the total
RVUs for the previous year. Under this proposed policy, the 19 percent
reduction in total RVUs would continue to be the maximum one-year
reduction for all codes (except those considered new and revised),
including those codes with phase-in values in the previous year. In
other words, for purposes of the 20 percent threshold, every service is
evaluated anew each year, and any applicable phase-in is limited to a
decrease of 19 percent. For example, if we were to adopt a 50 percent
reduction in total RVUs for an individual service, the reduction in any
particular year would be limited to a decrease of 19 percent in total
RVUs. Because we do not set rates 2 years in advance, the phase-in
transition would continue to apply until the year-to-year reduction for
a given code does not meet the 20 percent threshold. We solicited
comments regarding this proposal.
The list of codes subject to the phase-in and the associated
proposed RVUs that result from this methodology is available on the CMS
Web site under downloads for the CY 2017 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
The following is summary of the comments we received regarding the
phase-in of significant RVU reductions.
Comment: Many commenters supported the proposal that a 19 percent
reduction in total RVUs would continue to be the maximum one-year
reduction for all codes that are not new or revised. These commenters
urged CMS to finalize the proposal.
Response: We appreciate the support from the commenters.
Comment: Several commenters suggested that CMS should extend the
threshold for triggering the phase-in provision, by using a lower
single-year maximum reduction (such as 10 percent), at a rate different
than what the statute stipulates. The commenters stated that a lower
threshold would provide a greater safeguard against payment cuts and
disruption of services.
Response: Section 1848(c)(7) of the Act requires the phase-in if
the total RVUs for a service for a year would otherwise be decreased by
an estimated 20 percent or larger. We do not believe that we have the
statutory authority to establish a different threshold value for when
the phase-in applies.
Comment: One commenter objected to CMS' decision to exclude from
the phase-in codes with a reduction of 20 percent or more that fall
within a family with significant coding revisions. The commenter
requested that CMS reconsider this policy.
Response: We understand the commenters' concerns. In the CY 2016
final rule with comment period (80 FR 70927-70931), we finalized a
policy to identify services that are not subject to the phase-in
because they are new or revised codes. As we wrote at the time, we
excluded as new and revised codes those codes that describe a different
set of services in the update year when compared to the current year by
virtue of changes in other, related codes, or codes that are part of a
family with significant coding revisions. Significant coding revisions
within a family of codes can change the relationships among codes to
the extent that it changes the way that all services in the group are
reported, even if some individual codes retain the same number or, in
some cases, the same descriptor. We continue to believe that this is
the most accurate methodology to use in identifying new and revised
codes for the purposes of the phase-in transition. We also note that we
did not make a proposal to change how we identify services to which the
phase-in does not apply.
Comment: A commenter requested that CMS apply the phase-in policy
to services in the PFS with year-to-year reductions of 20 percent or
more in payment amount due to the statutory cap that requires payment
for the technical component (TC) of certain imaging services furnished
in the office setting to be made the lesser of the PFS or OPPS rates.
The commenter stated that this application would capture the spirit of
the phase-in legislation in dampening the impact of significant payment
reductions on a year to year basis.
Response: Section 1848(c)(7) of the Act requires the phase-in of
reductions of 20 percent or more in the total RVUs for individual
services. The OPPS cap, required under section 1848(b)(4)(A) of the
Act, specifies that if the PFS payment rate for the TC of certain
imaging services exceeds the OPPS payment amount for the services, the
OPPS payment amount must be substituted for the PFS TC payment amount.
The OPPS cap refers to, and requires substitution of, payment rates for
individual imaging services, and not a reduction in the total RVUs for
those services. As such, services that are subject to the OPPS cap are
not subject to the phase-in on that basis.
Comment: One commenter opposed the phase-in proposal. The commenter
stated that the proposal twisted a plain reading of the law to
effectively extend the phase-in period well beyond the 2 years
prescribed by the statute. The commenter questioned why Medicare
beneficiaries should have to pay a higher fee for overvalued services
when identified as such, and pointed out that in the budget-neutral
environment of the fee schedule, the proposal would delay the benefit
of these RVU reductions to the rest of the services listed in the PFS.
Response: We appreciate the concerns raised by the commenter. As we
have addressed over several rulemaking cycles, we are concerned about
the impact of misvalued services in creating distortions in relativity
across the fee schedule. However, we have already finalized through
notice and comment rulemaking and continue to believe that limiting
reductions to 19 percent as the maximum 1-year decrease for all codes
(except those considered new and revised) is the best and most fair way
to apply the phase-in. Additionally, because we do not set rates 2
years in advance, we believe there are significant obstacles to
implementing an alternative methodology. For example, codes may be
reviewed multiple times in a short period of time, and may have further
decreases in total RVUs for a subsequent year due to a variety of
reasons in addition to any change inputs from the initial year phase-
in. These might include supply and equipment price updates in non-
reviewed years, significant changes in specialty mix of practitioners
reporting the service, or changes in other PFS ratesetting policies
which could lead to several consecutive years of RVU reductions. In any
such cases, it would be impractical to identify with certainty what
portion of reductions in code values are due to input changes
established in a prior year versus input or policy changes from the
current year. We also note that all of these circumstances are
relatively rare since it is unusual for changes in code inputs to
result in reductions of greater than 40 percent. Therefore, while we
appreciate the importance of improving payment accuracy as soon as can
be practicable for the reasons stated by the commenter, we also believe
that, on balance, the best and most fair approach to implementing the
required phase-in of RVU reductions over multiple years is to re-
examine eligible codes for the phase-in on an annual basis, in
conjunction with our annual ratesetting.
After consideration of comments received, we are finalizing the
policy as proposed.

[[Page 80261]]

I. Geographic Practice Cost Indices (GPCIs)

1. Background
Section 1848(e)(1)(A) of the Act requires us to develop separate
Geographic Practice Cost Indices (GPCIs) to measure relative cost
differences among localities compared to the national average for each
of the three fee schedule components (that is, work, PE, and
malpractice (MP)). The PFS localities are discussed in section II.E.3.
of this final rule. Although the statute requires that the PE and MP
GPCIs reflect the full relative cost differences, section
1848(e)(1)(A)(iii) of the Act requires that the work GPCIs reflect only
one-quarter of the relative cost differences compared to the national
average. In addition, section 1848(e)(1)(G) of the Act sets a permanent
1.5 work GPCI floor for services furnished in Alaska beginning January
1, 2009, and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE
GPCI floor for services furnished in frontier states (as defined in
section 1848(e)(1)(I) of the Act) beginning January 1, 2011.
Additionally, section 1848(e)(1)(E) of the Act provided for a 1.0 floor
for the work GPCIs, which was set to expire on March 31, 2015. Section
201 of the MACRA amended the statute to extend the 1.0 floor for the
work GPCIs through CY 2017 (that is, for services furnished no later
than December 31, 2017).
Section 1848(e)(1)(C) of the Act requires us to review and, if
necessary, adjust the GPCIs at least every 3 years. Section
1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed
since the date of the last previous GPCI adjustment, the adjustment to
be applied in the first year of the next adjustment shall be half of
the adjustment that otherwise would be made. Therefore, since the
previous GPCI update was implemented in CY 2014 and CY 2015, we
proposed to phase in 1/2 of the latest GPCI adjustment in CY 2017.
We have completed a review of the GPCIs and proposed new GPCIs in
this final rule. We also calculate a geographic adjustment factor (GAF)
for each PFS locality. The GAFs are a weighted composite of each area's
work, PE and malpractice expense GPCIs using the national GPCI cost
share weights. While we do not actually use GAFs in computing the fee
schedule payment for a specific service, they are useful in comparing
overall areas costs and payments. The actual effect on payment for any
actual service would deviate from the GAF to the extent that the
proportions of work, PE and MP RVUs for the service differ from those
of the GAF.
As noted above, section 201 of the MACRA extended the 1.0 work GPCI
floor for services furnished through December 31, 2017. Therefore, the
proposed CY 2017 work GPCIs and summarized GAFs reflect the 1.0 work
floor. Additionally, as required by sections 1848(e)(1)(G) and
1848(e)(1)(I) of the Act, the 1.5 work GPCI floor for Alaska and the
1.0 PE GPCI floor for frontier states are permanent, and therefore,
applicable in CY 2017. See Addenda D and E to this final rule for the
CY 2017 GPCIs and summarized GAFs available on the CMS Web site under
the supporting documents section of the CY 2017 PFS final rule located
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
2. GPCI Update
The proposed updated GPCI values were calculated by a contractor.
There are three GPCIs (work, PE, and MP), and all GPCIs are calculated
relative to the national average for each measure. Additionally, each
of the three GPCIs relies on its own data source(s) and methodology for
calculating its value as described below. Additional information on the
CY 2017 GPCI update may be found in our contractor's draft report,
``Draft Report on the CY 2017 Update of the Geographic Practice Cost
Index for the Medicare Physician Fee Schedule,'' which is available on
our Web site. It is located under the supporting documents section for
the CY 2017 PFS final rule located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
a. Work GPCIs
The work GPCIs are designed to reflect the relative costs of
physician labor by Medicare PFS locality. As required by statute, the
work GPCI reflects one quarter of the relative wage differences for
each locality compared to the national average.
To calculate the work GPCIs, we use wage data for seven
professional specialty occupation categories, adjusted to reflect one-
quarter of the relative cost differences for each locality compared to
the national average, as a proxy for physicians' wages. Physicians'
wages are not included in the occupation categories used in calculating
the work GPCI because Medicare payments are a key determinant of
physicians' earnings. Including physician wage data in calculating the
work GPCIs would potentially introduce some circularity to the
adjustment since Medicare payments typically contribute to or influence
physician wages. That is, including physicians' wages in the physician
work GPCIs would, in effect, make the indices, to some extent,
dependent upon Medicare payments.
The work GPCI updates in CYs 2001, 2003, 2005, and 2008 were based
on professional earnings data from the 2000 Census. However, for the CY
2011 GPCI update (75 FR 73252), the 2000 data were outdated and wage
and earnings data were not available from the more recent Census
because the ``long form'' was discontinued. Therefore, we used the
median hourly earnings from the 2006 through 2008 Bureau of Labor
Statistics (BLS) Occupational Employment Statistics (OES) wage data as
a replacement for the 2000 Census data. The BLS OES data meet several
criteria that we consider to be important for selecting a data source
for purposes of calculating the GPCIs. For example, the BLS OES wage
and employment data are derived from a large sample size of
approximately 200,000 establishments of varying sizes nationwide from
every metropolitan area and can be easily accessible to the public at
no cost. Additionally, the BLS OES is updated regularly, and includes a
comprehensive set of occupations and industries (for example, 800
occupations in 450 industries). For the CY 2014 GPCI update, we used
updated BLS OES data (2009 through 2011) as a replacement for the 2006
through 2008 data to compute the work GPCIs.
Because of its reliability, public availability, level of detail,
and national scope, we believe the BLS OES data continue to be the most
appropriate source of wage and employment data for use in calculating
the work GPCIs (and as discussed in section II.E.2.b the employee wage
component and purchased services component of the PE GPCI). Therefore,
for the proposed CY 2017 GPCI update, we used updated BLS OES data
(2011 through 2014) as a replacement for the 2009 through 2011 data to
compute the work GPCIs.
b. Practice Expense GPCIs
The PE GPCIs are designed to measure the relative cost difference
in the mix of goods and services comprising practice expenses (not
including malpractice expenses) among the PFS localities as compared to
the national average of these costs. Whereas the physician work GPCIs
(and as discussed later in this section, the MP GPCIs) are comprised of
a single index, the PE GPCIs are comprised of four component indices
(employee wages; purchased services; office rent; and equipment,
supplies and

[[Page 80262]]

other miscellaneous expenses). The employee wage index component
measures geographic variation in the cost of the kinds of skilled and
unskilled labor that would be directly employed by a physician
practice. Although the employee wage index adjusts for geographic
variation in the cost of labor employed directly by physician
practices, it does not account for geographic variation in the cost of
services that typically would be purchased from other entities, such as
law firms, accounting firms, information technology consultants,
building service managers, or any other third-party vendor. The
purchased services index component of the PE GPCI (which is a separate
index from employee wages) measures geographic variation in the cost of
contracted services that physician practices would typically buy. (For
more information on the development of the purchased service index, we
refer readers to the CY 2012 PFS final rule with comment period (76 FR
73084 through 73085)). The office rent index component of the PE GPCI
measures relative geographic variation in the cost of typical physician
office rents. For the medical equipment, supplies, and miscellaneous
expenses component, we believe there is a national market for these
items such that there is not significant geographic variation in costs.
Therefore, the equipment, supplies and other miscellaneous expense cost
index component of the PE GPCI is given a value of 1.000 for each PFS
locality.
For the previous update to the GPCIs (implemented in CY 2014) we
used 2009 through 2011 BLS OES data to calculate the employee wage and
purchased services indices for the PE GPCI. As discussed in section
II.E.2.a., because of its reliability, public availability, level of
detail, and national scope, we continue to believe the BLS OES is the
most appropriate data source for collecting wage and employment data.
Therefore, in calculating the proposed CY 2017 GPCI update, we used
updated BLS OES data (2011 through 2014) as a replacement for the 2009
through 2011 data for purposes of calculating the employee wage
component and purchased service index component of the PE GPCI.
c. Malpractice Expense (MP) GPCIs
The MP GPCIs measure the relative cost differences among PFS
localities for the purchase of professional liability insurance (PLI).
The MP GPCIs are calculated based on insurer rate filings of premium
data for $1 million to $3 million mature claims-made policies (policies
for claims made rather than services furnished during the policy term).
For the CY 2014 GPCI update (seventh update) we used 2011 and 2012
malpractice premium data (78 FR 74382). The proposed CY 2017 MP GPCI
update reflects 2014 and 2015 premium data. Additionally, the proposed
CY 2017 MP GPCI update reflects several proposed technical refinements
to the MP GPCI methodology as discussed later in section 5.
d. GPCI Cost Share Weights
For CY 2017 GPCIs, we proposed to continue to use the current cost
share weights for determining the PE GPCI values and locality GAFs. We
refer readers to the CY 2014 PFS final rule with comment period (78 FR
74382 through 74383), for further discussion regarding the 2006-based
MEI cost share weights revised in CY 2014 that were also finalized for
use in the CY 2014 (seventh) GPCI update.
The GPCI cost share weights for CY 2017 are displayed in Table 12.

Table 12--Cost Share Weights for CY 2017 GPCI Update
------------------------------------------------------------------------
Proposed
Current CY 2017
cost cost
Expense category share share
weight weight
(%) (%)
------------------------------------------------------------------------
Work.............................................. 50.866 50.866
Practice Expense.................................. 44.839 44.839
--Employee Compensation......................... 16.553 16.553
--Office Rent................................... 10.223 10.223
--Purchased Services............................ 8.095 8.095
--Equipment, Supplies, Other.................... 9.968 9.968
Malpractice Insurance............................. 4.295 4.295
---------------------
Total........................................... 100.000 100.000
------------------------------------------------------------------------

e. PE GPCI Floor for Frontier States
Section 10324(c) of the Affordable Care Act added a new
subparagraph (I) under section 1848(e)(1) of the Act to establish a 1.0
PE GPCI floor for physicians' services furnished in frontier states
effective January 1, 2011. In accordance with section 1848(e)(1)(I) of
the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for
physicians' services furnished in states determined to be frontier
states. In general, a frontier state is one in which at least 50
percent of the counties are ``frontier counties,'' which are those that
have a population per square mile of less than 6. For more information
on the criteria used to define a frontier state, we refer readers to
the FY 2011 Inpatient Prospective Payment System (IPPS) final rule (75
FR 50160 through 50161). There are no changes in the states identified
as Frontier States for the CY 2017 final rule. The qualifying states
are: Montana, Wyoming, North Dakota, South Dakota, and Nevada. In
accordance with statute, we would apply a 1.0 PE GPCI floor for these
states in CY 2017.
f. Proposed GPCI Update
As explained above in the background section, the periodic review
and adjustment of GPCIs is mandated by section 1848(e)(1)(C) of the
Act. At each update, the proposed GPCIs are published in the PFS
proposed rule to provide an opportunity for public comment and further
revisions in response to comments prior to implementation. As discussed
later in this section, we are finalizing the GPCIs as proposed (except
where we correct technical errors). The final CY 2017 updated GPCIs for
the first and second year of the 2-year transition, along with the
GAFs, are displayed in Addenda D and E to this final rule available on
our Web site under the supporting documents section of the CY 2017 PFS
final rule Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
3. Payment Locality Discussion
a. Background
The current PFS locality structure was developed and implemented in
1997. There are currently 89 total PFS localities; 34 localities are
statewide areas (that is, only one locality for the entire state).
There are 52 localities in the other 16 states, with 10 states having 2
localities, 2 states having 3 localities, 1 state having 4 localities,
and 3 states having 5 or more localities. The combined District of
Columbia, Maryland, and Virginia suburbs; Puerto Rico; and the Virgin
Islands are the remaining three localities of the total of 89
localities. The development of the current locality structure is
described in detail in the CY 1997 PFS final rule (61 FR 34615) and the
subsequent final rule with comment period (61 FR 59494). We note that
the localities generally represent a grouping of one or more
constituent counties.
Prior to 1992, Medicare payments for physicians' services were made
under the reasonable charge system. Payments were based on the charging
patterns of physicians. This resulted in large differences in payment
for physicians' services among types of services, geographic payment
areas, and physician specialties. Recognizing this, the Congress
replaced the reasonable

[[Page 80263]]

charge system with the Medicare PFS in the Omnibus Budget
Reconciliation Act (OBRA) of 1989, and the PFS went into effect January
1, 1992. Payments under the PFS are based on the relative resources
involved with furnishing services, and are adjusted to account for
geographic variations in resource costs as measured by the GPCIs.
Payment localities originally were established under the reasonable
charge system by local Medicare carriers based on their knowledge of
local physician charging patterns and economic conditions. These
localities changed little between the inception of Medicare in 1967 and
the beginning of the PFS in 1992. Shortly after the PFS took effect, we
undertook a study in 1994 that culminated in a comprehensive locality
revision that was implemented in 1997 (61 FR 59494).
The revised locality structure reduced the number of localities
from 210 to the current 89, and the number of statewide localities
increased from 22 to 34. The revised localities were based on locality
resource cost differences as reflected by the GPCIs. For a full
discussion of the methodology, see the CY 1997 PFS final rule with
comment period (61 FR 59494). The current 89 fee schedule areas are
defined alternatively by state boundaries (for example, Wisconsin),
metropolitan areas (for example, Metropolitan St. Louis, MO), portions
of a metropolitan area (for example, Manhattan), or rest-of-state areas
that exclude metropolitan areas (for example, Rest of Missouri). This
locality configuration is used to calculate the GPCIs that are in turn
used to calculate payments for physicians' services under the PFS.
As stated in the CY 2011 PFS final rule with comment period (75 FR
73261), changes to the PFS locality structure would generally result in
changes that are budget neutral within a state. For many years, before
making any locality changes, we have sought consensus from among the
professionals whose payments would be affected. In recent years, we
have also considered more comprehensive changes to locality
configuration. In 2008, we issued a draft comprehensive report
detailing four different locality configuration options (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/downloads/ReviewOfAltGPCIs.pdf). We refer readers to
the CY 2014 PFS final rule with comment period for further discussion
regarding that report, as well as a discussion about the Institute of
Medicine's empirical study of the Medicare GAFs established under
sections 1848(e) (PFS GPCI) and 1886(d)(3)(E) (IPPS wage index) of the
Act.
The following is a summary of the comments we received regarding
the proposed CY 2017 GPCI update.
Comment: A few commenters including a major specialty society
expressed support for using more current data in calculating all three
GPCIs.
Response: We thank the commenters for their support.
Comment: One commenter expressed support for the elimination of all
geographic adjustment factors under the PFS, except those designed to
achieve a specific public policy goal, such as to encourage physicians
to practice in underserved areas. Another commenter opposed any
decrease in the GPCI.
Response: As previously discussed, section 1848(e)(1)(A) of the Act
requires us to develop separate GPCIs to measure resource cost
differences among localities compared to the national average for each
of the three GPCI components, and section 1848(e)(1)(C) of the Act
requires us to review and, if necessary, adjust the GPCIs at least
every 3 years; and based on new data, GPCI values may increase or
decrease.
Comment: A few commenters expressed concern regarding payment for
rural localities and recommended that CMS monitor how the GPCI
calculation changes affect the sustainability of health services in
rural communities. One commenter requested that CMS consider the
ongoing data issues regarding the GPCIs raised by stakeholders in the
Midwest, and establish 1.0 work and PE GPCI values for Wisconsin and
Iowa.
Response: As discussed previously in this section, we are required
to update the GPCIs at least every 3 years to reflect the relative cost
differences of operating a medical practice in each locality compared
to the national average costs. Additionally, as previously discussed in
this section, sections 1848(e)(1)(G) and 1848(e)(1)(I) of the Act
established the permanent 1.5 work GPCI floor for Alaska and the
permanent 1.0 PE GPCI floor for frontier States. We do not otherwise
have the authority to establish similar GPCI floors or other policies
that do not take into consideration the differences in physicians'
resource costs among localities.
Comment: One commenter supported the continuation of the 1.0 PE
GPCI floor for frontier states.
Response: As previously discussed, beginning January 1, 2011
section 1848(e)(1)(I) of the Act set a permanent 1.0 PE GPCI floor for
services furnished in frontier states (as defined in section
1848(e)(1)(I) of the Act).
Comment: Several commenters stated their objection to the use of
residential rents as a proxy for physician office space costs, and
stated that CMS should collect commercial rent data and use it either
as the basis for measuring geographic differences in physician office
rents or, if this is not feasible, use it to validate the residential
rents as a proxy. A few commenters requested that CMS provide a
specific explanation on the barriers to gaining better commercial rent
data.
Response: Because Medicare is a national program, and section
1848(e)(1)(A) of the Act requires us to establish GPCIs to measure
relative cost differences among localities compared to the national
average, we believe it is important to use the best data that is
available on a nationwide basis, that is regularly updated, and retains
consistency area-to-area, year-to-year. Since there is currently no
national data source available for physician office or other comparable
commercial rents, we continue to use county-level residential rent data
from the American Community Survey (ACS) as a proxy for the relative
cost differences in commercial office rents. The ACS is administered by
the United States Census Bureau, which is a leading source of national,
robust, quality, publicly available data. We agree that a commercial
data source for office rent that provided for adequate representation
of urban and rural areas nationally would be preferable to a
residential rent proxy. We have previously discussed in the CY 2005, CY
2008, and CY 2011 (69 FR 66262, 72 FR 66376, and 75 FR 73257,
respectively) final rules that we recognize that apartment rents may
not be a perfect proxy for physician office rent. We have also
conducted exhaustive searches for reliable commercial rent data sources
that are publicly available in the past and have not found any reliable
data that meets our accuracy needs, and we continue to conduct such
searches. With regards to suggestion that CMS should collect commercial
rent data, we note that we discussed this issue in the CY 2012 PFS
final rule with comment period (76 FR 73088) and stated with reference
to surveying physicians directly to gather data to compute office rent,
we note that the development and implementation of a survey could take
several years. Additionally, we have historically not sought direct
survey data from physicians related to the GPCI to avoid issues of
circularity and self-reporting bias. In the CY 2011 PFS final rule with
comment period (75 FR 73259), we

[[Page 80264]]

solicited public comments regarding the benefits of utilizing physician
cost reports to potentially achieve greater precision in measuring the
relative cost difference among Medicare localities. We also asked for
comments regarding the administrative burden of requiring physicians to
routinely complete these cost reports and whether this should be
mandatory for physicians' practices. We did not receive any feedback
related to that comment solicitation during the open public comment
period for the CY 2011 final rule with comment period. We continue to
have concerns that physician cost reports could be prohibitively
expensive, and as well about the administrative burden this approach
would place on physician's office staff. We reiterate that the GPCIs
are not an absolute measure of practice costs, rather they are a
measure of the relative cost differences for each of the three GPCI
components. The U.S. Census Bureau is a federal agency that specializes
in data collection, accuracy, and reliability, and we continue to
believe that where such a publicly available resource exists that can
provide useful data to assess geographic cost differences in office
rent, even though it is a proxy for the exact data we seek, that we
should utilize that available resource. Therefore, given its national
representation, reliability, high response rate and frequent updates,
we continue to believe the ACS residential rent data is the most
appropriate data source available at this time for the purposes of
calculating the rent index of the PE GPCI.
Comment: One commenter stated that it objects to the 8 percent
weight that the rent expense category has been given by CMS in
calculating the PE GPCI, and stated that office rent should be given a
much larger weight to more accurately reflect its impact on physician
practice expenses, and CMS should commit resources to update this data
since it is based on 10-year old data from the 2006 AMA Physician
Practice Information Survey (AMA PPIS).
Response: We would like to clarify that the office rent expense
category has a cost share weight of 10.223 percent, not 8 percent as
indicated by the commenter. The MEI cost share weights were derived
from data collected by the AMA on the AMA PPIS. CMS has previously
stated that we believe the AMA PPIS is a reliable data source, however
the AMA PPIS is not an ongoing data source that is regularly published.
We continued to use the AMA PPIS data source in the CY 2014 revisions
to the MEI which have not been further updated since, and therefore, as
discussed above, the 2006-based MEI cost share weights finalized for
use in the CY 2014 (seventh) GPCI update, were proposed for the CY 2017
(eighth) GPCI update. The AMA is no longer conducting the AMA PPIS
survey, and CMS' Office of the Actuary continues to look into viable
options for updating the MEI cost share weights going forward. In the
CY 2014 PFS final rule with comment period (78 FR 74275), we stated
that we continue to investigate possible data sources to use for the
purpose of rebasing the MEI in the future.
Comment: A few commenters expressed concern with the use of
unrelated proxy data for physician wages in geographic adjustment. The
commenters expressed concern about GPCI proxy inputs that result in
downward payment adjustments, which they believe do not reflect the
actual cost of physician practices. The commenters stated that better
data exist for measuring the real physician compensation rates, such as
recruitment compensation surveys and wages for physicians employed at
federally qualified health centers. The commenters also stated that
MedPAC studies have confirmed that the data sources currently relied
upon for geographic adjustment bear no correlation to physician
earnings. One commenter also stated that CMS has acknowledged that the
proxies utilized for the purposes of geographic adjustment have never
been validated and there never has been a new data source utilized in
the twenty years since the fee schedule was implemented. The commenters
urged CMS to undertake the necessary studies to identify reference
occupations that will accurately reflect the higher input costs of
rural physician earnings, and implement the resulting corrections to
the geographic adjustment of the fee schedule as soon as possible.
Response: We appreciate the comments regarding the professional
occupations used to determine the relative cost differences in
physician earnings for purposes of calculating the work GPCI. In
consideration of the ongoing concerns regarding the reference
occupations and other proxy data used to calculate the GPCIs, we also
note that in the past we received comments suggesting the use of survey
data to determine GPCI values, and stated that we would continue to
consider the possibility of establishing a physician cost report and
requiring a sufficiently large sample of physicians in each locality to
report data on actual costs incurred. However we also stated that we
believed that a physician cost report could take years to develop and
implement, and could be prohibitively expensive (75 FR 73259). We
solicited public comment regarding the potential benefits to be gained
from establishing a physician cost report and whether this approach is
appropriate to achieve potentially greater precision in measuring the
relative cost differences in physicians' practices among PFS
localities. We also solicited public comments on the potential
administrative burden of requiring physicians to routinely complete and
submit a cost report. We did not receive any feedback specifically
related to that comment solicitation (76 FR 73088). As noted previously
in this section, physicians' wages are not included in the occupation
categories (reference occupations) used in calculating the work GPCI
because Medicare payments are a key determinant of physicians'
earnings. We have long maintained that including physician wage data in
calculating the work GPCIs would potentially introduce some circularity
to the adjustment since Medicare payments typically contribute to
physician wages. In other words, including physicians' wages in the
physician work GPCI would, in effect, make the indices, to some extent,
dependent upon Medicare payments, which in turn are impacted by the
indices. We reiterate that the work GPCI is not an absolute measure of
physician earnings; rather it is a measure of the relative wage
differences for each locality as compared to the national average;
additionally, the work GPCI reflects only one quarter of those relative
wage differences consistent with the statutory requirement as discussed
previously in this section.
Comment: We received a few comments on the PFS locality structure
that were not within the scope of the CY 2017 proposed rule. For
example, several commenters requested that Prince William and Loudoun
counties in Virginia be changed from the Rest of Virginia locality into
the DC + MD/VA Suburbs locality. Another commenter stated that it
believes large cuts to rural and rest-of-State areas should be avoided
or minimized, but locality boundaries with large payment differences
should not be in the middle of urban areas, because they create payment
cliffs where payment can change by up to eight percent if an office
location is moved across a street or down a block. The commenter stated
that CMS should act quickly to create locality definitions that are not
constrained by county boundaries, and advocated implementing locality

[[Page 80265]]

definition changes based on Metropolitan Statistical Areas.
Response: We appreciate the suggestions for revisions to the PFS
locality structure. As discussed above, we did not propose changes to
the PFS locality structure; we note that the update to the California
Fee Schedule Areas discussed later in this section is the result of a
statutory requirement. Additionally, we would like to note that, absent
statutory provisions like those that pertain to California, changes to
the locality configuration within a state would lead to significant
redistributions in payments within that state. It has been our
practice, and we have stated in previous rulemaking (72 FR 38139, and
73 FR 38513), that we have not considered making changes to localities
without the support of a State medical association(s) to demonstrate
consensus for the change among the professionals whose payments would
be affected (with some increasing and some decreasing). Also, we would
like to clarify that, just as the localities under the Fee Schedule
areas used in the PFS are comprised of one or more constituent
counties, so are Metropolitan Statistical Areas. Therefore the concept
of a payment cliff between neighboring counties as described by the
commenter would not necessarily be mitigated by a change from PFS fee
schedule areas to Metropolitan Statistical Areas.
After consideration of the public comments received regarding the
proposed CY 2017 GPCI data update, we are finalizing as proposed.
b. California Locality Update to the Fee Schedule Areas Used for
Payment Under Section 220(h) of the Protecting Access to Medicare Act
(1) General Discussion and Legislative Change
Section 220(h) of the PAMA added a new section 1848(e)(6) to the
Act, that modifies the fee schedule areas used for payment purposes in
California beginning in CY 2017.
Currently, the fee schedule areas used for payment in California
are based on the revised locality structure that was implemented in
1997 as previously discussed. Beginning in CY 2017, section
1848(e)(6)(A)(i) of the Act requires that the fee schedule areas used
for payment in California must be Metropolitan Statistical Areas (MSAs)
as defined by the Office of Management and Budget (OMB) as of December
31 of the previous year; and section 1848(e)(6)(A)(ii) of the Act
requires that all areas not located in an MSA must be treated as a
single rest-of-state fee schedule area. The resulting modifications to
California's locality structure would increase its number of localities
from 9 under the current locality structure to 27 under the MSA-based
locality structure.
However, section 1848(e)(6)(D) of the Act defines transition areas
as the fee schedule areas for 2013 that were the rest-of-state
locality, and locality 3, which was comprised of Marin County, Napa
County, and Solano County. Section 1848(e)(6)(B) of the Act specifies
that the GPCI values used for payment in a transition area are to be
phased in over 6 years, from 2017 through 2021, using a weighted sum of
the GPCIs calculated under the new MSA-based locality structure and the
GPCIs calculated under the current PFS locality structure. That is, the
GPCI values applicable for these areas during this transition period
are a blend of what the GPCI values would have been under the current
locality structure, and what the GPCI values would be under the MSA-
based locality structure. For example, in the first year, CY 2017, the
applicable GPCI values for counties that were previously in rest-of-
state or locality 3 and are now in MSAs are a blend of 1/6 of the GPCI
value calculated for the year under the MSA-based locality structure,
and 5/6 of the GPCI value calculated for the year under the current
locality structure. The proportions shift by 1/6 in each subsequent
year so that, by CY 2021, the applicable GPCI values for counties
within transition areas are a blend of 5/6 of the GPCI value for the
year under the MSA-based locality structure, and 1/6 of the GPCI value
for the year under the current locality structure. Beginning in CY
2022, the applicable GPCI values for counties in transition areas are
the values calculated under the new MSA-based locality structure. For
the sake of clarity, we reiterate that this incremental phase-in is
only applicable to those counties that are in transition areas that are
now in MSAs, which are only some of the counties in the 2013 California
rest-of state locality and locality 3.
Additionally, section 1848(e)(6)(C) of the Act establishes a hold
harmless for transition areas beginning with CY 2017 whereby the
applicable GPCI values for a year under the new MSA-based locality
structure may not be less than what they would have been for the year
under the current locality structure. There are a total of 58 counties
in California, 50 of which are in transition areas as defined in
section 1848(e)(6)(D) of the Act. Therefore, 50 counties in California
are subject to the hold harmless provision. The other 8 counties, which
are metropolitan counties that are not defined as transition areas, are
not held harmless for the impact of the new MSA-based locality
structure, and may therefore potentially experience slight decreases in
their GPCI values as a result of the provisions in section 1848(e)(6)
of the Act, insofar as the locality in which they are located now newly
includes data from adjacent counties that decreases their GPCI values
relative to those that would have applied had the new data not been
incorporated. Therefore, the GPCIs for these eight counties under the
MSA-based locality structure may be less than they would have been
under the current GPCI structure. The eight counties that are not
within transition areas are: Orange; Los Angeles; Alameda; Contra
Costa; San Francisco; San Mateo; Santa Clara; and Ventura counties.
We emphasize that while transition areas are held harmless from the
impact of the GPCI changes using the new MSA-based locality structure,
because we proposed other updates for CY 2017 as part of the eighth
GPCI update, including the use of updated data, transition areas would
still be subject to impacts resulting from those other updates. Table
13 illustrates using GAFs, for CY 2017, the isolated impact of the MSA-
based locality changes and hold-harmless for transition areas required
by section 1848(e)(6) of the Act, the impact of the use of updated data
for GPCIs, and the combined impact of both of these changes.

[[Page 80266]]

Table 13--Impact on California GAFs as a Result of Section 1848(e)(6) of the Act and Updated Data by Fee
Schedule Area
[Sorted alphabetically by locality name]
----------------------------------------------------------------------------------------------------------------
Combined
2017 GAF % change % change impact of
Medicare fee schedule area Transition 2016 w/o due to new 2017 GAF w/ due to PAMA and
area GAF 1848(e)(6) GPCI data 1848(e)(6) 1848(e)(6) new GPCI
data (%)
----------------------------------------------------------------------------------------------------------------
Bakersfield.................... 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Chico.......................... 1 1.036 1.031 -0.48 1.031 0.00 -0.48
El Centro...................... 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Fresno......................... 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Hanford-Corcoran............... 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Los Angeles-Long Beach-Anaheim 0 1.092 1.090 -0.18 1.091 0.09 -0.09
(Los Angeles Cnty)............
Los Angeles-Long Beach-Anaheim 0 1.111 1.104 -0.63 1.101 -0.27 -0.90
(Orange Cnty).................
Madera......................... 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Merced......................... 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Modesto........................ 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Napa........................... 1 1.137 1.128 -0.79 1.128 0.00 -0.79
Oxnard-Thousand Oaks-Ventura... 0 1.089 1.083 -0.55 1.083 0.00 -0.55
Redding........................ 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Rest of California............. 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Riverside-San Bernardino- 1 1.036 1.031 -0.48 1.032 0.10 -0.39
Ontario.......................
Sacramento-Roseville-Arden- 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Arcade........................
Salinas........................ 1 1.036 1.031 -0.48 1.033 0.19 -0.29
San Diego-Carlsbad............. 1 1.036 1.031 -0.48 1.035 0.39 -0.10
San Francisco-Oakland-Hayward 0 1.124 1.125 0.09 1.142 1.51 1.60
(Alameda/Contra Costa Cnty)
San Francisco-Oakland-Hayward 1 1.137 1.128 -0.79 1.129 0.09 -0.70
(Marin Cnty)..................
San Francisco-Oakland-Hayward 0 1.191 1.194 0.25 1.175 -1.59 -1.34
(San Francisco Cnty)..........
San Francisco-Oakland-Hayward 0 1.182 1.187 0.42 1.171 -1.35 -0.93
(San Mateo Cnty)..............
San Jose-Sunnyvale-Santa Clara 1 1.036 1.031 -0.48 1.053 2.13 1.64
(San Benito Cnty).............
San Jose-Sunnyvale-Santa Clara 0 1.175 1.176 0.09 1.175 -0.09 0.00
(Santa Clara Cnty)............
San Luis Obispo-Paso Robles- 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Arroyo Grande.................
Santa Cruz-Watsonville......... 1 1.036 1.031 -0.48 1.042 1.07 0.58
Santa Maria-Santa Barbara...... 1 1.036 1.031 -0.48 1.036 0.48 0.00
Santa Rosa..................... 1 1.036 1.031 -0.48 1.037 0.58 0.10
Stockton-Lodi.................. 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Vallejo-Fairfield.............. 1 1.137 1.128 -0.79 1.128 0.00 -0.79
Visalia-Porterville............ 1 1.036 1.031 -0.48 1.031 0.00 -0.48
Yuba City...................... 1 1.036 1.031 -0.48 1.031 0.00 -0.48
----------------------------------------------------------------------------------------------------------------
Note: the Los Angeles-Long Beach-Anaheim; San Francisco-Oakland-Hayward; and San Jose-Sunnyvale-Santa Clara
Medicare localities are represented at a sub-locality level for the purpose of demonstrating the variation of
the GAF within the locality. The variation in the Los-Angeles-Long Beach-Anaheim locality exists only in CY
2017 and results from the two-year 50/50 phase in of the GPCI. The GAF variation in San Francisco-Oakland-
Hayward and San Jose-Sunnyvale-Santa Clara results from the localities containing both transition area and non-
transition area counties. For the remainder of Medicare localities, the GAF is consistent throughout the
entire locality.

Additionally, for the purposes of calculating budget neutrality and
consistent with the PFS budget neutrality requirements as specified
under section 1848(c)(2)(B)(ii)(II) of the Act, we proposed to start by
calculating the national GPCIs as if the current localities are still
applicable nationwide; then for the purposes of payment in California,
we override the GPCI values with the values that are applicable for
California consistent with the requirements of section 1848(e)(6) of
the Act. This approach is consistent with the implementation of the
GPCI floor provisions that have previously been implemented--that is,
as an after-the-fact adjustment that is implemented for purposes of
payment after both the GPCIs and PFS budget neutrality have already
been calculated.

(2) Operational Considerations

As discussed above, under section 1848(e)(6) of the Act, counties
that were previously in the rest-of-state locality or locality 3 and
are now in MSAs would have their GPCI values under the new MSA-based
locality structure phased in gradually, in increments of one-sixth over
6 years. Section 1848(e)(1)(C) of the Act requires that, if more than 1
year has elapsed since the date of the last previous GPCI adjustment,
the adjustment to be applied in the first year of the next adjustment
shall be 1/2 of the adjustment that otherwise would be made. While
section 1848(e)(6)(B) of the Act establishes a blended phase-in for the
MSA-based GPCI values, it does not explicitly state whether or how that
provision is to be reconciled with the requirement at section
1848(e)(1)(C) of

[[Page 80267]]

the Act. We believe that since section 1848(e)(6)(A) of the Act
requires that we must make the change to MSA-based fee schedule areas
for California GPCIs notwithstanding the preceding provisions of
section 1848(e) of the Act, and subject to the succeeding provisions of
section 1848(e)(6) of the Act, that applying the two-year phase-in
specified by the preceding provisions simultaneously with the six-year
phase-in would undermine the incremental 6-year phase-in specified in
section 1848(e)(6)(B) of the Act. Therefore, we proposed that the
requirement at section 1848(e)(1)(C) of the Act to phase in 1/2 of the
adjustment in year 1 of the GPCI update would not apply to counties
that were previously in the rest-of-state or locality 3 and are now in
MSAs, and therefore, are subject to the blended phase-in as described
above. Since section 1848(e)(6)(B) of the Act provides for a gradual
phase in of the GPCI values under the new MSA-based locality structure,
specifically in one-sixth increments over 6 years, if we were to also
apply the requirement to phase in 1/2 of the adjustment in year 1 of
the GPCI update then the first year increment would effectively be one-
twelfth. We note that this issue is only of concern if more than 1 year
has elapsed since the previous GPCI update, and would only be
applicable through CY 2021 since, beginning in CY 2022, the GPCI values
for such areas in an MSA would be fully based on the values calculated
under the new MSA-based locality structure for California.
As previously stated, the resulting modifications to California's
locality structure increase its number of localities from 9 under the
current locality structure to 27 under the MSA-based locality
structure. However, both the current localities and the MSA-based
localities are comprised of various component counties, and in some
localities only some of the component counties are subject to the
blended phase-in and hold harmless provisions required by section
1848(e)(6)(B) and (C) of the Act. Therefore, the application of these
provisions may produce differing GPCI values among counties within the
same fee schedule area under the MSA-based locality structure. For
example, the MSA-based San Jose-Sunnyvale-Santa Clara locality, is
comprised of 2 constituent counties--San Benito County, and Santa Clara
County. San Benito County is in a transition area (2013 rest-of-state),
while Santa Clara County is not. Hence, although the counties are in
the same MSA, the requirements of section 1848(e)(6)(B) and (C) of the
Act may produce differing GPCI values for each county. To address this
issue, we proposed to assign a unique locality number to the counties
that would be impacted in the aforementioned manner. As a result,
although the modifications to California's locality structure increase
the number of localities from 9 under the current locality structure to
27 under the MSA-based locality structure, for purposes of payment, the
actual number of localities under the MSA-based locality structure
would be 32 to account for instances where unique locality numbers are
needed as described above. Additionally, while the fee schedule area
names are consistent with the MSAs designated by OMB, we proposed to
maintain 2-digit locality numbers to correspond to the existing fee
schedule areas. Pursuant to the implementation of the new MSA-based
locality structure for California, the total number of PFS localities
would increase from 89 to 112. Table 14 displays the current fee
schedule areas in California, and Table 15 displays the MSA-based fee
schedule areas in California required by section 1848(e)(6) of the Act.
Additional information on the California locality update may be found
in our contractor's draft report, ``Draft Report on the CY 2017 Update
of the Geographic Practice Cost Index for the Medicare Physician Fee
Schedule,'' which is available on the CMS Web site. It is located under
the supporting documents section of the CY 2017 PFS final rule located
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.

Table 14--Current Fee Schedule Areas in California
[Sorted alphabetically by locality name]
------------------------------------------------------------------------
Locality number Fee schedule area Counties
------------------------------------------------------------------------
26.................. Anaheim/Santa Ana....... Orange.
18.................. Los Angeles............. Los Angeles.
03.................. Marin/Napa/Solano....... Marin, Napa, And Solano.
07.................. Oakland/Berkley......... Alameda and Contra
Costa.
05.................. San Francisco........... San Francisco.
06.................. San Mateo............... San Mateo.
09.................. Santa Clara............. Santa Clara.
17.................. Ventura................. Ventura.
99.................. Rest of State........... All Other Counties.
------------------------------------------------------------------------

Table 15--MSA-Based Fee Schedule Areas in California
[Sorted alphabetically by locality name]
----------------------------------------------------------------------------------------------------------------
New
Current locality number locality Fee schedule area Counties Transition area
number (MSA name)
----------------------------------------------------------------------------------------------------------------
99................................ 54 Bakersfield, CA....... Kern................ YES.
99................................ 55 Chico, CA............. Butte............... YES.
99................................ 71 El Centro, CA......... Imperial............ YES.
99................................ 56 Fresno, CA............ Fresno.............. YES.
99................................ 57 Hanford-Corcoran, CA.. Kings............... YES.
18................................ 18 Los Angeles-Long Beach- Los Angeles......... NO.
Anaheim, CA (Los
Angeles County).
26................................ 26 Los Angeles-Long Beach- Orange.............. NO.
Anaheim, CA (Orange
County).
99................................ 58 Madera, CA............ Madera.............. YES.
99................................ 59 Merced, CA............ Merced.............. YES.
99................................ 60 Modesto, CA........... Stanislaus.......... YES.
3................................. 51 Napa, CA.............. Napa................ YES.
17................................ 17 Oxnard-Thousand Oaks- Ventura............. NO.
Ventura, CA.
99................................ 61 Redding, CA........... Shasta.............. YES.
99................................ 75 Rest of State......... All Other Counties.. YES.
99................................ 62 Riverside-San Riverside, And San YES.
Bernardino-Ontario, Bernardino.
CA.
99................................ 63 Sacramento--Roseville- El Dorado, Placer, YES.
-Arden-Arcade, CA. Sacramento, And
Yolo.
99................................ 64 Salinas, CA........... Monterey............ YES.
99................................ 72 San Diego-Carlsbad, CA San Diego........... YES.

[[Page 80268]]

7................................. 7 San Francisco-Oakland- Alameda, Contra NO.
Hayward, CA (Alameda Costa.
County/Contra Costa
County).
3................................. 52 San Francisco-Oakland- Marin............... YES.
Hayward, CA (Marin
County).
5................................. 5 San Francisco-Oakland- San Francisco....... NO.
Hayward, CA (San
Francisco County).
6................................. 6 San Francisco-Oakland- San Mateo........... NO.
Hayward, CA (San
Mateo County).
99................................ 65 San Jose-Sunnyvale- San Benito.......... YES.
Santa Clara, CA (San
Benito County).
9................................. 9 San Jose-Sunnyvale- Santa Clara......... NO.
Santa Clara, CA
(Santa Clara County).
99................................ 73 San Luis Obispo-Paso San Luis Obispo..... YES.
Robles-Arroyo Grande,
CA.
99................................ 66 Santa Cruz- Santa Cruz.......... YES.
Watsonville, CA.
99................................ 74 Santa Maria-Santa Santa Barbara....... YES.
Barbara, CA.
99................................ 67 Santa Rosa, CA........ Sonoma.............. YES.
99................................ 73 Stockton-Lodi, CA..... San Joaquin......... YES.
3................................. 53 Vallejo-Fairfield, CA. Solano.............. YES.
99................................ 69 Visalia-Porterville, Tulare.............. YES.
CA.
99................................ 70 Yuba City, CA......... Sutter, and Yuba.... YES.
----------------------------------------------------------------------------------------------------------------

We received few comments regarding the California locality update
to the fee schedule areas used for payment under section 220(h) of
PAMA.
Comment: One commenter stated that it supports the proposed
California payment locality implementation plan. The commenter stated
that based on its analysis the calculations are accurate except for a
few errors. Specifically, the commenter stated that the CY 2016 GAFs
for 3 fee schedule areas [Los Angeles-Long Beach-Anaheim (Orange
County), San Francisco-Oakland-Hayward (Alameda/Contra Costa County),
and San Francisco-Oakland-Hayward (San Francisco County)] in Table 13
of the proposed rule (81 FR 46221 through 46222) were incorrect. The
commenter also requested that all of the 2016 GAFs in the table be
reported to three decimal places to avoid confusion with rounding.
Additionally, the commenter indicated that Sierra County in California
was missing from the CY 2017 Proposed GPCI County Data File in the CY
2017 Proposed Rule GPCI Public Use Files available on our Web site
under the supporting documents section of the CY 2017 PFS proposed rule
Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
Response: We thank the commenter for its support of our proposed
California payment locality implementation plan. With regard to the
errors noted by the commenter, we thank the commenter for bringing this
issue to our attention. We agree that the CY 2016 GAFs for Los Angeles-
Long Beach-Anaheim (Orange County), San Francisco-Oakland-Hayward
(Alameda/Contra Costa County), and San Francisco-Oakland-Hayward (San
Francisco County) were incorrect in Table 13 of the proposed rule, and
have been corrected in Table 13 in this final rule. We have also
updated all of the 2016 GAFs in Table 13 to reflect 3 decimal places as
to avoid confusion with rounding as requested. Additionally, we note
that while the GAFs for these 3 fee schedule areas were incorrect in
Table 13 of the proposed rule, the GAF values were correct in Addendum
D to the proposed rule available on our Web site under the supporting
documents section of the CY 2017 PFS Proposed Rule Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/. Moreover, GAF values are an analysis
tool, and are not used to determine service level payment.
Additionally, we note Sierra County was omitted from the CY 2017
Proposed GPCI County Data File because we removed counties with 0 total
RVUs in 2014. However, for the final rule we have revised the file to
include all counties, even those with 0 total RVUs in 2014. The updated
file can be viewed in the CY 2017 Final GPCI County Data File in the CY
2017 Final Rule GPCI Public use files available on our Web site.
Comment: One commenter requested that CMS implement the California
locality update requirement in a manner that does not require the
Medicare Administrative Contractor (MAC) for California to make changes
to the enrollment process for physician groups in California or changes
in the way that physician groups submit claims to the MAC.
Response: While we note that there are several internal
administrative burdens that result from the implementation of the
California locality update, we do not believe there should be related
burden on practitioners, and California practitioners will continue to
follow the existing process for submitting claims.
After consideration of the public comments received regarding the
proposed California payment locality implementation plan, we are
finalizing as proposed.
4. Update to the Methodology for Calculating GPCIs in the U.S.
Territories
In calculating GPCIs within U.S. states, we use county-level wage
data from the Bureau of Labor Statistics (BLS) Occupational Employment
Statistics Survey (OES), county-level residential rent data from the
American Community Survey (ACS), and malpractice insurance premium data
from state departments of insurance. In calculating GPCIs for the U.S.
territories, we currently use three distinct methodologies--one for
Puerto Rico, another for the Virgin Islands, and a third for the
Pacific Islands (Guam, American Samoa, and Northern Marianas Islands).
These three methodologies were adopted at different times based
primarily on the data that were available at the time they were
adopted. At present, because Puerto Rico is the only territory where
county-level BLS OES, county-level ACS, and malpractice premium data
are available, it is the only territory for which we use territory-
specific data to calculate GPCIs. For the Virgin Islands, because
county-level wage and rent data are not available, and insufficient
malpractice premium data are available, CMS has set the work, PE, and
MP GPCI values for the Virgin Islands payment locality at the national
average of 1.0 even though, like Puerto Rico, the Virgin Islands is its

[[Page 80269]]

own locality and county-level BLS OES data are available for the Virgin
Islands. For the U.S. territories in the Pacific Ocean, we currently
crosswalk GPCIs from the Hawaii locality for each of the three GPCIs,
and incorporate no local data from these territories into the GPCI
calculations even though county-level BLS OES data does exist for Guam,
but not for American Samoa or the Northern Mariana Islands.
As noted above, currently Puerto Rico is the only territory for
which we calculate GPCIs using the territory-specific information
relative to data from the U.S. States. For several years stakeholders
in Puerto Rico have raised concerns regarding the applicability of the
proxy data in Puerto Rico relative to their applicability in the U.S.
states. We believe that these concerns may be consistent across island
territories, but lack of available, appropriate data has made it
difficult to quantify such variation in costs. For example, some
stakeholders previously indicated that shipping and transportation
expenses increase the cost of acquiring medical equipment and supplies
in islands and territories relative to the mainland. While we have
previously attempted to locate data sources specific to geographic
variation in such shipping costs, we found no comprehensive national
data source for this information (we refer readers to 78 FR 74387
through 74388 for the detailed discussion of this issue). Therefore, we
have not been able to quantify variation in costs specific to island
territories in the calculation of the GPCIs.
For all the island territories other than Puerto Rico, the lack of
comprehensive data about unique costs for island territories has had
minimal impact on GPCIs because we have used either the Hawaii GPCIs
(for the Pacific territories) or used the unadjusted national averages
(for the Virgin Islands). In an effort to provide greater consistency
in the calculation of GPCIs given the lack of comprehensive data
regarding the validity of applying the proxy data used in the States in
accurately accounting for variability of costs for these island
territories, we proposed to treat the Caribbean Island territories (the
Virgin Islands and Puerto Rico) in a consistent manner. We proposed to
do so by assigning the national average of 1.0 to each GPCI index for
both Puerto Rico and the Virgin Islands. We did not propose any changes
to the GPCI methodology for the Pacific Island territories (Guam,
American Samoa, and Northern Marianas Islands) where we already
consistently assign the Hawaii GPCI values for each of the three GPCIs.
Additional information on the Proposed Update to the Methodology for
Calculating GPCIs in the U.S. Territories may be found in our
contractor's draft report, ``Draft Report on the CY 2017 Update of the
Geographic Practice Cost Index for the Medicare Physician Fee
Schedule,'' which is available on our Web site. It is located under the
supporting documents section of the CY 2017 PFS final rule located at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
The following is a summary of the comments we received regarding
the proposed update to the methodology for calculating GPCIs in the
U.S. territories.
Comment: Several commenters expressed support for CMS' proposal to
assign the national average of 1.0 to each GPCI in Puerto Rico, stating
that the physicians in Puerto Rico who treat patients enrolled in fee-
for-service Medicare will be reimbursed in a manner that more closely
aligns with the manner in which physicians in the other U.S.
territories are reimbursed, and better reflects the cost of practicing
medicine in Puerto Rico. Other commenters supporting the proposal also
suggested that there has been a need for revision of Medicare payment
in Puerto Rico, and that the territories of the U.S. have not been
treated similarly even though the territories are much alike. Another
commenter stated that the existing fee schedule for Puerto Rico does
not correlate with the cost of caring for patients, and that the
proposed policy is long overdue. Some commenters also stated that
increasing the GPCI's for Puerto Rico is an important and necessary
first step in trying to salvage Puerto Rico's deteriorated health
system.
Response: We thank the commenters for their support.
Comment: A few commenters requested that CMS consider raising the
GPCI values in Puerto Rico to 1.25.
Response: We proposed assigning the national average of 1.0 to each
GPCI index for both Puerto Rico and the Virgin Islands, in an effort to
provide greater consistency in the calculation of GPCIs among these
island territories, given the lack of information on the validity of
applying the proxy data used in the States to accurately account for
variability of costs in these territories as compared to the national
average costs. Ultimately we proposed to treat the Caribbean Island
territories (the Virgin Islands and Puerto Rico) in a consistent manner
by assigning the national average of 1.0 to each GPCI index. We do not
believe that it would be appropriate to raise the value to 1.25 in the
absence of data demonstrating that would be an accurate reflection of
costs in those territories relative to national average costs.
Comment: We received several comments that are outside of the scope
of the Physician Fee Schedule, requesting that CMS explore every option
to determine whether a one-time correction can be made to the Medicare
Advantage (MA) regulatory cycle so that the per-person monthly payment
to Puerto Rico MA Plans in CY 2017 will reflect the increase to the
fee-for-service spending in the territory as a result of the proposed
GPCI increase. Some commenters stated that it is imperative that CMS
see that the increased physician fees reach the actual providers and
are not diverted away from patient care by third parties such as
Medicare Advantage Organizations. Some commenters requested that CMS
clarify that the new GPCIs will be incorporated into the MA benchmarks
in CY 2018.
Response: We appreciate the concerns raised by the commenters.
Consistent with the statute, we published the final CY 2017 Rate
Announcement for Medicare Advantage on April 4, 2016. Medicare
Advantage actuarial bids and benefit packages for 2017 have been
approved by CMS and sponsors have begun marketing plan to
beneficiaries. Thus, a change in to CY 2017 benchmark would be
disruptive to beneficiaries. In future years, including CY 2018, we
will follow our normal process for calculating rates. This process
incorporates historical Fee for Service expenditures, which would
include any updates to Fee for Service payment rates, such as an
adjustment to the Puerto Rico GPCI. CMS will not be making any
adjustments to CY 2017 Medicare Advantage rates as a result of this
final rule. Finally, we note that according to the statute, we are
prohibited from interfering or directing the contracting between
Medicare Advantage Organizations (MAOs) and contracted providers. As
such, we are not permitted to dictate to MAOs how any increase in
payment rates can be spent, including on provider rates.
Comment: One commenter suggested that if the MA benchmark cannot be
adjusted for CY 2017 that CMS should postpone the applicability of the
GPCI change in Puerto Rico until CY 2018 when such an effect is also
reflected in the MA benchmarks.
Response: We do not agree that the proposal to update to the
methodology for calculating GPCIs in the U.S. territories, which will
provide greater consistency in the calculation of GPCIs for these
areas, should be delayed based on when the MA benchmarks will

[[Page 80270]]

reflect the increases as a result of this policy.
After consideration of the public comments received regarding our
proposal to treat the Caribbean Island territories (the Virgin Islands
and Puerto Rico) in a consistent manner, by assigning the national
average of 1.0 to each GPCI index for both Puerto Rico and the Virgin
Islands, we are finalizing as proposed.
5. Refinement to the MP GPCI Methodology
In the process of calculating MP GPCIs for the purposes of this
final rule, we identified several technical refinements to the
methodology that yield improvements over the current method. We also
proposed refinements that conform to our proposed methodology for
calculating the GPCIs for the U.S. Territories described above.
Specifically, we proposed modifications to the methodology to account
for missing data used in the calculation of the MP GPCI. Under the
methodology used in the CY 2014 GPCI update (78 FR 74380 through
74391), we first calculated the average premiums by insurer and
specialty, then imputed premium values for specialties for which we did
not have specific data, before adjusting the specialty-specific premium
data by market share weights. We proposed to revise our methodology to
instead calculate the average premiums for each specialty using issuer
market share for only available companies. This proposed methodological
improvement would reduce potential bias resulting from large amounts of
imputation, an issue that is prevalent for insurers that only write
policies for ancillary specialties for which premiums tend to be low.
The current method would impute the low premiums for ancillary
specialties across the remaining specialties, and generally greater
imputation leads to less accuracy. Additional information on the MP
GPCI methodology, and the proposed refinement to the MP GPCI
methodology may be found in our contractor's draft report, ``Draft
Report on the CY 2017 Update of the Geographic Practice Cost Index for
the Medicare Physician Fee Schedule,'' which is available on our Web
site. It is located under the supporting documents section of the CY
2017 PFS final rule located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
We did not receive any comments regarding the proposed technical
refinements to the MP GPCI methodology, and we are finalizing as
proposed.

J. Payment Incentive for the Transition From Traditional X-Ray Imaging
to Digital Radiography and Other Imaging Services

Section 502(a)(1) of Division O, Title V of the Consolidated
Appropriations Act, 2016 (Pub. L. 114-113) amended section 1848(b) of
the Act by adding new paragraph (b)(9). Effective for services
furnished on or after January 1, 2017, section 1848(b)(9)(A) of the Act
reduces by 20 percent the payment amounts under the PFS for the
technical component (TC) (including the TC portion of a global
services) of imaging services that are X-rays taken using film. The
reduction is made prior to any other adjustment under this section and
without application of this new paragraph.
Section 1848(b)(9) of the Act allows for the implementation of the
payment reduction through appropriate mechanisms which may include use
of modifiers. In accordance with section 1848(c)(2)(B)(v)(X), the
adjustments under section 1848(b)(9)(A) of the Act are exempt from
budget neutrality.
To implement this provision, in the CY 2017 PFS proposed rule (81
FR 46224), we proposed to establish a new modifier to be used on claims
that include imaging services that are X-rays (including the imaging
portion of a service) taken using film. Since the display of the
proposed rule, modifier FX has been established for that purpose.
Effective January 1, 2017, the modifier must be used on claims for X-
rays that are taken using film. The use of this modifier will result in
a 20 percent reduction for the X-ray service, as specified under
section 1848(b)(9)(A) of the Act.
The proposed rule preamble stated that the applicable HCPCS codes
describing imaging services that are X-ray services could be found on
the PFS Web site. However, we did not intend this to indicate that we
would be developing or displaying an exhaustive list of applicable
codes. Instead, we intended to refer to the several lists of PFS
imaging codes, including those that describe imaging services that are
X-rays.
Comment: Many commenters commented on the merits of the statutory
provision. The commenters stated that the reduction of Medicare film-
based x-ray payments by 20 percent will have unintended consequences on
patient care.
Response: We believe our proposal would implement the required
statutory provision and we do not believe that we have the authority to
alter the application of the provision based on these comments.
Comment: An overwhelming majority of the commenters requested CMS
implement an alternative policy to improve quality of imaging services.
The recommended policy would require registered radiologic technicians
to perform all Medicare film or digital radiography procedures. Other
commenters countered this recommended alternative by stating that it
would exclude otherwise qualified professionals who have undergone
education to acquire limited scope licenses or certification programs
demonstrating As Low As Reasonably Achievable (ALARA) safety practices
by either a third party, vendor training, or another didactic course
deemed acceptable by any of the four accreditation organizations. One
commenter also referenced 35 states that have an entry level
certification for X-ray technicians and that throughout the US, there
are x-ray technicians and limited scope X-ray machine operators that
are also licensed and certified.
Response: We appreciate commenters' interests in standards that
might improve quality of care for Medicare beneficiaries, but we did
not propose a policy regarding standards for radiologic technicians in
the proposed rule. Also, as previously stated, we do not believe we
have the authority to implement conditions of payment regarding
radiologic technicians as an alternative to the adjustments required by
the statutory provision.
Comment: A commenter recommended that a financial incentive be
provided for physicians to convert to digital machines as had been done
in the case of electronic medical records.
Response: The legislation does not authorize any financial
incentive in the form of increased payment, but provides an incentive
to use digital images to avoid the 20 percent reduction that applies to
imaging services that are X-rays taken using film.
Comment: One commenter requested that in the absence of a
meaningful opportunity to comment on the list of codes for which the
policy applies, the provision should be limited to traditional
diagnostic X-ray procedures only. Two commenters presented separate
lists of codes for which the payment reduction should apply. One
commenter also provided codes that should be explicitly excluded from
the payment reduction, for example, radiographic-fluoroscopic, vascular
and mammography X-ray imaging services, radioscopic, radioscopic and
radiography services provided in a

[[Page 80271]]

single examination. Other commenters also provided a list of procedures
that should be excluded. The commenter also requested that we publish
the list of applicable codes as soon as possible.
Response: As previously stated, we did not publish an exhaustive
list of applicable codes, and previously intended to point to existing
lists of PFS imaging services. We believe that physicians and non-
physician practitioners are in the best position to determine whether a
particular imaging service is an X-ray taken using film.
Comment: One commenter suggested that if at least half of the
number of discrete X-ray exposures required for the radiographic exam
are captured using a DR detector, then the examination should be
considered as digital and the payment differential should not be
applied. Another commenter requested that we clarify that the law only
applies (and requires use of a modifier) to sites that use X-ray as a
single method for image capture. The commenter also seeks clarification
that if a site uses both X-ray film and electronic capture of images
and maintains digital archives, by a picture archiving communication
system or other electronic method, that the site is not required to
report the modifier.
Response: At this time, in accordance with the statute, we are
requiring the FX modifier to be used whenever an imaging service is an
X-ray taken using film. As stated, the statute requires that if an
imaging service is an X-ray taken using film, a reduction in payment is
to occur. The statutory requirement applies at the service level, not
based on where the service is furnished or the method used to store
images. There is no provision for an exception to the payment reduction
based on the availability of various technologies or the use of certain
image archiving technology at a particular site.
After consideration of the public comments we received, we are
finalizing the establishment of new modifier ``FX'' to be reported on
claims for imaging services that are X-rays that are taken using film.
Beginning January 1, 2017, claims for imaging services that are X-
rays taken using film must include the modifier ``FX.''
The use of this modifier will result in a 20 percent reduction for
the X-ray service, as specified under section 1848(b)(9)(A) of the Act.

K. Procedures Subject to the Multiple Procedure Payment Reduction
(MPPR) and the OPPS Cap

Effective January 1, 2012, we implemented an MPPR of 25 percent on
the professional component (PC) of advanced imaging services. The
reduction applies when multiple imaging procedures are furnished by the
same physician (or physician in the same group practice) to the same
patient, in the same session, on the same day. Full payment is made for
the PC of the highest priced procedure. Payment for the PC of
subsequent services is reduced by 25 percent.
Section 502(a)(2)(A) of Division O, Title V of the Consolidated
Appropriations Act, 2016 (Pub. L. 114-113, enacted on December 18,
2015) added a new section 1848(b)(10) of the Act which revises the
payment reduction from 25 percent to 5 percent, effective January 1,
2017. Section 502(a)(2)(B) added a new subclause at section
1848(c)(2)(B)(v)(XI) which exempts the reduced expenditures
attributable to the revised 5 percent MMPR on the PC of imaging from
the PFS budget neutrality provision. We proposed to implement these
provisions for services furnished on or after January 1, 2017. We refer
readers to section VI.C of this final rule regarding the necessary
adjustment to the proposed PFS conversion factor to account for the
mandated exemption from PFS budget neutrality.
We note that the lists of services for the upcoming calendar year
that are subject to the MPPR on diagnostic cardiovascular services,
diagnostic imaging services, diagnostic ophthalmology services, and
therapy services; and the list of procedures that meet the definition
of imaging under section 5102(b) of the Deficit Reduction Act (DRA),
and therefore, are subject to the OPPS cap, are displayed in the public
use files for the PFS proposed and final rules for each year. The
public use files for CY 2017 are available on our Web site under
downloads for the CY 2017 PFS final rule with comment period at https://www.cms.gov/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html.
Comment: Commenters supported the proposal to implement the
statutory provision.
Response: We our finalizing our CY 2017 proposal to revise the MPPR
on the PC of diagnostic imaging services.

L. Valuation of Specific Codes

1. Background: Process for Valuing New, Revised, and Potentially
Misvalued Codes
Establishing valuations for newly created and revised CPT codes is
a routine part of maintaining the PFS. Since inception of the PFS, it
has also been a priority to revalue services regularly to make sure
that the payment rates reflect the changing trends in the practice of
medicine and current prices for inputs used in the PE calculations.
Initially, this was accomplished primarily through the 5-year review
process, which resulted in revised work RVUs for CY 1997, CY 2002, CY
2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY
2011. Under the 5-year review process, revisions in RVUs were proposed
and finalized via rulemaking. In addition to the 5-year reviews,
beginning with CY 2009, CMS and the RUC have identified a number of
potentially misvalued codes each year using various identification
screens, as discussed in section II.D.4 of this final rule.
Historically, when we received RUC recommendations, our process had
been to establish interim final RVUs for the potentially misvalued
codes, new codes, and any other codes for which there were coding
changes in the final rule for a year. Then, during the 60-day period
following the publication of the final rule, we accepted public comment
about those valuations. For services furnished during the calendar year
following the publication of interim final rates, we paid for services
based upon the interim final values established in the final rule. In
the final rule with comment period for the subsequent year, we
considered and responded to public comments received on the interim
final values, and typically made any appropriate adjustments and
finalized those values.
In the CY 2015 PFS final rule with comment period, we finalized a
new process for establishing values for new, revised and potentially
misvalued codes. Under the new process, we include proposed values for
these services in the proposed rule, rather than establishing them as
interim final in the final rule with comment period. Beginning with the
CY 2017 proposed rule, the new process is applicable to all codes,
except for new codes that describe truly new services. For CY 2017, we
proposed new values in the CY 2017 proposed rule for the vast majority
of new, revised, and potentially misvalued codes for which we received
complete RUC recommendations by February 10, 2016. To complete the
transition to this new process, for codes where we established interim
final values in the CY 2016 PFS final rule with comment period, we
reviewed the comments received during the 60-day public comment period
following release of the CY 2016 PFS final rule with comment period,
and re-proposed

[[Page 80272]]

values for those codes in the CY 2017 proposed rule.
We considered public comments received during the 60-day public
comment period for the proposed rule before establishing final values
in this final rule. As part of our established process we will adopt
interim final values only in the case of wholly new services for which
there are no predecessor codes or values and for which we do not
receive recommendations in time to propose values. For CY 2017, we are
not aware of any new codes that describe such wholly new services.
Therefore, we are not establishing any code values on an interim final
basis. However, we remind stakeholders that we continually review
stakeholder information regarding the valuation of codes under the
potentially misvalued code initiative and, under our existing process,
could consider proposing any particular changes as early as CY 2018
rulemaking.
2. Methodology for Proposing Work RVUs
We conduct a review of each code identified in this section and
review the current work RVU (if any), RUC-recommended work RVU,
intensity, time to furnish the preservice, intraservice, and
postservice activities, as well as other components of the service that
contribute to the value. Our review of recommended work RVUs and time
inputs generally includes, but is not limited to, a review of
information provided by the RUC, HCPAC (Health Care Professionals
Advisory Committee), and other public commenters, medical literature,
and comparative databases, as well as a comparison with other codes
within the PFS, consultation with other physicians and health care
professionals within CMS and the federal government, as well as
Medicare claims data. We also assess the methodology and data used to
develop the recommendations submitted to us by the RUC and other public
commenters and the rationale for the recommendations. In the CY 2011
PFS final rule with comment period (75 FR 73328 through 73329), we
discussed a variety of methodologies and approaches used to develop
work RVUs, including survey data, building blocks, crosswalks to key
reference or similar codes, and magnitude estimation (see the CY 2011
PFS final rule with comment period for more information). When
referring to a survey, unless otherwise noted, we mean the surveys
conducted by specialty societies as part of the formal RUC process. The
building block methodology is used to construct, or deconstruct, the
work RVU for a CPT code based on component pieces of the code.
Components used in the building block approach may include
preservice, intraservice, or postservice time and post-procedure
visits. When referring to a bundled CPT code, the building block
components could be the CPT codes that make up the bundled code and the
inputs associated with those codes. Magnitude estimation refers to a
methodology for valuing work that determines the appropriate work RVU
for a service by gauging the total amount of work for that service
relative to the work for a similar service across the PFS without
explicitly valuing the components of that work. In addition to these
methodologies, we have frequently utilized an incremental methodology
in which we value a code based upon its incremental difference between
another code or another family of codes. The statute specifically
defines the work component as the resources in time and intensity
required in furnishing the service. Also, the published literature on
valuing work has recognized the key role of time in overall work. For
particular codes, we refine the work RVUs in direct proportion to the
changes in the best information regarding the time resources involved
in furnishing particular services, either considering the total time or
the intraservice time.
Several years ago, to aid in the development of preservice time
recommendations for new and revised CPT codes, the RUC created
standardized preservice time packages. The packages include preservice
evaluation time, preservice positioning time, and preservice scrub,
dress and wait time. Currently there are six preservice time packages
for services typically furnished in the facility setting, reflecting
the different combinations of straightforward or difficult procedure,
straightforward or difficult patient, and without or with sedation/
anesthesia. Currently, there are three preservice time packages for
services typically furnished in the nonfacility setting, reflecting
procedures without and with sedation/anesthesia care.
We have developed several standard building block methodologies to
value services appropriately when they have common billing patterns. In
cases where a service is typically furnished to a beneficiary on the
same day as an E/M service, we believe that there is overlap between
the two services in some of the activities furnished during the
preservice evaluation and postservice time. Our longstanding
adjustments have reflected a broad assumption that at least one-third
of the work time in both the preservice evaluation and postservice
period is duplicative of work furnished during the E/M visit.
Accordingly, in cases where we believe that the RUC has not
adequately accounted for the overlapping activities in the recommended
work RVU and/or times, we adjust the work RVU and/or times to account
for the overlap. The work RVU for a service is the product of the time
involved in furnishing the service multiplied by the intensity of the
work. Preservice evaluation time and postservice time both have a long-
established intensity of work per unit of time (IWPUT) of 0.0224, which
means that 1 minute of preservice evaluation or postservice time
equates to 0.0224 of a work RVU.
Therefore, in many cases when we remove 2 minutes of preservice
time and 2 minutes of postservice time from a procedure to account for
the overlap with the same day E/M service, we also remove a work RVU of
0.09 (4 minutes x 0.0224 IWPUT) if we do not believe the overlap in
time has already been accounted for in the work RVU. The RUC has
recognized this valuation policy and, in many cases, now addresses the
overlap in time and work when a service is typically furnished on the
same day as an E/M service.
We note that many commenters and stakeholders have expressed
concerns with our ongoing adjustment of work RVUs based on changes in
the best information we have regarding the time resources involved in
furnishing individual services. We are particularly concerned with the
RUC's and various specialty societies' objections to our approach given
the significance of their recommendations to our process for valuing
services and since much of the information we have used to make the
adjustments is derived from their survey process. As explained in the
CY 2016 PFS final rule with comment period (80 FR 70933), we recognize
that adjusting work RVUs for changes in time is not always a
straightforward process, so we apply various methodologies to identify
several potential work values for individual codes. However, we want to
reiterate that we are statutorily obligated to consider both time and
intensity in establishing work RVUs for PFS services.
We have observed that for many codes reviewed by the RUC, final
recommended work RVUs appear to be incongruous with recommended
assumptions regarding the resource costs in time. This is the case for
a significant portion of codes for which we have recently established
or proposed work RVUs that are based on

[[Page 80273]]

refinements to the RUC-recommended values. When we have adjusted work
RVUs to account for significant changes in time, we begin by looking at
the change in the time in the context of the RUC-recommended work RVU.
When the recommended work RVUs do not appear to account for significant
changes in time, we employ the different approaches to identify
potential values that reconcile the recommended work RVUs with the
recommended time values. Many of these methodologies, such as survey
data, building blocks, crosswalks to key reference or similar codes,
and magnitude estimation have long been used in developing work RVUs
under the PFS. In addition to these, we sometimes use the relationship
between the old time values and the new time values for particular
services to identify alternative work RVUs based on changes in time
components.
In so doing, rather than ignoring the RUC-recommended value, we are
using the recommended values as a starting reference and then applying
one of these several methodologies to account for the reductions in
time that we believe have not otherwise been reflected in the RUC-
recommended value. When we believe that such changes in time have
already been accounted for in the RUC recommendation, then we do not
make such adjustments. Likewise, we do not arbitrarily apply time
ratios to current work RVUs to calculate proposed work RVUs. We use the
ratios to identify potential work RVUs and consider these work RVUs as
potential options relative to the values developed through other
options.
We clarify that we are not implying that the decrease in time as
reflected in survey values must equate to a one-to-one or linear
decrease in newly valued work RVUs. Instead, we believe that, since the
two components of work are time and intensity, absent an obvious or
explicitly stated rationale for why the relative intensity of a given
procedure has increased, significant decreases in time should be
reflected in decreases to work RVUs. If the RUC recommendation has
appeared to disregard or dismiss the changes in time, without a
persuasive explanation of why such a change should not be accounted for
in the overall work of the service, then we generally use one of the
aforementioned referenced methodologies to identify potential work
RVUs, including the methodologies intended to account for the changes
in the resources involved in furnishing the procedure.
Several commenters, including the RUC, in general have objected to
our use of these methodologies and deemed our actions in adjusting the
recommended work RVUs as inappropriate. We received several specific
comments regarding this issue in response to the CY 2016 PFS final rule
with comment period and those comments are summarized below.
Comment: Several commenters, including the RUC, stated that our
methodology for adjusting work RVUs appears to be contrary to the
statute.
Response: We disagree with these comments. Since section
1848(c)(1)(A) of the Act explicitly identifies time as one of the two
types of resources that encompass the work component of the PFS
payment, we do not believe that our use of the aforementioned
methodologies to adjust the work RVU to account for the changes in
time, which is one of the resources involved, is inconsistent with the
statutory requirements related to the maintenance of work RVUs, and we
have regularly used these and other methodologies in developing values
for PFS services. In selecting which methodological approach will best
determine the appropriate value for a service, we consider the current
and recommended work and time values, as well as the intensity of the
service, all relative to other services. In our review of RUC
recommended values, we have observed that the RUC also uses a variety
of methodologies to develop work RVUs for individual codes, and
subsequently validates the results of these approaches through
magnitude estimation or crosswalk to established values for other
codes.
Comment: Several commenters, including the RUC, stated that we
could not take one element of the services that has changed such as
intra-service time, and apply an overall ratio for reduction to the
work RVU based on changes to time, as that renders the value no longer
resource-based in comparison to the RUC-recommended values.
Response: We disagree with the commenters and continue to believe
that the use of time ratios is one of several reasonable methods for
identifying potential work RVUs for particular PFS services,
particularly when the alternative values do not account for information
that suggests the amount of time involved in furnishing the service has
changed significantly. We reiterate that, consistent with the statute,
we are required to value the work RVU based on the relative resources
involved in furnishing the service, which include time and intensity.
When our review of recommended values determines that changes in the
resource of time have been unaccounted for in a recommended RVU, then
we believe we have the obligation to account for that change in
establishing work RVUs since the statute explicitly identifies time as
one of the two elements of the work RVUs. We recognize that it would
not be appropriate to develop work RVUs solely based on time given that
intensity is also an element of work, but in applying the time ratios
we are using derived intensity measures based on current work RVUs for
individual procedures. Were we to disregard intensity altogether, the
work RVUs for all services would be developed based solely on time
values and that is definitively not the case. Furthermore, we reiterate
that we use time ratios to identify potential work RVUs, and then use
other methods (including estimates of work from CMS medical personnel
and crosswalks to key reference or similar codes) to validate these
RVUs. We also disagree with several commenters' implications that a
work RVU developed through such estimation methods is only resource-
based through the RUC process.
Comment: Several commenters, including the RUC, stated that our
inconsistent use of the time ratio methodology has rendered it
ineffective for valuation purposes and that by choosing the starting
base work value and/or physician time at random, we are essentially
reverse engineering the work value we want under the guise of a
standard algorithm.
Response: We do not choose a starting base work value and/or
physician time at random as suggested by the commenters. We use the RUC
recommended values or the existing values as the base values;
essentially, we are taking one of those values and applying adjustments
to account for the change in time that based on our analysis of the RUC
recommendation, we determine has not been properly accounted for to
determine an appropriate work RVU. In circumstances where adjustments
to time and the corresponding work RVU are relatively congruent or
persuasively explained, our tendency has been to use those values as
recommended. Where the RUC recommendations do not account for changes
in time, we have made changes to RUC-recommended values to account for
the changes in time.
Comment: Commenters, including the RUC, also stated that the use of
time ratio methodologies distills the valuation of the service into a
basic formula with the only variable being either the new total
physician time or the new intra-service physician time, and that these
methodologies are based

[[Page 80274]]

on the incorrect assumption that the per minute physician work
intensity established is permanent regardless of when the service was
last valued. Other commenters have suggested that previous assumed
times are inaccurate.
Response: We agree with commenters that per minute intensity for a
given service may change over time. If we believed that the per-minute
intensity for a given service were immutable, then a reverse-building
block approach to revaluation based on new time data could be
appropriate. However, we have not applied such an approach specifically
because we agree that the per-minute intensity of work is not
necessarily static over time or even necessarily during the course of a
procedure. Instead, we utilize time ratios to identify potential values
that account for changes in time and compare these values to other PFS
services for estimates of overall work. When the values we develop
reflect a similar derived intensity, we agree that our values are the
result of our assessment that the relative intensity of a given service
has remained similar.
Regarding the validity of comparing new times to the old times, we,
too, hope that time estimates have improved over many years especially
when many years have elapsed since the last time the service in
question was valued. However, we also believe that our operating
assumption regarding the validity of the pre-existing values as a point
of comparison is critical to the integrity of the relative value system
as currently constructed. Pre-existing times are a very important
element in the allocation of indirect PE RVUs by specialty, and had the
previously recommended times been overestimated, the specialties that
furnish such services would be benefitting from these times in the
allocation of indirect PE RVUs. As long time observers of the RUC
process, we also recognize that the material the RUC uses to develop
overall work recommendations includes the data from the surveys about
time. We have previously stated concerns regarding the validity of much
of the RUC survey data. However, we believe additional kinds of concern
would be warranted if the RUC itself were operating under the
assumption that its pre-existing data were typically inaccurate.
We understand stakeholders' concerns regarding how best to consider
changes in time in improving the accuracy of work RVUs and have
considered all of the issues raised by commenters. In conjunction with
our review of recommended code values for CY 2017, we conducted a
preliminary analysis to identify general tendencies in the relationship
between changes in time and changes in work RVUs for CY 2014 and CY
2015. We looked at services for which there were no coding changes to
simplify the analysis. The intent of this preliminary analysis was to
examine commenters' beliefs that CMS is only considering time when
making refinements to RUC recommended work values. For CY 2014, we
found that in the aggregate, the average difference between the RUC
recommended intraservice time and existing intraservice time was -17
percent, but the average difference between the RUC recommended work
RVU and existing work RVU was only -4 percent. However, the average
difference between the CMS refined work RVU and existing work RVU was -
7 percent. For CY 2015, the average difference between the RUC
recommended intraservice time and existing intraservice time was -17
percent, but the average difference between the RUC recommended work
RVU and existing work RVU was 1 percent, and the average difference
between the CMS refined work RVU and existing work RVU was -6 percent.
This preliminary analysis demonstrates that we are not making
refinements solely in consideration of time, if that were the case, the
changes in the work RVU values that we adopted would be comparable to
the changes in the time that we adopted, but that is not the case.
We believe that we should account for efficiencies in time when the
recommended work RVU does not account for those efficiencies, otherwise
relativity across the PFS can be significantly skewed over periods of
time. For example, if when a code is first valued, a physician was
previously able to do only 5 procedures per day, but due to new
technologies, the same physician can now do 10 procedures per day,
resource costs in time have empirically been lessened, and we believe
that relative reduction in resources involved in furnishing that
service should be accounted for in the assignment of work RVUs for that
service, since the statute explicitly identifies time as one of the two
components of work. Of course, if more resource intensive technology
has allowed for the increased efficiency in furnishing the procedure,
then the nonfacility PE RVUs for the service should also be adjusted to
account for this change. Additionally, we believe it may be that the
intensity per minute of the procedure may have changed with the greater
efficiency in time. Again, that is why we do not generally reduce work
RVUs in strict proportion to changes in time. We understand that
intensity is not entirely linear, and that data related to time as
obtained in the RUC survey instrument may improve over time, and that
the number of survey respondents may improve over time. However, we
also understand time as a tangible resource cost in furnishing PFS
services, and a cost that by statute, is one of the two kinds of
resources to be considered as part of the work RVU.
Therefore, in the proposed rule, we stated that we were interested
in receiving comments on whether, within the statutory confines, there
are alternative suggestions as to how changes in time should be
accounted for when it is evident that the survey data and/or the RUC
recommendation regarding the overall work RVU does not reflect
significant changes in the resource costs of time for codes describing
PFS services. We solicited comment on potential alternatives, including
the application of the reverse building block methodology, to making
the adjustments that would recognize overall estimates of work in the
context of changes in the resource of time for particular services.
The following is a summary of the comments we received in response
to our solicitation regarding potential alternatives, including the
application of the reverse building block methodology, to making the
adjustments that would recognize overall estimates of work in the
context of changes in the resource of time for particular services.
Comment: One commenter stated that it continues to support CMS in
its efforts to adjust work RVUs commensurate with changes in intra-
service and total time, as well as post-operative visits despite RUC
recommendations to the contrary. The commenter agreed with our changes
and encouraged CMS to continue to identify and address such
incongruities. The commenter stated that it is routine to encounter
recommended decreases in physician time and/or post-procedure visits
combined with RUC recommendations to maintain or increase the work
RVUs. The commenter agreed that when physician time decreases,
physician work should decrease comparatively, absent a compelling
argument that the intensity of the service has increased sufficiently
to offset the decrease in physician time. The commenter did not have
alternative suggestions for how CMS should make these adjustments, and
believes the approaches that CMS has taken are reasonable and
defensible.
Another commenter stated that it appreciates that CMS provided

[[Page 80275]]

information about how it reviews recommendations for work RVUs that
come from the RUC. Additionally, one commenter stated appreciation for
the consideration and effort that CMS gives in valuing the work RVUs
for a service. The commenter stated that the accuracy of RVU estimates
has improved as a result of CMS' various validation processes for
collecting data and its consideration of feedback from the RUC and
public commenters. The commenter stated that CMS should account for
efficiencies in the resource costs of time when the recommended work
RVU does not account for emerging efficiencies, such as advances in
surgical techniques, and that by considering time in these situations,
CMS will be able to effectively adjust both emerging technological
trends and their impact on resource costs needed to deliver care to
beneficiaries.
Response: We appreciate the commenters' support for our ongoing
adjustment of work RVUs based on changes in the best information we
have regarding the time resources involved in furnishing individual
services. We also agree that CMS should account for efficiencies in the
resource costs of time, as indicated by one commenter, and will
endeavor to do so when we consider the work RVU and how the effect of
advancements such as emerging technology and improvements in surgical
techniques impact the resource costs of time.
Comment: A few commenters, including the RUC, stated that all
adjustments to work RVUs should be solely based on the resources
involved in performing each procedure or service. The commenters stated
that all adjustments to work RVUs should either be work neutral to the
family or result in budget neutral adjustment to the conversion factor,
and that broadly redistributing work RVUs would distort the relative
value system and create unintended consequences.
Response: We agree that adjustments to work RVUs should be based on
the resources involved with each procedure or service, and consistent
with the statute, the work RVUs should reflect the relative resources
costs of time and intensity. We also agree with the commenter regarding
how changes in work RVUs affect PFS relativity. We have a long-standing
practice of making an adjustment to the CF to account for increases or
decreases in work RVUs across the PFS instead of scaling the work RVUs
to maintain overall relativity. The practical effect of a positive
adjustment to the CF is that the value of a single work RVU is greater
than it previously had been. In other words, the relative value of the
other work RVUs has increased, across the PFS, whenever we apply a
positive budget neutrality adjustment to the CF to account for an
overall decrease in work RVUs.
Comment: A few commenters, including the RUC, stated that they
appreciate CMS agreeing with the RUC's assertion that the usage of time
ratios to reduce work RVUs is typically not appropriate, as often a
change in physician time coincides with a change in the physician work
intensity per minute. The commenters stated that CMS acknowledges that
physician work intensity per minute is typically not linear and also
that making reductions in RVUs in strict proportion to changes in time
is inappropriate.
Response: We do not agree with the commenters' characterization of
our statements, and believe it misinterprets our view on this matter.
We specifically stated in the CY 2017 proposed rule that we are not
implying that the decrease in time as reflected in survey values must
necessarily equate to a one-to-one or linear decrease in newly valued
work RVUs, given that intensity for any given procedure may change over
several years or within the intraservice period. Nevertheless, we
believe that since the two components of work are time and intensity,
that absent an obvious or explicitly stated rationale for why the
relative intensity of a given procedure has specifically increased or
that the reduction in time is disproportionally from less-intensive
portions of the procedure, that significant decreases in time should
generally be reflected in decreases to work RVUs.
Comment: A few commenters, including the RUC, stated that they
wanted to remind CMS of the Agency's and the RUC's longstanding
position that treating all components of physician time as having
identical intensity is incorrect, and inconsistently applying this
treatment to only certain services under review creates inherent
payment disparities in a payment system that is based on relative
valuation. The commenters stated that when physician times are updated
in the fee schedule, the ratio of intra-service time to total time, the
number and level of bundled post-operative visits, the length of pre-
service, and the length of immediate post-service time may all
potentially change for the same service. These changing components of
physician time result in the physician work intensity per minute often
changing when physician time also changes, and the commenters
recommended that CMS always account for these nuanced variables. A few
commenters also stated that the RUC recommendations now explicitly
state when physician time has changed and address whether and to what
magnitude these changes in time impact the work involved.
Response: We appreciate the commenters' feedback. We understand
that not all components of physician time have identical intensity and
are mindful of this point when we are determining what the appropriate
work RVU values should be. We also agree that the nuanced variables
involved in the changing components of physician time must be accounted
for, and it is our goal to do so when determining the appropriate
valuation. We appreciate when the RUC recommendations provide as much
detailed information regarding the recommended valuations as possible,
including thorough discussions regarding physician time changes and how
the RUC believes such changes should or should not impact the work
involved, and we consider that information when conducting our review
of each code.
Comment: A few commenters stated that CMS places undue emphasis on
time and not enough emphasis on intensity or whether a value is
appropriately ranked in the Medicare fee schedule. The commenters
stated that CMS ignores compelling evidence that work has changed if
the time has not also changed, and that CMS uses codes as supporting
references for new lower values that make no clinical sense. The
commenters urged CMS to always consider all elements of relative work
in every review, including time, relative intensity and relative work.
Response: We disagree with commenters' statement that CMS ignores
compelling evidence that work has changed if the time has not also
changed. As previously stated, we are not making refinements solely in
consideration of time, and if that were the case, changes in work RVU
values that we adopted would consistently be comparable to the changes
in the time that we adopted, and that is not the case. It is our
practice to consider all elements of the relative work when we are
reviewing and determining work RVU valuations. Additionally, our review
of recommended work RVUs and time inputs generally includes review of
various sources such as information provided by the RUC, other public
commenters, medical literature, and comparative databases.
Comment: A few commenters, including the RUC, stated that they do
not agree with any suggested methodology to use a reverse building
block methodology to systematically

[[Page 80276]]

reduce work RVUs for services. The commenters stated that any purely
formulaic approach should never be used as the primary methodology to
value services, and that it is highly inappropriate due to the fact
that magnitude estimation was used to establish work RVUs for services.
Response: We note that a formulaic approach is not being used as
the primary methodology to value services. Instead, we use various
methodologies to identify values to consider relative to other PFS
services. We reiterate that we use the RUC-recommended values or the
existing values as the base values. We then apply adjustments to the
RUC-recommended values where, for example, the RUC's recommendations do
not account for changes in time.
Comment: Another commenter stated that the establishment of a time
formula or use of reverse building block methodology as the primary
method for valuation would completely disregard the possibility that
physicians actually get better at what they do in favor of the
erroneous conclusion that physicians only find new ways to cut corners.
The commenter provided an example to demonstrate why time alone does
not create value, and it is instead just one component of valuation.
The commenter described an example of two watchmakers that make watches
at different rates--one makes two watches per day, the other makes four
watches per day. Each watch involves the same number of gears,
sprockets, jewels, and escapements. One watchmaker is faster than the
other: More focused, more experienced, more agile, and able to
accomplish fastidious work more efficiently. At the end of one workday,
the first watchmaker has two finished watches on the bench, while the
other has four. The commenter questioned that if the watches are
identical, why should the faster (better) watchmaker be paid half the
price for each watch?
Response: We understand some stakeholders' interest in the
maintenance of work RVUs regardless of efficiencies gained. The work
RVU is not a measure of our appreciation for the work ethic of the
physician. Instead, the work RVU reflects the time and intensity of a
particular service relative to others on the PFS. For this reason, we
do not agree with the implication that we should ignore efficiencies in
time, and instead believe that we are obligated to recognize when
efficiencies change the relative resource costs involved in particular
procedures. Of course, such efficiencies can occur as physicians become
more proficient and can therefore complete a service or procedure in
less time. We believe that time is a tangible resource, particularly
the time of a physician or other practitioner paid on the PFS, and the
statute specifically identifies it as such.
Comment: A few commenters urged CMS to always enlist the assistance
of medical officers familiar with procedures under review to examine
CMS staff recommendations that reject the RUC recommendation.
Similarly, a few commenters also urged CMS to work with the RUC to
ensure that the robust discussions and key points that are discussed
during RUC meetings are transferred to CMS in a way that is meaningful
to staff to develop the proposed relative value recommendations.
Response: We note that the values proposed by CMS are developed
through consultation with, and input from CMS staff including medical
officers, who often attend RUC meetings as observers, and therefore,
have had the opportunity to listen to the discussions that take place
and key points that are raised during the RUC meetings.
Comment: One commenter stated that the recent rejections of RUC
recommendations by CMS to instead reduce the work RVUs for almost every
code, even if only by one or two percent, are illogical.
Response: We do not agree with the suggestion that we reject the
RUC-recommended values for most codes. Furthermore, given the numerical
specificity of the RUC-recommended values and that so many PFS services
reviewed under the misvalued code initiative are high-volume, we do not
believe that relatively minor adjustments are unimportant or illogical
because a minor adjustment to the work RVU of a high-volume code may
have a significant dollar impact. However, we would be interested to
know if stakeholders generally agree that the RUC-recommended values
represent only rough estimates, and because of that belief, minor
refinements would be considered illogical, as indicated by the
commenter.
Comment: A few commenters stated that they are concerned with the
CMS trend to discredit intensity when assigning work RVUs to
procedures. These commenters stated that intensity is a key factor when
specialties are making work RVU recommendations and needs to remain an
equal force along with time in the relative value system. One commenter
stated that it is concerned that CMS is repeatedly ignoring intensity
discussions and picking arbitrary crosswalks to justify lowering work
RVU values. One commenter stated that by placing the same value on
clearly different services that vary both in intensity and in types of
patients treated, CMS ignores its statutory requirement to consider
time and intensity in the valuation of services. One commenter stated
that CMS does not mention how it considers, weights or measures
intensity, and there is no validity to the assumption that reduced time
equals less work. The commenter stated that it found no published
evidence supporting this, and states that if the same amount of work is
performed for a shorter period of time, it is logical that the
intensity of work per unit of time increases. The commenter stated that
CMS must be transparent and demonstrate why current intensity
measurements are not appropriate, and if there is a more accurate way
to measure intensity, this must be clearly elucidated with evidence for
superiority of the alternative proposal.
Response: We disagree that we discredit intensity when we establish
work RVUs for procedures. We reiterate that we use RUC-recommended
values or existing values, which we understand to incorporate an
assessment of intensity, as the base values, and then subsequently
apply adjustments as necessary. Additionally, as we have previously
stated, we recognize that it would not be appropriate to develop work
RVUs solely based on time given that intensity is also an element of
work. Additionally, if we were to disregard intensity altogether, the
work RVUs for all services would be developed solely based on time
values, and that is absolutely not the case. We have previously stated
that in cases where the RUC's recommendations do not account for
changes in time, but do provide a persuasive explanation regarding why
the time has drastically changed but the work RVU value has remained
the same, our tendency has been to use those values as recommended.
When the RUC's recommendations do not account for changes in time, and
provide no explanation as to why this is appropriate, we have made
changes to the RUC-recommended values to account for changes in time.
We also disagree that we ignore the statutory requirement to
consider time and intensity in the valuation of services. Based on the
assessments of CMS medical officers and other reviewers, as well as
upon consideration of the survey results, and the rationales in the
recommendations, we make determinations about the overall work
valuations. We acknowledge that the degree to which intensity varies
among different procedures is a relatively subjective assessment, and
we understand that sometimes stakeholders

[[Page 80277]]

may have a different perspective in cases where the intensities of
procedures differ. We recognize that the IWPUT measure is a derived
value with specific uses for quantifying intensity. However, the
limited way in which that derived value is used under the RUC valuation
process, we believe reflects a general consensus that there are not
widely accepted metrics for intensity. As a part of recommendations for
misvalued codes, we welcome any information from stakeholders for us to
more objectively measure intensity.
Comment: A few commenters stated that they are concerned with the
current implied methodology that the 25th survey percentile is the
ceiling for RUC recommendations, and stated that if codes are
continually sent forth for re-survey and the 25th percentile is the
ceiling, a built in reduction is applied to all surveyed codes just by
the nature of surveying the codes, regardless of other factors.
Response: We disagree with commenters' statement that the 25th
survey percentile is the ceiling for RUC recommendations. We note that,
as previously stated in the CY 2011 final rule with comment period (75
FR 73328), we had concerns that surveys conducted on existing codes
produced predictable results, and upon clinical review of a number of
these situations, we were concerned over the validity of the survey
results since the survey values often were very close to the current
code values. Increasingly, the RUC is choosing to recommend the 25th
percentile survey value, potentially responding to the same concern we
have identified, rather than recommending the median survey value that
had historically been the most commonly used. We reiterate that this
does not designate the 25th percentile as the ceiling, rather suggests
that in many instances the 25th percentile is the most appropriate
since it is more frequently being identified through the RUC process as
the recommended value.
Comment: One commenter stated that the time data obtained through
the RUC survey process based on subjective physician perceptions of
time, may not be the most accurate data available on intraoperative
time. The commenter stated that CMS should be open to reviewing
additional sources of objective validated time data, and that such
sources might include peer reviewed and published studies of
comparative surgery times amongst different procedures in the same
institution using standardized metrics. Another commenter stated that
if CMS seeks specific information to substantiate time and intensity
changes associated with services, they should specify these clearly so
stakeholders can provide the necessary data detailing changes over
time.
Response: As previously discussed, our review of work RVUs and time
inputs utilizes information from various resources. It generally
includes, but is not limited to a review of information provided by the
RUC, HCPAC, and other public commenters, medical literature, and
comparative databases, as well as comparison with other codes with the
PFS, consultation with other physicians and health care professionals
within CMS and the federal government, as well as Medicare claims data.
Additionally, we also assess the methodology and data used to develop
the recommendations submitted to us by the RUC and other public
commenters and the rationale for the recommendations. However, we
continue to seek information regarding the best sources of objective,
routinely-updated, auditable, and robust data regarding the resource
costs of furnishing PFS services.
We thank the commenters for their feedback. We did not receive any
comments regarding specific potential alternatives to making the
adjustments that would recognize overall estimates of work in the
context of changes in the resource of time for particular services as
requested. However, we appreciate the commenters' sharing their
concerns and suggestions and will continue to consider them as we
continue examining the valuation of services, and as we explore the
best way to address these issues.
3. Requests for Refinement Panel
Consistent with the policy finalized in the CY 2016 PFS final rule
with comment period, we have retained the Refinement Panel process for
use with codes with interim final values where additional input by the
panel is likely to add value as a supplement to notice and comment
rulemaking. Because there are no codes with interim final values in
this final rule, the refinement panel is not necessary for CY 2017. We
note that many commenters requested inclusion of codes with proposed
values for a refinement panel. While these requests are not consistent
with our established process, given the number of requests we received,
we are addressing them here. Many commenters appear to believe that
that the purpose of the refinement panel process was to serve as a kind
of ``appeals'' or reconsideration process outside of notice and comment
rulemaking and that we have effectively eliminated a useful appeals
process. We understand that the refinement panel has been perceived as
an appeals process by many stakeholders. However, as we have previously
clarified, the purpose of the refinement panel process was to assist us
in reviewing the public comments on CPT codes with interim final work
RVUs and to consider more fully the interests of the specialty
societies who provide input on RVU work time and intensity with the
budgetary and redistributive effects that could occur if we accepted
extensive increases in work RVUs across a broad range of services. From
our perspective, the objective of the refinement panel has long been to
provide a needed venue for stakeholders to present any new clinical
information that was not available at the time of the RUC valuation for
interim final values in order that we arrive at the most appropriate
final valuation, especially since the initial values for such codes
were generally established approximately 2 months prior to being used
for Medicare payment. In recent years, we have continually observed
that the material presented to the refinement panel largely raised and
discussed issues and perspective already included as part of the RUC
meetings and considered by us.
We believe that our new process, in which we propose the vast
majority of code values in the proposed rule for public comment on
those proposed values prior to their taking effect, provides
stakeholders and the public with several opportunities to present data
or information that might affect code valuation. We believe that this
is generally consistent with the purpose of the rulemaking process and
reflects our efforts to increase transparency and accountability to the
public. We also note that we continue to seek new information that is
relevant to valuation of particular services, including those with
values recently finalized, for use in future rulemaking. We believe
that notice and comment rulemaking provides the most appropriate means
for valuing services under the PFS. We note that in several instances
in this final rule, thoughtful and informative comments have helped us
to finalize values for CY 2017 that we believe are improved from those
we had proposed. In many cases, these changes reflect the RUC-
recommended value. Therefore, we urge commenters to review this
information and continue to consider how we might continue to improve
the notice and comment rulemaking process rather than establish a
process outside of notice and comment rulemaking.
Table 27 contains a list of codes for which we proposed work RVUs;
this includes all RUC recommendations received by February 10, 2016,
and

[[Page 80278]]

codes for which we established interim final values in the CY 2016 PFS
final rule with comment period. When the proposed work RVUs vary from
those recommended by the RUC or for which we do not have RUC
recommendations, we address those codes in the portions of this section
that are dedicated to particular codes. The final work RVUs and work
time and other payment information for all CY 2017 payable codes are
available on the CMS Web site under downloads for the CY 2017 PFS final
rule at https://www.cms.gov/physicianfeesched/downloads/.
4. Methodology for Proposing the Direct PE Inputs To Develop PE RVUs
a. Background
On an annual basis, the RUC provides us with recommendations
regarding PE inputs for new, revised, and potentially misvalued codes.
We review the RUC-recommended direct PE inputs on a code by code basis.
Like our review of recommended work RVUs, our review of recommended
direct PE inputs generally includes, but is not limited to, a review of
information provided by the RUC, HCPAC, and other public commenters,
medical literature, and comparative databases, as well as a comparison
with other codes within the PFS, consultation with physicians and
health care professionals within CMS and the federal government, as
well as Medicare claims data. We also assess the methodology and data
used to develop the recommendations submitted to us by the RUC and
other public commenters and the rationale for the recommendations. When
we determine that the RUC's recommendations appropriately estimate the
direct PE inputs (clinical labor, disposable supplies, and medical
equipment) required for the typical service, are consistent with the
principles of relativity, and reflect our payment policies, we use
those direct PE inputs to value a service. If not, we refine the
recommended PE inputs to better reflect our estimate of the PE
resources required for the service. We also confirm whether CPT codes
should have facility and/or nonfacility direct PE inputs and refine the
inputs accordingly.
Our review and refinement of RUC-recommended direct PE inputs
includes many refinements that are common across codes, as well as
refinements that are specific to particular services. Table 28 details
our finalized refinements of the RUC's direct PE recommendations at the
code-specific level. In this final rule, we address several refinements
that are common across codes, and refinements to particular codes are
addressed in the portions of this section that are dedicated to
particular codes. We note that for each refinement, we indicate the
proposed impact on direct costs for that service. We note that, on
average, in any case where the impact on the direct cost for a
particular refinement is $0.32 or less, the refinement has no impact on
the proposed PE RVUs. This calculation considers both the impact on the
direct portion of the PE RVU, as well as the impact on the indirect
allocator for the average service. We also note that nearly half of the
proposed refinements listed in Table 28 result in changes under the
$0.32 threshold and are unlikely to result in a change to the proposed
RVUs.
We also note that the final direct PE inputs for CY 2017 are
displayed in the CY 2017 direct PE input database, available on the CMS
Web site under the downloads for the CY 2017 final rule at www.cms.gov/PhysicianFeeSched/. The inputs displayed there have also been used in
developing the final CY 2017 PE RVUs as displayed in Addendum B.
b. Common Refinements
(1) Changes in Work Time
Some direct PE inputs are directly affected by revisions in work
time. Specifically, changes in the intraservice portions of the work
time and changes in the number or level of postoperative visits
associated with the global periods result in corresponding changes to
direct PE inputs. The direct PE input recommendations generally
correspond to the work time values associated with services. We believe
that inadvertent discrepancies between work time values and direct PE
inputs should be refined or adjusted in the establishment of proposed
direct PE inputs to resolve the discrepancies.
(2) Equipment Time
Prior to CY 2010, the RUC did not generally provide CMS with
recommendations regarding equipment time inputs. In CY 2010, in the
interest of ensuring the greatest possible degree of accuracy in
allocating equipment minutes, we requested that the RUC provide
equipment times along with the other direct PE recommendations, and we
provided the RUC with general guidelines regarding appropriate
equipment time inputs. We continue to appreciate the RUC's willingness
to provide us with these additional inputs as part of its PE
recommendations.
In general, the equipment time inputs correspond to the service
period portion of the clinical labor times. We have clarified this
principle over several years of rulemaking, indicating that we consider
equipment time as the time within the intraservice period when a
clinician is using the piece of equipment plus any additional time that
the piece of equipment is not available for use for another patient due
to its use during the designated procedure. For those services for
which we allocate cleaning time to portable equipment items, because
the portable equipment does not need to be cleaned in the room where
the service is furnished, we do not include that cleaning time for the
remaining equipment items, as those items and the room are both
available for use for other patients during that time. In addition,
when a piece of equipment is typically used during follow-up post-
operative visits included in the global period for a service, the
equipment time would also reflect that use.
We believe that certain highly technical pieces of equipment and
equipment rooms are less likely to be used during all of the preservice
or postservice tasks performed by clinical labor staff on the day of
the procedure (the clinical labor service period) and are typically
available for other patients even when one member of the clinical staff
may be occupied with a preservice or postservice task related to the
procedure. We also note that we believe these same assumptions would
apply to inexpensive equipment items that are used in conjunction with
and located in a room with non-portable highly technical equipment
items since any items in the room in question would be available if the
room is not being occupied by a particular patient. For additional
information, we refer readers to our discussion of these issues in the
CY 2012 PFS final rule with comment period (76 FR 73182) and the CY
2015 PFS final rule with comment period (79 FR 67639).
(3) Standard Tasks and Minutes for Clinical Labor Tasks
In general, the preservice, intraservice, and postservice clinical
labor minutes associated with clinical labor inputs in the direct PE
input database reflect the sum of particular tasks described in the
information that accompanies the RUC-recommended direct PE inputs,
commonly called the ``PE worksheets.'' For most of these described
tasks, there are a standardized number of minutes, depending on the
type of procedure, its typical setting, its global period, and the
other procedures with which it is typically reported. The RUC sometimes
recommends a number of minutes either greater than or less

[[Page 80279]]

than the time typically allotted for certain tasks. In those cases, we
review the deviations from the standards and any rationale provided for
the deviations. When we do not accept the RUC-recommended exceptions,
we refine the proposed direct PE inputs to conform to the standard
times for those tasks. In addition, in cases when a service is
typically billed with an E/M service, we remove the preservice clinical
labor tasks to avoid duplicative inputs and to reflect the resource
costs of furnishing the typical service.
In general, clinical labor tasks fall into one of the categories on
the PE worksheets. In cases where tasks cannot be attributed to an
existing category, the tasks are labeled ``other clinical activity.''
We believe that continual addition of new and distinct clinical labor
tasks each time a code is reviewed under the misvalued code initiative
is likely to degrade relativity between newly reviewed services and
those with already existing inputs. This is because codes more recently
reviewed would be more likely to have a greater number of clinical
labor tasks as a result of the general tendency to increase the number
of clinical labor tasks. To mitigate the potential negative impact of
these additions, we review these tasks to determine whether they are
fully distinct from existing clinical labor tasks, typically included
for other clinically similar services under the PFS, and thoroughly
explained in the recommendation. For those tasks that do not meet these
criteria, we do not accept these newly recommended clinical labor
tasks.
(4) Recommended Items That Are Not Direct PE Inputs
In some cases, the PE worksheets included with the RUC
recommendations include items that are not clinical labor, disposable
supplies, or medical equipment or that cannot be allocated to
individual services or patients. We have addressed these kinds of
recommendations in previous rulemaking (78 FR 74242), and we do not use
items included in these recommendations as direct PE inputs in the
calculation of PE RVUs.
(5) New Supply and Equipment Items
The RUC generally recommends the use of supply and equipment items
that already exist in the direct PE input database for new, revised,
and potentially misvalued codes. Some recommendations, however, include
supply or equipment items that are not currently in the direct PE input
database. In these cases, the RUC has historically recommended that a
new item be created and has facilitated our pricing of that item by
working with the specialty societies to provide us copies of sales
invoices. For CY 2017, we received invoices for several new supply and
equipment items. Tables 30 and 31 detail the invoices received for new
and existing items in the direct PE database. As discussed in section
II.A. of this final rule, we encourage stakeholders to review the
prices associated with these new and existing items to determine
whether these prices appear to be accurate. Where prices appear
inaccurate, we encourage stakeholders to provide invoices or other
information to improve the accuracy of pricing for these items in the
direct PE database during the 60-day public comment period for this
final rule. We expect that invoices received outside of the public
comment period would be submitted by February 10th of the following
year for consideration in future rulemaking, similar to our new process
for consideration of RUC recommendations.
We remind stakeholders that due to the relativity inherent in the
development of RVUs, reductions in existing prices for any items in the
direct PE database increase the pool of direct PE RVUs available to all
other PFS services. Tables 30 and 31 also include the number of
invoices received, as well as the number of nonfacility allowed
services for procedures that use these equipment items. We provide the
nonfacility allowed services so that stakeholders will note the impact
the particular price might have on PE relativity, as well as to
identify items that are used frequently, since we believe that
stakeholders are more likely to have better pricing information for
items used more frequently. A single invoice may not be reflective of
typical costs and we encourage stakeholders to provide additional
invoices so that we might identify and use accurate prices in the
development of PE RVUs.
In some cases, we do not use the price listed on the invoice that
accompanies the recommendation because we identify publicly available
alternative prices or information that suggests a different price is
more accurate. In these cases, we include this in the discussion of
these codes. In other cases, we cannot adequately price a newly
recommended item due to inadequate information. Sometimes, no
supporting information regarding the price of the item has been
included in the recommendation. In other cases, the supporting
information does not demonstrate that the item has been purchased at
the listed price (for example, vendor price quotes instead of paid
invoices). In cases where the information provided on the item allows
us to identify clinically appropriate proxy items, we might use
existing items as proxies for the newly recommended items. In other
cases, we have included the item in the direct PE input database
without any associated price. Although including the item without an
associated price means that the item does not contribute to the
calculation of the proposed PE RVU for particular services, it
facilitates our ability to incorporate a price once we obtain
information and are able to do so.
(6) Service Period Clinical Labor Time in the Facility Setting
Generally speaking, our proposed inputs did not include clinical
labor minutes assigned to the service period because the cost of
clinical labor during the service period for a procedure in the
facility setting is not considered a resource cost to the practitioner
since Medicare makes separate payment to the facility for these costs.
We address proposed code-specific refinements to clinical labor in the
individual code sections.
(7) Procedures Subject to the Multiple Procedure Payment Reduction
(MPPR) and the OPPS Cap
We note that the public use files for the PFS proposed and final
rules for each year display both the services subject to the MPPR lists
on diagnostic cardiovascular services, diagnostic imaging services,
diagnostic ophthalmology services and therapy services and the list of
procedures that meet the definition of imaging under section
1848(b)(4)(B) of the Act, and therefore, are subject to the OPPS cap
for the upcoming calendar year. The public use files for CY 2017 are
available on the CMS Web site under downloads for the CY 2017 PFS final
rule at https://www.cms.gov/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html.
4. Specialty-Mix Assumptions for Proposed Malpractice RVUs
The final CY 2017 malpractice crosswalk table is displayed in the
public use files for the PFS final rule. The public use files for CY
2017 are available on the CMS Web site under downloads for the CY 2017
PFS final rule at https://www.cms.gov/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html. The table lists
the CY 2017 HCPCS codes and their respective source codes used to set
the final CY 2017 MP RVUs where the

[[Page 80280]]

source code for this calculation deviates from the source code for the
utilization otherwise used for purposes of PFS ratesetting. The MP RVUs
for all PFS services and the utilization crosswalk used to identify the
source codes for all other codes are reflected in Addendum B on the CMS
Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
5. Valuation of Specific Codes
(1) Anesthesia Services Furnished in Conjunction With Lower
Gastrointestinal (GI) Procedures (CPT Codes 00740 and 00810)
CPT codes 00740 and 00810 are used to report anesthesia furnished
in conjunction with lower gastrointestinal (GI) procedures. In the CY
2016 PFS proposed rule (80 FR 41686), we discussed that in reviewing
Medicare claims data, a separate anesthesia service is typically
reported more than 50 percent of the time that various colonoscopy
procedures are reported. We discussed that given the significant change
in the relative frequency with which anesthesia codes are reported with
colonoscopy services, we believed the relative values of the anesthesia
services should be reexamined. We proposed to identify CPT codes 00740
and 00810 as potentially misvalued and sought public comment regarding
valuation for these services.
The RUC recommended maintaining the base unit value of 5 as an
interim base value for both CPT code 00740 and 00810 on an interim
basis, due to their concerns about the specialty societies' surveys.
The RUC suggested that the typical patient vignettes used in the
surveys for both CPT codes 00740 and 00810 were not representative of
current typical practice and recommended that the codes be resurveyed
with updated vignettes. We stated in the CY 2017 proposed rule that we
believed it premature to propose any changes to the valuation of CPT
codes 00740 and 00810, continued to believe that these services are
potentially misvalued, and sought additional input from stakeholders
for consideration during future rulemaking.
Comment: Commenters were supportive of CMS' proposal to maintain
the current values for CPT codes 00740 and 00810 for CY 2017. One
commenter requested that CMS ensure that reimbursement for anesthesia
services remains adequate to compensate providers for the cost of
furnishing these services. Commenters also stated that due to greater
complexity of furnishing anesthesia services compared to moderate
sedation, payment for anesthesia services should not be lower than the
values established for moderate sedation.
One commenter stated that CMS' perception that these codes are
misvalued is related to the distinction between screening, diagnostic,
and therapeutic endoscopies. The commenter further stated that there
are no differences in the clinical risk and anesthesia preparation
regardless of the indication for these procedures and suggested that
the current base unit value of 5 units for CPT codes 00740 and 00810 is
appropriate and should be maintained. Another commenter stated that the
frequency of use of separate anesthesia services concurrent with
colonoscopy procedures is not due to any potential misvaluation, but
rather due to changes in Medicare coverage and payment policies that
encourage Medicare beneficiaries to undergo screening colonoscopies.
Response: We appreciate the information provided by commenters. We
continue to encourage feedback from interested parties and specialty
societies, all of which we will take under consideration for future
rulemaking.
(2) Soft Tissue Localization (CPT Codes 10035 and 10036)
In the CY 2016 PFS final rule with comment period, we established
the RUC-recommended work value as interim final for CPT codes 10035 and
10036. We also made standard refinements to remove duplicative clinical
labor and utilize standard equipment time formulas for the PACS
workstation proxy (ED050).
Comment on the CY 2016 PFS final rule with comment period: A
commenter stated that the clinical labor task ``Review/read X-ray, lab,
and pathology reports'' occurs during the preservice period, and it is
a separate activity than ``Review examination with interpreting MD'',
which occurs during the service period.
Response in the CY 2017 PFS proposed rule: We continued to believe
that the clinical labor was duplicative with the clinical labor for
``Review examination with interpreting MD'' because we believed that
the two descriptors detailed the same clinical labor activity taking
place, rather than two separate and distinct tasks.
In the CY 2017 proposed rule, we proposed to maintain our previous
refinement to 0 minutes for this clinical labor task for CPT codes
10035 and 10036. We also proposed to maintain the interim final work
RVUs for CPT codes 10035 and 10036.
We did not receive any comments in response to our proposed
valuation on CPT codes 10035 and 10036 and we are finalizing the
clinical labor task and work RVUs as proposed.
(3) Removal of Nail Plate (CPT Code 11730)
We identified CPT code 11730 through a screen of high expenditures
by specialty. The HCPAC recommended a work RVU of 1.10. We believed the
recommendation for this service overestimates the work involved in
performing this procedure, specifically given the decrease in physician
intraservice and total time concurrently recommended by the HCPAC. We
believed that a work RVU of 1.05, which corresponds to the 25th
percentile of the survey results, more accurately represents the time
and intensity of furnishing the service. To further support the
validity of the use of the 25th percentile of the survey, we identified
two crosswalk codes, CPT code 20606 (Arthrocentesis, aspiration and/or
injection, intermediate joint or bursa), with a work RVU of 1.00, and
CPT code 50389 (Removal of nephrostomy tube, requiring fluoroscopic
guidance), with a work RVU of 1.10, both of which have identical
intraservice times, similar total times and similar intensity. We noted
that our proposed work RVU of 1.05 for CPT code 11730 falls halfway
between the work RVUs for these two crosswalk codes. CPT code 11730 may
be reported with add-on CPT code 11732 to report performance of the
same procedure for each additional nail plate procedure.
Since CPT code 11732 was not reviewed by the HCPAC for CY 2017, we
proposed a new work value to maintain the consistency of this add-on
code with the base code, CPT code 11730. We proposed to remove 2
minutes from the physician intraservice time to maintain consistency
with the HCPAC-recommended reduction of 2 minutes from the physician
intraservice time period for the base code. We are using a crosswalk
from the value for CPT code 77001 (Fluoroscopic guidance for central
venous access device placement, replacement (catheter only or
complete), or removal (includes fluoroscopic guidance for vascular
access and catheter manipulation, any necessary contrast injections
through access site or catheter with related venography radiologic
supervision and interpretation, and radiographic documentation of final
catheter position) (List separately in addition to code for primary
procedure)), which has similar physician intraservice and total time
values; therefore, we proposed a

[[Page 80281]]

work RVU of 0.38 for CPT code 11732. As further support for this
proposal, we noted that this proposed RVU reduction is similar to the
value obtained by subtracting the incremental difference in the current
and recommended work RVUs for the base code from the current value of
CPT code 11732.
We proposed to use the HCPAC-recommended direct PE inputs for CPT
code 11730. We proposed to apply some of the HCPAC-recommended
refinements for CPT code 11730 to CPT code 11732, including the removal
of the penrose drain (0.25 in x 4 in), lidocaine 1%-2% inj (Xylocaine),
applicator (cotton-tipped, sterile) and silver sulfadiazene cream
(Silvadene), as well as the reduction of the swab-pad, alcohol from 2
to 1. In addition, we proposed not to include the recommended supply
items ``needle, 30g, and syringe, 10-12ml'' since other similar items
are present, and we believe inclusion of these additional supply items
would be duplicative. For clinical labor, we proposed to assign 8
minutes to ``Assist physician in performing procedure'' to maintain a
reduction that is proportionate to that recommended for CPT code 11730.
For the supply item ``ethyl chloride spray,'' we believed that the
listed input price of $4.40 per ounce overestimates the cost of this
supply item, and we solicited comment on the accuracy of this supply
item price. Finally, we proposed to add two equipment items as was done
in the base code, basic instrument pack and mayo stand, and proposed to
adjust the times for all pieces of equipment to eight minutes to
reflect the clinical service period time.
Comment: A commenter states that the work for CPT code 11730 has
not changed since the previous recommendation, thus maintenance of a
work RVU of 1.10 is proper.
Response: We continue to believe that the HCPAC-recommended
reduction in intraservice and total time supports a reduction in our
estimation of the physician work value of furnishing this service.
Comment: The HCPAC stated that it did not support the proposed
decrease in the work RVU for CPT code 11732.
Response: We welcome any additional input as to the appropriate
valuation of CPT code 11732. At this time, we continue to believe that
a work RVU of 0.38 is appropriate, considering its relationship to CPT
code 11730. We proposed values for CPT code 11732 based on its being an
add-on code for CPT code 11730. We remind commenters and stakeholders
that they may nominate this code family as potentially misvalued if
they believe that both codes should be evaluated through the standard
process, which would involve use of physician survey data and input
from the HCPAC for both codes. We are finalizing work RVUs of 1.05 for
CPT code 11730 and 0.38 for CPT code 11732, as well as the proposed PE
refinements.
(4) Bone Biopsy Excisional (CPT Code 20245)
In CY 2014, CPT code 20245 was identified by the RUC's 10-Day
Global Post-Operative Visits Screen.
For CY 2017, the RUC recommended a work RVU of 6.50 for CPT code
20245, including a change in global period from 10 to 0 days. We
disagreed with this value given the significant reductions in the
intraservice time, total time, and the change in the office visits
assuming the change in global period. The intraservice and total times
were decreased by approximately 33 and 53 percent respectively; while
the elimination of three post-operative visits (one CPT code 99214 and
two CPT code 99213 visits) alone would reduce the overall work RVU by
at least 38 percent under the reverse building block methodology. We
also note that the RUC-recommended work RVU of 6.50 only represents a
27 percent reduction relative to the previous work RVU of 8.95. To
develop a work RVU for this service, we used a crosswalk from CPT code
19298 (Placement of radiotherapy after loading brachytherapy catheters
(multiple tube and button type) into the breast for interstitial
radioelement application following (at the time of or subsequent to)
partial mastectomy, includes imaging guidance), since we believe the
codes share similar intensity and total time and the same intraservice
time of 60 minutes. Therefore, for CY 2017, we proposed a work RVU of
6.00 for CPT code 20245.
Comments: Several commenters, including the RUC, stated their
objection to the proposed crosswalk, indicating that it underestimated
the total time by 10 minutes and the physician work involved in
furnishing the service. Commenters recommended CMS accept the RUC-
recommended work RVU of 6.50.
The RUC also noted the current time of CPT code 20245 was based on
a survey of 35 individuals more than 15 years ago and due to the
previous flawed survey, the resulting IWPUT was almost zero. Given
these discrepancies, the surveyed time of 60 minutes better reflects an
appropriate level of intensity and complexity (IWPUT= 0.071) for this
service relative to other 0-day global procedures.
Another commenter stated concern that the values proposed by CMS
have been arrived at using methodologies that are not consistent with
the RUC-recommended values, and therefore, are not appropriately
relative to other similar services.
Response: Thank you for your comments. We present the information
in Table 16 to illustrate the differences between the CMS crosswalked
code and the additional RUC comparator codes.

Table 16--Crosswalk for CPT Code 20245
----------------------------------------------------------------------------------------------------------------
Intra-service
CPT code Descriptor time Total time Work RVU
----------------------------------------------------------------------------------------------------------------
20245........................... Bone Biopsy Excisional........ 60 160 * 6.50
19298........................... Place Breast Rad Tube/Cath.... 60 169 6.00
36247........................... Ins Cath ABDL/-Ext Art 3RD.... 60 131 6.29
43262........................... Endocholangiopancreatograp.... 60 138 6.60
----------------------------------------------------------------------------------------------------------------
* RUC recommended value.

Although the total times for CPT codes 19298 and 20245 are not
identical, we continue to believe it is a more accurate comparison than
the additional codes submitted by the RUC, which have 22-29 minutes
less total time.
We note that according to the most recent survey, respondents
lowered the work RVU of the 25th percentile, which we typically accept,
from 6.06 RVUs to 4.94 RVUs when the code was revalued with a 0-day
global period.
For CY 2017, we are finalizing the work RVU of 6.00 for CPT code
20245.

[[Page 80282]]

(5) Insertion of Spinal Stability Distractive Device (CPT Codes 22867,
22868, 22869, and 22870)
For CY 2016, the CPT Editorial Panel converted two Category III
codes to Category I codes describing the insertion of an interlaminar/
interspinous process stability device (CPT codes 22867 and 22869) and
developed two corresponding add-on codes (CPT codes 22868 and 22870).
The RUC recommended a work RVU of 15.00 for CPT code 22867, 4.00 for
CPT code 22868, 7.39 for CPT code 22869, and 2.34 for CPT code 22870.
We believe that the RUC recommendations for CPT codes 22867 and
22869 overestimate the work involved in furnishing these services. We
believe that a crosswalk to CPT code 36832 (Revision, open,
arteriovenous fistula; without thrombectomy, autogenous or
nonautogenous dialysis graft (separate procedure)), which has a work
RVU of 13.50 is a more accurate comparison. CPT code 36832 is similar
in total time, work intensity, and number of visits to CPT code 22867.
This crosswalk is supported by the ratio between total time and work in
the key reference service, CPT code 63047 (Laminectomy, facetectomy and
foraminotomy (unilateral or bilateral with decompression of spinal
cord, cauda equina and/or nerve root[s], [eg, spinal or lateral recess
stenosis]), single vertebral segment; lumbar). Therefore, we proposed a
work RVU of 13.50 for CPT code 22867. For CPT code 22869, we believed
that CPT code 29881 (Arthroscopy, knee, surgical; with meniscectomy
(medial OR lateral, including any meniscal shaving) including
debridement/shaving of articular cartilage (chondroplasty), same or
separate compartment(s), when performed) is an appropriate crosswalk
based on clinical similarity, as well as intensity and total time. CPT
code 29881 has a work RVU of 7.03; therefore, we proposed a work RVU of
7.03 for CPT code 22869. We proposed the RUC-recommended work RVU for
CPT codes 22868 and 22870 without refinement.
Comment: Several commenters disagreed with our proposed valuation
of the work RVU for CPT codes 22867 and 22869. They stated that the RUC
crosswalk for each of these codes, respectively, is either identical to
or a better match than the proposed CMS crosswalk.
Response: We recognize that the RUC crosswalk of CPT code 29915 for
CPT code 22867 has a total time that is more similar to the new code
than the crosswalk we proposed (CPT code 36832). We consider multiple
factors when identifying appropriate crosswalk codes. We note that
RUC's crosswalk, CPT code 29915, had very low service utilization, 355
in 2015, and was last reviewed by CMS and the RUC in April 2010. CPT
code 36832, in contrast, had service utilization of 21,529 in 2015, and
was most recently reviewed in October 2013. We considered the
combination of these factors in choosing a crosswalk and determining a
proposed work RVU. Commenters did not present any additional clinical
information or data about this code that would lead us to reconsider
our proposed valuation; therefore, we are finalizing the work RVU of
13.50 for CPT code 22867.
With regard to CPT code 22869, we disagree that the RUC crosswalk
to CPT code 29880 is a closer comparison than CPT code 29881. The
intraservice time for the newly created CPT code 22869 (43 minutes) is
between that of the RUC recommended crosswalk CPT code 29880 (45
minutes) and the CMS crosswalk CPTcode 29881 (40 minutes). Total time
for CPT code 29881, however, is identical to total time for CPT code
22869 (194 minutes), whereas the RUC recommended crosswalk CPT code
29880 has a higher total time (199 minutes). We continue to believe,
therefore, that our crosswalk is appropriate and we are finalizing the
proposed work RVU of 7.03 for CPT code 22869.
(6) Biomechanical Device Insertion (CPT Codes 22853, 22854, and 22859)
For CY 2016, the CPT Editorial Panel established three new Category
I add-on codes and deleted one code to provide a more detailed
description of the placement and attachment of biomechanical spinal
devices. For CPT code 22853, the RUC recommended a work RVU of 4.88.
For CPT codes 22854 and 22859, the RUC-recommended work RVUs are 5.50
and 6.00, respectively.
In reviewing the code descriptors, descriptions of work and
vignettes associated with CPT codes 22854 and 22859, we concluded that
the two procedures, in addition to having identical work time, contain
many clinical similarities and do not have quantifiable differences in
overall intensity. Therefore, we proposed the RUC-recommended work RVU
of 5.50 for both CPT code 22854 and CPT code 22859. We believe that the
RUC-recommended work RVU of 4.88 for CPT code 22853 overestimates the
work in the procedure relative to the other codes in the family. We
proposed a work RVU of 4.25 for CPT code 22853 based a crosswalk from
CPT code 37237 (Transcatheter placement of an intravascular stent(s)
(except lower extremity artery(s) for occlusive disease, cervical
carotid, extracranial vertebral or intrathoracic carotid, intracranial,
or coronary), open or percutaneous, including radiological supervision
and interpretation and including all angioplasty within the same
vessel, when performed; each additional artery (List separately in
addition to code for primary procedure)), which is similar in time and
intensity to the work described by CPT code 22853.
Comment: Several commenters disagreed with our proposed valuation
of the work RVU of 4.25 for CPT code 22853 rather than the RUC-
recommended work RVU of 4.88. They requested clarification regarding
our crosswalk for this new code to CPT code 37237 instead of the RUC-
recommended crosswalk of CPT code 57267.
Response: We take many factors into consideration when valuing a
work RVU for a new code. We note that CPT code 57267 and CPT code 37237
have identical intraservice times and very similar total work times. We
note that CPT code 37237 was most recently valued in April 2013,
whereas the RUC crosswalk CPT code 57267 was last reviewed in 2004. We
continue to believe that CPT code 37237 is an appropriate crosswalk for
valuing the new CPT code 22859. Therefore, we are finalizing our
proposed work RVU of 4.25 for CPT code 22853.
Comment: We received several comments objecting to our proposed
work RVU of 5.50 for CPT code 22859, which is identical to the work RVU
proposed by the RUC and accepted by CMS for CPT code 22854. Commenters
provided detailed descriptions of the two procedures in an effort to
demonstrate the higher intensity required by CPT code 22859 compared
with CPT code 22854, thereby justifying the RUC-recommended work RVU of
6.00 for CPT code 22859. Several commenters expressed confusion about
the descriptors for all three of the new CPT codes (CPT codes 22853,
22854, and 22859), in general, and stated their concern that the code
descriptors do not clearly differentiate the work involved in
furnishing the services.
Response: While we are somewhat persuaded by commenters' detailed
descriptions of the two procedures and the higher intensity of work
involved in furnishing CPT code 22859 compared with CPT code 22854, we
are concerned about a substantive disagreement between the RUC and
survey respondents about the intensities of work involved in furnishing
the services described by these new codes. The RUC and the survey
respondents valued the

[[Page 80283]]

relative intensities of the two codes in the reverse order. The survey
results indicated a work RVU of 8.16 (with 25th percentile of 7.0) for
CPT code 22854 and a work RVU of 8.0 (with 25th percentile of 6.0) for
CPT code 22859. The RUC reviewed the survey results and agreed that
respondents overvalued the work involved in performing CPT code 22854.
The RUC-recommended work RVU for CPT code 22854, which we are accepting
as recommended, was established through a crosswalk to CPT code 37234.
We agree that this is an appropriate crosswalk and valuation of this
service. For CPT code 22859, the RUC also believed that the survey
recommended work RVU of 8.0 was overvalued. The RUC recommended the
25th percentile of survey results, with a work RVU of 6.0. We find it
difficult to reconcile the conflicting valuations by the survey and the
RUC of the absolute and relative intensity of these new codes.
In addition to the survey results and RUC recommendations, we
reviewed the descriptors of these codes and agree with commenters who
found them vague and unclear. We share the concern of stakeholders who
indicated that the lack of differentiation in the codes may lead to
inconsistent use and reporting.
Given the disagreement between the RUC and survey respondents
regarding the order and level of intensity of these services, along
with confusion about the code descriptors, we find that valuing the
services of 22854 and 22859 differently from each another is difficult
to justify. Therefore, we are finalizing our proposed work RVU of 5.50
for CPT code 22859.
(7) Repair Flexor Tendon (CPT Codes 26356, 26357, and 26358)
In the CY 2016 PFS final rule with comment period, we established
an interim final work RVU of 9.56 for CPT code 26356 after considering
both its similarity in time to CPT code 25607 (Open treatment of distal
radial extra-articular fracture) and the recommended reduction in time
relative to the current times assumed for this procedure. We
established an interim final work RVU of 10.53 for CPT code 26357 based
on a direct crosswalk from CPT code 27654 (Repair, secondary, Achilles
tendon, with or without graft), as we believed that this work RVU
better reflected the changes in time for this procedure. For the last
code in the family, we established an interim final work RVU of 12.13
for CPT code 26358, based on the RUC-recommended increment of 1.60 work
RVUs relative to CPT code 26357.
Comment on the CY 2016 PFS final rule with comment period: We
received several comments regarding the interim final work values for
this family of codes. One commenter stated that it was inappropriate to
use time ratios to evaluate CPT code 26356 as it was last valued in
1995, noting that there was an anomalous relationship between the
current work RVU and the imputed time components in the RUC database.
This commenter also pointed out that when the previous time was
developed, fabrication of a splint was considered to be part of the
intraservice work, while in the current survey instrument, the
fabrication of the splint is considered to be part of the postservice
work since it is a dressing. This commenter urged CMS to adopt the RUC
recommendations. A different commenter agreed that the CMS crosswalk to
CPT code 25607 was an appropriate crosswalk for CPT code 26356 and
supported the CMS work RVU of 9.56.
Response in the CY 2017 PFS proposed rule: We appreciate the
support from the commenter. We continue to believe that our crosswalk
for this code is an appropriate choice, due to our estimate of overall
work between CPT code 26356 and CPT code 25607. We appreciate the
commenters' concerns regarding the time ratio methodologies and have
responded to these concerns about our methodology in section II.L of
this final rule. Although we note the commenter's statement about how
the service period in which fabrication of a splint takes place may
have evolved over time, we do not agree that this task would be
responsible for a decrease in intraservice survey time, as the
postservice survey time for CPT code 26356 remained unchanged at 30
minutes. If the decrease in intraservice time had been due to the shift
of splinting from the intraservice period to the postservice period,
then we would have expected to see an increase in the postservice
period minutes. However, they remained exactly the same in the
physician survey for CPT 26356. As we wrote earlier in this section, we
believe in the validity of using pre-existing time values as a point of
comparison, and we believe that we should account for efficiencies in
time when the recommended work RVU does not account for those
efficiencies. After consideration of comments received, we proposed to
maintain CPT code 26356 at its current work RVU of 9.56 for CY 2017.
Comment on the CY 2016 PFS final rule with comment period: Several
commenters disagreed with the work RVU for CPT code 26357. One
commenter stated that the CMS crosswalk to CPT code 27654 had less
total time and resulted in an inappropriately lower derived intensity.
This commenter urged CMS to adopt the RUC-recommended work value.
Another commenter stated that a better crosswalk for CPT code 26357
would be CPT code 25608 (Open treatment of distal radial intra-
articular fracture or epiphyseal separation), the next code in the same
upper extremity family that CMS used for the initial crosswalk. This
commenter stated that the CMS crosswalk for CPT code 26357 created a
rank order anomaly in terms of intensity within this family, and that
the commenter's suggested crosswalk would create two pairs of matched
codes, survey CPT codes 26356/26357 with crosswalk CPT codes 25607/
25608.
Response in the CY 2017 PFS proposed rule: We appreciate the
suggested crosswalk from the commenters, and we agree that the choice
of the initial CMS crosswalk creates a rank order anomaly within the
family in terms of intensity. As a result, after consideration of
comments received, we proposed to instead value CPT code 26357 at the
25th percentile survey work RVU of 11.00 for CY 2017. This valuation
corrects the anomalous intensity within the Repair Flexor Tendon family
of codes, and preserves the RUC-recommended increment between CPT codes
26356 and 26357.
Comment on the CY 2016 PFS final rule with comment period: The
commenters agreed that the RUC-recommended increment of 1.60 was
appropriate for the work RVU of CPT code 26358 when added to the work
RVU of CPT code 26357. However, commenters stated that this increment
of 1.60 should be added to the RUC-recommended work value for CPT code
26357, and not the CMS refined value from the CY 2016 PFS final rule
with comment period.
Response in the CY 2017 PFS proposed rule: We also continue to
believe that the increment of 1.60 is appropriate for the work RVU of
CPT code 26358. After consideration of comments received, we therefore
proposed to set the work RVU for this code at 12.60 for CY 2017, based
on the increment of 1.60 from CPT code 26357's proposed work RVU of
11.00.
In the CY 2017 proposed rule, we proposed to maintain the current
direct PE inputs for all three codes.
The following is a summary of the comments we received regarding
our proposed valuation of the Repair Flexor Tendon codes:

[[Page 80284]]

Comment: One commenter expressed support for the proposed work RVU
for the flexor tendon codes.
Response: We appreciate the support from the commenters.
After consideration of comments received, we are finalizing our
proposed valuation of the Repair Flexor Tendon codes.
(8) Closed Treatment of Pelvic Ring Fracture (CPT Codes 27197 and
27198)
For CY 2017, the CPT Editorial Panel deleted CPT codes 27193 and
27194 and replaced them with new CPT codes 27197 and 27198. The RUC
recommended a work RVU of 5.50 for CPT code 27193, and a work RVU of
9.00 for CPT code 27198. We proposed to change the global period for
these services from 90 days to 0 days because these codes typically
represent emergent procedures with which injuries beyond pelvic ring
fractures are likely to occur; we believe it is typical that multiple
practitioners would be involved in providing post-operative care and it
is likely that a practitioner furnishing a different procedure is more
likely to be providing the majority of post-operative care. If other
practitioners are typically furnishing care in the post-surgery period,
we believe that the six post-service visits included in CPT code 27197,
and the seven post-service visits included in CPT code 27198, would
likely not occur. This is similar to our CY 2016 review and valuation
of CPT codes 21811 (Open treatment of rib fracture(s) with internal
fixation, includes thoracoscopic visualization when performed,
unilateral; 1-3 ribs), 21812 (Open treatment of rib fracture(s) with
internal fixation, includes thoracoscopic visualization when performed,
unilateral; 4-6 ribs), and 21813 (Open treatment of rib fracture(s)
with internal fixation, includes thoracoscopic visualization when
performed, unilateral; 7 or more ribs). In our valuation of those
codes, we determined that a 0-day, rather than a 90-day global period
was preferable, in part because those codes describe rib fractures that
would typically occur along with other injuries, and the patient would
likely already be receiving post-operative care because of the other
injuries. We believe that the same rationale applies here. To establish
a work RVU for CPT code 27197, we proposed crosswalking this code to
CPT code 65800 (Paracentesis of anterior chamber of eye (separate
procedure); with removal of aqueous), due to its identical intraservice
time and similar total time, after removing the work associated with
postoperative visits, and its similar level of intensity. Therefore, we
proposed a work RVU of 1.53 for CPT code 27197. For CPT code 27198, we
proposed crosswalking this code to CPT code 93452 (Left heart
catheterization including intraprocedural injection(s) for left
ventriculography, imaging supervision and interpretation, when
performed) which has an identical intraservice time and similar total
time, after removing the work associated with post-operative visits
from CPT code 27198. We proposed a work RVU of 4.75 for CPT code 27198.
Comment: Some commenters stated that the new coding for these
services was designed, in part, to address the appropriateness of a 90-
day global period by differentiating between higher energy and lower
energy fractures. According to these commenters, the CPT Editorial
Panel redefined these codes as treating injuries from higher energy and
more unstable posterior pelvic ring injuries, and added a parenthetical
directing physicians to use E/M billing for closed treatment of
isolated lower energy fractures. These commenters say that the new
coding clarifies when to use E/M coding for these services and when to
bill these two codes. They state that these codes should thus remain
valued with 90-day global periods while less complicated fractures will
be billed with E/M coding.
Response: We took into consideration many factors when determining
the appropriate global period of this service. While we understand that
the new coding was partly designed to address the appropriateness of a
90-day global period, we continue to believe that a 0-day, rather than
a 90-day, global period is more appropriate for this code, since we
believe that the patient would likely already be receiving post-
operative care because of other injuries. We also believe that the
practitioner who performs the original procedure may not typically be
performing the follow-up care, and shifting to a 0-day global period
will allow the appropriate practitioner to report the follow up care,
when appropriate.
Comment: A commenter stated that assigning a 0-day global period to
this code will cause these codes to be different from all other closed
fracture codes, which the commenter believes will lead to confusion for
physicians and rank order anomalies.
Response: The commenter did not present sufficient information to
explain why the variation in global periods for these kinds of services
would uniquely cause rank order anomalies. We agree that it is
preferable that codes for similar procedures have similar global
periods; however, other factors specific to each code are taken into
consideration when determining the appropriate global period. In the
case of CPT codes 27197 and 27198, we continue to believe that the
emergent nature inherent with the injuries considered typical would
mean that other physicians would typically perform follow-up care. For
detailed guidance on billing global surgical procedures, we direct
readers to the Medicare Claims Processing Manual, Pub. 100-04; billing
requirements and adjudication of claims requirements for global
surgeries are under chapter 12, sections 40.2 and 40.4. We also note
that if this procedure is billed concurrently with another procedure
that is valued with a 10-day or 90-day global period, that the follow
up visits associated with the latter procedure would occur as part of
that package, while follow-up visits for these two codes would be
reported using E/M coding.
Comment: A commenter states that, for procedures valued as part of
a 90-day global period, the physician who is performing the primary
portion of the treatment is obligated to follow the patient throughout
the entire global period and furnish follow-up care.
Response: We understand the commenter's perspective that the
treating physician is obligated to provide follow-up care within the
global period; however, we do not believe that this necessitates the
valuation of every surgical procedure with a 10-day or 90-day global
period. While the treating physician would ideally provide follow-up
care for these codes were they to be assigned 90-day global periods, we
continue to believe that this would be an atypical situation for these
types of treatments and for these types of injuries. We note that the
assignment of a global period occurs in the process of evaluation of
codes and we take into consideration factors specific to each
procedure. There may be many instances when codes with similar
procedures have different global periods. We are finalizing as proposed
the work RVUs of 1.53 for CPT code 27197 and 4.75 for CPT code 27198,
as well as an assignment of 0-day global periods.
(9) Bunionectomy (CPT Codes 28289, 28291, 28292, 28295, 28296, 28297,
28298, and 28299)
The RUC identified CPT code 28293 as a 90-day global service with
more than 6 office visits and CPT codes 28290-28299 as part of the
family of services. In October 2015, the CPT Editorial Panel created
two new CPT codes (28291, 28295), deleted CPT codes 28290, 28293, and
28294 and revised CPT codes 28289, 28292, 28296,

[[Page 80285]]

28297, 28298 and 28299 based on the rationale that more accurate
descriptions of the services needed to be developed.
For CPT codes 28289, 28292, 28296, 28297, 28298, and 28299, the RUC
recommended and we proposed work RVUs of 6.90, 7.44, 8.25, 9.29, 7.75,
and 9.29 respectively. For CPT code 28291, the RUC recommended a work
RVU of 8.01 based on the 25th percentile of the survey. We believed the
recommendation for this service overestimates the overall work involved
in performing this procedure given the decrease in intraservice time,
total time, and post-operative visits when compared to deleted
predecessor CPT code 28293. Due to similarity in intraservice and total
times, we believed a direct crosswalk of the work RVUs for CPT code
65780 (Ocular surface reconstruction; amniotic membrane
transplantation, multiple layers) to CPT code 28291 more accurately
reflects the time and intensity of furnishing the service. Therefore,
for CY 2017, we proposed a work RVU of 7.81 for CPT code 28291.
For CPT code 28295, the RUC recommended a work RVU of 8.57 based on
the 25th percentile of the survey. We believed the recommendation for
this service overestimates the work involved in performing this
procedure given the similarity in the intensity of the services and
identical intraservice and total times as CPT code 28296. Therefore, we
proposed a direct RVU crosswalk from CPT code 28296 to CPT code 28295.
For CY 2017, we proposed a work RVU of 8.25 for CPT code 28295.
Comments: A few commenters, including the RUC, objected to the
proposed work RVUs for CPT codes 28291 and 28295. Commenters noted that
deleted CPT code 28293 was marked by the RUC as ``not to use for
validation of physician work''. The RUC noted the previous time was
based on Harvard time and when reviewed in 1995, the RUC maintained the
physician work and Harvard time because there was no compelling
evidence to revise the value at that time.
The RUC acknowledged that the deleted CPT code 28293 had 30 minutes
more intra-service time and a higher work RVU of 11.48 compared to the
recommended work RVU of 8.01 for CPT code 28291. However, the RUC
stated the differences in the physician work, time, intensity and the
actual new service as described in CPT code 28291 were appropriately
accounted for in its recommendation.
The RUC also stated disagreement with the proposed crosswalk of
work RVUs from CPT code 28291 to CPT code 65780. The RUC stated it
compared the family and relative ranking and believed CPT code 28291
was more complex and intense than CPT code 28298. The relative
difference in work and complexity was reviewed and correctly ranked by
the survey respondents at the 25th percentile, which corresponds with
the RUC-recommended value.
One commenter stated that CPT code 28293 was deleted and a new CPT
code was established because the two procedures were no longer
synonymous. Also, the slight decrease in the intraoperative intensity
with the new value is barely measurable, and therefore, the commenter
does not agree with CMS that a work RVU of 7.81 is a more accurate
valuation.
One commenter stated that CPT code 28295 is more intense than CPT
code 28296 because CPT code 28295 requires separate areas of
dissection. With CPT code 28296, the osteotomy and soft tissue
procedure are performed at the same anatomic location. The commenter
stated this nuance in complexity is the rationale for separate codes
and is similar to the rationale for separate cervical versus lumbar
spine codes or artery versus vein codes for vascular work.
Response: We appreciate additional information offered by the
commenters. After consideration of comments received, we agreed with
the additional information provided by commenters and are finalizing
the RUC-recommend work RVUs of 6.90, 8.01, 7.44, 8.57, 8.25, 9.29, 7.75
and 9.29 for CPT codes 28289, 28291, 28292, 28295, 28296, 28297, 28298
and 28299; respectively.
(10) Endotracheal Intubation (CPT Code 31500)
In the CY 2016 PFS final rule with comment period (80 FR 70914), we
identified CPT code 31500 as potentially misvalued. The specialty
societies surveyed this code, and after reviewing the survey responses
(which included increases in time) the RUC recommended a work RVU of
3.00 for CPT code 31500. After reviewing the RUC's recommendation, we
proposed a work RVU of 2.66, based on a direct crosswalk to CPT code
65855 (Trabeculoplasty by laser surgery), which has similar intensity
and service times.
Comment: Commenters requested that CMS finalize the RUC-recommended
work RVU of 3.00 instead of CMS' proposed 2.66 work RVUs. The RUC
stated that the surveyed median intraservice time is 10 minutes,
representing a doubling of the current intraservice time of 5 minutes.
Commenters also disagreed with CMS' proposed crosswalk from CPT code
65855. The RUC stated that given the emergent nature of the services
reported with CPT code 31500, there are few relevant physician work and
time-based comparisons within the resource-based relative value scale
(RBRVS).
Response: We appreciate commenters' feedback on our proposal. As
pointed out by the commenters, the survey data shows increased
intraservice and total times for these services. We agree with
commenters that due to the emergent nature of these services, there are
few relevant physician work and time-based comparisons for this
service. Therefore, due to the emergent nature of these services and
service time increases, for CY 2017, we are finalizing a work RVU of
3.00 for CPT code 31500.
(11) Flexible Laryngoscopy (CPT Codes 31572, 31573, 31574, 31575,
31576, 31577, 31578, and 31579)
After we identified CPT codes 31575 and 31579 as potentially
misvalued (80 FR 70912-70914), the RUC referred the entire flexible
laryngoscopy family of codes back to the CPT Editorial Panel for
revision and the addition of several codes representing new technology
within this family of services. At the May 2015 CPT meeting, the CPT
Editorial Panel added three new codes to describe laryngoscopy with
ablation or destruction of lesion and therapeutic injection. Based on
the survey results, the time resources involved in furnishing the
procedures described by this code family experienced a significant
reduction in the intraservice period, yet the recommended work RVUs
were not similarly reduced. Therefore, in reviewing the recommended
values for this family of codes we looked for a rationale for increased
intensity and absent such rationale, proposed to adjust the recommend
work RVUs to account for significant changes in time.
For CPT code 31575, we disagreed with the RUC-recommended work RVU
of 1.00, and we instead proposed a work RVU of 0.94. We looked at the
total time ratio for CPT code 31575, which is decreasing from 28
minutes to 24 minutes, and applied this ratio of 0.86 times the current
work RVU of 1.10 to derive our proposed work RVU of 0.94. We supported
this value for CPT code 31575 through a crosswalk to CPT code 64405
(Injection, anesthetic agent; greater occipital nerve), which shares 5
minutes of intraservice time and also has a work RVU of 0.94.
We agreed with the RUC that CPT code 31575 serves as the base code
for the rest of the Flexible Laryngoscopy family. As a result, we
proposed to

[[Page 80286]]

maintain the same RUC-recommended increments for the rest of the codes
in this family, measuring the increments from CPT code 31575's refined
work RVU of 0.94 instead of the RUC-recommended work RVU of 1.00. This
meant that each of the work RVUs for the codes in the rest of the
family decreased by 0.06 when compared to the RUC-recommended value. We
therefore proposed a work RVU of 1.89 for CPT code 31576, a work RVU of
2.19 for CPT code 31577, a work RVU of 2.43 for CPT code 31578, a work
RVU of 3.01 for CPT code 31572, a work RVU of 2.43 for CPT code 31573,
a work RVU of 2.43 for CPT code 31574, and a work RVU of 1.88 for CPT
code 31579.
Regarding the direct PE inputs, we proposed to use refined clinical
labor time for ``Obtain vital signs'' for CPT codes 31577 and 31579
from 3 minutes to 2 minutes. We believe that this extra clinical labor
time is duplicative, as these codes are typically performed with a same
day E/M service. Each procedure is only allotted a maximum of 5 minutes
for obtaining vital signs, and since 3 minutes are already included in
the E/M code, we proposed to reduce the time to 2 minutes for these
services. Similarly, we proposed to remove the 3 minutes of clinical
labor time for ``Clean room/equipment by physician staff'' from CPT
codes 31575, 31577, and 31579. These procedures are typically reported
with a same day E/M service, making the clinical labor minutes for
cleaning the room in these procedure codes duplicative of the time
already included in the E/M codes.
For CPT code 31572, we proposed to remove the ``laser tip, diffuser
fiber'' supply (SF030) and replace it with the ``laser tip, bare
(single use)'' supply (SF029) already present in our direct PE
database. We believe that the invoice for SF030 submitted with the RUC
recommendation is not current enough to establish a new price for this
supply; as a result, we substituted the SF029 supply for this input. We
welcomed the submission of new invoices to accurately price the
diffuser fiber with laser tip.
We also proposed to make significant changes to the prices of
several of the supplies and equipment related to Flexible Laryngoscopy,
as well as to the prices of scopes more broadly. We proposed to set the
price of the disposable biopsy forceps supply (SD318) at $26.84, based
on the submission of an invoice with a price of $536.81 for a unit size
of 20. In our search for additional information regarding scope inputs,
we obtained a quote from a vendor listing the current price for several
equipment items related to the use of scopes. Since we believe that the
prices in vendor quotes would typically be equal to or higher than
prices actually paid by practitioners, we are updating the prices in
our direct PE database to reflect this new information. As part of this
process, we proposed to increase the price of the ``light source,
xenon'' (EQ167) from $6,723.33 to $7,000 to reflect current pricing
information. We also proposed to adjust the price of the ``fiberscope,
flexible, rhinolaryngoscopy'' (ES020) from $6,301.93 to $4,250.00.
In accordance with the wider proposal that we made involving the
use of scope equipment, we proposed to separate the scopes used in
these procedures from the scope video systems. In the course of
researching different kinds of scopes, we obtained vendor pricing for
two different types of scopes used in these procedures. We proposed to
price the ``rhinolaryngoscope, flexible, video, non-channeled'' (ES063)
at $8,000 and the ``rhinolaryngoscope, flexible, video, channeled''
(ES064) at $9,000 in accordance with our vendor quotes. We proposed to
use the non-channeled scope for CPT codes 31575, 31579, and 31574 and
the channeled scope for CPT codes 31576, 31577, 31578, 31572, and 31573
in accordance with the RUC-recommended video systems that stipulated
channeled versus non-channeled scope procedures.
We believe that the ``Video-flexible laryngoscope system'' listed
in the recommendations is not a new form of equipment, but rather
constitutes a version of the existing ``video system, endoscopy''
equipment (ES031). We did not add a new equipment item to our direct PE
database; instead, we proposed to use the submitted invoices to update
the price of the ES031 endoscopy video system. As the equipment code
for ES031 indicates, we proposed to define the endoscopy video system
as containing a processor, digital capture, monitor, printer, and cart.
We proposed to price ES031 at $15,045.00; this reflected a price of
$2,000.00 for the monitor, $9,000.00 for the processor, $1,750.00 for
the cart, and $2,295.00 for the printer. These prices were obtained
from our vendor invoice, with the exception of the printer, which is a
crosswalk to the ``video printer, color (Sony medical grade)''
equipment (ED036).
We did not agree that there is a need for multiple different video
systems for this collection of Flexible Laryngoscopy codes based on our
understanding of the clinical differences among the codes. In keeping
with this understanding, we proposed to use the same existing ``video
system, endoscopy'' equipment (ES031) for the remaining codes in the
family that included RUC recommendations for new equipment items named
``Video-flexible channeled laryngoscope system'' and ``Video-flexible
laryngoscope stroboscopy system.'' For CPT codes 31576, 31577, 31578,
31572, and 31573, we proposed to replace the Video-flexible channeled
laryngoscope system with the existing endoscopy video system (ES031)
along with a channeled flexible video rhinolaryngoscope (ES064). For
CPT code 31579, we proposed to rename the RUC-recommended ``Video-
flexible laryngoscope stroboscopy system'' to the shortened
``stroboscopy system'' (ES065) and assign it a price of $19,100.00.
This reflected the price of the StrobeLED Stroboscopy system included
on the submitted invoice. We proposed to treat the stroboscopy system
as a scope accessory, which was included along with the ``video system,
endoscopy'' equipment (ES031) and the ``rhinolaryngoscope, flexible,
video, non-channeled'' (ES063) for CPT code 31579. When the price of
the scope, the scope video system, and the stroboscopy system were
summed together, the total proposed equipment price was $42,145.00.
We proposed to refine the recommended equipment times for several
equipment items to conform to changes in clinical labor time. These
are: The fiberoptic headlight (EQ170), the suction and pressure cabinet
(EQ234), the reclining exam chair with headrest (EF008), and the basic
instrument pack (EQ137). We proposed to use the standard equipment time
formula for scope accessories for the endoscopy video system (ES031)
and the stroboscopy scope accessory system (ES065). We also proposed to
refine the equipment time for the channeled and non-channeled flexible
video rhinolaryngoscopes to use the standard equipment time formula for
scopes. For this latter pair of two new equipment items, this proposal
resulted in small increases to their respective equipment times.
The following is a summary of the comments we received regarding
our proposed valuation of the Flexible Laryngoscopy codes:
Comment: Several commenters disagreed with the proposed work RVU
for CPT code 31575. Commenters stated that the use of a work/time ratio
was inconsistent with the methodology of magnitude estimation, and that
reducing work RVUs by mathematical formula can arbitrarily manipulate
intensities without allowing input from survey

[[Page 80287]]

recommendations provided by experts who perform the service. Commenters
indicated their disapproval for a reverse building block methodology
that assumes that if times for individual services change, work values
must also change.
Response: We continue to believe that the use of these
methodologies, including the use of time ratios, is an appropriate
process for code valuation when recommended work RVUs do not appear to
account for significant changes in time. As we stated earlier in our
discussion on this topic in this final rule, we use time ratios to
identify potential work RVUs and consider these work RVUs as potential
options relative to the values developed through other methodologies
for code valuation. We continue to believe that the decrease in total
time for CPT code 31575 from 28 minutes to 24 minutes was not accounted
for in the recommended work RVU, and as a result we proposed a work RVU
of 0.94, supported by a crosswalk to CPT code 64405. We continue to
believe that this valuation for CPT code 31575 more accurately captures
the reduction in physician work caused by the decrease in the time
required to perform the procedure, noting again that the statute
specifically defines the work component as the resources in time and
intensity required in furnishing the service. We believe that our
crosswalk to CPT code 64405, which has very similar time and intensity
values to CPT code 31575 at the same work RVU of 0.94, supports our
valuation for this service.
Comment: Several commenters objected to the application of the work
RVU increment to the rest of the codes in this family, measuring the
increments from CPT code 31575's refined work RVU of 0.94 instead of
the RUC-recommended work RVU of 1.00. Commenters stated that these
codes were reviewed individually, not incrementally, and the use of an
increment to reduce the work RVU of each code in the family by 0.06 was
inappropriate. Commenters disagreed with the notion that when a base
code's value is modified or reduced all other codes in the family
should be reduced accordingly.
Response: We review codes individually for valuation. When we apply
an increment from a base code to the rest of a code family, we do so
only after reviewing each code individually and determining that the
RUC-recommended relativity between the codes in the family is correct.
For this particular family of codes, we stated our belief that the
relativity between the codes in the family was accurate, and that the
increment between the codes should be maintained after adjusting the
work RVU for the base code (CPT code 31575) to account for its
significant decrease in time. As we detailed in our discussion of code
valuation methodologies earlier in this final rule, we use a variety of
different methods, such as survey data, building blocks, crosswalks to
key reference or similar codes, time ratios, and increments between
codes within the same family. In our review of RUC-recommended values,
we have observed that the RUC also uses a variety of methodologies to
develop work RVUs for individual codes, and subsequently validates the
results of these approaches through magnitude estimation or crosswalk
to established values for other codes. We continue to believe that the
use of an incremental methodology is the most accurate way to value
this particular code family because it maintains the appropriate
relativity among the Flexible Laryngoscopy codes.
Comment: One commenter disagreed with our refinement to remove the
clinical labor time for ``Clean room/equipment by physician staff''
from the three codes in this family performed with a same day E/M
service. The commenter stated that the clinical staff have to clean the
equipment for procedure not used during the E/M service. According to
the commenter, they clean that equipment separately and are assisting
the physician during the entire procedure.
Response: In response to the commenter, we investigated this issue
and determined that in the past we have sometimes provided 1 minute of
clinical labor time for cleaning additional equipment beyond what would
be cleaned during the E/M visit. As a result, we are restoring 1 minute
of clinical labor time for ``Clean room/equipment by physician staff''
for CPT codes 31575, 31577, and 31579.
Comment: One commenter stated that there was a lack of clarity
regarding the removal of the laser tip, diffuser fiber supply (SF030)
from CPT code 31572. The commenter stated that the commenter supplied
an invoice for the fibers, believed the invoice price was accurate, and
believed the invoice should be utilized to set the price for this item.
Response: We continue to believe that the invoice for SF030
submitted with the RUC recommendation, which dates from 2009, is not
current enough to establish a new price for this supply. We are
continuing to maintain the laser tip, bare (single use) supply (SF029)
in its place for CPT code 31572. As we discuss in the PE section of
this final rule (II.A), we have concerns that the pricing for the laser
tip, diffuser fiber supply has become outdated, and we are requesting
the submission of additional current pricing information. We are
maintaining the current pricing for this supply at $850 pending the
submission of additional data.
We note as well that there were many comments addressing our
proposal to reclassify scope equipment, as well as the proper pricing
of the scope equipment utilized in this family of codes. These comments
are summarized with responses in the PE section of this final rule
(II.A).
After consideration of comments received, we are finalizing the
work RVUs of the codes in the Flexible Laryngoscopy family at the
proposed values. We are also finalizing the proposed direct PE inputs,
with the exception of the refinement to the ``Clean room/equipment by
physician staff'' clinical labor detailed above.
(12) Laryngoplasty (CPT Codes 31580, 31584, 31587, 31551-31554, 31591,
and 31592)
CPT code 31588 (Laryngoplasty, not otherwise specified (e.g., for
burns, reconstruction after partial laryngectomy)) was identified as
potentially misvalued based on the RUC's 90-Day Global Post-Operative
Visits screen. When this code family was reviewed by the RUC, it was
determined that some codes in the family required revision to reflect
the typical patient before a survey could be conducted and the code
family was referred to the CPT Editorial Panel for revision. At its
October 2015 meeting, the CPT Editorial Panel approved the creation of
six new codes, revision of three codes, and deletion of three codes.
For CPT codes 31580, 31587, 31551, 31552, 31553, 31554, and 31592, CMS
proposed the RUC-recommended work RVUs.
For CPT code 31584, the RUC recommended a work RVU of 20.00. We
believed that the 25th percentile of the survey, which is a work RVU of
17.58, better represents the time and intensity involved with
furnishing this service based on a comparison with and assessment of
the overall intensity of other codes with similar instraservice and
total time. This value is also supported by a crosswalk code of CPT
code 42844 (Radical resection of tonsil, tonsillar pillars, and/or
retromolar trigone; closure with local flap (e.g., tongue, buccal)),
which has identical intraservice time and identical total time.
Therefore, we proposed a work RVU of 17.58 for CPT code 31584.

[[Page 80288]]

Comment: Several commenters requested that we provide an
explanation for our proposed work RVU of 17.58 for the revised CPT code
31584 instead of the RUC-recommended work RVU of 20.00. They stated
that the modified code now represents the combination of two previously
separate CPT codes (the existing CPT code 31584 combined with CPT code
31600) and that the work RVU should better reflect the sum of the total
time for these combined procedures. Commenters further noted that the
proposed work RVU of 17.58 is lower, even, than the existing work RVU
for CPT code 31584. A commenter requested that CMS consider two
additional codes for comparison: CPT code 37660 and CPT code 43280.
Response: We take multiple factors into account when valuing a
service that replaces two previously separate codes. We consider the
efficiencies of combining two services, as reflected in the adjustment
upwards of the intra-service and total time for this code. We also
review the code description and identify a value that is consistent
with other, similar, 90-day global codes. Our valuation is above the
median work RVU for a group of 28 codes with similar intraservice and
total time. Commenters have not provided any additional information
that would suggest this code should be valued differently from other
90-day global codes with similar time and intensity.
We reviewed the two additional codes that commenters recommended as
comparisons. We note that CPT code 43280 (work RVU of 18.1) was most
recently valued in 1997 and that for low-volume code CPT code 37660,
physician intensity is considerably higher than that for CPT code
31584, suggesting a poor reference for comparing the work involved in
furnishing the service. For these reasons, we do not believe this code
is an appropriate comparison for CPT code 31584 and we are finalizing
our work RVU of 17.58 for CPT code 31584.
For CPT code 31591, the RUC recommended a work RVU of 15.60. We
believed that the 25th percentile of the survey, which is a work RVU of
13.56, better represents the time and intensity involved with
furnishing this service based on a comparison of the overall intensity
of other codes with similar instraservice and total time. The 25th
percentile of the survey is additionally bracketed by two crosswalk
codes that we estimate have slightly lower and slighter higher overall
intensities, CPT code 36819 (Arteriovenous anastomosis, open; by upper
arm basilic vein transposition), which has a work RVU of 13.29, and CPT
code 49654 (Laparoscopy, surgical, repair, incisional hernia (includes
mesh insertion, when performed); reducible), which has a work RVU of
13.76; both of these codes have identical intraservice time and similar
total time. Therefore, we proposed a work RVU of 13.56 for CPT code
31591.
Comment: Several commenters disagreed with our proposed work RVU of
13.56 for CPT code 31591, stating that the RUC-recommended work RVU of
15.60 better reflects the work required to perform the procedure.
Response: In developing our proposed valuation, we looked at other
90-day global codes with identical intraservice time and similar total
time (between 275 and 335), and we note that the median work RVU of the
resulting values (reflecting 33 codes) is 13.76. We chose the 25th
percentile of the survey because of its closeness to the median work
RVU of comparable services. We recognize that the RUC's crosswalk to
CPT code 58544, with a work RVU of 15.60, has a lower total time than
the codes we used as comparisons, but we note that this code has very
low utilization, with 103 procedures billed in 2015. We continue to
believe that two codes bracketing the 25th percentile of the work RVU
for CPT code 31591 (CPT codes 36819 and 49654), as noted in the CY2017
PFS proposed rule, provide a better reference for valuing the new code,
and that a work RVU of 13.56 adequately represents the time and
intensity involved with furnishing the service. Therefore, we are
finalizing our proposed work RVU of 13.56 for CPT code 31591.
Additionally, the RUC forwarded invoices provided by a medical
specialty society for the video-flexible laryngoscope system used in
these services. We discussed our proposed changes to the items included
in equipment item ES031 (video system, endoscopy) in the CY 2017
proposed rule (81 FR 46247). Consistent with those proposed changes, we
proposed to add a Nasolaryngoscope, non-channeled, to the list of
equipment items used for CPT codes 31580, 31584, 31587, 31551-31554,
31591, and 31592, along with the modified equipment item ES031.
Comment: We received several comments, including from the RUC,
about our proposal to implement a separate pricing approach for
equipment inputs for this family of codes. Commenters requested a delay
in implementing our approach until the RUC convened a PE subcommittee
and provided CMS with specific recommendations for these codes.
Response: We appreciate the commenters' interests in making certain
that there is appropriate opportunity for stakeholders to provide
feedback and recommendations on the reclassification and pricing of
scopes. Because these codes are currently under review, however, we
believe that they should be valued according to a scheme that
accurately describes the scope equipment typically used in the
services. We continue to believe that our proposed classification
system for scopes is the more proper methodology to use for valuation
of these codes for the CY 2017. Please refer to II.A of the final rule
for additional discussion on the new pricing process.
(13) Closure of Left Atrial Appendage With Endocardial Implant (CPT
Code 33340)
The CPT Editorial Panel deleted category III CPT code 0281T
(Percutaneous transcatheter closure of the left atrial appendage with
implant, including fluoroscopy, transseptal puncture, catheter
placement(s), left atrial angiography, left atrial appendage
angiography, radiological supervision and interpretation) and created
new CPT code 33340 to describe percutaneous transcatheter closure of
the left atrial appendage with implant. The RUC recommended a work RVU
of 14.00. We proposed a work RVU of 13.00 for CPT code 33340, which is
the minimum survey result. Based on our clinical judgment and that the
key reference codes discussed in the RUC recommendations have higher
intraservice and total service times than the median survey results for
CPT code 33340, we stated in the CY 2017 proposed rule that we believe
a work RVU of 13.00 would more accurately represent the work value for
this service.
Comment: We received several comments, including from the RUC.
Commenters noted inaccuracies in CMS' description of the RUC
recommendations including descriptions of the relationship between the
RUC-recommended work RVU, survey results, and service times for the two
key reference codes. Commenters requested that CMS finalize the RUC-
recommended work RVU of 14.00.
Response: We appreciate the commenters' feedback and acknowledge
that we inadvertently mischaracterized the RUC's recommendations
related to this service. We agree that the survey results showed a 25th
percentile survey result of 19.88 and that during the RUC meeting, this
code was referred to the facilitation committee whereby the RUC
identified two comparable codes with

[[Page 80289]]

14.00 work RVUs, which the RUC factored into its analysis and
recommended valuation for this service. After consideration of the
comments, we are finalizing the RUC-recommended work RVU of 14.00 for
CPT code 33340.
(14) Valvuloplasty (CPT Codes 33390 and 33391)
The CPT Editorial Panel created new codes to describe valvuloplasty
procedures and deleted existing CPT code 33400 (Valvuloplasty, aortic
valve; open, with cardiopulmonary bypass). New CPT code 33390
represents a simple valvuloplasty procedure and new CPT code 33391
describes a more complex valvuloplasty procedure. We proposed to use
the RUC-recommended values for CPT code 33390. For CPT code 33391, the
RUC recommended a work RVU of 44.00, the 25th percentile survey result.
The RUC estimated that approximately 70 percent of the services
previously reported using CPT code 33400 would be reported using CPT
code 33391, with 30 percent reported using new CPT code 33390.
Therefore, the typical service previously reported with CPT code 33400
ought to now be reported with CPT code 33391. Compared to deleted CPT
code 33400, the survey results for CPT code 33391 showed similar median
intraservice times and decreased total times. Therefore, we proposed a
work RVU of 41.50 for CPT code 33391, which is the current value of CPT
code 33400. Given that the typical service should remain consistent
between the two codes, we stated that we believe the work RVUs should
remain consistent as well.
Comment: Commenters disagreed with CMS' proposed valuation of CPT
code 33391, citing increased intensity and complexity of the
procedures. Commenters noted that more complex patients are undergoing
valvuloplasty (for instance, adult cardiac patients) when historically
these patients would have received aortic valve replacements.
Response: As discussed in the CY 2017 proposed rule, the deleted
CPT code 33400 is being replaced with two CPT codes that identify
simple and complex procedures. The RUC's utilization crosswalk suggests
that approximately 70 percent of the services that would previously
have been reported using the combined code (CPT code 33400) would now
be reported with CPT code 33391, the complex procedure. Based on the
RUC's utilization crosswalk, the complex procedure would be the typical
procedure reported under the combined code (CPT code 33400). The survey
data for the complex procedure (CPT code 33391) showed similar median
intraservice times and decreased total times compared to CPT code
33400. Therefore, for CY 2017, we are finalizing a work RVU of 35.00
for CPT code 33390 and a work RVU of 41.50 for CPT code 33391.
(15) Mechanochemical Vein Ablation (MOCA) (CPT Codes 36473 and 36474)
At the October 2015 CPT meeting, the CPT Editorial Panel
established two Category I codes for reporting venous mechanochemical
ablation, CPT codes 36473 and 36474. We proposed the RUC-recommended
work RVU of 3.50 for CPT code 36473. For CPT code 36474, we proposed a
work RVU of 1.75 and stated that we believed the RUC-recommended work
RVU of 2.25 does not accurately reflect the typical work involved in
furnishing this procedure. The specialty society survey showed that
this add-on code has half the work of the base code (CPT code 36473).
This value is supported by the ratio between work and time in the key
reference service (CPT code 36476: Endovenous ablation therapy of
incompetent vein, extremity, inclusive of all imaging guidance and
monitoring, percutaneous, radiofrequency; second and subsequent veins
treated in a single extremity, each through separate access sites (List
separately in addition to code for primary procedure)).
The RUC-recommended direct PE inputs for CPT codes 36473 and 36474
included inputs for an ultrasound room (EL015). Based on the clinical
nature of these procedures, we stated in our proposal that we do not
believe that an ultrasound room would typically be used to furnish
these procedures. We proposed to remove inputs for the ultrasound room
and subsequently include a portable ultrasound (EQ250), power table
(EF031), and light (EF014). The RUC also recommended that the
ultrasound machine be allocated clinical staff time based on the PACS
workstation formula. We stated that we did not believe that an
ultrasound machine would be used like a PACS workstation, as images are
generated and reviewed in real time. Therefore, we proposed to remove
all direct PE inputs associated with the PACS workstation.
Comment: We received several comments, including from the RUC.
Commenters disagreed with CMS' proposed work RVU of 1.75 for CPT code
36474 and requested that CMS finalize the RUC's recommendation of 2.25
work RVUs. The RUC disagreed with CMS' rationale for the proposed work
RVU for CPT code 36474. The RUC stated that the ratio between CMS'
proposed physician time and physician work for the survey code is
0.058, whereas that same ratio for the key reference code used by the
RUC is 0.0883, and that the divergent ratios between the two services
are not comparable.
Response: The commenters recommended that we accept the RUC-
recommended ratio of 36 percent between the RUC-recommended work RVUs
for CPT codes 36473 and 36474. We disagree. The RUC survey reported 79
minutes of total time for CPT code 36473 and 30 minutes of total time
for CPT code 36474, a decrease of greater than 50 percent between the
base code and the add-on code. As discussed in the proposed rule, our
proposed work RVU of 1.75 for CPT code 36474 is supported by the ratio
between work and time in the key reference service. The RUC
recommendations made reference to two identical sets of services that
use differing mechanisms for ablating the vein (radiofrequency
procedures reported with CPT codes 36475 and 36476 (work RVUs of 5.30
and 2.65); laser procedures reported with CPT codes 36478 and 36479
(work RVUs of 5.30 and 2.65)). Both key reference code sets have a work
RVU ratio of 50 percent (5.30 versus 2.65) between the base codes and
the add-on codes. Therefore, for CY 2017, we are finalizing a work RVU
of 3.50 for CPT code 36473 and a work RVU of 1.75 for CPT code 36474.
Comment: Commenters requested that CMS restore the direct PE inputs
for the ultrasound room, which includes the PACS workstation.
Commenters stated that the PACS workstation is needed for these
procedures to store and make images available for future use.
Response: Commenters suggested that the ultrasound room was
necessary for this procedure since the ultrasound room includes a PACS
workstation that would allow for storage of the images and subsequent
future use. As we discussed in the proposed rule, during the typical
procedure, the images would be used in real time rather than being
stored for subsequent interpretation. Further, the ultrasound room
would not be typically used during these procedures. Our proposal
included a portable ultrasound that allows for use of the images during
the course of the procedure.
Comment: One commenter requested that CMS include an additional
direct PE input for a ClariVein catheter for both CPT codes 36473 and
36474, and included invoices related to this item. The commenter
suggested that an additional catheter is necessary to prevent
contamination during treatment of subsequent vessels if the catheter

[[Page 80290]]

used in an initial vessel were reused in a subsequent vessel.
Response: The invoice data submitted by the commenter appears to be
applicable to the ClariVein catheters in some instances and in others
to the ClariVein kits. Our review of the ClariVein kits indicated that
the ClariVein catheters are part of the ClariVein kits. Because we lack
clear product data regarding the cost of the ClariVein kits versus the
ClariVein catheters and whether the catheters are included in the price
of the kits, for CY 2017, we are finalizing our proposed direct PE
inputs for the ClariVein kits for CPT codes 36473 and 36474 without
modification. We welcome additional feedback from stakeholders
regarding the product data and costs for the ClariVein catheters and
ClariVein kits for consideration in future rulemaking.
(16) Dialysis Circuit (CPT Codes 36901, 36902, 36903, 36904, 36905,
36906, 36907, 36908, 36909)
In January 2015, a CPT/RUC workgroup identified the following CPT
codes as being frequently reported together in various combinations:
35475 (Transluminal balloon angioplasty, percutaneous; brachiocephalic
trunk or branches, each vessel), 35476 (Transluminal balloon
angioplasty, percutaneous; venous), 36147 (Introduction of needle and/
or catheter, arteriovenous shunt created for dialysis (graft/fistula);
initial access with complete radiological evaluation of dialysis
access, including fluoroscopy, image documentation and report), 36148
(Introduction of needle and/or catheter, arteriovenous shunt created
for dialysis (graft/fistula); additional access for therapeutic
intervention), 37236 (Transcatheter placement of an intravascular
stent(s) (except lower extremity artery(s) for occlusive disease,
cervical carotid, extracranial vertebral or intrathoracic carotid,
intracranial, or coronary), open or percutaneous, including
radiological supervision and interpretation and including all
angioplasty within the same vessel, when performed; initial artery),
37238 (Transcatheter placement of an intravascular stent(s), open or
percutaneous, including radiological supervision and interpretation and
including angioplasty within the same vessel, when performed; initial
vein), 75791 (Angiography, arteriovenous shunt (eg, dialysis patient
fistula/graft), complete evaluation of dialysis access, including
fluoroscopy, image documentation and report (includes injections of
contrast and all necessary imaging from the arterial anastomosis and
adjacent artery through entire venous outflow including the inferior or
superior vena cava), radiological supervision and interpretation),
75962 (Transluminal balloon angioplasty, peripheral artery other than
renal, or other visceral artery, iliac or lower extremity, radiological
supervision and interpretation), and 75968 (Transluminal balloon
angioplasty, each additional visceral artery, radiological supervision
and interpretation). These codes are frequently reported together for
both dialysis circuit services and transluminal angioplasty services.
At the October 2015 CPT Editorial Panel meeting, the panel approved the
creation of nine new codes and deletion of four existing codes used to
describe bundled dialysis circuit intervention services, and the
creation of four new codes and deletion of 13 existing codes used to
describe bundled percutaneous transluminal angioplasty services (see
discussion of the latter code family in the next section). The Dialysis
Circuit family of codes overlaps with the Open and Percutaneous
Transluminal Angioplasty family of codes (CPT codes 37246-37249), as
they are both being constructed from the same set of frequently
reported together codes. We reviewed these two families of codes
concurrently to maintain relativity between these clinically similar
procedures based upon the same collection of deleted codes.
For CPT code 36901, we proposed a work RVU of 2.82 instead of the
RUC-recommended work RVU of 3.36. When we compared CPT code 36901
against other codes in the RUC database, we found that the RUC-
recommended work RVU of 3.36 would be the highest value in the database
among the 32 0-day global codes with 25 minutes of intraservice time.
Generally speaking, we are particularly skeptical of RUC-recommended
values for newly ``bundled'' codes that appear not to recognize the
full resource overlap between predecessor codes. Since the recommended
values would establish a new highest value when compared to other
services with similar time, we believed it likely that the recommended
value for the new code does not reflect the efficiencies in time. Of
course, were there compelling evidence for this valuation accompanying
the recommendation, we would consider such information. We also noted
that the reference code selected by the survey participants, CPT code
36200 (Introduction of catheter, aorta), has a higher intraservice time
and total time, but a lower work RVU of 3.02 We believe that there are
more accurate CPT codes that can serve as a reference for CPT code
36901. As a result, we proposed to crosswalk CPT code 36901 to CPT code
44388 (Colonoscopy through stoma; diagnostic). CPT code 44388 has a
work RVU of 2.82, and we believe it is a more accurate crosswalk for
valuation due to its similar overall intensity and shared intraservice
time of 25 minutes with 36901 and similar total time of 65 minutes.
We proposed a work RVU of 4.24 for CPT code 36902 instead of the
RUC-recommended work RVU of 4.83. The RUC-recommended work RVU is based
upon a direct crosswalk to CPT code 43253 (Esophagogastroduodenoscopy,
flexible, transoral), which shares the same 40 minutes of intraservice
time with CPT code 36902. However, CPT code 43253 has significantly
longer total time than CPT code 36902, 104 minutes against 86 minutes,
which we believe reduces its utility for comparison. We instead
proposed to crosswalk the work RVU for CPT code 36902 from CPT code
44408 (Colonoscopy through stoma), which has a work RVU of 4.24. In
addition to our assessment that the two codes share similar
intensities, CPT code 44408 also shares 40 minutes of intraservice time
with CPT code 36902 but has only 95 minutes of total time and matches
the duration of the procedure under review more closely than the RUC-
recommended crosswalk to CPT code 43253. We also note that the RUC-
recommended work increment between CPT codes 36901 and 36902 was 1.47,
and by proposing a work RVU of 4.24 for CPT code 36902, we would
maintain a very similar increment of 1.42. As a result, we proposed a
work RVU of 4.24 for CPT code 36902, based on this direct crosswalk to
CPT code 44408. For CPT code 36903, we proposed a work RVU of 5.85
instead of the RUC-recommended work RVU of 6.39. The RUC-recommended
value is based on a direct crosswalk to CPT code 52282
(Cystourethroscopy, with insertion of permanent urethral stent). Like
the previous pair of RUC-recommended crosswalk codes, CPT code 52282
shares the same intraservice time of 50 minutes with CPT code 36903,
but has substantially longer total time (120 minutes against 96
minutes) which we believe limits its utility as a crosswalk. We
proposed a work RVU of 5.85 based on maintaining the RUC-recommended
work RVU increment of 3.03 as compared to CPT code 36901 (proposed at a
work RVU of 2.82), the base code for this family of related procedures.
We also point to CPT code 44403 (Colonoscopy through stoma; with
endoscopic mucosal resection) as a reference point for this value. CPT
code

[[Page 80291]]

44403 has a work RVU of 5.60, but also lower intraservice time (45
minutes as compared to 50 minutes) and total time (92 minutes as
compared to 96 minutes) in relation to CPT code 36903, suggesting that
a work RVU a bit higher than 5.60 would be an accurate valuation.
Therefore, we proposed a work RVU of 5.85 for CPT code 36903, based on
an increment of 3.03 from the work RVU of CPT code 36901.
We proposed a work RVU of 6.73 instead of the RUC-recommended work
RVU of 7.50 for CPT code 36904. Our proposed value comes from a direct
crosswalk from CPT code 43264 (Endoscopic retrograde
cholangiopancreatography), which shares the same intraservice time of
60 minutes with CPT code 36904 and has a higher total time. We also
looked to the intraservice time ratio between CPT codes 36901 and
36904; this works out to 60 minutes divided by 25 minutes, for a ratio
of 2.4, and a suggested work RVU of 6.77 (derived from 2.4 times CPT
code 36901's work RVU of 2.82). This indicates that our proposed work
RVU of 6.73 maintains relativity within the Dialysis Circuit family. As
a result, we proposed a work RVU of 6.73 for CPT code 36904, based on a
direct crosswalk to CPT code 43264.
We proposed a work RVU of 8.46 instead of the RUC-recommended work
RVU of 9.00 for CPT code 36905. We looked at the intraservice time
ratio between CPT codes 36901 and 36905 as one potential method for
valuation, which is a 1:3 ratio (25 minutes against 75 minutes) for
this case. This means that one potential value for CPT code 36905 would
be triple the work RVU of CPT code 36901, or 2.82 times 3, which
results in a work RVU of 8.46. We also investigated preserving the RUC-
recommended work RVU increment between CPT code 36901 and 36905, which
was an increase of 5.64. When this increment is added to the work RVU
of 2.82 for CPT code 36901, it also resulted in a work RVU of 8.46 for
CPT code 36905. Therefore, we proposed a work RVU of 8.46 for CPT code
36905, based on both the intraservice time ratio with CPT code 36901
and the RUC-recommended work increment with the same code.
For CPT code 36906, we proposed a work RVU of 9.88 instead of the
RUC-recommended work RVU of 10.42. We based the proposed value upon the
RUC-recommended work RVU increment between CPT codes 36901 and 36906,
which is 7.06. When added to the work RVU of 2.82 for CPT code 36901,
the work RVU for CPT code 36906 would be 9.88. We are supporting this
value through the use of two crosswalks that both share the same 90
minutes of intraservice time with 36906. These are CPT code 31546
(Laryngoscopy, direct, with submucosal removal of non-neoplastic
lesion(s) of vocal cord) at a work RVU of 9.73 and CPT code 61623
(Endovascular temporary balloon arterial occlusion, head or neck) at a
work RVU of 9.95.
The final three codes in the Dialysis Circuit family are all add-on
codes, which make comparisons difficult to the global 0-day codes that
make up the rest of the family. We proposed a work RVU of 2.48 instead
of the RUC-recommended work RVU of 3.00 for CPT code 36907. Due to the
difficulty of comparing CPT code 36907 with the non-add-on codes in the
rest of the Dialysis Circuit family, we looked instead to compare the
value to the add-on codes in the Open and Percutaneous Transluminal
Angioplasty family of codes (CPT codes 37246-37249). As we stated
previously, both of these groups of new codes are being constructed
from the same set of frequently reported together codes. We reviewed
these two families of codes together to maintain relativity across the
two families, and so that we could compare codes that shared the same
global period.
We proposed the RUC-recommended work RVUs for all four codes in the
Open and Percutaneous Transluminal Angioplasty family of codes. As a
result, we compared CPT code 36907 with the RUC-recommended work RVU of
2.97 for CPT code 37249, which is also an add-on code. These procedures
should be clinically very similar, since both of them are performing
percutaneous transluminal angioplasty on a central vein, and both of
them are add-on procedures. We looked at the intraservice time ratio
between these two codes, which was a comparison between 25 minutes for
CPT code 36907 against 30 minutes for CPT code 37249. This produces a
ratio of 0.83, and a proposed work RVU of 2.48 for CPT code 36907 when
multiplied with the RUC-recommended work RVU of 2.97 for CPT code
37249. We noted as well that the intensity was markedly higher for CPT
code 36907 as compared to CPT code 37249 when using the RUC-recommended
work values, which did not make sense since CPT code 36907 would
typically be a clinically less intense procedure. Using the
intraservice time ratio results in the two codes having exactly the
same intensity. As a result, we therefore proposed a work RVU of 2.48
for CPT code 36907, based on this intraservice time ratio with the RUC-
recommended work RVU of CPT code 37249.
For CPT code 36908, we disagree with the RUC-recommended work RVU
of 4.25, and we instead proposed a work RVU of 3.73. We did not
consider the RUC work value of 4.25 to be accurate for CPT code 36908,
as this was higher than our proposed work value for CPT code 36902
(4.24), and we did not believe that an add-on code should typically
have a higher work value than a similar non-add-on code with the same
intraservice time. We identified two appropriate crosswalks for valuing
CPT code 36908: CPT code 93462 (Left heart catheterization by
transseptal puncture through intact septum or by transapical puncture)
and CPT code 37222 (Revascularization, endovascular, open or
percutaneous, iliac artery). Both of these codes share the same
intraservice time as CPT code 36908, and both of them also have the
same work RVU of 3.73, which results in these codes also sharing the
same intensity since they are all add-on codes. We therefore proposed a
work value of 3.73 for CPT code 36908, based on a direct crosswalk to
CPT codes 93462 and 37222.
Finally, we proposed a work RVU of 3.48 for CPT code 36909 instead
of the RUC-recommended work RVU of 4.12. The RUC-recommended value
comes from a direct crosswalk from CPT code 38746 (Thoracic
lymphadenectomy by thoracotomy). We compared the RUC-recommended work
RVU for this procedure to other add-on codes with 30 minutes of
intraservice time and found that the recommended work RVU of 4.12 would
overestimate the overall intensity of this service relative to those
with similar times. In reviewing the range of these codes, we believed
that a more appropriate crosswalk is to CPT code 61797 (Stereotactic
radiosurgery (particle beam, gamma ray, or linear accelerator)) at a
work RVU of 3.48. We believed that this value is more accurate when
compared to other add-on procedures with 30 minutes of intraservice
time across the PFS. As a result, we proposed a work RVU of 3.48 for
CPT code 36909 based on a direct crosswalk from CPT code 61797.
We proposed to use the RUC-recommended direct PE inputs for these
nine codes with several refinements. We did not propose to include the
recommended additional preservice clinical labor for CPT codes 36904,
36905, and 36906. The preservice work description is identical for all
six of the global 0-day codes in this family; there is no justification
given in the RUC recommendations as to why the second three codes need
additional clinical labor time beyond the minimal preservice clinical
labor assigned to the

[[Page 80292]]

first three codes. We do not believe that the additional staff time
would be typical. Patient care already would have been coordinated
ahead of time in the typical case, and the need for unscheduled
dialysis or other unusual circumstances would be discussed prior to the
day of the procedure. We therefore proposed to refine the preservice
clinical labor for CPT codes 36904, 36905, and 36906 to match the
preservice clinical labor of CPT codes 36901, 36902, and 36903.
We proposed to refine the L037D clinical labor for ``Prepare and
position patient/monitor patient/set up IV'' from 5 minutes to 3
minutes for CPT codes 36901-36906. The RUC recommendation included a
written justification for additional clinical labor time beyond the
standard 2 minutes for this activity, stating that the extra time is
needed to prepare the patient's arm for the procedure. We agreed that
extra time may be needed for this activity as compared to the default
standard of 2 minutes; however, we proposed to assign 1 extra minute
for preparing the patient's arm, resulting in a total of 3 minutes for
this task. We did not believe that 3 extra minutes would be typically
needed for arm positioning.
We proposed to remove the ``kit, for percutaneous thrombolytic
device (Trerotola)'' supply (SA015) from CPT codes 36904, 36905, and
36906. We believed that this thrombolytic device kit and the
``catheter, thrombectomy-Fogarty'' (SD032) provide essentially the same
supply, and the use of only one of them would be typical in these
procedures. We believed that each of these supplies can be used
individually for thrombectomy procedures. We proposed to remove the
SA015 supply and retain the SD032 supply, and we solicited additional
comment and information regarding the use of these two supplies.
We also proposed to remove the recommended supply item ``covered
stent (VIABAHN, Gore)'' (SD254) and replace it with the ``stent,
vascular, deployment system, Cordis SMART'' (SA103) for CPT codes 36903
and 36906. The Cordis SMART vascular stent was previously used in the
past for CPT code 37238, which is the deleted code for transcatheter
placement of an intravascular stent that CPT codes 36903 and 36906 are
replacing. We did not have a stated rationale as to the need for this
supply substitution, and therefore, we did not believe it would be
appropriate to replace the current items with a significantly higher-
priced item without additional information.
We also proposed to refine the quantity of the ``Hemostatic patch''
(SG095) from 2 to 1 for CPT codes 36904, 36905, and 36906. This supply
was not included in any of the deleted base codes out of which the new
codes are being constructed, and while we agreed that the use of a
single hemostatic patch has become common clinical practice, we did not
agree that CPT codes 36904-36906 would typically require a second
patch. As a result, we proposed to refine the SG095 supply quantity
from 2 to 1 for CPT codes 36904-36906, which also matches the supply
quantity for CPT codes 36901-36903.
Included in the RUC recommendation for the Dialysis Circuit family
of codes were a series of invoices for a ``ChloraPrep applicator (26
ml)'' supply. We solicited comments regarding whether the Betadine
solution has been replaced by a Chloraprep solution in the typical case
for these procedures. We also solicited comments regarding whether the
``ChloraPrep applicator (26 ml)'' detailed on the submitted invoices is
the same supply as the SH098 ``chlorhexidine 4.0% (Hibiclens)''
applicator currently in the direct PE database.
Finally, we also solicited comments about the use of guidewires for
these procedures. We requested feedback about which guidewires would be
typically used for these procedures, and which guidewires are no longer
clinically necessary.
The following is a summary of the comments we received regarding
our proposed valuation of the Dialysis Circuit codes. Due to the large
number of comments we received for this code family, we will first
summarize the comments related to general code valuation, followed by
the comments related to specific work RVUs, and finally the comments
related to direct PE inputs.
Comment: Several commenters stated that the cumulative impact of
reimbursement reductions for the Dialysis Circuit family of codes in
physician work and practice expense would be quite dramatic. The
commenters compared the total RVU of the old codes against the total
RVU of the newly created codes and found a decrease of roughly 20-30
percent. Commenters expressed concern that if the proposed rates were
to be implemented, many outpatient access centers that focus on
providing care for ESRD patients might no longer be able to operate.
Response: We share the concern of the commenters in maintaining
access to care for Medicare beneficiaries. We believe that improved
payment accuracy under the PFS generally facilitates access to
reasonable and necessary physicians' services.
We note that a change in overall RVUs for particular services,
regardless of the magnitude of the change, may reflect improved
accuracy. For example, comparing the summed total RVU of CPT codes
36147, 36148, 36870, and 37238 against the total RVU of CPT code 36906
is an accurate method to describe the services taking place under the
coding schema effective for 2016 and 2017, respectively. Through the
bundling of these frequently reported services, it is reasonable to
expect that the new coding system will achieve savings via elimination
of duplicative assumption of the resources involved in furnishing
particular servicers. For example, a practitioner would not be carrying
out the full preservice work four separate times for CPT codes 36147,
36148, 36870, and 37238, but preservice times were assigned to each of
the codes under the old coding. We believe the new coding assigns a
more accurate preservice time and thus reflects efficiencies in
resource costs that existed regardless of how the services were
previously reported.
Comment: Several commenters objected to the crosswalk codes used by
CMS for proposed work valuation. Commenters stated that comparing the
Dialysis Circuit codes to colonoscopy or endoscopic retrograde
cholangiopancreatography (ERCP) codes was inappropriate, as it
undervalued the technical skill and judgment necessary to furnish the
services. In other words, the crosswalks chosen by CMS were invalid due
to the differences in the procedures in question, with the Dialysis
Circuit codes being more intensive procedures than the CMS crosswalks.
Response: We disagree with the commenters that the choice of
crosswalk codes is inappropriate for work valuation. We believe that,
generally speaking, codes with similar intensity and time values are
broadly comparable across the PFS, as the fee schedule is based upon a
relative value system. For the Dialysis Circuit codes in particular, we
provided a specific rationale for each crosswalk detailing why we
believed it to be an appropriate selection. Regarding the statement
from the commenters that colonoscopy codes, such as CPT code 44388, are
inappropriate for use as crosswalks in this family of codes, we note
that the RUC-recommended work RVU for CPT code 36901 was based upon a
direct crosswalk to the work RVU of a colonoscopy code (CPT code
45378). We continue to believe that the crosswalks for this family of
codes are appropriate

[[Page 80293]]

choices, since they share highly similar intensity and time values with
the reviewed codes.
Comment: Some commenters disagreed with the use of time ratios for
work valuation. These commenters stated that the use of direct
crosswalks based only on intraservice time comparison or ratios of
intraservice time inappropriately discounted the variation in technical
skill, judgment, and risk inherent to these procedures.
Response: We continue to believe that the use of these
methodologies, including the use of time ratios, is an appropriate
process for identifying potential values for particular codes,
especially when the recommended work RVUs do not appear to account for
significant changes in time. As we stated earlier in our discussion on
this topic in this final rule, we use time ratios to identify potential
work RVUs and consider these work RVUs as potential options relative to
the values developed through other methodologies for code valuation. We
continue to believe our valuation for the Dialysis Circuit codes
accurately captures the reduction in physician work caused by the
efficiencies gained in both time and intensity through the bundling
together of frequently reported services.
Comment: One commenter disagreed with the use of CMS comparisons
between the RUC-recommended work RVUs for the Dialysis Circuit codes
and the work RVU for other codes with similar time values in the rest
of the fee schedule, particularly for CPT code 36901. The commenter
stated that whether or not CPT code 36901 had the highest work RVU
among other 0-day global codes with 25 minutes of intra-service time
was irrelevant. The commenter pointed out that some code must be the
highest value because the RBRVS represents a range of services of
varying intensity. The commenter stated that CMS' reasoning undervalued
the importance of work intensity in favor of the more easily
quantifiable time variable, which was clinically inaccurate and
contradictory to the principles of the relative value system.
Response: We disagree with the commenter about the invalidity of
comparing newly created codes to existing codes with similar time
values on the PFS. While it is true that there must be a highest value
for any particular subset of codes, we believe the best approach in
establishing work RVUs for codes is to compare the service to other
services with similar times and identify codes with similar overall
intensities. As we wrote in the proposed rule with regards to CPT code
36901, we have reservations with RUC-recommended values for newly
``bundled'' codes that appear not to recognize the full resource
overlap between predecessor codes. Since the recommended values would
establish a new highest value when compared to other services with
similar time, we believe it likely that the recommended value for the
new code does not reflect the efficiencies gained through bundling. We
believe that these comparisons to other codes with similar time values
and intensities are an important tool in helping to maintain relativity
across the fee schedule.
Comment: A commenter disagreed with the CMS valuation for these
codes based on a clinical rationale pertaining to how the services are
defined. The commenter stated that the dialysis access circuit is
defined as originating in the artery adjacent to the arterial
anastomosis and including all venous outflow (whether single or
multiple veins) to the axillary-subclavian vein junction. While several
different arteries and veins may be included in this definition, from a
functional perspective it is a single ``vessel''. The commenter stated
that because of this greater propensity for multiple lesions in these
procedures, it is appropriate to define the access vessel as CPT has
done and allow reporting of only a single angioplasty or stent in that
entire conduit. However, the commenter reported that the survey built
on the ``typical patient'' (51 percent of the cases) was unable to
recognize the additional work of additional angioplasty or stent for
the Dialysis Circuit family of codes, even though multiple or arterial
lesions occur with significant frequency. Because the coding structure
of the Dialysis Circuit family does not include a code for ``additional
vessels'', the valuation of the codes needs to incorporate the resource
cost of patient cases where multiple or arterial lesions occur. The
commenter contended that this problem with the survey methodology
affected the work intensity of these codes, and justifies a higher
intensity for these procedures.
Response: We share the commenter's concerns with the survey data
collected by the RUC. This is why we have long employed different
approaches to identify potential values for work RVUs, such as time
ratios, building blocks, and crosswalks to key reference or similar
codes, in addition to the recommended survey data. We also note that
our methodology generally values services based on assumptions
regarding the typical case, not occasional complications that may
require additional work when they occur. For the particular case of the
Dialysis Circuit family of codes, we do not agree with the commenter
that the single ``vessel'' classification of these procedures supports
a higher intensity compared to other related codes. These codes have
been defined by CPT in a similar fashion to the lower extremity
revascularization codes, in which the code is only billed a single time
regardless of the number of lesions or number of stents placed. Due to
the similarity with these existing codes located elsewhere in the PFS,
we do not believe that it would be appropriate to value the Dialysis
Circuit codes differently.
Comment: Several commenters suggested that there was compelling
evidence for the higher RUC-recommended work RVUs because the vignette
developed by the CPT Editorial Panel does not accurately reflect the
typical ESRD patient. Commenters stated that the vignette for the
Dialysis Circuit codes significantly underestimated the age of the
typical patient, and may have led survey respondents to report less
time. According to commenters, the frail and elderly ESRD patients that
constitute the typical patients for these procedures are much sicker
than the typical patient in other codes on the PFS, and this serves to
justify valuing these codes at a higher intensity.
Response: We appreciate the submission of additional information
regarding the patient population for these codes. We recognize that
some services may require additional work due to an unusually difficult
patient population. However, we do not agree at this time that the
Dialysis Circuit family of codes has a uniquely different patient
population that justifies an increase in valuation over other
comparable codes on the PFS. We note that for CPT code 36901, the RUC
recommended a work RVU of 3.36 based on a direct crosswalk to CPT code
45378, a flexible colonoscopy code. Our proposed work RVU of 2.82 for
the same code was based on a direct crosswalk to CPT code 44388, which
is another colonoscopy code. The patient population for these two
crosswalk codes is similar, and both codes share similar time and
intensity. We believe that our crosswalk code is a more appropriate
choice given the time values and the efficiencies gained from bundling.
However, based on this recommended crosswalk code, we believe that the
RUC considers the patient population for CPT code 45378 to be
appropriate for comparison to CPT code 36901, and that the reviewed
code does not possess an unusually resource-intensive patient
population. This same

[[Page 80294]]

pattern holds true for the other codes in the Dialysis Circuit family,
which were valued using similar comparisons to established codes with
typical patient populations.
Comment: One commenter suggested that the difficulties posed by the
patient population for the Dialysis Circuit codes were not sufficiently
reflected in the RUC recommendations. The commenter stated that the
patients receiving dialysis circuit services are extremely sick, and
every step in the process of caring for those patients is more complex
than those involved in caring for the average Medicare patient. The
commenter stated that CMS underestimated the amount of time required to
perform specific tasks and assumes that those tasks can be performed by
individuals with lower levels of training and credentials than are used
in typical practice. The commenter requested a series of direct PE
refinements to this family of codes, many of which went above the
original RUC recommendations, including clinical labor times
significantly above the usual standards and using clinical labor
staffing types outside the normal range. The commenter stated an
intention to present data to support the recommendations at a later
date.
Response: We appreciate the additional information provided by the
commenter about this family of codes. We emphasize that we do not
believe that the RUC need be the exclusive source of information used
in valuation of PFS services, and we are supportive of the submission
of additional data that can aid in the process of determining the
resources that are typically used to furnish these services. Because we
did not receive data from the commenter to support these increases
above the RUC recommendations, we are not incorporating these changes
into the Dialysis Circuit codes at this time. However, we urge
interested stakeholders to consider submitting robust data regarding
costs for these and other services.
We are also seeking information on how to reconcile situations
where we have multiple sets of recommendations from the RUC and from
other PFS stakeholders, both for this specific case and for the
situation more broadly, given the need to maintain relativity among PFS
services.
The following comments address the proposed work valuation of
individual codes in the family.
Comment: A commenter contended that the proposed work RVU of 2.82
undervalues CPT code 36901. The commenter stated that compelling
evidence regarding CPT's inaccurate description of the typical ESRD
patient as 45 years old led to lower survey times and hence the ``new
highest value'' problem mentioned by CMS. The commenter recommended
that CMS should finalize the RUC work RVU of 3.36, or barring that,
should finalize a work RVU of 3.02 based on a direct crosswalk to CPT
code 36200. The commenter stated that this code is very similar
clinically in work and intensity to CPT code 36901.
Response: We summarized and responded to the general issues
surrounding patient populations above. We disagree with the commenter
that CPT code 36200 is a more appropriate choice for a crosswalk code
for CPT code 36901. CPT code 36200 has 5 additional minutes of
intraservice time (30 minutes as compared to 25 minutes) and 25
additional minutes of total time (91 minutes as compared to 66
minutes). In addition to this substantial difference in time values,
the intensity of CPT code 36200 is also significantly lower than CPT
code 36901. If we were to adopt the recommended crosswalk to a work RVU
of 3.02, the intensity of CPT code 36901 would be 50 percent higher
than the intensity CPT code 36200. Since we are statutorily obligated
to base our valuation on time and intensity, we believe that this makes
CPT code 36200 an inferior choice for a crosswalk code when compared to
our choice of CPT code 44388, which shares very similar time and
intensity with CPT code 36901.
Comment: A commenter stated that CPT code 36902 should have a
higher increment in work RVU from CPT code 36901 because it included
work unable to be accounted for in a survey on the typical patient. The
commenter indicated that according to published literature, more than
one stenosis is present requiring angioplasty in 20-30 percent of
dialysis access cases. A higher increment in work RVU from CPT code
36901 to 36902 would reflect the work of additional angioplasty on
separate stenoses and arterial angioplasty that occurs in some cases,
but cannot be reflected in a ``typical'' 51 percent case vignette. The
commenter requested that CMS adopt the RUC-recommended work RVU for CPT
code 36902.
Response: We generally establish RVUs for services based on the
typical case. If a particular patient case requires treatment outside
the defined dialysis circuit code descriptor, then additional catheter
placement and imaging may be reported, assuming that all of the proper
requirements for separate billing are met. We do not believe that it
would be appropriate to increase the work RVU for CPT code 36902 based
on these non-typical situations.
Comment: A commenter stated that the CMS proposed work RVU of 5.85
undervalues the work involved in the services described by CPT code
36903, based on the belief that the CPT patient vignette does not
reflect the typical patient and that ``additional vessel'' angioplasty
or stenting work is included in CPT code 36903 but was not able to be
captured in a survey utilizing the ``typical'' patient.
Response: We addressed these issues in previous comment responses.
We continue to believe that the proposed work RVU for CPT code 36903 is
accurate.
Comment: A commenter disagreed with the proposed work RVUs for CPT
codes 36904 and 36905. The commenter suggested that CMS should use time
ratios from the base code in the family, CPT code 36901, starting from
a work RVU of 3.02 instead of the proposed work RVU of 2.82. The
commenter suggested that this would produce work RVUs for CPT codes
36904 and 36905 almost identical to the RUC-recommended values, which
the commenter urged CMS to adopt.
Response: We agree with the commenter that the use of time ratios
is one potential method to use in the process of determining code
valuation. However, since we stated previously that we believe our
proposed work RVU of 2.82 is more accurate for CPT code 36901 than the
commenter's suggestion of 3.02, we do not believe that applying the
same time ratios provides a rationale for adopting the RUC-recommended
work RVUs for CPT codes 36904 and 36905.
Comment: A commenter disagreed with CMS' proposed work RVU of 9.88
for CPT code 36906 based upon the RUC-recommended increment of 7.06
from CPT code 36901. The commenter stated that the RUC value was well
supported as the 25th percentile survey result and the survey times for
the code were adversely impacted by CPT errors in the code descriptor
and RUC survey limitations.
Response: We do not agree that the RUC's work valuation for CPT
code 36906 maintains relativity within the fee schedule. We believe
that the increment between CPT code 36901 and 36906 maintains
relativity within the Dialysis Circuit family of codes, which is why we
proposed to use it for valuation. However, we believe that the
recommended work RVU for CPT code 36906 insufficiently accounted for
the efficiencies in resource use achieved through bundling together its
predecessor codes. We continue to

[[Page 80295]]

believe that the proposed work RVU of 9.88, bracketed between
crosswalks to CPT codes 31546 and 61623, provides the most accurate
valuation for this service.
Comment: A commenter disagreed with the proposed work RVU of 2.48
for CPT code 36907, and stated that the work RVU should be identical to
CPT code 37249 at a value of 2.97. The commenter stated these two
services are clinically identical, and the CMS contention that CPT code
36907 would typically be a clinically less intense procedure is not
correct. According to the commenter, the intensity involved in both of
these add-on codes is the work and risk of crossing the central venous
stenosis and performing intervention within the thorax where
complications could be severe. The commenter stated that there is no
difference in this work intensity based upon the direction of
approach--from the dialysis access or from a native (femoral) vein.
Both require advancing a long wire from the access site through the
stenosis, superior and inferior vena cava, and right atrium, which is
needed no matter which direction one is approaching the lesion. As a
result, the commenter suggested that CPT code 36907 should have the
same work RVU as CPT code 37249.
Response: While we agree with the commenter that these two services
are clinically similar procedures, we do not agree with the commenter
that the work between the two is identical. In particular, we believe
that the difference in the intraservice time (25 minutes for CPT code
36907 against 30 minutes for CPT code 37249) should be accounted for in
the work valuation, as the former code takes 20 percent less time to
perform. We note as well that under our proposed valuation, these two
codes have exactly the same intensity, with the difference in the work
value occurring solely as a result of the decreased time required to
perform CPT code 36907. Since time is one of the resources we are
obligated to use for code valuation, we believe that the proposed
values for these two codes are more accurate than setting both of them
to the same work RVU.
Comment: One commenter supported the proposed work RVUs of 3.73 for
CPT code 36908 and 3.48 for CPT code 36909.
Response: We appreciate the support from the commenter.
The following comments address the proposed direct PE inputs for
the Dialysis Circuit family of codes.
Comment: Several commenters urged CMS to accept the recommended
additional preservice clinical labor for CPT codes 36904, 36905, and
36906. Commenters stated that the patient presentation and the
requisite preservice clinical labor is inherently different for CPT
codes 36904-36906 when compared with CPT codes 36901-36903. Commenters
indicated that the latter group are elective procedures, which are
scheduled and planned well in advance of the procedure and performed on
days that do not conflict with the patient's dialysis schedule. In
contrast, the former group are urgent procedures typically done when a
patient presents to their dialysis treatment with a thrombosed access.
According to the commenters, the urgent nature of these procedures, the
need for additional preoperative testing because of missed dialysis,
and the need for arranging unscheduled dialysis treatment requires
additional preservice time for the procedural staff.
Response: We disagree with the commenters. We continue to note that
the preservice work description is identical for all six of the 0-day
global codes in this family. Generally speaking, we also typically
provide less preservice clinical labor time for emergent procedures,
not more preservice clinical labor time, as there is no time for these
tasks to be performed. We continue to believe that all six of these
codes are most accurately valued by sharing the same preservice
clinical labor times.
Comment: Several commenters stated that the recommended 5 minutes
of clinical labor for ``Prepare and position patient/monitor patient/
set up IV'' were reasonable because these cases are done on the upper
extremity using portable c-arm fluoroscopy. According to commenters,
the additional time includes prepping and positioning the arm, applying
appropriate shielding to the patient's torso, positioning the c-arm
unit, and then positioning other radiation shielding devices.
Commenters stated that each of these activities requires more time in
the arm, which typically must be extended to the side to be accessible
for access and imaging; this is different from procedures done in the
long plane of the body including the torso and legs. The commenters
stated that 5 minutes is a more accurate reflection of the required
clinical labor time than the proposed 3 minutes.
Response: We continue to believe that additional time may be needed
for this activity as compared to the default standard of 2 minutes.
However, we maintain that the commenter's request for 3 additional
minutes (for a total of 5 minutes) would not typically be required for
arm positioning, as this additional clinical labor time is generally
not included in similar procedures. We do not agree that the additional
tasks described by the commenters would require the requested 5 minutes
of clinical labor time, and we are maintaining our proposed value of 3
minutes.
Comment: Several commenters opposed the CMS proposal to remove the
``kit, for percutaneous thrombolytic device (Trerotola)'' supply
(SA015) from the RUC recommended supplies for CPT code 36904, 36905,
and 36906, under the belief that only one device would typically be
used in these procedures. Commenters indicated that this understanding
was incorrect. According to the commenters, a mechanical thrombectomy
device and a Fogarty thrombectomy balloon serve different purposes and
both are necessary to perform a dialysis access thrombectomy.
Commenters provided lengthy clinical rationales to support their point
of view, which can be summarized as follows: ``The Fogarty balloon is
small and highly compliant allowing it to be pulled through the artery
and into the access without damaging the vessels. The thrombectomy
device cannot be used safely for this function. This device is larger
so risks pushing the fibrin plug into the artery if passed across the
arterial anastomosis from the access--risking distal arterial
embolization. The device is also much more rigid being made from metal
and with irregular shape that risks damaging the endothelium of the
artery causing arterial injury.'' As a result, commenters requested
that the listed devices ``catheter, thrombectomy-Fogarty'' (SD032) and
``kit, for percutaneous thrombolytic device (Trerotola)'' supply
(SA015) both remain in the supply list for these codes.
Response: We appreciated the detailed presentation of additional
clinical information regarding the use of the percutaneous thrombolytic
device kit from the commenters. After review of the comments and the
contents of the kit, we believe that its inclusion in these three
procedures is appropriate. According to the device literature, the kit
contains a rotor for macerating the clot, a catheter for removing the
clot, and a sheath for introducing the device. We will therefore
restore the SA015 supply to CPT codes 36904, 36905, and 36906. However,
we are removing the Fogarty catheter (SD032) and 1 of the 2 vascular
sheaths (SD136), as these are contained within the kit. The literature
for the percutaneous thrombolytic device kit clearly stipulates that
there is no need for additional catheters to remove the clot, which
makes the

[[Page 80296]]

Fogarty catheter a duplicative supply which can be removed.
Comment: Several commenters disagreed with the CMS proposal to
remove the recommended supply item ``covered stent (VIABAHN, Gore)''
(SD254) and replace it with the ``stent, vascular, deployment system,
Cordis SMART'' (SA103) for CPT codes 36903 and 36906. Commenters stated
that covered stents are the only stent devices that are FDA approved
and supported by evidence from randomized controlled trials for use in
dialysis access procedures. They are typically used in recurrent or
elastic stenosis in dialysis access and have become the standard of
care for these interventions. One commenter stated that Braid Forbes
Health Research analyzed stent use in CPT code 37238 using CMS OPPS
claims data, and found that the covered stent (VIABAHN, Gore), was used
67.5 percent of the time and the SA103, stent, vascular, deployment
system, Cordis SMART, was used 32.5 percent of the time. Commenters
stressed that bare metal stents, such as the Cordis SMART, are not
indicated for use in the Dialysis Circuit procedures.
Response: We appreciate the submission of this additional clinical
information regarding the use of stents for these procedures. After
consideration of the comments, we are restoring the covered stent
(VIABAHN, Gore) (SD254) to CPT codes 36903 and 36906 as originally
recommended. Because we are including the SD254 covered stent, we are
not adding the stent, vascular, deployment system, Cordis SMART (SA103)
supply to these procedures.
Comment: Several commenters disagreed with the CMS proposal to
reduce the quantity of the Hemostatic patch (SG095) from 2 to 1 for CPT
codes 36904, 36905, and 36906. Commenters stated that two hemostatic
patches are necessary in these procedures because they require two
separate cannulations and sheaths. At the end of the case, both sheath
sites are removed and covered with a hemostatic patch which aids in
preventing bleeding and maintaining sterility. The commenters stressed
that because there are two access sites, two hemostatic patches are
required, one to cover each site.
Response: We appreciate the additional clinical information
submitted by the commenters. In response to this information, we are
finalizing inclusion of the second Hemostatic patch (SG095) to CPT
codes 36904, 36905, and 36906, as recommended by the RUC.
Comment: In response to the CMS solicitation of feedback regarding
the Chloraprep applicator (26 ml) supply, commenters indicated that
Chloraprep solution has replaced Betadine solution when performing
sterile preparation of the dialysis access circuit due to its greater
efficacy as preoperative skin prep. Commenters indicated that this
supply was most accurately represented by the submitted invoice.
Another commenter stated that studies have shown that preparation of
central venous sites with a 2% aqueous chlorhexidine gluconate (in 70%
alcohol) is superior for skin site preparation to either 10% povidone-
iodine or 70% alcohol alone, and that in 2002, the CDC recommended that
2% chlorhexidine be used for skin antisepsis prior to catheter
insertion. One commenter recommended that CMS replace the Betadine
povidone soln (SJ041) with two units of swab, patient prep, 3.0 ml
(Chloraprep) supply (SJ088) in the inputs for CPT codes 36901-36906.
Response: We appreciate the submission of additional clinical
information regarding the Chloraprep supply from the commenters. We
agree with the recommended supply substitution, and we are therefore
removing 60 ml of the Betadine solution (SJ041) and replacing it with
two units of the swab, patient prep, 3.0 ml (Chloraprep) supply (SJ088)
for CPT codes 36901-36906. We will add the Chloraprep applicator (26
ml) supply to the direct PE input database at a price of $8.48 based on
an average of the three submitted invoices; it is not currently
assigned to any codes. We also agree that it is a distinct supply from
the ``chlorhexidine 4.0% (Hibiclens)'' (SH098) supply already located
in the direct PE database.
Comment: Several commenters provided additional information
regarding the use of guidewires in these procedures. Commenters stated
that the three wires used in the Dialysis Circuit codes are the minimum
required for these interventions and frequently additional wires would
be needed in more complicated cases or in cases in which more than one
access must be used. Commenters stated that the guidewires submitted
are the bare minimum needed for the typical case.
Response: We appreciate the additional information from the
commenters regarding the use of guidewires. We proposed to use the RUC-
recommended quantities for these supplies, and we are not finalizing
any changes.
Comment: One commenter stated that vascular procedures involving
fluoroscopy or radiography require the use of a radio-opaque ruler
(SD249) to accurately size or locate tributaries and lesions beneath
the skin. The commenter indicated that some of the base procedure codes
(CPT codes 36903 and 36906) include this supply, while it is missing
from CPT codes 36902 and 36905 and should be included.
Response: Based upon recommendations from the RUC and specialties,
we believe that the use of this supply is typical in stent procedures
such as CPT codes 36903 and 36906. It was included in CPT code 37238,
which is a predecessor code for these two procedures. However, the
radio-opaque ruler does not appear to be typical in the other dialysis
codes and we do not believe that it would be typically required in the
non-stent procedures, as it was not included in any of the other
predecessor codes.
Comment: One commenter requested that CMS include additional
miscellaneous supplies that were missing or underrepresented in the
cost inputs. These supplies were not included in the RUC
recommendations for these codes. The commenter also requested
increasing the quantity of each category of gloves to 3 and the
quantity of gowns to 3 for each of the base codes (CPT codes 36901-
36906) to more accurately reflect the typical use of these items in the
dialysis circuit procedures.
Response: We believe the supplies as recommended are typical for
these procedures. We also believe the proposed number of gloves and
gowns would be sufficient for the typical case; we currently do not
have any data to suggest that there is a need for additional gloves or
gowns in these procedures. The remainder of the additional
miscellaneous items appear to be new supplies with no included
invoices. Many of these new items may have analogous supplies already
present in our direct PE database. For the others, we will consider
pricing them if invoices are submitted as part of our normal process
for updating supply and equipment costs.
After consideration of comments received, we are finalizing the
work RVUs for the Dialysis Circuit codes as proposed. We are also
finalizing the proposed direct PE inputs, with the refinements detailed
above.
(17) Open and Percutaneous Transluminal Angioplasty (CPT Codes 37246,
37247, 37248, and 37249)
In January 2015, a CPT/RUC workgroup identified the following CPT
codes as being frequently reported together in various combinations:
35475 (Transluminal balloon angioplasty, percutaneous; brachiocephalic
trunk or

[[Page 80297]]

branches, each vessel), 35476 (Transluminal balloon angioplasty,
percutaneous; venous), 36147 (Introduction of needle and/or catheter,
arteriovenous shunt created for dialysis (graft/fistula); initial
access with complete radiological evaluation of dialysis access,
including fluoroscopy, image documentation and report), 36148
(Introduction of needle and/or catheter, arteriovenous shunt created
for dialysis (graft/fistula); additional access for therapeutic
intervention), 37236 (Transcatheter placement of an intravascular
stent(s) (except lower extremity artery(s) for occlusive disease,
cervical carotid, extracranial vertebral or intrathoracic carotid,
intracranial, or coronary), open or percutaneous, including
radiological supervision and interpretation and including all
angioplasty within the same vessel, when performed; initial artery),
37238 (Transcatheter placement of an intravascular stent(s), open or
percutaneous, including radiological supervision and interpretation and
including angioplasty within the same vessel, when performed; initial
vein), 75791 (Angiography, arteriovenous shunt (eg, dialysis patient
fistula/graft), complete evaluation of dialysis access, including
fluoroscopy, image documentation and report (includes injections of
contrast and all necessary imaging from the arterial anastomosis and
adjacent artery through entire venous outflow including the inferior or
superior vena cava), radiological supervision and interpretation),
75962 (Transluminal balloon angioplasty, peripheral artery other than
renal, or other visceral artery, iliac or lower extremity, radiological
supervision and interpretation), and 75968 (Transluminal balloon
angioplasty, each additional visceral artery, radiological supervision
and interpretation).
At the October 2015 CPT Editorial Panel meeting, the panel approved
the creation of four new codes and deletion of 13 existing codes used
to describe bundled percutaneous transluminal angioplasty services. The
Open and Percutaneous Transluminal Angioplasty family of codes overlaps
with the Dialysis Circuit family of codes (CPT codes 36901-36909), as
they are both being constructed from the same set of frequently
reported together codes. We reviewed these two families of codes
concurrently to maintain relativity between these clinically similar
procedures based upon the same collection of deleted codes. After
consideration of these materials, we proposed to accept the RUC-
recommended work RVU for CPT codes 37246, 37247, 37248, and 37249.
For the clinical labor direct PE inputs, we proposed to use the
RUC-recommend inputs with several refinements. Our proposed inputs
refined the recommended clinical labor time for ``Prepare and position
patient/monitor patient/set up IV'' from 5 minutes to 3 minutes for CPT
codes 37246 and 37248. The RUC recommendation included a written
justification for additional clinical labor time beyond the standard 2
minutes for this activity, stating that the extra time was needed to
move leads out of X-ray field, check that X-ray is not obstructed and
that there is no risk of collision of X-ray equipment with patient. As
we wrote for the same clinical labor activity in the Dialysis Circuit
family, we agreed that extra time might be needed for this activity as
compared to the default standard of 2 minutes; however, we assigned 1
extra minute for the additional positioning tasks, resulting in a total
of 3 minutes for this task. We did not believe that 3 extra minutes
would be typically needed for preparation of the X-ray. The equipment
times for the angiography room (EL011) and the PACS workstation (ED050)
were also refined to reflect this change in clinical labor.
We proposed to remove the ``drape, sterile, femoral'' supply
(SB009) and replace it with a ``drape, sterile, fenestrated 16in x
29in'' supply (SB011) for CPT codes 37246 and 37248. The two base codes
out of which these new codes are being constructed, CPT codes 35471 and
35476, both made use of the SB011 fenestrated sterile drape supply, and
there was no rationale provided for the switch to the SB009 femoral
sterile drape in the two new codes. We solicited comment on the use of
sterile drapes for these procedures, and what rationale there was to
support the use of the SB009 femoral sterile drape as typical for these
new procedures.
The following is a summary of the comments we received regarding
our proposed valuation of the Open and Percutaneous Transluminal
Angioplasty codes.
Comment: One commenter disagreed with the CMS proposed value of 3
minutes for the ``Prepare and position patient/monitor patient/set up
IV'' clinical labor task. The commenter stated that the recommended 5
minutes of time was needed to move leads out of X-ray field, check that
X-ray is not obstructed and that there is no risk of collision of X-ray
equipment with patient. The commenter also indicated that the patient's
arm needs to be positioned on an arm board, and requested time for this
activity.
Recommended: We continue to believe that additional time may be
needed for this activity as compared to the default standard of 2
minutes. However, we maintain that the commenter's request for 3
additional minutes (for a total of 5 minutes) would not typically be
required for preparing the X-ray and conducting arm positioning. We do
not agree that the additional tasks described by the commenters would
require the requested 5 minutes of clinical labor time, and we are
maintaining our proposed value of 3 minutes.
Comment: Several commenters objected to the proposed replacement of
the ``drape, sterile, femoral'' supply (SB009) with the ``drape,
sterile, fenestrated 16in x 29in'' supply (SB011) for CPT codes 37246
and 37248. Commenters stated that the vast majority of these new
procedures will be performed from a femoral or jugular approach and
will utilize a standard femoral drape. According to the commenters, the
fenestrated drape provides a limited sterile field (16x29in) which does
not allow room for sterile manipulation of wires and catheters as they
extend away from the entry into the vascular system. With the creation
of the new dialysis access circuit CPT code family, commenters
indicated that the use of extremity access and fenestrated drapes would
become much less typical for the new angioplasty code set.
Response: We appreciate the presentation of additional clinical
information from the commenters regarding the sterile drape most
appropriate for these procedures. As a result, we are finalizing
inclusion of the sterile femoral drape supply (SB009) to CPT codes
37246 and 37248. We will therefore not be adding the fenestrated drape
supply (SB011) to these procedures.
After consideration of comments received, we are finalizing the
proposed work RVUs for the four codes in the family. We are also
finalizing the proposed direct PE inputs, with the refinement to the
sterile femoral drape detailed above.
(18) Esophagogastric Fundoplasty Trans-Oral Approach (CPT Code 43210)
For CY 2016, the CPT Editorial Panel established CPT code 43210 to
describe trans-oral esophagogastric fundoplasty. The RUC recommended a
work RVU of 9.00 and for CY 2016, we established an interim final work
RVU of 7.75 for CPT code 43210. We noted that a work RVU of 7.75, which
corresponds to the 25th

[[Page 80298]]

percentile of the survey, more accurately reflected the resources used
in furnishing this service.
Comment on the CY 2016 PFS final rule with comment period:
Commenters urged CMS to accept the RUC-recommended work RVU of 9.00 for
CPT code 43210. The commenters believed that the RUC-recommended value
compared well with the key reference service, CPT code 43276
(Endoscopic retrograde cholangiopancreatography (ERCP); with removal
and exchange of stent(s), biliary or pancreatic duct, including pre-
and post-dilation and guide wire passage, when performed, including
sphincterotomy, when performed, each stent exchanged), which has a work
RVU of 8.94 and an intraservice time of 60 minutes. Commenters believed
that due to similar intraservice times and intensities, that CPT code
43210 should be valued nearly identically to CPT code 43276. Some
commenters also stated that to maintain relativity within the upper GI
code families, CPT code 43210 should not have a lower work RVU than CPT
code 43276 since the majority of survey participants indicated that CPT
code 43210 is more complex than CPT code 43276. Additionally, one
commenter noted that an esophagogastroduodenoscopy (EGD) is used twice
during this service, before and after fundoplication. The commenter
stated that because this is a multi-stage procedure, other EGD codes
are not comparable. The commenter also pointed out that this technology
has a small number of users and urged CMS to accept the RUC-recommended
work RVU of 9.00 until there is additional utilization, and to consider
reviewing this code again in subsequent years.
Response in the CY 2017 PFS proposed rule: We referred this code to
the CY 2016 multi-specialty refinement panel for further review, which
recommended we accept the RUC-recommended value of 9.00 work RVUs.
There are four ERCP codes with 60 minutes of intraservice time, three
of which have work RVUs of less than 7.00 and only one of the four
codes has a work RVU higher than 7.75 RVUs (8.94). Based on our
estimate of overall work for this service, we continue to believe that
the 25th percentile of the survey more accurately reflects the relative
resource costs associated with this service. Therefore, for CY 2017, we
proposed a work RVU of 7.75 for CPT code 43210.
The following is a summary of the comments we received regarding
our proposed valuation of CPT code 43210:
Comment: Commenters indicated that the survey results were limited
since this is a new technology. Commenters requested that CMS finalize
the RUC-recommended work RVU of 9.00, with the understanding that the
service will be reviewed again in the near future with more robust
survey data as the technology continues to be adopted. Commenters
disagreed with CMS' comparison to other EGD codes for purposes of
establishing the work RVU, due to differences in the inherent clinical
procedural steps involved with this code, including that EGD is used
more than once (pre- and post-fundoplication) to ensure successful
completion of the procedure.
Response: While it may be true that multiple EGDs may be performed
during this procedure, the surveyees are familiar with the service and
we assume included this information in their proposed time and work
recommendations. However, the values recommended by the survey and the
RUC are not consistent with other codes with similar times and
intensities. We noted in the CY 2016 interim final rule that CPT code
43240 (Drainage of cyst of the esophagus, stomach, and/or upper small
bowel using an endoscope) has 10 minutes more intraservice time and a
work RVU of 7.25. Therefore, we are finalizing for CY 2017 a work RVU
of 7.75 for CPT code 43210.
(19) Esophageal Sphincter Augmentation (CPT Codes 43284 and 43285)
In October 2015, the CPT Editorial Panel created two new codes to
describe laparoscopic implantation and removal of a magnetic bead
sphincter augmentation device used for treatment of gastroesophageal
reflux disease (GERD). The RUC noted that the specialty societies
conducted a targeted survey of the 145 physicians who have been trained
to furnish these services and who are the only physicians who have
performed these procedures. They noted that only 18 non-conflicted
survey responses were received despite efforts to follow up and that
nine physicians had no experience in the past 12 months with the
procedure. The RUC agreed with the specialty society that the expertise
of those responding was sufficient to consider the survey; however,
neither the RUC nor the specialty society used the survey results as
the primary basis for their recommended value.
For CPT code 43284, the RUC recommended a work RVU of 10.13. We
compared this code to CPT code 43180 (Esophagoscopy, rigid, transoral
with diverticulectomy of hypopharynx or cervical esophagus (e.g.,
Zenker's diverticulum), with cricopharyngeal myotomy, includes use of
telescope or operating microscope and repair, when performed), which
has a work RVU of 9.03 and has identical intraservice time and similar
total time. We stated in the proposed rule that we believe the overall
intensity of these procedures is similar; therefore, we proposed a work
RVU of 9.03 for CPT code 43284.
For CPT code 43285, the RUC recommended a work RVU of 10.47. We
used the increment between the RUC-recommended work RVU for this code
and CPT code 43284 (0.34 RVUs) to develop our proposed work RVU of 9.37
for CPT code 43285.
Comment: We received many comments on our proposal from various
stakeholders including practitioners, manufacturers, the RUC, and
medical specialty societies representing various surgical specialties.
For CPT code 43284, commenters indicated that CMS' proposed crosswalk
from CPT code 43180 was inadequate with regard to time and complexity
of the services. Commenters stated that CPT code 43180 has 10 minutes
less immediate post-service time and one less post-operative visit.
Some commenters stated that it appears that the difference between the
specialty society median survey total time for 43284 and the total time
for CMS' proposed crosswalk from CPT code 43180 was too great to
discount. Commenters also disagreed that CPT code 43284 and CMS'
proposed crosswalk from CPT code 43180 had similar complexity
considering that one of the procedures was performed on a natural
orifice with endoscopy versus a procedure with a surgical incision.
Commenters indicated that management of surgical patients with
incisions necessitates a more thorough evaluation of the body than an
endoscopic procedure.
For CPT code 43285, commenters noted that although CPT code 47562
(the RUC-recommended crosswalk) requires more intraservice time than
the aggregate survey median time for CPT code 43285, the median
intraservice time may be understated because of the number of people
without experience, and suggested that the total time for CPT codes
43285 and 47562 is nearly identical and both require similar work and
intensity. Commenters stated that only 18 non-conflicted survey
responses were received despite the efforts of the specialty societies,
and that nine physicians had no experience with the procedure in the
past 12 months. Commenters also noted that the RUC recommendations used
the specialty society survey times, but provided a crosswalk for work
RVU valuation.

[[Page 80299]]

Many commenters expressed additional concerns about the specialty
society survey data, indicating that the survey median and 25th
percentile work RVUs were inconsistent with the total physician work
for services reported with CPT codes 43284 and 43285. Commenters stated
that to accept the results of the survey is to essentially state that
the opinions of inexperienced surgeons is adequate to determine the
value of a surgical procedure and lacked input from surgeons
experienced in performing the procedure. Commenters suggested that CMS
maintain carrier pricing for services reported with CPT codes 43284 and
43285 while the specialty societies conduct new surveys that include
data from surgeons experienced with the procedures. Some commenters
suggested that the work of CPT codes 43284 and/or 43285 is more similar
to fundoplication procedures reported with CPT code 43280 (a work RVU
of 18.10). Other commenters suggested valuations for these procedures
ranging from 14 to 17 work RVUs, stating that the services reported
with CPT codes 43284 and 43285 were slightly less complicated than
fundoplication procedures, but more complex than the valuations
reflected in the survey results, RUC recommendations, and CMS proposed
values.
Response: We appreciate the feedback received from stakeholders
regarding valuation of these services. After considering the comments
received, for CY 2017, we are finalizing the RUC-recommended values for
CPT codes 43284 (a work RVU of 10.13) and 43285 (a work RVU of 10.47).
We recognize commenters' concerns regarding the specialty society
survey data and believe these codes may be potentially misvalued. We
look forward to receiving feedback from interested parties and
specialty societies regarding accurate valuation of these services for
consideration during future rulemaking.
(20) Percutaneous Biliary Procedures Bundling (CPT Codes 47531, 47532,
47533, 47534, 47535, 47536, 47537, 47538, 47539, 47540, 47541, 47542,
47543, and 47544)
This group of fourteen codes was reviewed by the RUC at the April
2015 meeting. We established interim final values for this group of
codes during the CY 2016 PFS rulemaking cycle, and subsequently
received updated RUC recommendations from the October 2015 meeting for
the CY 2017 PFS rulemaking cycle. Our proposals for these codes
incorporated both the updated RUC recommendations, as well as public
comments received as part of the interim final status of these
procedures.
We received several comments regarding the CMS refinements to the
work values for this family of codes in the CY 2016 final rule with
comment period. The relevance of many of these comments has been
diminished by the new series of RUC recommendations for work values
that we received as a result of the October 2015 meeting. Given that we
proposed the updated RUC-recommended work RVUs for CPT codes 47531,
47532, 47533, 47534, 47535, 47536, 47537, 47538, 47539, 47540, 47542,
47543, and 47544, we solicited additional comments relative to these
proposed values. We agreed that the second round of physician surveys
conducted for the October 2015 RUC meeting more accurately captured the
work and time required to perform these procedures. The one exception
was CPT code 47541; the survey times for this procedure were identical
as conducted for the April and October 2015 RUC meetings, yet the RUC
recommendation increased from a work RVU of 5.61 in April to a work RVU
of 7.00 in October. Given that the time values for the procedure
remained unchanged between the two surveys, we do not understand why
the work RVU would have increased by nearly 1.50 in the intervening
months. Since this code also has an identical intraservice time (60
minutes) and total time (121 minutes) as CPT code 47533, we do not
agree that it should be valued at a substantially higher rate compared
to a medically similar procedure within the same code family. We
therefore proposed to crosswalk the work value of CPT code 47541 to the
work value of CPT code 47533, and we proposed a work RVU of 5.63 for
both procedures.
We also note that many of the codes in the Percutaneous Biliary
Procedures family were previously included in Appendix G, and were
valued under the assumption that moderate sedation was typically
performed on the patient. As part of the changes for services
previously valued with moderate sedation as inherent, we are removing a
portion of the work RVU and preservice work time from CPT codes 47532,
47533, 47534, 47535, 47536, 47538, 47539, 47540, and 47541. For
example, we proposed a work value for CPT code 47541 with a 0.25
reduction from 5.63 to 5.38, and a 10 minute reduction in its
preservice work time from 33 minutes to 23 minutes, to reflect the work
that will now be reported separately using the new moderate sedation
codes. CPT codes 47542, 47533, and 47544 also were valued with moderate
sedation; however, as add-on codes, they are not subject to alterations
in their work RVUs or work times since the moderate sedation code with
work RVUs and work time (99152) will only be billed once for each base-
code and not additionally with the add-on codes. These changes are
reflected in Appendix B and the work time file posted to the web; see
section II.D for more details.
For the direct PE inputs, we did not propose to include the
recommended L051A clinical labor for ``Sedate/apply anesthesia'' and
the L037D for ``Assist Physician in Performing Procedure'' for CPT
codes 47531 and 47537. As we wrote in the CY 2016 final rule with
comment period (80 FR 71053), we believe that this clinical labor
describes activities associated with moderate sedation, and moderate
sedation is not typical for these procedures. We also proposed to
refine the L037D clinical labor for ``Clean room/equipment by physician
staff'' from 6 minutes to 3 minutes for all of the codes in this
family. Three minutes is the standard for this clinical labor activity,
and we continued to maintain that the need for additional clinical
labor time for this cleaning activity would not be typical for these
procedures.
Comment on the CY 2016 PFS final rule with comment period: One
commenter disagreed with our refinement to replace supply item
``catheter, balloon, PTA'' (SD152) with supply item ``catheter, balloon
ureteral (Dowd)'' (SD150). The commenter stated that a Dowd catheter is
designed and FDA approved for use in the prostatic urethra by
retrograde placement through the penile urethra, and it is not designed
for use in an antegrade ureteral dilation procedure. The commenter
stated that this replacement is inappropriate. The updated RUC
recommendations for this family of codes also restored the balloon PTA
catheter.
Response in the CY 2017 PFS proposed rule: We proposed again to
replace the recommended supply item ``catheter, balloon, PTA'' (SD152)
with supply item ``catheter, balloon ureteral (Dowd)'' (SD150). We
believed that the use of this ureteral balloon catheter, which is
specifically designed for catheter and image guidance procedures, would
be more typical than the use of a PTA balloon catheter. While we
recognize that the Dowd catheter is not FDA approved, it is our
understanding that the PTA balloon catheter has also not been FDA
approved for use in these procedures. We were uncertain if the
commenter was requesting that we should no longer include catheters
that lack FDA approval in the direct PE database; this

[[Page 80300]]

would preclude the use of most of the catheters in our direct PE
database. We solicited additional comment on the use of FDA approved
catheters; in the meantime, we continued our long-standing practice of
using the catheters in the direct PE database without explicit regard
to FDA approval in particular procedures.
We also proposed to remove the recommended supply item ``stone
basket'' (SD315) from CPT code 47543 and add it to CPT code 47544.
Based on the code descriptors, we believed that the stone basket was
intended to be included in CPT code 47544 and was erroneously listed
under CPT code 47543. We solicited comments from the public to help
clarify this issue.
We noted again that many of the codes in the Percutaneous Biliary
Procedures family were previously included in Appendix G, and as part
of the change in moderate sedation reporting, we removed some of the
recommended direct PE inputs related to moderate sedation from CPT
codes 47532, 47533, 47534, 47535, 47536, 47538, 47539, 47540, and
47541. We removed the L051A clinical labor time for ``Sedate/apply
anesthesia'', ``Assist Physician in Performing Procedure (CS)'', and
``Monitor pt. following moderate sedation''. We also removed the
conscious sedation pack (SA044) supply, and some or all of the
equipment time for the stretcher (EF018), the mobile instrument table
(EF027), the 3-channel ECG (EQ011), and the IV infusion pump (EQ032).
These changes are reflected in the public use files posted to the web;
see section II.D for more details.
The following is a summary of the comments we received regarding
our proposed valuation of the Percutaneous Biliary Procedures codes.
Comment: Several commenters disagreed with the proposed work RVU of
5.45 for CPT code 47541. Commenters stated that although CPT codes
47541 and 47533 share similar time values, the patient population for
CPT code 47541 is more complex with post-surgical anatomy and atypical
problems. Therefore, the commenters stated that the direct crosswalk
creates a sharp rank order anomaly within the family, and requested
that CMS adopt the RUC-recommended work RVU.
Response: We agree with the commenters that the proposed work RVU
for CPT code 47541 has the potential to create an anomalous
relationship between the services in this family of codes. After
considering the comments, we are finalizing a work RVU of 6.75 for CPT
code 47541, which is the RUC-recommended work RVU of 7.00 after
removing 0.25 RVUs to account for the fact that moderate sedation will
now be billed separately for this service.
Comment: One commenter requested 2 minutes for the clinical labor
task ``Sedate/apply anesthesia'' and 15 minutes for the clinical labor
task ``Assist Physician in Performing Procedure'' for CPT codes 47531
and 47537. The commenter agreed with CMS that moderate sedation was not
typical for either procedure, but stated that the 2 minutes was for the
RN to administer the pre-procedure prophylactic antibiotics and the 15
minutes for assisting the physician was unrelated to moderate sedation.
Response: We disagree with the commenter that the clinical labor
time for these tasks would be typical for CPT codes 47531 and 47537.
For the 2 minutes of apply anesthesia time, we do not agree that this
clinical labor time should be assigned when the clinical staff is
performing an entirely different activity. We have not assigned
clinical labor time in this way in the past, and the request for 2
minutes related to administering pre-procedure prophylactic antibiotics
was never discussed in the recommendations for these procedures.
For the 15 minutes of assist physician time, the commenter did not
provide a justification for why an additional staff member would be
needed or what the staff member would be doing. CPT codes 47531 and
47537 already contain two clinical staff members, one technician to
assist the physician and another technician to acquire images, plus a
circulator. The other codes in the Percutaneous Biliary Procedures
family previously had a third RN clinical staff member to administer
the sedation to the patient, before moderate sedation was split off
into its own separate procedure codes. However, CPT codes 47531 and
47537 do not typically require sedation, and we do not agree that this
additional clinical staff member would be required to perform the
procedures.
Comment: Several commenters again objected to the proposed
replacement of the recommended supply item ``catheter, balloon, PTA''
(SD152) with supply item ``catheter, balloon ureteral (Dowd)'' (SD150).
Commenters stated that this would not reflect the practice patterns of
the Interventional Radiology community, as it is atypical and even
quite rare to use ureteral balloon dilatation catheters in the biliary
tree. The commenters provided information regarding the size of uretal
balloon catheters, indicating that the maximum diameter is 8mm (Bard)
or 7mm (Cook Medical). According to commenters, these sizes are
frequently inadequate to treat the wide variety of pathologies in the
biliary tree where often balloon sizes up to 12 mm are required. As a
result, the commenters stated that the change of the balloon catheter
supply item does not accurately represents the actual supplies utilized
in real practice, nor does the Dowd ureteral balloon catheter satisfy
the clinical need performed during the procedure.
Response: We appreciate the additional clinical information
supplied by the commenters regarding the current use of balloon
catheters. However, although commenters stated that Bard catheters and
Cook Medical catheters are frequently too small to treat some of the
wide variety of pathologies that occur in the biliary tree, commenters
did not indicate what size balloon catheter would be typically used for
these particular procedures in the Percutaneous Biliary Procedures, or
provide a specific rationale for why the catheter we proposed (the Dowd
ureteral balloon catheter) would not be appropriate for these
procedures. We note again that we are required to assess resources
based on the typical case, and the commenters did not provide data to
indicate that the proposed Dowd catheter would be inadequate in the
typical case for these procedures in question, only that it may be
insufficient for certain pathologies in the biliary tree. We continue
to believe that the Dowd ureteral balloon catheter, which is
specifically designed for catheter and image guidance procedures, would
be more typical than the use of a PTA balloon catheter.
Comment: One commenter indicated that the stone basket supply
(SD315) had indeed been incorrectly assigned to CPT code 47543, and
thanked CMS for moving it to CPT code 47544 where it was intended.
Response: We appreciate the response from the commenter.
After consideration of comments received, we are finalizing our
proposed work RVUs for the Percutaneous Biliary Procedures family of
codes, with the one change to a work RVU of 6.75 for CPT code 47541. We
are finalizing our proposed direct PE inputs without refinement.
(21) Percutaneous Image Guided Sclerotherapy (CPT Code 49185)
For CY 2016, we established an interim final work RVU of 2.35 for
CPT code 49185 based on a crosswalk from CPT code 62305 (Myelography
via lumbar injection, including radiological supervision and
interpretation; 2 or more regions (e.g., lumbar/thoracic,

[[Page 80301]]

cervical/thoracic, lumbar/cervical, lumbar/thoracic/cervical)); which
we believed accurately reflected the time and intensity involved in
furnishing services reported with CPT code 49185. We also requested
stakeholder input on the price of sclerosing solution (supply item
SH062) as the volume of the solution in this procedure (300 mL) is much
higher than other CPT codes utilizing sclerosing solution (between 1
and 10 mL).
Comment on the CY 2016 PFS final rule with comment period: In
response to the CY 2016 PFS final rule with comment period (80 FR
71054), commenters disagreed with CMS' crosswalk from CPT code 62305.
Commenters suggested that the RUC's recommended crosswalk from CPT code
31622 (Bronchoscopy, rigid or flexible, including fluoroscopic
guidance, when performed; diagnostic, with cell washing, when performed
(separate procedure)) was a more appropriate comparison due to the
similarity of the services. Commenters requested that CPT code 49185 be
referred to the refinement panel. The requests did not meet the
requirements related to new clinical information for referral to the
refinement panel. We continue to believe that for CPT code 49185 a
crosswalk from the value of CPT code 62305 is accurate due to
similarities in overall work.
Commenters also stated that the procedure reported with CPT code
49185 required a separate clinical labor staff type. The commenter
noted that, due to the inclusion of this additional individual, the
L037D clinical labor and additional gloves were appropriate to include
in the procedure. The commenter did not provide any evidence for this
claim.
Response in the CY 2017 PFS proposed rule: We continue to believe
that this additional use of clinical staff would not be typical for CPT
code 49185. This procedure does not involve moderate sedation, and
therefore, we do not believe that there would be a typical need for a
third staff member. Additionally, we did not receive any information
regarding the sclerosing solution (supply item SH062) that supports
maintaining an input of 300 mL, which far exceeds the volume associated
with other CPT codes.
Therefore, for CY 2017, we proposed a work RVU of 2.35 for CPT code
49185. We sought stakeholder feedback regarding why a different work
RVU or crosswalk would more accurately reflect the resources involved
in furnishing this service. We also proposed to maintain our direct PE
refinements from the CY 2016 PFS final rule with comment period, but
proposed to refine the direct practice expense inputs for the
sclerosing solution (supply item SH062) from 300 mL to 10 mL, which is
the highest level associated with other CPT codes utilizing sclerosing
solution.
The following is a summary of the comments we received regarding
our proposed valuation of CPT code 49185.
Comment: Commenters requested that CMS use the RUC-recommended
crosswalk from CPT code 31622 instead of the CMS-proposed crosswalk
from CPT code 62305. Commenters stated that CMS' crosswalk undervalues
the services, the RUC-recommended crosswalk has analougous clinical
activities during the procedure, as well as a similar risk, and the
intensity of work involved for services reported with CMS' comparison
code is less than during sclerotherapy. Commenters suggested that the
sclerotherapy procedure includes inherent risks and challenges that are
not adequately accounted for in CMS' proposed crosswalk.
Response: We disagree with commenters that the RUC's recommended
crosswalk from CPT code 31622 has analogous clinical activities
compared to CMS' proposed crosswalk from CPT code 62305. CMS' crosswalk
code refers to a procedure with injection, drainage, and aspiration,
which has more clinical similarity to CPT code 49185 than the RUC's
recommended crosswalk from 31622, which is used to report a broncoscopy
procedure. We continue to believe that a work RVU of 2.35 is an
appropriate valuation for services reported using CPT code 49185 and we
maintain that CPT code 62305 is an accurate crosswalk, since CPT codes
49185 and 62305 have similar service times. Therefore, for CY 2017, we
are finalizing a work RVU of 2.35 for CPT code 49185.
Comment: Commenters disagreed with CMS' proposal to include a
direct PE input of 10 mL of sclerosing solution (supply item SH062) and
requested that CMS accept the RUC's recommendation to include 300 ml of
sclerosing solution as part of the direct PE inputs for this procedure.
One commenter indicated that other services that utilize sclerosing
solution are used to describe injection of sclerosant into vascular
structures which tend to be relatively small in size, and therefore,
use a much smaller volume. Another commenter stated that for this
procedure, the sclerosing solution is injected and drained three
separate times, equating to 100 mL per injection, and that use of
lesser volumes of sclerosant or less than three administrations of the
sclerosant during the procedure would allow for more frequent
recurrence necessitating additional procedures.
Response: We appreciate the commenters' feedback regarding the
direct PE inputs for CPT code 49185. We inadvertently included the RUC-
recommended quantity of 300 mL for the sclerosing solution (supply item
SH062) in developing the proposed rates for this code. For CY 2017, we
are finalizing the RUC-recommended direct PE inputs, including 300 mL
of sclerosing solution. We welcome stakeholder feedback regarding the
appropriate PE inputs for this procedure for consideration for CY 2018,
including volume and pricing of the sclerosing agent.
(22) Genitourinary Procedures (CPT Codes 50606, 50705, and 50706)
In the CY 2016 PFS final rule with comment period, we established
as interim final the RUC-recommended work RVUs for all three codes. We
did not receive any comments on the work values for these codes, and we
proposed to maintain all three at their current work RVUs.
The RUC recommended the inclusion of ``room, angiography'' (EL011)
for this family of codes. As we discussed in the CY 2016 PFS final rule
with comment period, we did not believe that an angiography room would
be used in the typical case for these procedures, and we therefore
replaced the recommended equipment item ``room, angiography'' with
equipment item ``room, radiographic-fluoroscopic'' (EL014) for all
three codes on an interim final basis. We also stated our belief that
since the predecessor procedure codes generally did not include an
angiography room and we did not have a reason to believe that the
procedure would have shifted to an angiography room in the course of
this coding change, we did not believe that the use of an angiography
room would be typical for these procedures.
Comment on the CY 2016 PFS final rule with comment period: Several
commenters disagreed with the CMS substitution of the fluoroscopic room
in place of the angiography room. The commenters stated that all three
of these procedures were previously reported using CPT code 53899
(Unlisted procedure, urinary system) which does not have any PE inputs,
and the RUC recommendations included as a reference CPT code 50387
(Removal and replacement of externally accessible transnephric ureteral
stent), which includes an angiography room. The commenters suggested
that CPT code 50387 was an example of a predecessor code that included
the use of an angiography room, along with other

[[Page 80302]]

codes that are being bundled together to create the new Genitourinary
codes.
Response in the CY 2017 PFS proposed rule: We did not agree with
the commenters' implication that because CPT code 50387 was an
appropriate reference code for use in valuation, that it necessarily
would have previously been used to describe services that are now
reported under CPT codes 50606, 50705, or 50706. Our perspective was
consistent with the RUC-recommended utilization crosswalk for the three
new codes, which did not suggest that the services were previously
reported using 50706. We did not believe that use of one particular
code for reference in developing values for another necessarily meant
that the all of the same equipment would be used for both services.
We did not believe that these codes described the same clinical
work either. CPT code 50387 is for the ``Removal and replacement of
externally accessible transnephric ureteral stent'' while CPT code
50606 describes an ``Endoluminal biopsy of ureter and/or renal
pelvis'', CPT code 50705 refers to ``Ureteral embolization or
occlusion'', and CPT code 50706 details ``Balloon dilation, ureteral
stricture.'' Additionally, the codes do not have the same global
periods, which makes comparisons between CPT code 50387 and CPT codes
506060, 50705, and 50706 even more difficult. We noted that while the
commenter stated that CPT code 50387 was provided as a reference for
these procedures, 50387 is not listed as a reference for any of these
three codes, or mentioned at all in the codes' respective summary of
recommendations. However, we acknowledged that among the procedures
that are provided as references, many of them included the use of an
angiography room, such as CPT code 36227 (Selective catheter placement,
external carotid artery) and CPT code 37233 (Revascularization,
endovascular, open or percutaneous, tibial/peroneal artery, unilateral,
each additional vessel). Therefore, we agreed that the use of the
angiography room in these procedures, or at least some of its component
parts, might be warranted.
Comment on the CY 2016 PFS final rule with comment period: A
commenter stated that the substitution of the fluoroscopic room for the
angiography room was clinically unjustified. The commenter stated that
the angiography room was needed for these procedures to carry out 3-
axis rotational imaging (so as to avoid rolling the patient), ensure
sterility, and avoid unacceptable radiation exposure to physicians,
their staff, and their patients. The commenter indicated that the only
piece of equipment listed in the angiography room that would not be
typically utilized for these procedures is the Provis Injector. All of
the other items were used for these Genitourinary procedures. The
commenter urged CMS to restore the angiography room to these
procedures.
Response in the CY 2017 PFS proposed rule: We agreed that it is
important to provide equipment that is medically reasonable and
necessary. Our concern with the use of the angiography room for these
codes was that we did not believe all of the equipment would be
typically necessary to furnish the procedure. For example, the
commenter agreed that the Provis Injector would not be required for
these Genitourinary codes. Therefore, we proposed to remove the
angiography room from these three procedures and add in its place the
component parts that make up the room. Table 17 detailed these
components:

Table 17--Angiography Room (EL011) Components
------------------------------------------------------------------------
Component
-------------------------------------------------------------------------
100 KW at 100 kV (DIN6822) generator
C-arm single plane system, ceiling mounted, integrated multispace
T motorized rotation, multiple operating modes
Real-time digital imaging
40 cm image intensifier at 40/28/20/14cm
30 x 38 image intensifier dynamic flat panel detector
Floor-mounted patient table with floating tabletop designed for
angiographic exams and interventions (with peistepping for image
intensifiers 13in+)
18 in TFT monitor
Network interface (DICOM)
Careposition: radiation free positioning of collimators
Carewatch: acquisition and monitoring of configurable dose area product
Carefilter: Cu-prefiltration
DICOM HIS/RIS
Control room interface
Injector, Provis
Shields, lower body and mavig
Leonardo software
Fujitsu-Siemens high performance computers
Color monitors
Singo modules for dynamic replay and full format images
Prepared for internal networking and Siemens remote servicing, both
hardware and software
------------------------------------------------------------------------

We included all of the above components except the Provis Injector,
as commenters indicated that its use would not be typical for these
procedures. We welcomed additional comments regarding if these or other
components were typically used in these Genitourinary procedures. We
lacked pricing information for these components; we therefore proposed
to include each of these components in the direct PE input database at
a price of $0.00 and we solicited invoices from the public for their
costs to be able to price these items for use in developing final PE
RVUs for CY 2017.
We also noted that we believed that this issue illustrated a
potentially broad problem with our use of equipment ``rooms'' in the
direct PE input database. For most services, we only include equipment
items that are used and unavailable for other uses due to their use
during the services described by a particular code. However, for items
included in equipment ``rooms,'' we allocate costs regardless of
whether the individual items that comprise the room are actually used
in the particular service.
To maintain relativity among different kinds of procedures, we were
interested in obtaining more information specifying the exact resources
used in furnishing services described by different codes. We hoped to
address this subject in greater detail in future rulemaking.
The following is a summary of the comments we received regarding
our proposed valuation of the Genitourinary codes:
Comment: Many commenters objected to the removal of the angiography
room from these codes and its replacement with the component parts of
the room. Commenters stated that it was misguided to unbundle the
components of the angiography room when one equipment item within the
room is not utilized. They indicated that there are numerous cases
where an equipment room is used despite the fact that not every item in
the room is needed for a service, because in practice the rooms are
configured for the most typical type of procedure performed within the
room and it would not be efficient or realistic to remove items from a
room when a less typical service is needed. For the specific case of
the Provis Injector equipment, commenters stated it could not be used
elsewhere and there was no way to create a separate angiography room
for nonvascular procedures that did not require the injector.
Commenters did not generally agree with the CMS proposal to price
all of the components of the angiography room at $0.00 pending invoices
from the public regarding their individual cost. Commenters stated that
the resource cost of the angiography room components was clearly not
$0.00, since the equipment in total costs over $1.3 million. Commenters
stated that it was

[[Page 80303]]

not realistic to submit 21 separate invoices during the 60 day comment
period, and furthermore that the components of the angiography room are
typically not sold separately.
Response: We appreciate the feedback from commenters regarding the
difficulties involved in pricing the components for the angiography
room. We have longstanding issues with the equipment rooms as they are
currently constituted, due to our belief that all of the components of
the room may not typically be used in performing the procedure in
question. We continue to believe that these three codes do not make use
of all of the components of the angiography room, and we believe that
this code family serves as a clear example of the problems in
relativity associated with the use of ``rooms'' as equipment items for
a limited set of services under the PFS. However, we agree with the
commenters that it is not likely that the components of the angiography
room do not have a price. Therefore, while we continue to seek invoices
for more detailed pricing information, we are restoring the angiography
room (EL011) equipment to these three codes, with an equipment time of
47 minutes for CPT code 50606, 62 minutes for CPT code 50705, and 62
minutes for CPT code 50706, in each case consistent with the equipment
time in CY 2016. We intend to continue to consider the use of equipment
``rooms'' more broadly for future rulemaking.
After consideration of comments received, we are finalizing our
work values for the three Genitourinary codes as proposed. We are
finalizing the proposed direct PE inputs as well, with the changes to
the angiography room as detailed above.
(23) Electromyography Studies (CPT Code 51784)
We identified CPT code 51784 as potentially misvalued through a
screen of high expenditure services by specialty. This family also
includes CPT code 51785 (Needle electromyography studies (EMG) of anal
or urethral sphincter, any technique) but was not included in this
survey. Both services have 0-day global periods. The RUC recommended a
work RVU of 0.75 for CPT code 51784. We believe that this service is
more accurately valued without a global period, since that is more
consistent with other diagnostic services, and specifically, with all
the other diagnostic electromyography services. We proposed to
eliminate the global period and proposed the RUC-recommended work RVU
of 0.75 for CY 2017. We also proposed to change the global period for
CPT code 51785 from 0-day to no global period, to be consistent with
the global period for CPT code 51784. Additionally, we proposed to add
CPT code 51785 to the list of potentially misvalued codes to update the
value of the service considering the change in global period, and to
maintain consistency with CPT code 51784.
Comment: A commenter supported CMS' proposal to accept the RUC-
recommended work value. The commenter requested that CMS indicate any
global period changes and requests for codes as part of the family when
CMS initially nominates a code or reviews the RUC level of interest
(LOI) prior to distribution.
Another commenter, while supporting our acceptance of the RUC-
recommended work RVU for CPT code 51784, did not support adding CPT
code 51785 to the potentially misvalued code list as that code was
addressed recently when the new CPT codes were created for urodynamic
testing procedures.
Response: We appreciate commenters' perspectives. We note that CPT
code 51785 has not been valued since January 2003, at the same RUC
meeting wherein CPT code 51784 was valued. We encourage stakeholders to
submit the entire code family when submitting codes for inclusion on
the list of potentially misvalued codes.
Comment: One commenter stated that there is no difference in the
work value of CPT code 51784 whether it has a 0-day global period
versus an XXX global period, and should not be considered as
potentially misvalued.
Response: We note that CPT code 51784 was identified as potentially
misvalued through a screen of high expenditure services by specialty.
In the standard process of code valuation, CMS decided to change the
global period to XXX, indicating no global period, so that the code is
more closely aligned with other similar services.
Comment: One commenter did not agree that CMS should accept the
RUC-recommended work values, stating that the RUC-recommended work RVU
underestimates the work involved in furnishing this service.
Response: We remind commenters and stakeholders that disagree with
CMS values, including those based on RUC recommendations, that in
addition to submitting comments on our proposed rules, they may also
nominate codes as potentially misvalued through the public nomination
process. After consideration of comments, we are finalizing the work
and global period changes as proposed.
(24) Cystourethroscopy (CPT Code 52000)
In the CY 2016 PFS final rule with comment period, CMS identified
CPT code 52000 through the screen for high expenditure services. We
stated in the CY 2017 proposed rule that the RUC-recommended work RVU
of 1.75 for CPT code 52000 is higher than the work RVUs for all 0-day
global codes with 10 minutes of intraservice time and we did not
believe that the overall intensity of this service was greater than all
of the other codes. Instead, we proposed that this code compares
favorably to CPT code 58100 (Endometrial sampling (biopsy) with or
without endocervical sampling (biopsy), without cervical dilation, any
method (separate procedure)), which has a work RVU of 1.53, and has
identical intraservice time and similar total time. Therefore, we
proposed a work RVU of 1.53 for CPT code 52000, using a direct
crosswalk to CPT code 58100.
Comment: Commenters requested that CMS finalize the RUC-recommended
work RVU of 1.75 for this procedure. Commenters stated that the RUC-
recommended crosswalk codes were a more accurate comparison of
physician work, time, and intensity for procedures reported with CPT
code 52000.
Response: The RUC-recommended work RVU of 1.75 is higher than the
work RVUs associated with all other codes with 0-day global periods and
10 minutes of intraservice time, and we continue to believe that the
work and intensity of this service is similar to other CPT codes with
10 minutes of intraservice time. Therefore, we are finalizing a work
RVU of 1.53 for CPT code 52000.
(25) Biopsy of Prostate (CPT Code 55700)
In the CY 2016 PFS final rule with comment period, CMS identified
CPT code 55700 as potentially misvalued based on the high expenditure
by specialty screen.
The RUC subsequently reviewed this code for physician work and
practice expense and recommended a work RVU of 2.50 based on the 25th
percentile of the survey. We believed the RUC-recommended work RVU
overestimates the work involved in furnishing this service given the
reduction in total service time; specifically, the reduction in
preservice and postservice times. The RUC recommendation also appears
overvalued when compared to similar 0-day global services with 15
minutes of intraservice time and comparable total times. To develop a
proposed work RVU, we crosswalked the work RVUs

[[Page 80304]]

for this code from CPT code 69801 (Labyrinthotomy, with perfusion of
vestibuloactive drug(s), transcanal), noting similar levels of
intensity, similar total times, and identical intraservice times.
Therefore, we proposed a work RVU of 2.06 for CPT code 55700.
Comments: A few commenters, including the RUC, noted the RUC
compared CPT code 55700 to other 0-day global services with 15 minutes
of intraservice time and stated that the RUC-recommended value was
appropriate. The RUC noted that the overall work of the surveyed code
was similar to services: CPT code 93503 (Insertion and placement of
flow directed catheter (eg, Swan-Ganz) for monitoring purposes) (work
RVU = 2.91, intraservice time of 15 minutes) and CPT code 36556
(Insertion of non-tunneled centrally inserted central venous catheter;
age 5 years or older) (work RVU = 2.50, intraservice time of 15
minutes). The RUC determined that these services required the same
intra-service time, comparable physician work and intensity and
recommended CMS accept the RUC-recommended work RVU of 2.50.
Additionally, the RUC continued to urge specialty societies to submit
invoices for new equipment.
Response: We appreciate additional information offered by the
commenters. After consideration of comments received, we agree with the
additional information provided by commenters and are finalizing the
RUC-recommended work RVU of 2.50.
(26) Laparoscopic Radical Prostatectomy (CPT Code 55866)
In the CY 2016 PFS final rule with comment period, we established
an interim final work RVU of 21.36 for CPT code 55866 based on a direct
crosswalk to CPT code 55840 (Prostatectomy, retropubic radical, with or
without nerve sparing). We stated that we believed these codes were
medically similar procedures with nearly identical time values, and we
did not believe that the difference in intensity between CPT code 55840
and CPT code 55866 was significant enough to warrant the RUC-
recommended difference of 5.50 work RVUs. We also compared CPT code
55866 to the work RVU of 25.18 for CPT code 55845, and stated our
belief that, in general, a laparoscopic procedure would not require
greater resources than an open procedure.
Comment on the CY 2016 PFS final rule with comment period: Several
commenters disagreed with the statement that a laparoscopic procedure,
such as CPT code 55866, would generally require fewer resources than an
open procedure, such as CPT code 55840. Commenters stated that
developing the skill necessary to perform a minimally invasive
laparoscopic surgery requires a greater degree of experience and
specialized training than that required to perform an open
prostatectomy. Commenters indicated that this level of practitioner
skill should be reflected in the work RVU for the procedure, as
intensity is based in part upon skill, mental effort, and psychological
stress.
Response in the CY 2017 PFS proposed rule: We agreed with the
commenters that skill and technique, as well as mental effort and
psychological stress on the part of the practitioner contribute to the
overall intensity of the furnishing a given service, and therefore, are
one of the two components in determining code-level work RVUs. However,
we did not believe that relative increases in requisite skill or
technique can be considered alone. Although the development of new
technology (such as robotic assistance) may create a greater burden of
knowledge on the part of the practitioner, it can also make procedures
faster, safer, and easier to perform. This means that there may be
reductions in time for such a procedure (which is the other component
of the work RVU), but also that the mental effort and psychological
stress for a given procedure may be mitigated by the improvements in
safety. Therefore, we did not agree that a newer procedure that
includes additional technology and requires greater training would
inherently be valued at a higher rate than an older and potentially
more invasive procedure.
Comment on the CY 2016 PFS final rule with comment period: A
commenter stated that CPT code 55866 describes two very different
procedures in one code. The descriptor for the code states ``includes
robotic assistance when performed'', and the procedure is performed
differently depending on whether or not the robotic assistance is
included. The commenter indicated that the vast majority of radical
prostatectomies are performed with the robot, and although the outcomes
are the same in both cases, the procedures are completely different.
Response in the CY 2017 PFS proposed rule: We agreed with the
commenter that the descriptor includes the possibility for confusion,
especially on the part of the survey respondents. Valuing this code
based on the typical case is difficult when the procedure differs
depending on the inclusion or exclusion of robotic assistance. We
suggested that valuation might be improved if the CPT Editorial Panel
were to consider further revisions to this code to describe the two
cases of laparoscopic radical prostatectomy: With and without robotic
assistance.
Comment on the CY 2016 PFS final rule with comment period: One
commenter stated that the application of the phase-in transition for
facility-only codes like CPT code 55866 would have a particularly
egregious impact in the second year of the transition. The commenter
urged CMS to ensure that its implementation of the phase-in transition
does not undermine the protections created by the statute.
Response in the CY 2017 PFS proposed rule: Please see sections II.G
and II.H for a discussion of the phase-in transition and its
implementation in its second year.
Comment on the CY 2016 PFS final rule with comment period: Several
commenters requested that CMS refer CPT code 55866 to the refinement
panel for review. At the refinement panel, the presenters brought up
new evidence in the form of a study published in 2016 describing
discharge data for radical laparoscopic prostatectomies. The presenters
stated that there were many more people included in this study as
opposed to the 30 respondents in the survey data, and that on average
the robotic procedure took 90 minutes longer than the open procedure.
The additional time needed to perform the procedure, as indicated by
this new study's results, was presented as a new rationale as to why
CMS should accept the RUC-recommended work RVU.
Response in the CY 2017 PFS proposed rule: CPT code 55866 was
referred to the CY 2016 Multi-Specialty Refinement Panel per the
request of commenters. The outcome of the refinement panel was a median
work RVU of 26.80, the same value as the RUC recommended in the
previous rulemaking cycle. After consideration of the comments and the
results of the refinement panel, we proposed for CY 2017 to maintain
the interim final work RVU of 21.36 for CPT code 55866. We were
interested in the results of the study mentioned at the refinement
panel, and we stated that we would consider incorporating this data
into the valuation of this code, including, if appropriate, adjustments
to the work times used in PFS ratesetting. We also solicited that the
study be submitted through the public comment process so that we could
allow it proper consideration along with other information submitted by
the public, rather than using the results of a single study to propose
valuations. We were also curious about the time values

[[Page 80305]]

regarding the duration of CPT code 55866. One of the members of the
refinement panel stated that on average the robotic procedure took 90
minutes longer than the open procedure. This was not what was indicated
by the survey data from the RUC recommendations, which had the two
procedures valued at virtually identical times (same intraservice time,
6 minutes difference total time). We therefore solicited comment on
whether the times included in this study were more accurate than the
time reflected in the RUC surveys.
The following is a summary of the comments we received regarding
our proposed valuation of CPT code 55866:
Comment: One commenter agreed that the code descriptor for CPT code
55866 might have caused confusion by the RUC survey respondents. The
commenter stated that they were encouraged by the CMS comments that the
valuation might be improved if the CPT Editorial Panel were to consider
further revisions to this code to describe a laparoscopic radical
prostatectomy with and without robotic assistance. The commenter
requested a strong statement from CMS urging the CPT Editorial Panel to
create two unique codes: One for laparoscopic radical prostatectomy and
one for robotic radical prostatectomy.
Response: We believe that there are potential problems with CPT
code 55866 as it is currently described and with the corresponding RUC
recommendation. Commenters presented data suggesting that there are
significant differences between the robotic and non-robotic versions of
the procedure in the length of time required to perform the operation.
However, the same data also suggests that the non-robotic version of
the laparoscopic radical prostatectomy has become comparatively rare.
Given the information presented by commenters, we believe that
valuation might be improved with further revisions to this code.
However, we note that we do not direct the work of the CPT Editorial
Panel, and we also note the comparative rarity of the non-robotic
version of the procedure.
Comment: Several commenters referenced a study entitled ``Robot-
assisted versus Open Radical Prostatectomy: A Contemporary Analysis of
an All-payer Discharge Database'' by J.L. Leow, S.L. Chang, and
colleagues. This study was published in February 2016, and it detailed
how university investigators analyzed more than 600,000 men undergoing
radical prostatectomy in the United States from 2003-2013, which showed
that the robotic approach took on average 90 minutes longer than an
open radical prostatectomy. Commenters noted how this contrasted to the
RUC survey data that had only 32 respondents and recommended an
intraservice time equal to an open radical prostatectomy (180 minutes).
The commenters presented the study data in favor of demonstrating how
the robotic approach to radical prostatectomy detailed in CPT code
55866 takes significantly more time to perform than the open approach
detailed in the CMS crosswalk code 55840. Commenters recommended that
CMS adopt the RUC-recommended work RVU of 26.80 based on this new
clinical evidence contained in the study.
Response: We appreciate the submission of this additional clinical
information from the commenters. We have had longstanding interest in
using robust data sources regarding the resource costs of PFS services,
and we believe that the use of such additional outside data sources can
improve the accuracy of the valuation of services. However, we do note
that the cited study was not specifically designed to measure
intraoperative times and did not use the same ``skin to skin''
definition of intraservice time typically used in the development of
times included in PFS ratesetting.
In this case of the particular comment, we note the potential
logical dissonance of the commenter urging us to adopt the RUC-
recommended work value derived from the RUC survey by citing
alternative data that calls into question the accuracy of the time data
from the same RUC survey. In other words, we are troubled with the idea
that we should consider survey data as valid for work while rejecting
its validity for time, given that time is one of the two elements of
overall work.
Despite these concerns, we agree that the study presents additional
data indicating that there is a significant difference between the open
and robotic-assisted forms of laparoscopic radical prostatectomy, and
that the robotic form described by CPT code 55866 likely takes a longer
time to perform. Based on this presentation of additional clinical
evidence, we agree with the commenters that the recommended work RVU of
26.80 is a more appropriate value for this procedure.
After consideration of comments received, we are finalizing a work
RVU of 26.80 for CPT code 55866.
(27) Hysteroscopy (CPT Codes 58555, 58558, 58559, 58560, 58561, 58562,
and 58563)
During CY 2016 PFS rulemaking, we identified CPT code 58558 as a
potentially misvalued code via the high expenditure specialty screen.
CPT codes 58559-58563 were also included in the RUC's January 2016
review of this family of codes.
For CPT code 58555, the RUC recommended a work RVU of 3.07. We
proposed that the 25th percentile survey result, a work RVU of 2.65,
accurately reflects the resources involved in furnishing this service.
We stated that this value is bracketed by two crosswalk codes, CPT code
43191 (Esophagoscopy, rigid, transoral; diagnostic, including
collection of specimen(s) by brushing or washing when performed
(separate procedure)), which has a work RVU of 2.49, and CPT code 31295
(Nasal/sinus endoscopy, surgical; with dilation of maxillary sinus
ostium (for example, balloon dilation), transnasal or via canine
fossa), which has a work RVU of 2.70. CPT codes 43191 and 31295 have
identical intraservice times and similar total times when compared with
CPT code 58555.
For CPT code 58558, the RUC recommended a work RVU of 4.37.
However, we believed that a direct crosswalk from CPT code 36221 (Non-
selective catheter placement, thoracic aorta, with angiography of the
extracranial carotid, vertebral, and/or intracranial vessels,
unilateral or bilateral, and all associated radiological supervision
and interpretation, includes angiography of the cervicocerebral arch,
when performed), which has a work RVU of 4.17, and identical
intraservice time, and similar total time, more accurately reflects the
time and intensity of furnishing this service. Our proposed work RVU
was additionally supported by using an increment between this code and
the base code for this family, CPT code 58555. The increment between
the RUC-recommended values for these two codes is 1.3. That increment
added to the proposed work RVU of 2.65 for the base code, CPT code
58555, results in a work RVU of 3.95. Therefore, we proposed a work RVU
of 4.17 RVUs for CPT code 58558.
For CPT code 58559, the RUC recommended a work RVU of 5.54.
However, we believed that a direct crosswalk from CPT code 52315
(Cystourethroscopy, with removal of foreign body, calculus, or ureteral
stent from urethra or bladder (separate procedure); complicated), which
has a work RVU of 5.20, a similar intraservice

[[Page 80306]]

time, and similar total time as compared with CPT code 58559 more
accurately reflects the time and intensity of furnishing this service.
This proposed value was additionally supported by using an increment
between CPT code 58559 and the base code for this family, CPT code
58555. The increment between the RUC recommended values for the two
codes is 2.47. That increment added to the proposed value for the base
code, CPT code 58555, would result in a work RVU of 5.12. Therefore, we
proposed a work RVU of 5.20 for CPT code 58559.
For CPT code 58560, the RUC recommended a work RVU of 6.15. We
stated in the proposed rule that we believe that a direct crosswalk
from CPT code 52351 (Cystourethroscopy, with ureteroscopy and/or
pyeloscopy; diagnostic), which has a work RVU of 5.75 and which has
more intraservice time and very similar total time, more accurately
reflects the time and intensity of furnishing this service. Our
proposal further supported this value by using an increment between CPT
code 58560 and the base code for this family, CPT code 58555. We stated
that the increment between the RUC recommended values for the two codes
is 3.08. That increment added to the proposed value for the base code,
CPT code 58555, would result in a work RVU of 5.73. Therefore, we
proposed a work RVU of 5.75 for CPT code 58560.
For CPT code 58561, the RUC recommended a work RVU of 7.00. We
stated in the proposed rule that we believe that a direct crosswalk
from CPT code 35475 (Transluminal balloon angioplasty, percutaneous;
brachiocephalic trunk or branches, each vessel), which has a work RVU
of 6.60 and which has similar intraservice and total times, more
accurately reflected the time and intensity of furnishing this service.
We also noted that our proposal was further supported by using an
increment between CPT code 58561 and the base code for this family, CPT
code 58555. The increment between the RUC recommended values for the
two codes is 3.93. That increment added to the proposed value for the
base code, CPT code 58555, would result in a work RVU of 6.58.
Therefore, we proposed a work RVU of 6.60 for CPT code 58561.
For CPT code 58562, the RUC recommended a work RVU of 4.17.
However, we believed that a direct crosswalk of the work RVUs for CPT
code 15277 (Application of skin substitute graft to face, scalp,
eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or
multiple digits, total wound surface area greater than or equal to 100
sq cm; first 100 sq cm wound surface area, or 1% of body area of
infants and children), which has a work RVU of 4.00 and which has
identical intraservice time and similar total time, more accurately
reflects the time and intensity of furnishing this service. The RUC
also used this code as one of its supporting codes for its
recommendation. This value is additionally supported by using an
increment between CPT code 58562 and the base code for this family, CPT
code 58555. The increment between the RUC recommended values for the
two codes is 1.10. That increment added to the proposed value for the
base code, CPT code 58555, results in a work RVU of 3.75. Therefore, we
proposed a work RVU of 4.00 for CPT code 58562.
For CPT code 58563, the RUC recommended a work RVU of 4.62.
However, we believed that a direct crosswalk of the work RVUs for CPT
code 33962 (Extracorporeal membrane oxygenation (ECMO)/extracorporeal
life support (ECLS) provided by physician; reposition peripheral
(arterial and/or venous) cannula(e), open, 6 years and older (includes
fluoroscopic guidance, when performed)), which has a work RVU of 4.47
and that has identical intraservice time and similar total time, more
accurately reflects the resources involved in furnishing this service.
This value is additionally supported by using an increment between CPT
code 58563 and the base code for this family, CPT code 58555. The
increment between the RUC recommended values for the two codes is 1.55.
That increment added to the proposed value for the base code, CPT code
58555), results in a work RVU of 4.20. We note that CPT code 58563 has
the same instraservice time and the same total time as CPT code 58558;
however, we agreed that the intensity would be slightly higher for this
service. Therefore, we proposed a work RVU of 4.47 for CPT code 58562.
The RUC submitted invoices for two new equipment items used in
furnishing CPT code 58558, the hysteroscopic fluid management system
and the hysteroscopic resection system. We proposed to use these
invoice prices for the hysteroscopic fluid management system, which
totaled $14,698.38. The hysteroscopic resection system included the
price of the hysteroscope, as well as other items necessary for tissue
removal. However, we generally price endoscopes separately and not as a
part of a system. To maintain consistency, we proposed not to include
the hysteroscope from the Resection System. Instead, we proposed to
update the equipment item ``endoscope, rigid, hysteroscopy'' (ES009)
with the invoice price, $6,207.50. We did not propose to include the
sterilization tray from the hysteroscopic resection system because we
believe this tray has generally been characterized as an indirect
practice expense. For the hysteroscopic resection system, we proposed
to include the hysteroscopic tissue remover ($18,375), the sheath
($1,097.25), and the calibration device ($300), and created a new
equipment item code, priced at $19,857.50 in the proposed direct PE
input database. We did not propose to include the calibration device
since the submitted price was not documented with a paid invoice.
Comment: Commenters, including the RUC, disagreed with CMS'
proposed refinements to the work RVUs for these procedures, and
requested that CMS finalize the RUC-recommended work values for these
codes. Commenters suggested that these procedures are more complex in
cases where it is more difficult to find and feed the scopes through
the cervix. Commenters suggested that it appeared as though CMS used a
time to work ratio to value these services, stating further that, for
example, CPT code 58555 requires a forced dilation of a natural
orifice, very small in size and can be difficult to identify in a post-
menopausal patient or a patient with prior cervical surgery. Commenters
suggested that the CMS crosswalk codes are for a natural orifice that
might not require any dilation or only a 10% dilation, and the orifice
is consistently the same with little variation among patients.
Response: While we appreciate the commenters' feedback, we do not
consider forced or difficult dilation as described by the commenter to
be typical based on the RUC's clinical vignette and that the difficulty
of forced dilation at the time of surgery can often be offset by
preoperative cervical ripening. Therefore, we are finalizing the
following work RVUs for each code in this family.
CPT code 58555, 2.65 work RVUs;
CPT code 58558, 4.17 work RVUs;
CPT code 58559, 5.20 work RVUs;
CPT code 58560, 5.75 work RVUs;
CPT code 58561, 6.60 work RVUs;
CPT code 58562, 4.00 work RVUs; and
CPT code 58563, 4.47 work RVUs.
Comment: Regarding the direct PE inputs for CPT code 58558, one
commenter requested that CMS add a procedure kit and update the prices
for these supplies to reflect the cost of providing this procedure in
the physician office setting. The commenter also submitted invoices
related to other direct PE inputs for this code, including invoices for
the incisor blade and the procedure kit, which the commenter

[[Page 80307]]

indicated includes inflow tubing, outflow tubing, and the non-sterile
components of jumper cables and a tissue trap.
Response: We appreciate the feedback we received regarding the
direct PE inputs for CPT code 58558. We agree with the addition of the
hysteroscopic procedure kit and are creating a new supply item
``hysteroscopic fluid management tubing set'' using a single invoice
price of $320. Additionally, we note that we inadvertently did not
remove the existing direct PE inputs related to suction, which we
proposed to replace with the hysteroscopic fluid management system.
Therefore, we are removing direct PE inputs for the following items:
Supply item SD009: Canister, suction;
Supply item SD031: Catheter, suction; and
Equipment item EQ235: Suction machine (Gomco).
The commenter also included an additional invoice for the incision
instrument. Based on this new information, we are renaming this new
supply item, ``hysteroscopic tissue removal device,'' with a final
price of $629.00, which is the simple average of the two invoice prices
we have received for this supply item ($599 and $659 respectively).
Additionally, we note that our proposed summary price for the
hysteroscopic resection system was added incorrectly. The correct price
is $19,772.25. We are also modifying the equipment title to ensure
clarity of items included in the hysteroscopic resection system
(control unit, footpiece, handpiece, sheath and calibration device).
(28) Intracranial Endovascular Intervention (CPT Codes 61645, 61650,
and 61651)
For CY 2016, we established an interim final work RVU of 15.00 for
CPT code 61645, 10.00 for CPT code 61650 and 4.25 for CPT code 61651.
The RUC-recommended values for CPT codes 61645, 61650 and 61651 were
17.00, 12.00 and 5.50, respectively. We valued CPT code 61645 by
applying the ratio between the RUC-recommended reference code, CPT code
37231 (revascularization, endovascular, open or percutaneous, tibial,
peroneal artery, unilateral, initial vessel; with transluminal stent
placement(s) and atherectomy, includes angioplasty within the same
vessel, when performed), to the work and time for CPT code 61645. We
valued CPT code 61650 based on a crosswalk to CPT code 37221
(revascularization, endovascular, open or percutaneous, iliac artery,
unilateral, initial vessel; with transluminal stent placement(s),
includes angioplasty within the same vessel, when performed), due to
similar intensity and intraservice time. We valued CPT code 61651 based
on a crosswalk to CPT code 37223 (revascularization, endovascular, open
or percutaneous, iliac artery, each additional ipsilateral iliac
vessel; with transluminal stent placement(s), includes angioplasty
within the same vessel, when performed (list separately in addition to
the code for primary procedure)), due to similar intraservice time and
intensity.
Both CPT codes 61645 and 61650 included postservice work time
associated with a level 3 inpatient hospital visit. In the CY 2016 PFS
final rule with comment period, we stated that we believe that for the
typical patient, these services would be considered hospital outpatient
services, not inpatient services. As a result, the intraservice time of
the hospital observation care service was valued in the immediate
postservice time. We refined the work time for CPT code 61645 by
removing 55 minutes of work time associated with CPT code 99233, and
added 30 minutes of time to the immediate postservice time. Therefore,
the total time for CPT code 61645 was reduced to 241 minutes and the
immediate postservice time increased to 83 minutes. We also removed the
inpatient visit from CPT code 61650, which reduced the total time to
206 minutes and increased the postservice time to 75 minutes.
Comment on the CY 2016 PFS final rule with comment period:
Commenters disagreed with our categorization of these codes as
typically outpatient. Commenters stated that according to Medicare
claims data, the predecessor codes were performed primarily on an
inpatient basis. Additionally, commenters pointed out that the new
codes would typically be performed on acute stroke patients. Commenters
also said as the new codes are inpatient-only, the CMS reductions in
work and time based on the assumption of outpatient status are flawed
and suggested we accept the RUC-recommended values. Commenters also
requested that these codes be referred to the refinement panel.
Response in the CY 2017 PFS proposed rule: For CY 2016, we valued
CPT codes 61645, 61650, and 61651 based on comparisons to CPT codes
37231, 37221, and 37223, respectively. We continue to believe that
these crosswalks are appropriate comparisons based on intensity and
intraservice time, and because no persuasive information was presented
at the refinement panel that indicated that these comparisons are not
accurate. Therefore, for CY 2017, we proposed work RVUs of 15.00 for
CPT code 61645, 10.00 for CPT code 61650, and 4.25 for CPT code 61651.
We also proposed time inputs based on our refinements of the RUC
recommendations, including removing the time associated with a hospital
inpatient visit (CPT code 99233) from the intraservice work time, and
adding 30 minutes to the immediate postservice time for both CPT codes
61645 and 61650.
We do not believe that 0-day global codes should include post-
operative visits; rather, if global codes require post-operative
visits, they are more appropriately assigned 10- or 90-day global
periods based on our current criteria. Our policy has been to remove
the visit from the post-operative period and the associated minutes
from the total time while adding 30 minutes to the immediate
postservice period without necessarily making an adjustment to the work
RVU (see the CY 2010 PFS proposed rule, 74 FR 33557; also see the CY
2011 PFS proposed rule, 75 FR 40072). We solicited comment on the
inclusion of post-operative visits in valuation of codes with 0-day
global periods. Both CPT codes 61645 and 61650 are assigned 0-day
global periods, and the refinements we proposed reflected changes to
more appropriately value these codes with 0-day global periods.
The following is a summary of the comments we received regarding
our proposed valuations for the intracranial endovascular intervention
family:
Comment: Commenters, including the RUC, requested that CMS finalize
the RUC-recommended work RVUs for CPT codes 61645, 61650 and 61651. The
RUC suggested that evaluating the actual physician work performed in
the inpatient setting is more accurate than applying a crosswalk to a
CPT code that is performed predominantly in the outpatient setting. As
examples, the RUC noted that CPT code 61645 would not be performed in
the outpatient setting, and CPT codes 61650 and 61651 would be
performed in the intensive care unit. For CPT codes 61645 and 61650,
commenters also expressed concern about CMS' proposed refinements to
remove the time associated with a postservice visit from each code and
subsequently adding 30 minutes to the immediate postservice period for
each of these codes. The RUC suggested that these CMS refinements
artificially reduced the total work time for CPT codes 61645 and 61650.

[[Page 80308]]

Response: We continue to believe that our crosswalks for each of
these codes accurately reflect the physician work involved in these
procedures due to similarities in intensity and intraservice time. For
example, our proposed work RVU of 15.00 for CPT code 61645 would be the
highest work value among comparable codes with similar intraservice
times. We note that we identified three CPT codes with similar
intraservice times (CPT codes 33955, 33956, and 33988) that had higher
work RVUs than our proposed work RVU of 15.00, but these three CPT
codes are used to report extracorporeal membrane oxygenation or
extracorporeal life support services (ECMO/ECLS) procedures, which we
do not believe are comparable to the CPT codes in this family.
Regarding physician time for CPT codes 61645 and 61650, as we
discussed in the proposed rule, we do not believe that 0-day global
codes should include post-operative visits; rather, if global codes
require post-operative visits, they are more appropriately assigned 10-
or 90-day global periods based on our current criteria. Our policy has
been to remove the visit from the post-operative period and the
associated minutes from the total time while adding 30 minutes to the
immediate postservice period without necessarily making an adjustment
to the work RVU (see the CY 2010 PFS proposed rule, 74 FR 33557; also
see the CY 2011 PFS proposed rule, 75 FR 40072).
Therefore, for CY 2017, we are finalizing a work RVU of 15.00 for
CPT code 61645, a work RVU of 10.00 for CPT code 61650, and a work RVU
of 4.25 for CPT code 61651.
(29) Epidural Injections (CPT Codes 62320, 62321, 62322, 62323, 62324,
62325, 62326, and 62327)
We proposed the RUC-recommended work RVU for all eight of the codes
in this family.
We proposed to remove the 10-12mL syringes (SC051) and the RK
epidural needle (SC038) from all eight of the codes in this family. We
stated that these supplies were duplicative, as they are included in
the epidural tray (SA064). As an alternative, we raised the possibility
of removing the epidural tray and replacing it with the individual
supply components used in each procedure; we solicited public comment
on either the inclusion of the epidural tray or its individual
components for this family of codes.
The following is a summary of the comments we received regarding
our proposed valuation of the Epidural Injection codes:
Comment: A few commenters expressed their support for the proposed
work values.
Response: We appreciate the support from the commenters.
Comment: Several commenters disagreed with the proposed removal of
the 10-12mL syringes (SC051) and the RK epidural needle (SC038) due to
the CMS belief that they are duplicative of the supplies in the
epidural tray (SA064). Commenters stated that although there are three
syringes listed in the epidural tray, none of the syringes in the tray
are the 10-12mL syringe. In addition, none of the needles currently
listed in the epidural tray (SA064) are an epidural needle. As a
result, commenters indicated that there was no reason to replace the
epidural tray with its individual components.
Response: We appreciate this clarification from the commenters
regarding the components that make up the epidural tray. Taking this
information into account, we are restoring the 10-12mL syringes (SC051)
and the RK epidural needle (SC038) to all eight of the codes in this
family.
After consideration of comments received, we are finalizing the
proposed work RVUs for the Epidural Injection codes. We are also
finalizing the proposed direct PE inputs, with the addition of the 10-
12mL syringes and the RK epidural needle detailed above.
(30) Endoscopic Decompression of Spinal Cord (CPT Code 62380)
For CY 2016, the CPT Editorial Panel created CPT code 62380 to
describe the endoscopic decompression of neural elements. The RUC
recommended a work RVU of 10.47 based on a crosswalk to CPT code 47562
(Laparoscopy, surgical; cholecystectomy) with a higher intraservice
time than reflected in the survey data. Since we believe CPT codes
62380 and 47562 are similar in intensity, we believe using the same
work RVU as the crosswalk code overestimates the work involved in
furnishing CPT code 62380. Reference CPT code 49507 (Repair initial
inguinal hernia, age 5 years or older; incarcerated or strangulated)
has a work RVU of 9.09 and has similar intensity and an identical
intraservice time compared to CPT code 62380. Therefore, we proposed a
work RVU of 9.09 for CPT code 62380.
Comment: Some commenters reiterated that the RUC-recommended direct
crosswalk to CPT code 47562 is appropriate since this code has a
similar physician time, and the IWPUT of the RUC-recommended work RVU
is 0.085, a comparable valuation when compared with other spinal
decompression procedures. The RUC agreed that the intensity of CPT code
62380 was greater, which offsets the 10 minute difference in
intraservice time between the two codes. The RUC indicated that the
difference in intensity between these procedures is based on CPT code
62380 involving decompression about neural elements and the spinal
cord, where the opportunity for complications and for loss of function
is high. One commenter indicated that CMS' proposed work RVU would fall
below the minimum survey results.
A few commenters expressed concerns about the structure of the CPT
code descriptors and RUC-recommended valuations. Commenters suggested
that the CPT Editorial Panel and the RUC did not take certain
indications into account such as differences between the physician work
required for endoscopic tubular microdiscectomy compared to lumbar
spinal stenosis decompression and posterior cervical posterior
laminoforaminotomy. Commenters indicated that the specialty society
survey data was inadequate due to the inexperience of the survey
respondents, with others suggesting that the survey times were not
reflective of some practitioners' experience or patient complexity.
The commenters indicated that the current RUC recommendations for
full endoscopic tubular endoscopic surgery are based on limited
experience among survey respondents with lumbar microdiscectomy, and
insufficient experience with lumbar spinal stenosis decompression and
posterior cervical foraminotomy without fusion and are invalid for
these indications. Commenters requested that the current CPT codes and
valuations for full endoscopic lumbar spinal stenosis decompression and
posterior cervical foraminotomy without fusion remain unchanged until
further RUC survey data are examined. Some commenters suggested
alternative crosswalks including CPT code 61548 (Hypophysectomy or
excision of pituitary tumor, transnasal or transseptal approach,
nonstereotactic) with a work RVU of 23.37, CPT code 63030 (Laminotomy
(hemilaminectomy), with decompression of nerve root(s), including
partial facetectomy, foraminotomy and/or excision of herniated
intervertebral disc; 1 interspace, lumbar) with a work RVU of 13.18,
and CPT code 63056 (Transpedicular approach with decompression of
spinal cord, equina and/or nerve root(s) (e.g., herniated
intervertebral disc), single segment;

[[Page 80309]]

lumbar (including transfacet, or lateral extraforaminal approach)
(e.g., far lateral herniated intervertebral disc)) with a work RVU of
21.86.
Response: As discussed above, commenters raised multiple concerns
about the accuracy of the survey results, the RUC's recommended
valuation of this service, and our subsequent proposed refinements.
Therefore, at this time, we are finalizing contractor pricing for CPT
code 62380. We note that the summary of recommendations (SOR) included
with the RUC recommendations indicated that the expert panel reviewing
the survey data for this procedure believed the survey median and 25th
percentile work RVU were inconsistent with the physician work as it
related to other major open spine procedures. Subsequently, the RUC
recommended a work RVU of 10.47 based on a crosswalk from CPT code
47562 (Laparoscopy, surgical; cholecystectomy). The RUC noted that
procedures reported with CPT code 62380 have ten minutes less
intraoperative time compared to the RUC's recommended crosswalk from
CPT code 62380, but suggested that the physician work of endoscopic
decompression in the small disc interspace near the spinal nerve roots
of the cauda equina is more complex and will require more post-
discharge office work for required imaging to confirm stabilization and
for physical therapy orders and monitoring.
We note that based on the RUC's utilization crosswalk, services
that will be reported in CY 2017 with CPT code 62380 are currently
reported using either CPT code 22899 (Unlisted procedure, spine) or CPT
code 0275T (Percutaneous laminotomy/laminectomy (interlaminar approach)
for decompression of neural elements, (with or without ligamentous
resection, discectomy, facetectomy and/or foraminotomy), any method,
under indirect guidance (e.g., fluoroscopic, CT), with or without the
use of an endoscope, single or multiple levels, unilateral or
bilateral; lumbar)), which are both contractor priced for CY 2016. We
welcome feedback from interested parties and specialty societies
regarding valuation of this service for consideration in future
rulemaking.
(31) Paravertebral Block Injection (CPT Codes 64461, 64462, and 64463)
In CY 2015, the CPT Editorial Panel created three new codes to
describe paravertebral block injections at single or multiple levels,
as well as for continuous infusion for the administration of local
anesthetic for post-operative pain control and thoracic and abdominal
wall analgesia. For the CY 2016 PFS final rule with comment period, we
established the RUC-recommended work RVUs of 1.75 and 1.10 as interim
final for CPT codes 64461 and 64462, respectively. For CPT code 64463,
we utilized a direct crosswalk from three other injection codes (CPT
codes 64416 (Injection, anesthetic agent; brachial plexus, continuous
infusion by catheter (including catheter placement), 64446 (Injection,
anesthetic agent; sciatic nerve, continuous infusion by catheter
(including catheter placement), and 64449 (Injection, anesthetic agent;
lumbar plexus, posterior approach, continuous infusion by catheter
(including catheter placement)), which all had a work RVU of 1.81, as
we believed this crosswalk more accurately reflected the work involved
in furnishing this service.
Comment on the CY 2016 PFS final rule with comment period: We
received comments from the RUC stating CPT code 64463 was more
comparable to CPT code 64483 (Injection(s), anesthetic agent and/or
steroid, transforaminal epidural, with imaging guidance (fluoroscopy or
CT); lumbar or sacral, single), which has a work RVU of 1.90 and
requires the same physician work and time to perform. The RUC
recommended we accept a work RVU of 1.90, which is the 25th percentile
of the survey. Another commenter stated that our interim final work RVU
for CPT code 64463 was inappropriate since imaging guidance is not part
of our comparison codes. The commenter advocated for us to accept the
survey respondent's selection of CPT code 64483 as the most appropriate
comparison code and assign a work RVU of 1.90.
Response in the CY 2017 PFS proposed rule: After reviewing and
considering the comments, we stated we continued to believe that CPT
codes 64416, 64446, and 64449, all of which have 20 minutes of
intraservice time, are better crosswalks to CPT code 64463, which also
has 20 minutes of intraservice time and a similar total time. In
contrast, the crosswalk code recommended by commenters, CPT 64483, only
has 15 minutes of intraservice time. Therefore, for CY 2017 we proposed
a work RVU of 1.81 for CPT code 64463.
The following is a summary of the comments we received regarding
our proposed valuations for the Paravertebral Block Injection family:
Comment: One commenter stated that CMS based its decision on an
inappropriate comparison of CPT code 64463 with codes that describe
continuous peripheral nerve blocks that do not include imaging
guidance. The commenter stated that the imaging component included in
CPT code 64463 was justification for at least the 0.09 difference
between the RUC recommendation and the CMS proposed value. The
commenter offered CPT code 47000 (Biopsy of liver, needle;
percutaneous), which has identical intraservice time and a work RVU of
1.90 as a comparator code.
Response: We appreciate the additional information offered by the
commenters and we agree with the commenter's statement that the image
guidance component of this service was justification for the 0.09
difference between the RUC recommendation and the CMS proposed value.
After review and consideration of the comments, we are finalizing the
RUC-recommended work RVUs of 1.75, 1.10 and 1.90 for CPTs code 64461,
64462 and 64463, respectively for CY 2017.
(32) Implantation of Neuroelectrodes (CPT Codes 64553 and 64555)
The RUC identified CPT codes 64553 and 64555 as a site of service
anomaly during the CY 2016 PFS rulemaking cycle. In the Medicare claims
data, these services were typically reported in the nonfacility
setting, yet the survey data were predicated on a facility-based
procedure. We agreed with the RUC that these two codes should be
referred to the CPT Editorial Panel to better define the services, in
particular to investigate the possibility of establishing one code to
describe temporary or testing implantation and another code to describe
permanent implantation. We maintained the CY 2015 work RVUs and direct
PE inputs for these two codes on an interim basis until receiving
updated recommendations from the CPT Editorial Panel and the RUC.
Comment on the CY 2016 PFS final rule with comment period: A
commenter requested that CMS allow practitioners to bill the MACs
separately for a percutaneous electrode kit (SA022) for CPT code 64555.
The commenter stated that without allowing for a separate payment for
the percutaneous electrode kit, the payment for the procedure would be
insufficient to cover the physician's costs.
Response in the CY 2017 PFS proposed rule: We agreed that CPT codes
64553 and 64555 as currently constructed were potentially misvalued
codes, which is why we maintained the CY 2015 work RVUs and direct PE
inputs on an interim basis. We believe that the disposable supplies
furnished incident to the procedure are paid through the nonfacility PE
RVUs. The

[[Page 80310]]

percutaneous electrode kit (SA022) was not previously included in the
direct PE inputs for either of these two services, and since we
proposed to maintain current direct PE inputs pending additional
recommendations, we do not agree that disposable supplies should be
separately payable. We proposed to maintain the interim final work RVUs
and direct PE inputs for these two codes, and we looked forward to
reviewing recommendations regarding these procedures again for future
rulemaking.
Additionally, we were alerted to a discrepancy regarding the times
for these codes in the CY 2016 work time file. Our proposed CY 2017
work time file addressed this discrepancy by reflecting the RUC
recommended times of 155 minutes for CPT code 64553 and 140 minutes for
CPT code 64555.
The following is a summary of the comments we received regarding
our proposed valuation of the Implantation of Neuroelectrodes codes:
Comment: One commenter responded to the CMS request for information
about whether there was a need for separate codes for temporary/testing
and permanent placement for neuroelectrodes. The commenter stated that
it did not support the creation of new separate codes at this time. The
commenter stressed that the current codes account for the work of both
temporary/testing and permanent placement, making the creation of new
codes unwarranted.
Response: We appreciate the submission of this information from the
commenter. We did not receive any comments addressing the proposed
valuation of these codes.
After consideration of comments, we are finalizing the proposed
work RVUs and proposed direct PE inputs for CPT codes 64553 and 64555.
(33) Ocular Reconstruction Transplant (CPT Code 65780)
In CY 2015, the RUC identified CPT code 65780 as potentially
misvalued through a misvalued code screen for 90-day global services
that included more than 6 office visits. The RUC recommended a direct
work RVU crosswalk from CPT code 27829 (Open treatment of distal
tibiofibular joint (syndesmosis) disruption, includes internal
fixation, when performed). After examining comparable codes, we
determined the RUC-recommended work RVU of 8.80 for CPT code 65780
would likely overstate the work involved in the procedure given the
change in intraservice and total times compared to the previous values.
We believed that the ratio of the total times (230/316) applied to the
work RVU (10.73) more accurately reflected the work involved in this
procedure. Therefore, we established an interim final work RVU of 7.81
for CPT code 65780.
Comment on the CY 2016 PFS final rule with comment period: The RUC
and other commenters disagreed with our interim final values based on
objections to our use of time ratios in developing work RVUs for PFS
services.
Response in the CY 2017 PFS proposed rule: We stated that we
appreciate the commenters' concerns and responded to these concerns
about our methodology in section II.L of the CY 2017 proposed rule.
After review of the comments, we continued to consider the work RVU of
7.81 to accurately represent the work involved in CPT code 65780. We
believed this service was similar in overall intensity to CPT code
27766 (Open treatment of medial malleolus fracture, includes internal
fixation, when performed) that has a work RVU of 7.89 and a total time
that more closely approximates that of CPT code 65780.
In the CY 2017 proposed rule, we proposed a work RVU of 7.81 for
CPT code 65780.
We did not receive any comments in response to our proposed
valuation on CPT code 65780; therefore, we are finalizing a work RVU of
7.81 as proposed.
(34) Trabeculoplasty by Laser Surgery (CPT Code 65855)
In CY 2015, the RUC identified CPT code 65855 as potentially
misvalued through the review of 10-day global services with more than
1.5 postoperative visits. The RUC noted that the code was changed from
a 90-day to a 10-day global period when it was last valued in 2000.
However, the descriptor was not updated to reflect that change. CPT
code 65855 describes multiple laser applications to the trabecular
meshwork through a contact lens to reduce intraocular pressure. The
current practice is to perform only one treatment session during a 10-
day period and then wait for the effect on the intraocular pressure.
The descriptor for CPT code 65855 has been revised and removes the
language ``1 or more sessions'' to clarify this change in practice.
The RUC recommended a work RVU of 3.00 for CPT code 65855. While
the RUC-recommended value represents a reduction from the CY 2015 work
RVU of 3.99, we stated that significant reductions in the intraservice
time, the total time, and the change in the office visits represent a
more significant change in the work resources involved in furnishing
the typical service. The intraservice and total times were decreased by
approximately 33 percent while the elimination of two postoperative
visits (CPT code 99212) alone would reduce the overall work RVU by at
least 24 percent under the reverse building block method. However, the
RUC-recommended work RVU only represents a 25 percent reduction
relative to the previous value. To identify potential work RVUs for
this service, we calculated an intraservice time ratio between the CY
2015 intraservice time, 15 minutes, and the RUC-recommended
intraservice time, 10 minutes, and applied this ratio to the current
work RVU of 3.99 to arrive at a work RVU of 2.66 for CPT code 65855,
which we established as interim final for CY 2016.
Comment on the CY 2016 PFS final rule with comment period: A few
commenters, including the RUC, provided explanations as to how the RUC
recommendation had already accounted for the reduction in physician
intraservice time and post-operative visits. Some commenters disagreed
with CMS' interim final values based on objections to CMS' use of time
ratios in developing work RVUs for PFS services.
Response in the CY 2017 PFS proposed rule: We stated that we
appreciated the commenters' concerns regarding the time ratio
methodologies and responded to those concerns about our methodology in
section II.H.2 of the CY 2017 proposed rule. After considering the
explanations provided by commenters through public comments describing
the RUC's methodologies in more detail, we agreed that the proposed
value did not accurately reflect the physician work involved in
furnishing the service.
In the CY 2017 proposed rule, we proposed the RUC-recommended work
RVU value of 3.00 for CPT code 65855.
We did not receive any comments in response to our proposed
valuation on CPT code 65855; therefore, we are finalizing a work RVU of
3.00 as proposed.
Comment: A few commenters stated their support of CMS' decision to
propose the RUC-recommended value for CY 2017 and strongly urged us to
finalize the proposal.
Response: Thank you for your comments. For CY 2017 we are
finalizing the RUC-recommended work RVU of 3.00 for CPT code 65855.

[[Page 80311]]

(35) Glaucoma Surgery (CPT Codes 66170 and 66172)
The RUC identified CPT codes 66170 and 66172 as potentially
misvalued through a screen for 90-day global codes that included more
than six office visits. We believed the RUC-recommended work RVU of
13.94 for CPT code 66170 did not accurately account for the reductions
in time. Specifically, the survey results indicated reductions of 25
percent in intraservice time and 28 percent in total time. These
reductions suggested that the RUC-recommended work RVU for CPT code
66170 overstated the work involved in furnishing the service, since the
recommended value only represented a reduction of approximately seven
percent. We believed that applying the intraservice time ratio, the
ratio between the CY 2015 intraservice time, 60 minutes, and the RUC-
recommended intraservice time, 45 minutes, applied to the current work
RVU, 15.02, resulted in a more appropriate work RVU of 11.27.
Therefore, for CY 2016, we established an interim final work RVU of
11.27 for CPT code 66170.
For CPT code 66172, the RUC recommended a work RVU of 14.81. After
comparing the RUC-recommended work RVU for this code to the work RVU
for similar codes (for example, CPT code 44900 (Incision and drainage
of appendiceal abscess, open) and CPT code 52647 (Laser coagulation of
prostate, including control of postoperative bleeding, complete
(vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or
dilation, and internal urethrotomy are included if performed))), we
believed the RUC-recommended work RVU of 14.81 overstated the work
involved in this procedure. For the same reasons and following the same
valuation methodology utilized above, we applied the intraservice time
ratio between the CY 2015 intraservice time and the survey intraservice
time, 60/90, to the CY 2015 work RVU of 18.86. This resulted in a work
RVU of 12.57 for CPT code 66172. Therefore, for CY 2016, we established
an interim final work RVU of 12.57 for CPT code 66172.
Comment on the CY 2016 PFS final rule with comment period: Several
commenters, including the RUC, objected with our interim final values
based on objections to our use of time ratios in developing work RVUs
for PFS services. Commenters also requested CMS refer CPT codes 66170
and 66172 to the refinement panel.
Response in the CY 2017 PFS proposed rule: We acknowledged
commenters' concerns regarding the time ratio methodologies and
responded to those concerns in section II.H.2 of the CY 2017 proposed
rule (81 FR 46162). CPT codes 66170 and 66172 were referred to the CY
2016 multi-specialty refinement panel per commenters' request. The
outcome of the refinement panel was a median of 13.94 RVUs for CPT code
66170 and 14.84 RVUs for CPT code 66172. Due to the new information
presented to the refinement panel regarding the level of intensity
required to perform millimeter incisions in the eye, we agreed with the
assessment of the refinement panel and proposed a work RVU of 13.94 for
CPT code 66170 and 14.84 for CPT code 66172 for CY 2017.
The following is a summary of the comments we received regarding
our proposed valuations for the Glaucoma Surgery family:
Comments: Several commenters stated their support of CMS' decision
to propose the values recommended by the refinement panel for CPT codes
66170 and 66172. Some commenters, including the RUC, also brought to
our attention discrepancies between our proposal for these codes in the
CY 2017 proposed rule and the work RVUs posted in Addendum B on the CMS
Web site.
Response: For CY 2017, we are finalizing a work RVU of 13.94 for
CPT code 66170 and a work RVU of 14.84 for CPT code 66172. We
appreciate commenters bringing this issue regarding conflicting
information in the CY 2017 PFS proposed rule preamble text and the
public use files published on the CMS Web site. We have corrected this
discrepancy in this final rule and the associated public use files.
(36) Retinal Detachment Repair (CPT Codes 67101, 67105, 67107, 67108,
67110, and 67113)
For CY 2015, the CPT Editorial Panel made several changes to CPT
codes 67101 and 67105. These changes include revising the code
descriptors to exclude ``diathermy'' and ``with or without drainage of
subretinal fluid'' and removing the reference to ``1 or more
sessions.'' The recommended global period also changed from 90 days to
10 days. For CPT code 67101, we proposed the RUC recommended work RVU
of 3.50, which was based on the 25th percentile of the survey. For CPT
code 67105, the RUC recommended a work RVU of 3.84 based on the 25th
percentile of the survey. The RUC also stated that CPT code 67105 was a
more intense procedure, and therefore, it should have a higher work RVU
than CPT code 67101. Currently, CPT code 67101 has a higher work RVU
than CPT code 67105 and according to the surveys, the intraservice and
total times remain higher for CPT code 67101. We do not understand why
the RUC believes that CPT code 67105 is more work than CPT code 67101.
Therefore, we did not propose the RUC-recommended work RVU of 3.50 for
CPT code 67105. We did not find evidence that CPT code 67105 is more
intense than CPT code 67101 and accordingly, proposed a lower work RVU
for CPT code 67105. To value CPT code 67105, we used the RVU ratio
between CPT codes 67101 and 67105. We divided the current work RVU of
8.53 for CPT code 67105, by the current work RVU of 8.80 for CPT code
67101 and multiplied the quotient by the RUC-recommended work RVU of
3.50 for CPT code 67101 to arrive at a work RVU of 3.39. Therefore, for
CY 2017, we proposed a work RVU of 3.39 for CPT code 67105.
CPT codes 67107, 67108, 67110, and 67113 were identified through
the Relative Assessment Workgroup process under the 90-day global post-
operative visit screen in CY 2015. The RUC recommended a work RVU of
16.00 for CPT code 67107, which corresponded to the 25th percentile of
the survey. While the RUC recommendation represented a five percent
reduction from the current work RVU of 16.71, we believed the RUC
recommendation still overvalued the service given the 15 percent
reduction in intraservice time and 25 percent reduction in total time.
We used the intraservice time ratio between the existing and new
time values to identify an interim final work RVU of 14.06. We believed
this value accurately reflected the work involved in this service and
was comparable to other codes that have the same global period and
similar intraservice time and total time. For CY 2016, we established
an interim final work RVU of 14.06 for CPT code 67107. For CPT code
67108, the RUC recommended a work RVU of 17.13 based on the 25th
percentile of the survey, which reflected a 25 percent reduction from
the current work RVU. The survey results reflected a 53 percent
reduction in intraservice time and a 42 percent reduction in total
time. We believed the RUC-recommended work RVU overestimated the work,
given the significant reductions in intraservice time and total time
and does not maintain relativity among the codes in this family. To
determine the appropriate value for this code and maintain relativity
within the family, we preserved the 1.13 work RVU increment recommended
by the RUC between this code and CPT code 67107

[[Page 80312]]

and applied that increment to the interim final work RVU of 14.06 for
CPT code 67107. Therefore, we established an interim final work RVU of
15.19 for CPT code 67108. For CPT code 67110, the RUC recommended
maintaining the current work RVU of 10.25. To maintain appropriate
relativity with the work RVUs established for the other services within
this family, we used the RUC-recommended 5.75 work RVU differential
between CPT code 67107 and CPT code 67110 to establish the CY 2016
interim final work RVU of 8.31 for CPT code 67110. For CPT code 67113,
the RUC recommended and we established an interim final work RVU of
19.00 based on the 25th percentile of the survey.
Comment on the CY 2016 PFS final rule with comment period: We
received several comments disagreeing with our interim final values
based on objections to our use of time ratios in developing work RVUs
for PFS services. Some commenters also stated that by using some RUC-
recommended increments and rejecting others, we have not only
established inconsistencies within the family of codes, but potentially
opened up anomalies across a wide range of services. The RUC also
expressed disagreement with using the recommended work RVU increments
without using the recommended work RVU. Some commenters also stated the
new IWPUT values for these three services are inappropriately low and
pointed to the derived per minute intensity of 0.064 for CPT code 67110
as particularly problematic.
Response in the CY 2017 PFS proposed rule: We disagreed with the
statement about inconsistencies as the codes in this family are valued
relative to one another based on the times and level of physician work
required for each code.
We also stated that generally we do not agree that a low IWPUT
itself indicates overall misvaluation as the validity of the IWPUT as a
measure of intensity depends on the accuracy of the assumptions
regarding the number, level, and work RVUs attributable to visits for
services in the post-operative global period for individual services.
We provided an example where a service with an unrealistic number
or level of postoperative visits may have a very low derived intensity
for the intra-service time. CPT codes 67107, 67108, and 67110 were
referred to the CY 2016 multispecialty refinement panel per commenters'
request. The outcome of the refinement panel was a median work RVU of
16.00, 17.13, and 10.25, respectively. After consideration of the
comments and the results of the refinement panel, we proposed a work
RVU of 16.00, 17.13, and 10.25 for CPT codes 67107, 67108, and 66110,
respectively, for CY 2017.
The following is a summary of the comments we received regarding
our proposed valuations for the Retinal Detachment Repair family:
Comments: A few commenters, including the RUC, noted that CPT codes
67101 and 67105 were last valued by the Harvard study. The RUC stated
that during the Harvard studies, CPT code 67101 was valued higher due
to greater total time. However, now photocoagulation is reported at
vastly higher levels than the cryotherapy procedure, as it is
considered to be a more effective treatment. A few commenters stated
that given the changing nature of the service since the last valuation,
the intensity of CPT code 67105 is now greater and urged CMS to accept
the RUC-recommended values.
For CPT codes 67107, 67108, 67110, and 67113, several commenters
supported CMS' decision to propose the values recommended by the
refinement panel and urged CMS to finalize these proposed values. A few
commenters, including the RUC, brought to our attention discrepancies
between our proposal for these codes and the work RVUs posted in
Addendum B on the CMS Web site.
Response: We note that, according to the surveys, the intraservice
and total times were significantly higher for CPT code 67101 and note
the specialty societies recommended a higher work RVU for CPT code
67101 prior to the RUC meeting. Although commenters state that
photocoagulation (CPT code 67105) is typically billed more frequently
than diathermy (CPT code 67101), we do not believe the utilization rate
of a service in and of itself is reason enough to warrant an increase
in RVUs. Therefore, for CY 2017, we are finalizing a work RVU of 3.50
and 3.39 for CPT codes 67101 and 67105, respectively.
We appreciate commenters bringing to our attention the issue
regarding conflicting information in the CY 2017 PFS proposed rule
preamble text and the public use files published on the CMS Web site.
We have corrected this discrepancy in this final rule and the public
use files.
For CY 2017, we are finalizing a work RVU of 16.00, 17.13, 10.25
and 19.00 for CPT codes 67107, 67108, 66110 and 67113, respectively, in
agreement with the refinement panel recommendations.
(37) Fetal MRI (74712 and 74713)
For CY 2016, we established the RUC-recommended work RVU of 3.00 as
interim final for CPT code 74712. We established an interim final work
RVU of 1.78 for CPT code 74713 based on a refinement of the RUC-
recommended work RVU of 1.85 using the ratio of work to time for both
codes. This proposed value also corresponds to the 25th percentile
survey result.
Comment on the CY 2016 PFS final rule with comment period:
Commenters stated that the work RVU of 1.78 for CPT code 74713 did not
reflect the higher intensity inherent in the procedure's typical
patient. The commenter explained that the typical patient is pregnant
with twins and has a higher likelihood of complications related to
congenital anomalies, as well as of ischemic brain injury with twin
gestations. The commenter further stated that twin gestations are more
difficult to image. Commenters requested that CPT code 74713 be
referred to the multispecialty refinement panel.
Response in the CY 2017 PFS proposed rule: CPT code 74713 was
referred to the CY 2016 multispecialty refinement panel. After
considering the comments and the results of the refinement panel, we
agreed with commenters that an RVU of 1.78 underestimated the work for
CPT code 74713.
In the CY 2017 proposed rule, we proposed a work RVU of 1.85 for
the service for CY 2017.
We did not receive any comments in response to our proposed
valuation on CPT code 74713; therefore, we are finalizing the proposed
work RVU.
(38) Abdominal Aortic Ultrasound Screening (CPT Code 76706)
For CY 2017, the CPT Editorial Panel created a new code, CPT code
76706, to describe abdominal aortic ultrasound screening, currently
described by HCPCS code G0389. The specialties that surveyed CPT code
76706 for the RUC were vascular surgery and radiology, and the direct
PE inputs recommended by the RUC included an ultrasound room. Based on
an analysis of Medicare claims data, the dominant specialties
furnishing the service are family practice and internal medicine. We
believe that these specialties may more typically use a portable
ultrasound device rather than an ultrasound room. Therefore, we
proposed to accept the RUC-recommended work RVU of 0.55, and the RUC-
recommended PE inputs for this service, but we solicited comment
regarding whether or not it would be more accurate to substitute a
portable ultrasound device or possibly a hand-held device for an
ultrasound room for CPT code 76706. We note that while the phase-in of
significant

[[Page 80313]]

reductions in RVUs ordinarily would not apply to new codes, we believe
that it would be appropriate to consider this change from a G-code to a
CPT code to be fundamentally similar to an editorial coding change
since the service is not described differently, and therefore, we
proposed to apply the phase-in to this service by comparing the
previous value of the G-code to the value for the new CPT code.
Comment: One commenter stated that this service should be furnished
by a physician or surgeon that specializes in vascular disease. The
commenter noted that CMS should assign inputs based on which
specialties would more appropriately furnish a given service. Another
commenter disagreed with our statement in the CY 2017 proposed rule
that the dominant specialties furnishing this service are family
practice and internal medicine. The commenter stated that these
specialties are more likely to make use of a portable ultrasound device
rather than an ultrasound room. One commenter says that this service is
underutilized, and CMS should implement policies which support
screening.
Response: We appreciate the commenters' perspectives. We note that,
in evaluating codes in the Medicare Physician Fee Schedule (MPFS), we
price codes based on the typical service. Our review of the Medicare
claims data indicates that the combined utilization for the technical
component of this service and the service billed globally is typically
billed under the PFS by family practice and internal medicine, which is
why we solicited comment on whether the PE inputs for this service
should be revised.
Comment: A commenter supported our decision to apply the phase-in
to this code.
Response: We thank the commenter for the support.
Comment: A commenter agreed with CMS that family practice
physicians typically use a portable ultrasound device rather than an
ultrasound room. The commenter stated that CMS should continue to
include an ultrasound room as a direct PE input, unless other
specialties furnishing the service indicate that they do not typically
make use of an ultrasound room.
One commenter states that abdominal aortic aneurysm screenings are
performed on nonportable machines in either ambulatory or hospital
settings, and therefore, an ultrasound room is appropriate.
Response: We thank the commenters, and we will take this
information regarding the appropriate PE inputs for this service into
consideration for future rulemaking. While the specialty mix of the
practitioners furnishing services can be helpful in identifying typical
PE inputs, we continue to seek definitive information regarding the
most appropriate PE inputs for this code. For CY 2017, we are
finalizing the RUC-recommended work and PE inputs, as proposed.
(39) Fluoroscopic Guidance (CPT Codes 77001, 77002, and 77003)
In the CY 2015 PFS final rule with comment period, CMS indicated
that while CPT codes 77002 and 77003 had been previously classified as
stand-alone codes without global periods, we believe their vignettes
and CPT Manual parentheticals are consistent with an add-on code as has
been established for CPT code 77001. Therefore, the global periods for
CPT codes 77002 and 77003 now reflect an add-on code global period with
modifications to the vignettes and parentheticals.
For CPT code 77001, we proposed the RUC-recommended work RVU of
0.38. We stated that the RUC-recommended work RVUs for CPT codes 77002
and 77003 did not appear to account for the significant decrease in
total times for these codes relative to the current total times. We
noted that these three codes describe remarkably similar services and
have identical intraservice and total times. Based on the identical
times and notable similarity for all three of these codes, we proposed
a work RVU of 0.38 for all three codes.
The following is a summary of the comments we received regarding
our proposed valuation of the Fluoroscopic Guidance codes:
Comment: A few commenters disagreed with the change in the global
period for CPT codes 77002 and 77003 to reflect their status as add-on
codes. The commenters stated that this would imply that the imaging-
related preservice and postservice activities inherent to these image
guidance codes are captured by the base codes with which they are
reported, which simply is not the case. The commenters provided an
example of how reporting of radiation specific information, such as
fluoroscopy time, is not included in the postservice activities of the
base codes.
Response: CPT codes 77002 and 77003 were surveyed under the
assumption that they would be classified as add-on codes, and the RUC
recommendations for both work RVUs and direct PE inputs reflect this
status. We do not believe that it would be appropriate to assign these
codes a different global period after they were surveyed and valued
with the understanding that they would be classified as add-on codes.
Comment: Many commenters disagreed with the proposed work RVU of
0.38 for CPT codes 77002 and 77003. Commenters stated that these two
codes should not share the same work RVU as CPT code 77001, on the
basis that the physician work, intensity and complexity of codes 77002
and 77003 are greater than the first code in the family. Commenters
stated that the intensity and complexity increases in parts of the body
where there are additional anatomy considerations, such as superficial
and deep structures to consider with CPT code 77002, as well as
additional neuro and spinal structures to consider when performing CPT
code 77003. One commenter suggested that there was clinical data
indicating that CPT codes 77002 and 77003 take longer to perform than
CPT code 77001, in contradiction of the RUC survey data that assigned
all three codes identical time values. The commenter stated that this
was likely due to the greater complexity and procedural variability of
the latter two codes. Another commenter recognized that these codes
describe similar services but stressed that they do not describe
identical services, which was especially important for CPT code 77003
as it pertains to spinal procedure and carries more risk than the other
two codes.
Response: We recognize the concerns raised by the commenters in
assigning the same work RVU of 0.38 to the three codes in the
Fluoroscopic Guidance family. We note that even in cases where we
assign the same work RVU, we do not believe that the services are
identical, only that they share the same overall resources in work as
measured in RVUs. We also appreciate the reference to additional
clinical data from one commenter suggesting that CPT codes 77002 and
77003 take longer to perform than CPT code 77001. We have longstanding
concerns about using survey data alone for code valuation, and we are
always interested in investigating additional sources of information to
assist in this process. We encourage future commenters to submit this
data as part of their public comment so that it can be used by CMS as
part of the code valuation process. Based on the submission of this
additional data, we believe that the CPT codes 77002 and 77003 are more
accurately valued at a higher RVU than CPT code 77001.
After consideration of comments received, we are finalizing the
RUC-recommended work RVUs for all three codes in the family, which is
an increase from the proposed work RVU of 0.38 to a work RVU 0.54 for
CPT code

[[Page 80314]]

77002 and to 0.60 for CPT code 77003. We are finalizing the proposed
work RVU of 0.38 for CPT code 77001 without change.
(40) Mammography--Computer Aided Detection Bundling (CPT Codes 77065,
77066 and 77067)
Section 104 of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554)
required us to create separate codes with higher payment amounts for
digital mammography compared to film mammography, which was the
technology considered to be typical at the time. In addition, the
statute required additional payment to be made when computer-aided
detection (CAD) was used.
In CY 2002, we began valuing digital mammography services using
three G-codes, G0202, G0204, and G0206 to describe screening
mammography, unilateral diagnostic mammography, and bilateral
diagnostic mammography, respectively. CMS implemented the requirements
of BIPA section 104(d)(1), which applied to tests furnished in 2001, by
using the work RVUs of the parallel CPT codes, but establishing a fixed
PE RVU rather than using PE RVUs developed under the standard PE
methodology. The fixed amount of PE RVUs for these codes has generally
remained unchanged since implementation of the G-codes that
specifically described digital imaging.
Most mammography services under Medicare have since been billed
with these G-codes when digital mammography was used, and with CPT
codes 77055, 77056, and 77057 when film mammography was used. The use
of CAD has been reported with CPT codes 77051 and 77052. For CY 2017,
the CPT Editorial Panel deleted CPT codes 77051, 77052, 77055, 77056,
77057 and created three new CPT codes, 77065, 77066, and 77067, to
describe mammography services bundled with CAD. For CY 2017, the RUC
recommended work RVUs of 0.81 for CPT code 77065, 1.00 for CPT code
77066, and 0.76 for CPT code 77067, as well as new PE inputs for use in
developing resource-based PE RVUs based on our standard methodologies.
The RUC recommended these inputs and only one medical specialty society
provided us with a set of single invoices to price the equipment used
in furnishing these services.
We reviewed these coding changes and proposed changes to valuation
for these codes for CY 2017. The revised CPT coding mitigates the need
for both separate G-codes and the CAD add-on codes. Based upon these
coding changes and the RUC-recommended input values, overall Medicare
payment for mammography services would be drastically reduced. This is
particularly true for the technical component of these services, which
could possibly be reduced up to 50 percent relative to the PE RVUs
currently used for payment for these services.
Based on our initial review of the recommended inputs for the new
codes, we believed that these changes would likely result in values
more closely related to the relative resources involved in furnishing
these services. However, we recognized that these services,
particularly the preventive screenings, are of particular importance to
the Medicare program and the health of Medicare beneficiaries. We were
concerned that making drastic changes in coding and payment for these
services could be disruptive in ways that could adversely impact
beneficiary access to necessary services. We also recognized that
unlike almost any other high-volume PFS service, the RVUs used for
payment for many years have not been developed through the generally
applicable PFS methodologies, and instead reflect the statutory
directive under section 104 of the BIPA. Similarly, we recognized that
the changes in both coding and valuation are significant changes for
those who provide these services. Therefore, instead of proposing to
simultaneously adopt the revised CPT coding and drastic reductions in
overall payment rates, we believed it was advisable to propose to adopt
the new coding, including the elimination of separate billing for CAD,
for CY 2017 without proposing immediate implementation of the
recommended resource inputs. We anticipated that we would consider the
recommended inputs, including the pricing of the required equipment, as
carefully as possible prior to proposing revised PE values through
subsequent rulemaking.
Therefore, for CPT codes 77065, 77066, and 77067, we proposed to
accept the RUC-recommended work RVUs, but to crosswalk the PE RVUs for
the technical component of the current corresponding G-codes, as we
sought further pricing information for these equipment items.
Since the publication of the proposed rule, we have determined that
for several reasons related to claims processing systems, Medicare
claims systems will be unable to process claims using CPT codes 77065,
77066, and 77067 for CY 2017. However, given the parallel structure of
these new CPT codes, 77065, 77066, and 77067 to existing G-codes G0206,
G0204, and G0202, we anticipate that the claims systems will be fully
capable of processing the appropriate payment policies and prices
discussed below for CPT codes 77065, 77066, and 77067 by using the
existing G-codes. Therefore, for CY 2017, we will operationalize the
new coding rules, including adoption of the new code descriptors for
CPT codes 77065, 77066, and 77067 through use of the three current G-
codes. For the purposes of discussion below, we discuss policies and
payment rates for these three codes using the CPT numbers. Therefore,
in the preamble discussion below, references to the G-codes refer to
the descriptors, policies, and rates for CY 2016 and references to the
new CPT codes refer to the 2017 descriptors, policies and rates that
will be implemented through revisions to the current G-codes. We
anticipate being able to adopt the CPT coding for CY 2018.
In addition to soliciting comment on this proposal, we also
solicited input on rates for these services in the commercial market to
help us understand the potential impacts of any future proposed
revisions to PFS payment rates.
Finally, we noted that by proposing to adopt the new coding for CY
2017, any subsequent significant reduction in RVUs (greater than 20
percent) for the codes would be subject to the statutory phase-in under
section 1848(c)(7).
To help us examine the resource inputs for these services, we
solicited public comment on the list of items recommended as equipment
inputs for mammography services. We also invited commenters to provide
any invoices that would help with future pricing of these items.

Table 18--Recommended Equipment Items for Mammography Services
------------------------------------------------------------------------
# Item description Quantity Purpose
------------------------------------------------------------------------
1............ 2D Selenia 1 Mammography unit and in-
Dimensions room console itself.
Mammography
System.

[[Page 80315]]

2............ Mammo 1 Required for MQSA. The
Accreditation phantom is currently
Phantom. valued into the existing
mammography room.
3............ Phantom Case...... 1 Protects expensive
required phantom from
damage.
4............ Paddle Storage 3 It requires 3 racks to
Rack. hold and prevent damage
to all of the paddles
that are part of the
typical standard
mammography system.
5............ Needle 1 Needed for a full
Localization Kit. functioning mammography
room. Allows for the
performance of needle
localizations. Input is
not separately in the PE
for the mammography
guided procedure codes,
19281-19282, as a fully
functioning mammography
room is needed for those
procedures.
6............ Advanced Workflow 1 Workflow system
Manager System. connecting mammography
room and workstations.
7............ Cenova 2D Tower 1 CAD server, and also used
System. for post-processing.
8............ Image Checker CAD 1 License required for
(9.4) License for using CAD. This is a one-
One FFDM. time fee.
9............ Film Digitizing 1 Digitizes analog films to
System (. digital for comparison
purposes.
10........... Mammography Chair. 1 A special chair needed
for patients who cannot
stand to safely have
their mammogram
performed.
11........... Laser Imager 1 Prints high resolution
Printer. copies of the mammograms
to send to surgeons and
oncologists, and to use
in the OR.
12........... Barcode Scanner... 1 Allows selection of
individual patient file
for interpretation.
13........... MRS V7 SQL 1 MQSA requires that the
Reporting System. facility develop and
maintain a database that
tracks recall rates from
screening, true and
false positive and true
and false negative
rates, sensitivity,
specificity, and cancer
detection rate. A
reporting system is
required to build the
required database and
produce the federally
required quality audit.
Components below needed
for the reporting
system. The reporting
system is currently
valued into the existing
mammography room.
14........... Worksheet Printing 1 Database reports are
Module. required for federal
tracking purposes. This
is used to generate
reports for MQSA.
15........... Site License...... 1 License for site to use
the reporting system.
This is a one-time fee.
16........... Additional 3 Licenses for radiologists
Concurrent User to use the reporting
License. system. A minimum of
three additional
licenses is typical.
17........... Densitometer...... 1 Required for MQSA.
------------------------------------------------------------------------

We also received specialty society recommendations for a new
Equipment Item, a physician PACS mammography workstation. We note that
we discuss physician PACS workstation in section II.A of this rule. The
items that comprise the physician PACS mammography workstation are
listed in Table 19. We requested public comment as to the
appropriateness of this list and if some items are indirect expenses or
belong in other codes. We also invited commenters to provide any
invoices that would help with future pricing of these items.

Table 19--Physician PACS Mammography Workstation
------------------------------------------------------------------------

-------------------------------------------------------------------------
PC Tower.
Monitors 5 MP (mammo) (x2).
3rd & 4th monitor (for speech recognition, etc.).
Admin Monitor (the extra working monitor).
Keyboard & Mouse.
Powerscribe Microphone.
Software--SV APP SYNC 1.3.0.
Software--R2 Cenova.
------------------------------------------------------------------------

We also note that for CY 2015, the CPT Editorial Panel created CPT
codes 77061, 77062, and 77063 to describe unilateral, bilateral, and
screening digital breast tomosynthesis, respectively. CPT code 77063 is
an add-on code to CPT code 77057, the CPT code for screening
mammography. To be consistent with our use of G-codes for digital
mammography, we did not implement two of these three CPT codes for
Medicare purposes. We only adopted CPT code 77063 as an add-on code to
HCPCS code G0202. Instead of adopting stand-alone CPT codes 77061 and
77062, we created a new code, G0279 Diagnostic digital breast
tomosynthesis, as an add-on code to the diagnostic digital mammography
HCPCS codes G0204 and G0206 and assigned it values based on CPT code
77063. Pending revaluation of the mammography codes using direct PE
inputs, we proposed in CY 2017 to maintain the current coding structure
for digital breast tomosynthesis with the technical change that HCPCS
code G0279 be reported with CPT codes 77065 or 77066 as the replacement
codes for HCPCS codes G0204 and G0206.
Comment: Many commenters expressed support for our decision to
prevent a drastic reduction in payment for the technical component of
these services by maintaining the PE RVUs from CMS' digital mammography
coding. A few commenters expressed concern that shifting to our
standard resource-based PE valuation methodology in future rulemaking
would drastically reduce payments. Some commenters agreed that CMS does
not have sufficient pricing data to value digital mammography. One
commenter stated that the RUC-recommended direct PE inputs do not need
to be re-considered, as they include pricing data provided by the
specialty that most frequently furnishes the service.
Response: We will continue to carefully consider the potential
negative impact that our valuation of these services will have on
beneficiary access as we evaluate all relevant sources of data in
future rulemaking, including data provided by the RUC.
Comment: A commenter did not support our intention to seek more
pricing information in the commercial market, stating that commercial
payers are generally more responsive to market incentives to reduce
rather than increase prices.
Response: We refer readers to the CY 2010 PFS final rule with
comment period (74 FR 61743 through 61748) that describes CMS'
methodology in evaluating practice expense. We would consider a variety
of different data sources, pending their availability and
applicability. We believe that having

[[Page 80316]]

more information regarding pricing in the commercial market may help us
to contextualize recommended pricing, as well as potential impact of
significant changes in payment.
Comment: One commenter expressed concern that, despite our
maintenance of PE RVUs and our acceptance of RUC-recommended work RVUs,
these services will still see significant payment reductions.
Response: We are accepting the RUC-recommended work RVUs, which
equal the sum of the base code work RVUs for mammography and for CAD.
The work RVUs for the new mammography coding are therefore not changing
from their current values. Furthermore, as we are retaining the PE RVUs
from the digital mammography G-codes in the new coding, the practice
expense valuation is not changing. Therefore, payment amounts for
mammography services will not see significant reductions for CY 2017.
We expect to revalue these services through our standard code valuation
process in future rulemaking.
Comment: One commenter said that CMS should accept the RUC-
recommended direct PE inputs.
Response: As noted earlier, we did not propose the RUC-recommended
inputs for these three codes for several reasons, including our
concerns that drastic changes in coding and payment for these services
could be disruptive in ways that could adversely affect beneficiary
access to necessary services, and that unlike almost any other high-
volume PFS service, the RVUs used for payment for many years have not
been developed through the generally applicable PFS methodologies.
Therefore, instead of proposing to simultaneously adopt the revised CPT
coding and drastic reductions in overall payment rates, we believed it
was advisable to propose to adopt the new coding, including the
elimination of separate billing for CAD, for CY 2017 without proposing
immediate implementation of the recommended resource inputs.
Comment: One commenter requested clarification regarding if the PE
RVUs were valued using the RUC-recommended direct PE inputs, as these
inputs were posted in Public Use Files (PUFs) for the CY 2017 Proposed
Rule.
Response: We thank the commenter for pointing out that direct PE
inputs were posted for these codes. These inputs were inadvertently
included in the Public Use Files. We reiterate that we are not
implementing PE inputs for these services, and we are instead
crosswalking the PE RVUs from the digital mammography HCPCS codes
G0202, G0204, and G0206, as doing so prevents a drastic reduction in
payments. We included potential direct PE inputs in the text of the CY
2017 proposed rule to facilitate public comment and information in
anticipation of developing updated PE RVUs for these services in future
rulemaking.
Comment: A commenter stated that this coding violates statutory
requirements set forth by BIPA that required the agency to: (1) create
separate codes with higher payment amounts for digital mammography
compared to film mammography and (2) pay separately when computer-aided
detection (CAD) was used.
Response: The BIPA requirements specifically refer to screening and
diagnostic mammography furnished during the period beginning on April
1, 2001, and ending on December 31, 2001. CMS chose to retain the
payment rates for the technical component following this period.
Comment: A number of commenters volunteered to help CMS in pricing
direct PE inputs for these services.
Response: We thank the commenters and seek as much information as
possible regarding appropriate establishment of direct PE inputs for
these services.
Comment: A commenter stated that the potential reductions to the
technical component that we are avoiding would have been based on
flawed methodology, particularly stating that the PE per hour values
used in PE ratesetting methodology is inaccurate as it is based on the
Physician Practice Expense Information Survey (PPIS) from 2007-2008,
which the commenter considers to be flawed. The commenter also stated
that the interest rate applied to high cost capital equipment such as
imaging is inappropriately low, and that the equipment utilization rate
assumption is inappropriately high.
Response: We note that the 90 percent equipment utilization rate
only applies to diagnostic imaging services with equipment priced at $1
million dollars or more. The most recent recommended inputs for these
services do not include imaging equipment priced at $1 million dollars
or more, so the 90 percent equipment utilization would not apply.
However, we would address any application of a different utilization
rate through notice and comment rulemaking when valuing the codes under
our standard PE methodology. As always, we welcome information about
the validity of the assumptions we make in calculation of direct and
indirect costs in terms of PE. We previously noted our interest in
improving PE calculations through incorporation of alternative data
sources and we continue to seek information from interested
stakeholders as to the kinds of data sources that might be available.
For CY 2017, we are finalizing the proposed work RVUs and PE RVUs
associated with CPT codes 77067, 77066 and 77065 for use with HCPCS
codes G0202, G0204, and G0206, respectively.
(41) Radiation Treatment Devices (CPT Codes 77332, 77333, and 77334)
We identified CPT codes 77332, 77333, and 77334 through the high
expenditures by specialty screen. These services represent an
incremental increase of complexity from the simple to the intermediate
to the complex in design of radiation treatment devices. The RUC
recommended no change from the current work RVUs of 0.54 for CPT code
77332, 0.84 for CPT code 77333 and 1.24 for CPT code 77334. We believed
the recommended work RVUs overstate the work involved in furnishing
these services, as they do not sufficiently reflect the degree to which
the RUC concurrently recommended a decrease in intraservice or total
time. For CPT code 77332, we believed the RUC recommendation to
maintain its current value despite a 34 percent decrease in total time
appeared to ignore the change in time. Therefore, we proposed a value
for this code based on a crosswalk from the value from CPT code 93287
(Peri-procedural device evaluation (in person) and programming of
device system parameters before or after a surgery, procedure, or test
with analysis, review and report by a physician or other qualified
health care professional; single, dual, or multiple lead implantable
defibrillator system), due to its identical intraservice time, similar
total time, and similar level of intensity. We therefore proposed a
work RVU of 0.45 for CPT code 77332. We further supported this
valuation with CPT code 97760 (Orthotic(s) management and training
(including assessment and fitting when not otherwise reported) upper
extremity(s), lower extremity(s) and/or trunk, each 15 minutes), which
has similar physician time and intensity measurements and a work RVU of
0.45. As these codes are designed to reflect an incremental increase in
work value from simple, to intermediate, and complex device designs, we
used an incremental difference methodology to value CPT codes 77333 and
77334. We proposed a work RVU of 0.75 for CPT code 77333, maintaining
its recommended increment from CPT code 77332. For CPT code 77334, we
proposed a work RVU of 1.15, which would maintain its increment from
CPT code 77332.

[[Page 80317]]

Comment: Several commenters did not support CMS' use of CPT code
93287 as a crosswalk code to value CPT code 77332, as it is not a
radiology service.
Response: We appreciate the commenters' concern about using a non-
radiology service to assist in our valuation of this code family. We
note that it is fundamental to the validity of the relative value
system that codes furnished by different kinds of physicians remain
valid relative to each other. We commonly value codes by use of
crosswalks to other codes that are similar in terms of time and
intensity, and this may extend across different mixes of specialties
furnishing each service on the MPFS.
Comment: One commenter did not support CMS' pointing to the RUC's
recommendation of a reduction of total time without a commensurate
reduction in work RVU, as the current time is a CMS/Other source time,
which is not derived from a survey and was assigned over 20 years ago.
Response: We utilize a variety of methodologies and approaches in
developing work RVUs, and we believe that the total time value for this
service is one of several appropriate criteria that can be used to
estimate the overall time and intensity. We believe that the
intraservice and total times listed for this service are valid elements
in allowing us to determine an appropriate work RVU. Furthermore, we
note that the current times assigned to this code have been used to
allocate indirect PE to services furnished by the same specialties, and
use of this value is consistent with code valuation methodology.
Comment: One commenter asked for clarification regarding if CMS is
comparing the total time for CPT code 93287 to the current physician
time of 77332 or to the survey time on which the RUC recommendation was
based. One commenter stated that CMS' characterization of the
intraservice time of crosswalk CPT code 93287 as identical to CPT code
77332 is incorrect; the intraservice time for 77332 is 15 minutes, and
the intraservice time of CPT code 93287 is 13.5 minutes.
Response: We thank the commenter for bringing this to our
attention; our previous statement that the intraservice time of CPT
code 93287 is identical to the RUC-recommended intraservice time is
incorrect. The RUC-recommended intraservice time of 15 minutes is
similar, but not identical to the intraservice time of CPT code 93287
which is 13.5 minutes. We continue to believe that a work RVU of 0.45
is appropriate because we continue to believe the overall work for
these services is approximately the same as 97760. As further support
for our proposed value, we refer to 93016 (Cardiovascular stress test
using maximal or submaximal treadmill or bicycle exercise, continuous
electrocardiographic monitoring, and/or pharmacological stress;
supervision only, without interpretation and report) which has an
intraservice time that is identical to the RUC-recommended intraservice
time for 77332, as well as a similar total time.
Comment: One commenter stated that these codes have XXX global
periods, and therefore, do not have standard pre or post service
packages. These standard pre and post services packages did not exist
at the time that this service was valued, thus the convention of
eliminating pre-service time and applying minimal post-service time to
services with XXX global periods was not applied at that time.
Response: We appreciate the commenter's concerns about standard
time packages not being applied to these codes. We continue to believe,
however, that use of the RUC-recommended time to value the work RVU in
this case is appropriate because we believe that time values are a
critical element of establishing work RVUs.
Comment: A few commenters stated that CMS' proposed reduction in
the work RVUs for CPT codes 77333 and 77334 based on an incremental
relationship with CPT code 77332 is arbitrary, and that a reduction to
the work RVU for CPT code 77332 does not automatically justify a
reduction to the other two family codes.
A commenter supported the use of incremental valuation methodology
in theory but did not believe it is appropriately applied to these
codes, because the commenter believes that the valuation of CPT code
77332, upon which the increments are based, is incorrect.
Response: We refer readers to a discussion of the methodology for
establishing work RVUs in section II.L.2 of this final rule. As
outlined there, we frequently use an incremental methodology to
identify potential work RVUs for particular codes. We note that we are
maintaining the RUC-recommended incremental relationship between these
three codes. This code family is structured to represent simple,
intermediate, and complex procedures, and we seek to maintain that
structure for this code family. Therefore, we are finalizing the work
RVUs as proposed. We provide the information in Table 20 to illustrate
our valuation of CPT code 77332 and its value relative to our crosswalk
codes:

Table 20--Valuation of CPT Code 77332 Relative to Crosswalk Codes
----------------------------------------------------------------------------------------------------------------
HCPCS Description Intra time Total time Work RVU IWPUT
----------------------------------------------------------------------------------------------------------------
77332--Current.................... Treatment devices, .............. 28 .54 .....
design and
construction; simple
(simple block,
simple bolus).
77332--CMS........................ Treatment devices, 15 18 .45 0.012
design and 6
construction; simple
(simple block,
simple bolus).
93287............................. Peri-procedural 13.5 26 .45 0.012
device evaluation & 6
programming.
97760............................. Orthotic management 14 18 .45 0.025
and training. 7
93016............................. Cardiovascular stress 15 19 .45 0.024
test. 0
----------------------------------------------------------------------------------------------------------------

(42) Special Radiation Treatment (CPT Code 77470)
We identified CPT code 77470 through the high expenditures by
specialty screen. We proposed the RUC-recommended work RVU of 2.03.
However, we believe the description of service and vignette describe
different and unrelated treatments being performed by the physician and
clinical staff for a typical patient, and this presents a disparity
between the work RVUs and PE RVUs. We solicited comment on information
that would clarify this apparent disparity to help determine
appropriate PE inputs. In addition, we solicited comment to determine
if creating two G-codes, one that describes the work portion of this
service, and one that describes the PE portion, may be a potentially
more accurate method of valuing and paying for the service or services
described by this code.

[[Page 80318]]

Comment: Some commenters maintained that the clinical labor and
physician work component are related and are necessarily reported
together. Commenters did not approve of CMS suggestion of breaking the
work and PE components of this service into two separate G-codes in
future rulemaking, stating that the CPT descriptor is accurate and
represents the typical patient. Some commenters sought greater
explanation for why CMS believes that the work and PE portions of this
service are unrelated; commenters question if it is because the
vignettes offered for the work and PE describe treatments for two
separate diagnoses. Commenters also questioned if CMS is assuming that
the ``devices'' mentioned in the description of clinical labor
activities overlap with Radiation Treatment Devices codes which are
also being evaluated in this rule. A commenter stated that if CMS is
suggesting that there should be multiple CPT codes for every possible
diagnosis for the use of this code, then that suggestion is
problematic.
Response: According to the description of work provided for this
service, the physician performs cognitive work such as planning,
consideration of test results, and therapeutic treatment contingency
planning that is in addition to what he or she would typically be
performing for most radiation treatments. Meanwhile, the radiation
therapist handles the treatment devices, performs tasks such as
positioning the patient, and helps facilitate the scan of the patient.
We believe that this may describe activities that are fundamentally
disconnected. To illustrate our concern, we offer the example that this
is akin to a physician removing a mole from a patient's hand while the
clinical staff places a cast on the patient's foot; we see no
compelling clinical evidence to indicate that the two tasks are
related. In addition, the disparate diagnoses described by the
vignettes further calls into question the degree to which the work and
PE components are interrelated. While we agree that there should not
separate coding for each possible diagnosis for a particular service,
in trying to accurately assess relative value, we believe that the work
and PE components should be valued under unified assumptions about the
typical service. We are finalizing the RUC-recommended work RVU and PE
inputs as proposed; however, we continue to have serious concerns about
the validity of this coding.
(43) Interstitial Radiation Source Codes (CPT Codes 77778 and 77790)
In the CY 2016 PFS final rule with comment period, we established
an interim final value for CPT code 77790 without a work RVU,
consistent with the RUC's recommendation. We did not use the RUC-
recommended work RVU to establish the interim final values for CPT code
77778. We stated that the specialty society survey included a work time
that was significantly higher than the RUC-recommended work time
without a commensurate change in the work RVU. For CY 2016, we
established the 25th percentile work RVU survey result of 8.00 as
interim final for CPT code 77778 and 0 work RVUs for CPT code 77790.
Comment on the CY 2016 PFS final rule with comment period:
Commenters agreed that the preservice survey times and the RUC-
recommended survey times were inconsistent and explained that this
inconsistency resulted from the RUC's use of preservice packages in
developing recommendations. In addition, commenters stated that because
the work associated with CPT code 77790 (including pre-time
supervision, handling, and loading of radiation seeds into needles) was
bundled into CPT code 77778, that the additional work should be
reflected in the RVU for CPT code 77778. Commenters encouraged us to
accept the RUC-recommended work RVU of 8.78 and requested that CPT code
77778 be referred to the refinement panel.
Response in the CY 2017 PFS proposed rule: We did not refer CPT
code 77778 to the CY 2016 multispecialty refinement panel because
commenters did not provide new clinical information. We continued to
believe that, based on the reduction in total work time, an RVU of 8.00
accurately reflected the work involved in furnishing CPT code 77778.
In the CY 2017 proposed rule, we proposed a work RVU of 8.00 for
CPT code 77778 and 0 work RVUs for CPT code 77790. We also sought
comment on whether we should use time values based on preservice
packages if the recommended work value was based on time values that
were significantly different than those ultimately recommended.
The following is a summary of the comments we received regarding
our proposed valuations for CPT codes 77778 and 77790:
Comment: Some commenters stated that CMS underestimates the
additional work inherent in furnishing CPT code 77778, considering that
it is being bundled with CPT code 77790.
Commenters did not agree with our decision not to accept the RUC-
recommended work RVU of 8.78 and to propose for CY 2017 a work RVU of
8.00, considering the disparity between the survey total time and the
RUC-recommended total time. According to the RUC, the survey
respondents had accurately estimated the work RVU based on magnitude
estimation while overestimating the relatively low intensity pre-
service time involved in performing this service, and this explains the
disparity between the survey time and the RUC-recommended total time.
One commenter noted that the RUC significantly reduced the pre-time
because it did not include work in supervising the ordering of the
isotope. Several commenters stated that CMS routinely accepts and uses
pre-service time packages as recommended by the RUC.
Response: We continue to question how the same survey respondents
that significantly overestimated the total time based on the RUC's
analysis could nonetheless accurately estimate the overall work. We are
also concerned about the specialty society's perspective that the RUC
does not consider the work of supervising the ordering of the isotope
as part of the service, given the survey respondents clearly considered
such work to be described by the code. We believe that it is important
that a particular code clearly describes the work involved in
furnishing a service. While we appreciate the usefulness of pre-time
packages generally, for this particular code, we believe that in this
case the drastic time difference from the survey time value to the RUC-
recommended time value that the pre-time package produces is
problematic, especially since there does not appear to be consensus
regarding which services are included in the code, or which might be
perceived to be separately reportable.
In general we are concerned with using recommended time values that
are disconnected from recommended work RVUs, including in cases where
the recommended work RVU may include elements of work that are not
reflected in the assumptions in time, as appears to be the case for
this code. We reiterate that we believe the statute directs us to
establish work RVUs that reflect the relative resource costs in time
and intensity, so we believe that there should be an identifiable
relationship between time and work RVUs.
To align the time and work associated with this code, we proposed a
reduction of the work RVU from 8.78 to 8.00 as we proposed. However,
upon consideration of comments, we were persuaded that

[[Page 80319]]

the RUC-recommended work RVUs for this service are appropriate,
particularly because the work includes the supervision, handling, and
loading of radiation seeds, and it reflects the bundling with CPT code
77790.
While we are not finalizing a change in the time associated with
this code since we proposed to use the RUC recommended value based on
the pre-service package, we seek additional information regarding the
best approach to valuing work when there is a clear disconnect between
assumptions regarding time described by a code and the time recommended
by the RUC. We understand that pre-service time packages can be a
helpful tool in assigning estimates of time to particular codes
relative to others on the PFS and that these times may be significantly
different than those derived from survey results. However, since the
RUC has repeatedly stated that its recommendations reflect the typical
resources involved in furnishing PFS services, we believe it would be
important for us to be able to identify cases where the recommended
time values reflect the application of particular policies rather than
the best estimate of the actual time involved in furnishing procedures.
(44) Colon Transit Imaging (78264, 78265, 78266)
In establishing CY 2016 interim final values, we accepted the RUC
recommended work RVUs for CPT codes 78265 and 78266. We believed that
the RUC-recommended RVU of 0.80 overestimated the work involved in
furnishing CPT code 78264 and as a result, we established an interim
final work RVU of 0.74 based on a crosswalk to CPT code 78226
(hepatobiliary system imaging, including gallbladder when present), due
to similar intraservice times and intensities.
Comment on the CY 2016 PFS final rule with comment period:
Commenters did not support our interim final work RVU for CPT code
78264. Commenters disagreed with our assessment of CPT code 78264 as
having a higher work RVU and shorter intraservice time relative to the
other codes in the family. One commenter stated that a difference of
two minutes in intraservice time was insignificant and should not be
used as a rationale for revaluing. Another commenter stated that we
should have maintained the RUC-recommended crosswalk of CPT code 78264
to CPT code 78227 (Hepatobiliary system imaging, including gallbladder
when present; with pharmacologic intervention, including quantitative
measurement(s) when performed) due to similarities in service, work and
intensity. Based on these concerns, commenters requested that CPT code
78264 be referred to the refinement panel.
Response in the CY 2017 PFS proposed rule: CPT code 78264 was
referred to the CY 2016 multi-specialty refinement panel for further
review. We calculated the refinement panel results as the median of
each vote. That result for CPT code 78264 was 0.79 RVUs.
In the CY 2017 proposed rule, we proposed a value of 0.79 for CPT
code 78264.
The following is a summary of the comments we received regarding
our proposed valuation of the Colon Transit Imaging codes:
Comment: A commenter recommended that we reexamine the data
associated with these codes to ensure the accuracy of the final values.
Response: We thank the commenter for this input. We continue to
believe that the proposed valuation on CPT code 78264 most accurately
describes the work, time and intensity associated with this service;
therefore, we are finalizing the work RVU as proposed.
(45) Cytopathology Fluids, Washings or Brushings and Cytopathology
Smears, Screening, and Interpretation (CPT Codes 88104, 88106, 88108,
88112, 88160, 88161, and 88162)
In the CY 2016 PFS final rule with comment period, we made a series
of refinements to the recommended direct PE inputs for this family of
codes. We removed the equipment time for the solvent recycling system
(EP038) and the associated clinical labor described by the tasks
``Recycle xylene from stainer'' and ``Order, restock, and distribute
specimen containers and or slides with requisition forms'' due to our
belief that these were forms of indirect PE. This refinement applied to
all seven codes in the family. We also noticed what appeared to be an
error in the quantity of non-sterile gloves (SB022), impermeable staff
gowns (SB027), and eye shields (SM016) assigned to CPT codes 88108 and
88112. The recommended value of these supplies was a quantity of 0.2,
which we believed was intended to be a quantity of 2. We therefore
refined the value of these supplies to 2 for CPT codes 88108 and 88112.
Comment on the CY 2016 PFS final rule with comment period: Several
commenters disagreed with our characterization of the solvent recycling
system and its associated clinical labor tasks as indirect PE.
Commenters stated that the solvent recycling system costs are direct
expenses since they are based on the amount of recycled solvent
allocated to each specimen, with solvents allocated to specific
specimens based on batch size. They indicated that the related clinical
labor tasks are direct PE as they are also based on the amount of
recycled solvent allocated to each specimen. The time for these tasks
varies based on the batch size, which varies by procedure.
Response in the CY 2017 PFS proposed rule: We maintained our
previously stated belief that these are forms of indirect PE, as they
are not allocated to any individual service. Under the established PE
methodology, direct PE inputs are defined as clinical labor, medical
supplies, or medical equipment that are individually allocable to a
particular patient for a particular service. We continue to believe
that a solvent recycling system would be in general use for a lab
practice, and that the associated clinical labor tasks for ordering and
restocking specimen containers can be more accurately described as
administrative activities. We proposed to maintain these refinements
from the previous rulemaking cycle for CPT codes 88104-88162.
Comment on the CY 2016 PFS final rule with comment period: A
commenter indicated that we did not account for the batch size when
considering the supply quantities for CPT codes 88108 and 88112. The
commenter indicated that the practice expense inputs should be assumed
to have a batch size of five for these two codes, and therefore, no
edits should be made. The commenter requested that we restore the
quantity of 0.2 for the gloves, gowns, and eye shields associated with
these procedures. This did not apply to the other codes on the
submitted spreadsheet, which had a batch size of one.
Response in the CY 2017 PFS proposed rule: We appreciated the
assistance of the commenter in clarifying the batch size for these
procedures. As a result, we proposed to refine the supply quantity of
the non-sterile gloves (SB022), impermeable staff gowns (SB027), and
eye shields (SM016) back to the RUC-recommended value of 0.2 for CPT
codes 88108 and 88112.
The following is a summary of the comments we received regarding
our proposed valuation of the Cytopathology Fluids and Cytopathology
Smears codes:
Comment: A few commenters continued to disagree that the proposed
refinements to the direct PE inputs were forms of indirect PE.
Commenters stated that these tasks are direct expenses, as they are
variable based on the volume

[[Page 80320]]

of these services, with the clinical labor and equipment time directly
attributable to the quantity of specimens typically provided from a
typical laboratory. Commenters also stated that these activities were
not captured in the questions asked on the indirect practice expense
cost survey.
Response: We continue to believe that these are administrative
tasks that are more accurately classified as forms of indirect PE
because they are not allocable to an individual service. Whether these
tasks are variable based on the volume of the services is unrelated to
this classification. For example, some services may require additional
time for administrative staff to record electronic health records or
restock inventory than other services, but in all cases these are
defined as indirect PE under the established methodology, as they are
administrative tasks that are not allocated to any individual service.
We disagree that the validity of the practice expense data rests on
whether or not particular questions were asked on the survey. We note
that we understand medical practice and technology often change over
time and the PE survey data is used to capture the relative difference
in practice expenses incurred by various specialties as opposed to
representing a summation of all individual items that incur an expense.
Therefore, we do not believe that inclusion or exclusion of particular
items means that the underlying data are invalid for purposes of
measuring relativity.
Comment: A commenter agreed with the changes to the RUC-recommended
supply quantity of 0.2 for the non-sterile gloves (SB022), impermeable
staff gowns (SB027), and eye shields (SM016) in CPT codes 88108 and
88112.
Response: We appreciate the support from the commenter.
After consideration of comments, we are finalizing the proposed
direct PE inputs for CPT codes 88104, 88106, 88108, 88112, 88160,
88161, and 88162.
(46) Flow Cytometry Interpretation (CPT Codes 88184, 88185, 88187,
88188, and 88189)
The Flow Cytometry Interpretation family of codes is split into a
pair of codes used to describe the technical component of flow
cytometry (CPT codes 88184 and 88185) that do not have a work
component, and a trio of codes (CPT codes 88187, 88188, and 88189) that
do not have direct practice expense inputs, as they are professional
component only services. CPT codes 88184 and 88185 were reviewed by the
RUC in April 2014, and their CMS refined values were included in the CY
2016 PFS final rule with comment period. The full family of codes was
reviewed again at the January 2016 RUC meeting, and new recommendations
were submitted to CMS as part of the CY 2017 PFS rulemaking cycle.
We proposed the RUC-recommended work RVU of 0.74 for CPT code
88187, and the RUC-recommended work RVU of 1.70 for CPT code 88189. For
CPT code 88188, we proposed a work RVU of 1.20 instead of the RUC-
recommended work RVU of 1.40. We arrived at this value by noticing that
there were no comparable codes with no global period in the RUC
database with intraservice time and total time of 30 minutes that had a
work RVU higher than 1.20. The RUC-recommended work RVU of 1.40 would
go beyond the current maximum value and establish a new high, which is
not consistent with our estimation of the overall intensity of this
service relative to the others. As a result, we believe it is more
accurate to crosswalk CPT code 88188 to the work value of the code with
the current highest value, which is CPT code 88120 (Cytopathology, in
situ hybridization (for example, FISH), urinary tract specimen with
morphometric analysis, 3-5 molecular probes) at a work RVU of 1.20. We
believe that CPT code 88120 is crosswalk comparable code since it
shares the identical intraservice time and total time of 30 minutes
with CPT code 88188.
We also noted that the survey increment between CPT codes 88187 and
88188 at the RUC-recommended 25th percentile was 0.40 (between work
RVUs of 1.00 and 1.40), and this increment of 0.40 when added to CPT
code 88187's work RVU of 0.74 would arrive at a value of 1.14. In
addition, the total time for CPT code 88188 decreases from 43 minutes
to 30 minutes, which is a ratio of 0.70, and when this time ratio is
multiplied by CPT code 88188's previous work value of 1.69, the result
would be a new work RVU of 1.18. With this information in mind, we
proposed a work RVU of 1.20 for CPT code 88188 as a result of a direct
crosswalk to CPT code 88120.
For CPT codes 88184 and 88185, which describe the technical
component of flow cytometry, we proposed to use the RUC-recommended
inputs with a series of refinements. However, we believe that the
coding for these two procedures may inhibit accurate valuation. CPT
code 88184 describes the first marker for flow cytometry, while CPT
code 88185 is an add-on code that describes each additional marker. We
believe that it may be more accurate to have a single CPT code that
describes the technical component of flow cytometry on a per patient
case basis, as these two procedures are always performed together and
it is difficult to determine the clinical labor, supplies, and
equipment used in the typical case under the current coding structure.
We solicited comments regarding the public interest in consolidating
these two procedures into a single code used to describe the technical
component of flow cytometry.
Absent such a change in coding, we proposed to refine the clinical
labor time for ``Instrument start-up, quality control functions,
calibration, centrifugation, maintaining specimen tracking, logs and
labeling'' from 15 minutes to 13 minutes for CPT code 88184. We
maintained that 13 minutes for this activity, which is the current time
value, would be typical for the procedure, as CPT code 88182 also uses
13 minutes for the identical clinical labor task. We also proposed to
refine the L054A clinical labor for ``Load specimen into flow
cytometer, run specimen, monitor data acquisition, and data modeling,
and unload flow cytometer'' from 10 minutes to 7 minutes using the same
rationale, a comparison to CPT code 88182.
We proposed to maintain the clinical labor for ``Print out
histograms, assemble materials with paperwork to pathologists Review
histograms and gating with pathologist'' for CPT code 88184 at 2
minutes, as opposed to the RUC-recommended 5 minutes. A clinical labor
time of 2 minutes is standard for this activity; we disagree with the
RUC rationale that reviewing histograms and gating with the pathologist
in this procedure is not similar to other codes. We also note that the
review of histograms with a pathologist is not even described by CPT
code 88184, which again refers to the technical component of flow
cytometry, not the professional component. We also proposed to refine
the L033A clinical labor time for ``Clean room/equipment following
procedure'' from 2 minutes to 1 minute for CPT code 88184. We have
established 1 minute in previous rulemaking (80 FR 70902) as the
standard time for this clinical labor activity in the laboratory
setting.
We proposed to maintain our removal of the clinical labor time for
``Enter data into laboratory information system, multiparameter
analyses and field data entry, complete quality assurance
documentation'' for both CPT code 88182 and CPT code 88184. As we
stated in the CY 2016 PFS final rule with comment period (80 FR 70979),
we have not recognized the laboratory information system as an
equipment

[[Page 80321]]

item that can be allocated to an individual service. We continue to
believe that this is a form of indirect PE, and therefore, we do not
recognize the laboratory information system as a direct PE input, and
we do not consider this task as typically performed by clinical labor
on a per-service basis.
We proposed to maintain the quantity of the ``lysing reagent''
supply (SL089) at 2 ml for CPT code 88185, as opposed to the RUC-
recommended quantity of 3 ml. In our discussions with pathology
specialists who perform flow cytometry, we were informed that the use
of 50-55 ml of the lysing reagent would be typical for an entire
patient case. The RUC recommendation similarly suggested a quantity of
46 ml or 48 ml per patient case. We were also told that the most
typical number of markers used for flow cytometry is 24, consisting of
1 service of CPT code 88184 and 23 services of CPT code 88185. An
investigation of our claims data confirmed this information, indicating
that 24 markers is the most frequent per patient case for flow
cytometry, and the use of more than 20 markers is typical. We believe
that this data supports our refinement of the lysing reagent from a
quantity of 3 ml to a quantity of 2 ml for CPT code 88185, which is
also the current value for the procedure and the RUC-recommended value
from the previous set of recommendations. For the typical case of 24
markers, our value would produce a total lysing reagent quantity of 51
ml (5 ml from the single service of CPT code 88184 and 46 ml from the
23 services of CPT code 88185), which matches with the amount required
for a total per patient case. If we were to adopt the RUC
recommendation, the total lysing reagent quantity would be 74 ml, which
is well in excess of what we believe to be typical for these
procedures.
We also proposed to refine the quantity of the ``antibody, flow
cytometry'' supply (SL186) from quantity 1.6 to quantity 1, which is
also the current value for the supply and the RUC-recommended value
from the previous set of recommendations. We do not agree that more
than one antibody would be typically used for each marker. We are
reaffirming the previous RUC recommendation, and maintaining the
current quantity of 1 antibody for each marker.
We did not agree with the recommended additional time for the
``printer, dye sublimation (photo, color)'' equipment (ED031). We
proposed to maintain the equipment time at 2 minutes for CPT code
88184, and at 1 minute for CPT code 88185. As we stated in the CY 2016
PFS final rule with comment period (80 FR 70979), we proposed to assign
equipment time for the dye sublimation printer to match the clinical
labor time for ``Print out histograms, assemble materials with
paperwork to pathologists.'' We do not believe that it would be typical
for the printer to be in use longer than it takes to accomplish this
clinical labor task.
The following is a summary of the comments we received regarding
our proposed valuation of the Flow Cytometry Interpretation codes. Due
to the large number of comments we received for this code family, we
will first summarize the comments related to the coding structure of
CPT codes 88184 and 88185, followed by the comments related to specific
work RVUs, and finally the comments related to the direct PE inputs.
Comment: Many commenters disagreed with the potential concept of
consolidating CPT codes 88184 and 88185 into a single code used to
describe the technical component of flow cytometry. Commenters stated
that the resources required for the first marker and for each
subsequent marker differ, and with flow cytometry, there is no
``typical case.'' Because the number of markers differ for different
disease states, such as HIV, Lyme disease, and acute leukemias, the
current coding structure is designed to reflect different valuations of
the professional component codes, based on the number of markers that
must be interpreted. Many commenters stressed that this makes one code
for the technical component of flow cytometry infeasible, and strongly
advised against it. One commenter was also concerned that a coding
structure change may exacerbate the undervaluation of these services,
which have been recently reviewed twice by the RUC and resulted in
substantial decreases in the practice expense relative values.
A few commenters supported the possibility of combining CPT codes
88184 and 88185 into a single code. One commenter stated that the
current coding structure does not incentivize the use of less reagents,
and actually penalizes labs that appropriately test fewer markers.
According to this commenter, moving to a single code structure would be
consistent with the vast majority of lab tests, would simplify billing
processes, and may make development of more cost-effective panels
financially desirable. The commenter supported further examination of a
single CPT code and urged that current payment rates should be frozen
while such examination occurs. Another commenter suggested a slightly
different coding structure, one which would collapse the codes into a
series of case rate codes that reflect the procedures: screening,
classification, and monitoring. There was support from one additional
commenter for a three code proposal designed to track this workflow.
Response: We appreciate the detailed responses from the commenters
about the proper coding structure used to describe the technical
component of flow cytometry. We do not intend to finalize any
recommendations regarding the coding structure at this time, but we
will consider this information for future proposals regarding these
services.
Comment: Many commenters made general comments about decreases to
the proposed rates for either the professional or the technical
component of the flow cytometry codes. Commenters stated that there was
no justification for the reduction in payment rates, and that the
decreases would hamper laboratories' ability to offer the flow
cytometry services. One commenter stated that the payment cuts were not
realistic and would result in flow cytometry not being financially
feasible in the less expensive physician-office setting. Another
commenter indicated that further reductions to these codes would result
in an inability to maintain the level of professional services required
to reduce medical errors.
Response: We share the concern of the commenters in ensuring that
payment for Medicare services is based on an accurate assessment of the
relative resource costs involved in furnishing the service. With
regards to the technical component of flow cytometry, most of the
decrease in code valuation is taking place due to a decrease in the
quantity of the lysing reagent supply (SL089). The RUC has agreed that
there was previously an excess of this supply in CPT codes 88184-88185,
and has recommended a decrease of approximately 78 percent in this
supply quantity, from 336 ml to 74 ml, in the typical case of 24
markers. Due to the resource-based nature of the RVU system, this
substantial reduction in supply costs will be reflected in the RVUs for
these procedures. We note that since CY 2016 the phase-in of
significant reductions in RVUs has been in effect; if the total RVUs
for a service for a year would otherwise be decreased by an estimated
20 percent or more as compared to the total RVUs for the previous year,
those decreases are limited to a 19 percent reduction in total RVUs. We
note that the phase-in mechanism allows reductions to be transitioned
in over time rather than instituting large decreases in a single

[[Page 80322]]

rule cycle. Please see section II.H for more information regarding the
phase-in of significant RVU reductions.
Comment: Many commenters disagreed with the proposed work RVU of
1.20 for CPT code 88188. Several commenters took issue with the CMS
statement that there were no comparable codes with no global period in
the RUC database with intra-service time and total time of 30 minutes
that had a work RVU higher than 1.20. These commenters indicated that
there were at least 10 such codes valued over 1.20 RVUs in the 2016 RUC
database (1 XXX and 9 ZZZ add-on global codes), ranging in work value
from 1.38 to 2.40 RVUs, with a median of 1.67. The commenters suggested
that these codes supported the higher RUC-recommended work RVU of 1.40
for CPT code 88188.
Response: We continue to believe that there are no comparable codes
with the same global period with intraservice time and total time of 30
minutes that have a work RVU higher than 30 minutes. When we used the
phrase ``no global period'' to refer to CPT code 88188, we were not
referring to add-on codes with a global period of ZZZ. We have stated
on numerous occasions that we believe the resources required to furnish
add-on codes constitute a separate category, and we typically only
compare add-on codes to other add-on codes. We do not believe that it
is appropriate to compare the work RVU of add-on codes with 30 minutes
of intraservice time to the work RVU of CPT code 88188, which is not an
add-on code.
With regards to non-add on codes, Table 21 lists all 13 codes in
the RUC database with 30 minutes of intraservice time, fewer than 40
minutes of total time, and a global period of XXX:

Table 21: Work RVU of Codes With Comparable Time Values to CPT Code
88188
------------------------------------------------------------------------
Work
HCPCS Descriptor RVU
------------------------------------------------------------------------
77331................................ Special radiation 0.87
dosimetry.
78195................................ Lymph system imaging.... 1.20
78456................................ Acute venous thrombus 1.00
image.
86079................................ Phys blood bank serv 0.94
authrj.
88120................................ Cytp urne 3-5 probes ea 1.20
spec.
88187................................ Flowcytometry/read 2-8.. 0.74
88365................................ Insitu hybridization 0.88
(fish).
88368................................ Insitu hybridization 0.88
manual.
88374................................ M/phmtrc alys ishquant/ 0.93
semiq.
93750................................ Interrogation vad in 0.92
person.
95251................................ Gluc monitor cont phys 0.85
i&r.
97004................................ Ot re-evaluation........ 0.60
97606................................ Neg press wound tx >50 0.60
cm.
------------------------------------------------------------------------

As we stated previously, there are no codes with a work RVU higher
than 1.20, which is where we proposed to value CPT code 88188. We
acknowledge that there are global XXX codes with 30 minutes of
intraservice time that have a work RVU greater than 1.20. However, all
of these codes have at least 40 minutes of total time, which is 33
percent higher at a minimum than the total time for CPT code 88188. We
believe that a crosswalk to CPT code 88120, which shares the identical
time values as CPT 88188, is a more appropriate choice than codes that
have substantially higher total time. In the particular case of CPT
code 88188, we continue to believe that establishing a new maximum work
value above 1.20 would not be consistent with our estimation of the
overall intensity of this service relative to the others on the PFS.
Comment: Some commenters disagreed with the proposed work RVU of
CPT code 88188 based on the work increments between the codes in the
family. These commenters stated that the original recommended work
values had almost identical increments between the three services (0.60
between CPT codes 88187 and 88188, and 0.63 between CPT codes 88188 and
88189); however the median survey results indicated a much greater
physician work increment between CPT codes 88188 and 88189. According
to commenters, the final RUC recommendations were based on the
expertise of the RUC to establish the work increment between CPT codes
88187 and 88188 (0.74) higher than the increment between CPT codes
88188 and 88189 (0.30). In other words, the recommended work increment
between CPT code 88187 (work RVU = 0.74) and CPT code 88188 (work RVU =
1.40) was significantly larger than the work increment between CPT code
88188 (work RVU = 1.40) and CPT code 88189 (work RVU = 1.70). The
commenters stated that the survey results and expert opinion justified
this smaller increment between the final two codes, and the RUC-
recommended work RVU of 1.40 for CPT code 88188.
Response: We disagree that the survey data justifies a smaller
increment between the final two codes. While this is true for the 25th
percentile survey results, the exact opposite is true for the survey
median results, in which the increment between CPT codes 88187 and
88188 is 0.35 and the increment between CPT codes 88188 and 88189 is
0.70. In addition, in the current pre-reviewed version of these codes,
the increment between CPT codes 88187 and 88188 is 0.33, while the
increment between CPT codes 88188 and 88189 is 0.54. We believe that
this suggests the survey data on the work increments is conflicting,
not conclusive, and that the RUC-recommended increments are a departure
from the previous incremental structure of this code family, in which
the second two codes had a larger increment than the first two codes.
We do not agree that the work increments at the survey 25th percentile
are a sufficient justification for adopting the recommended work RVU
for CPT code 88188 due to the additional data regarding work increments
between these codes detailed above.
Comment: Several commenters stated that over the last decade, flow
cytometric analyses have changed through new technological advances
that have led to an increased interpretative sophistication. It is now
typical for the physician to analyze substantially more data than in
the past. According to commenters, with the advent of 5, 6, 8, and 10
color flow cytometry the intensity and complexity of these services has
significantly increased. Commenters stated that this increased
intensity and complexity is reflected in the RUC recommendation for
this service, based on new physician work associated with technological
changes, time, and intensity.
Response: We appreciate this additional information about the
professional interpretation of flow cytometry from the commenters.
However, we note that the RUC-recommended intensity of CPT codes 88187
and 88189 has actually decreased compared to the current pre-reviewed
version of these codes. We believe that this indicates that the same
new technological advances also allow practitioners to analyze data
faster and with fewer errors, which is reflected in the decreased work
RVUs and time values in the RUC recommendations. The only one of the
three codes with a RUC-recommended increase in intensity is CPT code
88188. This increased intensity in the second code creates an anomalous
relationship within the

[[Page 80323]]

family, as the RUC-recommended intensity for CPT code 88188 is equal to
the intensity for CPT code 88189, in contrast to the current pre-
reviewed version of these codes where the three codes have a linear
increase in intensity (IWPUT = 0.39, 0.43, 0.50). We do not understand
why the professional interpretation of 9 to 15 markers would have an
equal intensity to interpreting 16 or more markers. Logic would suggest
that CPT code 88188 should have a lower intensity than CPT code 88189,
which is indeed the case at our proposed work RVU of 1.20. The proposed
value also re-establishes a linear increase in intensity between the
three codes as additional markers are interpreted (IWPUT = 0.37, 0.40,
0.47). We believe that this intensity data offers additional support
for our proposed work RVU.
Comment: One commenter disagreed with the CMS crosswalk to the work
RVU of CPT code 88120, which the commenter suggested was completely
different in step by step work effort, intensity, and complexity. The
commenter stated that CPT code 88120 typically only involves
identifying and quantifying a limited subset molecular probes (for
example, FISH probes for chromosomes 3, 7, 17 and 9p21 loss), using two
to four color signal enumeration to detect aneuploidy staining of
nuclei on slides from isolated cell preparations, usually from
morphologically well-characterized specimens. In contrast, the
commenter stated that for CPT code 88188 the pathologist is required to
integrate multi-parameter diagnostic information on different cell
populations (both abnormal and normal), by assessing cell scatter (size
and shape) along with signal intensity and pattern of staining of cell
surface markers with antibody reagents using four to six (or more)
color fluorescent antibody probes. The pathologist must perform
successive, iterative analyses of 2- and 3-dimensional plots and
histograms and re-gating of identified cell populations (based on size,
shape, relative staining patterns, signal intensity, etc.) to
characterize cell lineage and render a final diagnosis and
interpretation. Due to this clinical rationale, the commenter indicated
that the work and complexity of CPT code 88188 was substantially
greater than CPT code 88120.
Response: We disagree with the commenter that CPT code 88120 is an
inappropriate crosswalk code for CPT code 88188. These codes are both
recently-reviewed pathology codes with identical intraservice time and
total time values within the Cytopathology listing of the CPT manual.
We also note that many of the activities listed by the commenter are
not detailed in the intraservice work description for CPT code 88188,
and may not be needed in the typical case.
The following comments address the proposed direct PE inputs for
the Flow Cytometry family of codes.
Comment: Many commenters disagreed with the proposed time of 13
minutes for the clinical labor activity ``Instrument start-up, quality
control functions, calibration, centrifugation, maintaining specimen
tracking, logs and labeling.'' Commenters stated that the CMS
comparison to CPT code 88182 was not appropriate, as that code uses
older/simpler technology, with CPT code 88184 using 4-6 or more color
channels while CPT code 88182 uses 1-2 channels. Commenters stressed
that these clinical labor tasks are unique to this flow cytometry
service, and they should not be assumed to take the identical time as
other services. Other commenters stated that three instruments must be
run consecutively, and the task includes quality control calibration,
taking a minimum of 13 to 16 minutes in dedicated technical staff time.
Another commenter indicated that the time required to complete these
activities is continually increasing as more regulatory requirements
are added, and that the recently added flow cytometry requirement for
individual antibody lot/shipment testing increased this time
exponentially.
Response: We disagree with the commenters that the identical
clinical labor activity would take longer to perform for CPT code 88184
than it would for CPT code 88182. Both of these procedures use the same
equipment to perform this task, a flow cytometer (EP014) and a
centrifuge (EP007). We do not agree that there is additional clinical
labor time required for using additional color channels in CPT code
88184, as the same equipment is being used to perform the same clinical
labor task as in CPT code 88182. We did not receive data from the
commenters suggesting that regulatory requirements are increasing the
time required to perform this clinical labor task, nor was this
reflected in the RUC recommendations, which continued to recommend the
same unchanged time for this task.
Comment: Many commenters objected to the proposed clinical labor
time of 7 minutes for the ``Load specimen into flow cytometer, run
specimen, monitor data acquisition, and data modeling, and unload flow
cytometer'' activity for CPT code 88184. Commenters stated that the CMS
comparison to the clinical labor time used for this same activity in
CPT code 88182 was not appropriate as CPT code 88184 uses 4-6 color
channel instruments and up, while 88182 uses only 1-2 channels.
According to the commenters, the time it takes for data capture, data
modeling, data acquisition, and computational analysis is exponentially
longer for CPT code 88184 than for CPT code 88182, since additional
colors result in more complicated profiles which are more difficult and
time consuming to evaluate. Another commenter stated that 7 minutes was
wholly inadequate to perform all of these tasks, and that analysis of a
specimen can take 12 to 15 minutes, depending on the complexity of the
case.
Response: We continue to disagree with the commenters that the
identical clinical labor activity would take longer to perform for CPT
code 88184 than it would for CPT code 88182. As we stated in response
to the previous comment, we do not agree that there is additional
clinical labor time required for using additional color channels in CPT
code 88184, as the same equipment is being used to perform the same
clinical labor task as in CPT code 88182. For the same reason, we do
not agree that this clinical labor activity takes 12 to 15 minutes to
perform, since the identical task only requires 7 minutes for CPT code
88182.
Comment: Many commenters opposed the proposed value of 2 minutes
for the clinical labor activity ``Print out histograms, assemble
materials with paperwork to pathologists Review histograms and gating
with pathologist'' for CPT code 88184. Commenters stated that it was
not reasonable to expect that a flow cytometry technologist could print
out histograms, assemble the documents and deliver them to a
pathologist, and review the histograms with a pathologist, all in the
span of a mere 120 seconds. Commenters were concerned that flow
cytometry technologists cannot produce a high-quality product and
ensure its accuracy and completeness for presentation to a pathologist
in the proposed time. One commenter noted that although their specific
procedure for these steps was largely electronic, their workflow
analysis corroborated the RUC's conclusion because it showed that it
took 5 minutes for staff to complete the equivalent activities. Several
other commenters stated that if the time the cyotechnologist takes to
determine exactly which histograms to print is subtracted, then they
could agree with the proposed 2 minutes. Commenters also stated that
printing is not performed all at one time, with 25-30 pages of
information and data printed over a 5 minute time span, and one

[[Page 80324]]

commenter indicated that the process was ``largely electronic'' with
clinical staff not using the equipment for the full duration that it is
in use.
Response: We appreciate the support from several of the commenters.
In responding to the comments for this clinical labor activity and the
equipment time for the dye sublimation printer (ED031), it became clear
that the clinical labor time for printing was not the same as the
equipment time that the printer was in use. Based on the information
from the commenters that printing is not performed all at one time, we
are assigning the full 5 minutes of equipment time for the dye
sublimation printer; however, we are maintaining our proposed 2 minutes
of clinical labor time for ``Print out histograms, assemble materials
with paperwork to pathologists Review histograms and gating with
pathologist'', as commenters have informed us that the clinical staff
do not use the equipment for the full duration that it is in use.
Comment: Several commenters disagreed with the proposed clinical
labor time of 1 minute for ``Clean room/equipment following procedure''
for CPT code 88184. The commenters stated that this time is allocated
over entire patient case, and that it is typical and critical to clean
the equipment between patient cases. The commenters also supplied
details about the cleaning process, regarding how the laboratory
technician cleans the equipment and workspace by decontaminating the
equipment and work bench surfaces, as well as carrying out waste
management after the procedure.
Response: We appreciate the additional information from the
commenters regarding the cleaning of the room. However, the commenters
did not provide a rationale as to why CPT code 88184 requires
additional clinical labor above the standard value of 1 minute for room
cleaning in lab procedures. We continue to believe that the standard
clinical labor time is the most accurate valuation for this clinical
labor task.
Comment: Many commenters requested that CMS restore the clinical
labor time for the ``Enter data into laboratory information system,
multiparameter analyses and field data entry, complete quality
assurance documentation'' activity. Commenters stated that this data
entry is manually entered and must be performed for each individual
patient case. Several commenters indicated that entering test-specific
data takes between five and ten minutes, and entry of client
information and demographics and specimen information takes additional
time that cannot be short-changed. Commenters emphasized that these are
extremely important tasks that require technical skills, and assigning
zero minutes to this critical task was illogical for a service like
flow cytometry. One commenter stated that the current RUC-recommended
value of four minutes was already a gross underestimation of the time
required to complete these activities for the majority of testing, and
suggested that these activities commonly take more than ten minutes to
perform.
Response: We agree with the commenters that entering patient data
into information systems is an important task, and we agree that it
would take more than zero minutes to perform. However, the commenters
did not address our rationale for removing this clinical labor time
from CPT codes 88184 and 88185, which is that this task is indirect PE.
As we stated in the CY 2016 final rule with comment period (80 FR
70979), we have not recognized the laboratory information system as an
equipment item that can be allocated to an individual service. We
continue to believe that this is indirect PE, and therefore, we do not
recognize the laboratory information system as a direct PE input, and
we do not consider this task as typically performed by clinical labor
on a per-service basis.
Comment: One commenter requested the inclusion of additional
cytotechnologist time of 10 minutes for CPT code 88184 and 2 minutes
for CPT code 88185, as well as an additional desktop computer with
monitor (ED021) equipment times of 10 minutes for 88184 and 2 minutes
for 88185. This additional time was intended to reflect the time spent
using the flow cytometry analytics software (EQ380).
Response: We agree with the RUC recommendations that the clinical
labor and equipment time associated with the flow cytometry analytics
software is already accounted for in the recommended clinical labor
inputs. As the recommendations indicate, this time is included as part
of the clinical labor activities ``Accession specimen'', ``Instrument
start-up, quality control functions'', ``Load specimen into flow
cytometer, run specimen'' and ``Print out histograms, assemble
materials with paperwork to pathologists.''
Comment: Many commenters disagreed with the proposed supply
quantity of 2 for the lysing reagent (SL089) in CPT code 88185.
Commenters stated that although they acknowledged that the current
Medicare data showed that a patient case of 24 markers is typical, this
result ignored other relevant pieces of information. The commenters
indicated that an analysis of the 2014 Medicare 5% Sample Carrier
Database showed that over 50 percent of individual providers typically
bill fewer than 20 markers per patient case, and that since these
providers are generally smaller and see fewer annual cases, the
proposed supply quantity of 2 would potentially drive these providers
to consider ceasing their flow cytometry services. The commenter also
stated that these codes are often billed as part of either the Hospital
IPPS or OPPS, which should be factored into the typical number of
markers billed per case. The commenter also stated that the most common
professional component of flow cytometry, CPT code 88189, would be
associated with patient cases that bill for fewer than 24 markers, from
16 to 24.
Response: We reiterate that we establish payment rates based on the
typical case, which the commenters agreed was 24 total markers. We have
historically established payment rates based on the typical service and
do not believe that it would be appropriate or serve the purpose of
relativity to deviate from that practice in this case. We also do not
believe that the payment for these codes under the IPPS or OPPS is a
directly relevant factor in defining the typical case under the
Physician Fee Schedule. We believe that the patient population and
typical case under the IPPS would not necessarily be the same as the
typical case under the PFS. Finally, we agree that CPT code 88189 would
be associated with patient cases that bill for fewer than 24 markers,
as the code descriptor states that it refers to the performance of 16
or more markers. However, we do not believe that this affects the
number of markers in the typical case, which the commenters agreed was
24 for the typical patient.
Comment: A commenter stated that that it opposed putting a number
or cap on markers because there is a wide range of possible markers
required to achieve patient diagnosis.
Response: We agree with the commenter, and we are not establishing
a cap or determining a fixed number of markers to use for these
procedures. As stated previously, however, we are required to establish
payment rates based on the typical case, which our internal data and
commenter feedback has agreed is 24 markers.
Comment: Other commenters disagreed with the CMS proposal for the
lysing reagent based on the supply quantity needed to perform the
procedure. A commenter stated that the 46-48 mL quantity detailed by
CMS in

[[Page 80325]]

the proposed rule was based on a RUC recommendation; however, the RUC's
amount was based on an average of 16 markers, not 24 markers. Although
the commenter agreed that 24 markers reflected a common case, the
commenter stated that it was necessary to consider the amount of lysing
agent for a 24 marker case, not to assume that the 46-48 mL amount
based upon 16 markers also applies to 24 markers. Another commenter
stated that a laboratory using ammonia chloride needs at least 2.5 ml
of lysing reagent for each time that CPT code 88185 is performed.
Response: We did not base our proposal for this supply quantity
upon the RUC recommendation. As we stated in the proposed rule, we were
informed that the use of 50-55 ml of the lysing reagent would be
typical for an entire patient case based on our discussions with
pathology specialists who perform flow cytometry. For the typical case
of 24 markers, our value would produce a total lysing reagent quantity
of 51 ml (5 ml from the single service of CPT code 88184 and 46 ml from
the 23 services of CPT code 88185), which matches with the amount
required for a total per patient case. Since commenters agreed that 24
markers was the typical patient case, we continue to believe that our
proposed quantity of 2 ml is the most accurate value for CPT code
88185.
Comment: Many commenters objected to the proposed supply quantity
of 1 for the flow cytometry antibody (SL186) in CPT codes 88184 and
88185. Commenters stated that although it is standard practice to use a
single antibody multiple times during the analysis, each antibody or
marker can only be billed once per analysis. According to commenters,
multiple use of such antibodies are not reportable or billable, but are
critical to the overall analysis and interpretation of results and are
part of the total cost for each procedure performed. Some commenters
explained that the recommended quantity of 1.6 antibodies per billed
marker was based on averaging together two separate analyses: a survey
of 59 professionals performing flow cytometry that found 1.52
antibodies required per marker, and a customer survey that found 1.87
antibodies per marker. A different commenter stated that its member
laboratories found that under the current four-color process, 1.36
antibodies per marker is necessary. Another commenter stated that while
one antibody is generally used per marker, the required use of controls
for many of these markers for analysis or quality control means that
this value is greater than 1 antibody per marker reported.
Response: We appreciate the additional data presented regarding the
clinical use of the flow cytometry antibody supply. However, we
continue to have reservations regarding the information that we have
received regarding the 1.6 quantity for this supply. Different
commenters recommended different quantities of this supply required to
furnish the procedure, ranging from 1 to 1.36 to 1.52 to 1.6 to 1.87.
We are hesitant to increase the quantity of this supply given the wide-
ranging information that we received from commenters. We are also
concerned that although commenters referenced studies that found
different supply quantities for SL186, commenters did not submit the
data associated with these studies for our review. We would be more
open to the idea of increasing the supply quantity to 1.6 if this data
were supported by clinical data or study. We also note that one
commenter stated that one antibody is ``generally used'' per marker,
which supports our contention that the proposed value of 1 antibody for
CPT codes 88184 and 88185 would be typical. As a result, we are
maintaining a supply quantity of 1 for the flow cytometry antibody
supply, which is also the current value for the supply and the RUC-
recommended value from the previous set of recommendations.
Comment: Several commenters disagreed with the proposed equipment
time for the dye sublimation printer (ED031). Commenters stated that
printing is not performed all at one time, with 25-30 pages of
information and data printed over a 5 minute time span. Commenters
indicated that this time cannot be linked directly to one particular
clinical labor task line, and the printer cannot be used for any other
task during these 5 minutes even while it is not actively printing.
Response: We appreciated the additional information from the
commenters regarding the use of the dye sublimation printer. Due to the
presentation of this new information detailing how the equipment time
for the printer is disassociated from any clinical labor tasks, we will
increase the equipment time to the RUC-recommended 5 minutes for CPT
code 88184 and 2 minutes for CPT code 88185.
After consideration of comments received, we are finalizing the
proposed work RVUs for CPT code 88187, 88188, and 88189. We are also
finalizing the proposed direct PE inputs, with the refinement to the
dye sublimation printer detailed above.
(47) Microslide Consultation (CPT Codes 88321, 88323, and 88325)
CPT codes 88321, 88323, and 88325 were reviewed by the RUC in April
2014 for their direct PE inputs only, and the CMS refined values were
included in the CY 2016 PFS final rule with comment period. The family
of codes was reviewed again at the January 2016 RUC meeting for both
work values and direct PE inputs, and new recommendations were
submitted to CMS as part of the CY 2017 PFS rulemaking cycle.
In the CY 2016 PFS final rule with comment period, we finalized our
proposal to remove many of the inputs for clinical labor, supplies, and
equipment for CPT code 88325. The descriptor for this code did not
state that slide preparation was taking place, and therefore, we
refined the labor, supplies, and equipment inputs to align with the
inputs recommended for CPT code 88321, which also does not include the
preparation of slides. After further discussion with pathologists and
consideration of comments received, we have been persuaded that slide
preparation does take place in conjunction with the service described
by CPT code 88325. In the RUC-recommended direct PE inputs from the
January 2016 meeting, the labor, supplies, and equipment inputs related
to slide preparation were added once again to CPT code 88325. We
proposed to accept these restorations related to slide preparation
without refinement.
Regarding the clinical labor direct PE inputs, we proposed to
assign 1 minute of L037B clinical labor for ``Complete workload
recording logs. Collate slides and paperwork. Deliver to pathologist''
for CPT codes 88323 and 88325. We are maintaining this at the current
value for CPT code 88323, and adding this 1 minute to CPT code 88325
based on our new understanding that slide preparation is undertaken as
part of the service described by this code. We proposed to remove the
clinical labor for ``Assemble and deliver slides with paperwork to
pathologists'' from all three codes, as we believe this clinical labor
is redundant with the labor assigned for ``Complete workload recording
logs.'' We similarly proposed to remove the clinical labor for ``Clean
equipment while performing service'' from CPT codes 88323 and 88325, as
we believe it to be redundant with the clinical labor assigned for
``Clean room/equipment following procedure.''
We proposed to maintain the quantity of the ``stain, hematoxylin''
supply

[[Page 80326]]

(SL135) at 16 ml for CPT codes 88323 and 88325, as opposed to the RUC-
recommended quantity of 32 ml. The RUC recommendation stated that the
hematoxylin supply does not include eosin and should not be redundant;
the stains are not mixed together, but are instead sequential. The
recommendation also made a comparison to the use of the hematoxylin
supply quantity in CPT code 88305. However, we note that CPT code 88305
does not include 8 ml of eosin stain (SL201), but instead 8 gm of eosin
solution (SL063), and these are not the same supply. Therefore we do
not agree that a direct comparison of the supply quantities is the most
accurate way to value these procedures. For CPT codes 88323 and 88325,
we continue to note that the prior supply inputs for these procedures
had quantity 2.4 of the eosin solution (SL063) and quantity 4.8 of the
hematoxylin stain (SL135); in other words, a 1:2 ratio between the
eosin and hematoxylin. We proposed to maintain that 1:2 ratio with 8 ml
of the eosin stain (SL201) and 16 ml of the hematoxylin stain (SL135).
We also proposed to update the use of the eosin solution (sometimes
listed as ``eosin y'') in our supply database. We believe that the
eosin solution supply (SL063), which is measured in grams, reflects an
older process of creating eosin stains by hand. This is in contrast to
the eosin stain supply (SL201), which is measured in milliliters, and
can be ordered in a state that is ready for staining immediately. We do
not believe that the use of eosin solution would reflect typical lab
practice today, with the readily availability for purchase of
inexpensive eosin staining materials. We also note that in the CY 2016
PFS final rule with comment period, we removed 8 gm of the eosin
solution and replaced it with 8 ml of the eosin stain, and this
substitution was accepted without further change in the most recent set
of RUC recommendations. As a result, we proposed to update the price of
the eosin stain supply from $0.044 per ml to $0.068 per ml to reflect
the current cost of the supply. We also proposed to use CPT codes 88323
and 88325 as a model, and replace the use of eosin solution with an
equal quantity of eosin stain for the rest of the codes that make use
of this supply. This applies to 15 other CPT codes: 88302 (Level II--
Surgical pathology, gross and microscopic examination), 88304 (Level
III--Surgical pathology, gross and microscopic examination), 88305
(Level IV--Surgical pathology, gross and microscopic examination),
88307 (Level V--Surgical pathology, gross and microscopic examination),
88309 (Level VI--Surgical pathology, gross and microscopic
examination), 88364 (In situ hybridization (e.g., FISH), per specimen;
each additional single probe stain procedure), 88365 (In situ
hybridization (e.g., FISH), per specimen; initial single probe stain
procedure), 88366 (In situ hybridization (e.g., FISH), per specimen;
each multiplex probe stain procedure), 88367 (Morphometric analysis, in
situ hybridization (quantitative or semi-quantitative), using computer-
assisted technology, per specimen; initial single probe stain
procedure), 88368 (Morphometric analysis, in situ hybridization
(quantitative or semi-quantitative), manual, per specimen; initial
single probe stain procedure), 88369 (Morphometric analysis, in situ
hybridization (quantitative or semi-quantitative), manual, per
specimen; each additional single probe stain procedure), 88373
(Morphometric analysis, in situ hybridization (quantitative or semi-
quantitative), using computer-assisted technology, per specimen; each
additional single probe stain procedure), 88374 (Morphometric analysis,
in situ hybridization (quantitative or semi-quantitative), using
computer-assisted technology, per specimen; each multiplex probe stain
procedure), 88377 (Morphometric analysis, in situ hybridization
(quantitative or semi-quantitative), manual, per specimen; each
multiplex probe stain procedure), and G0416 (Surgical pathology, gross
and microscopic examinations, for prostate needle biopsy, any method).
The following is a summary of the comments we received regarding
our proposed valuation of the Microslide Consultation codes.
Comment: One commenter supported the restoration of the direct PE
inputs related to slide preparation in CPT code 88325 and requested
that CMS update the PE data files for CY 2016 to reflect these changes.
Response: We appreciate the support from the commenter. The
proposed rates for CY 2017 reflected these changes to the direct PE
inputs. However, the RVUs for CY 2016 were unaffected by this proposal,
as has been our longstanding practice for interim final codes.
Comment: Several commenters requested that CMS add an additional 1
minute for the clinical labor activity ``Complete workload recording
logs. Collate slides and paperwork. Deliver to pathologist'' in CPT
code 88321. Commenters stated that this clinical labor task was
accidently left off of the April 2014 RUC recommendation for CPT code
88321, and that it was a necessary task that was not redundant with
other clinical labor activities.
Response: We agree with the commenters that 1 minute of clinical
labor time for this task is an appropriate addition for CPT 88321 to be
consistent with the identical clinical labor task taking place in other
codes in the family.
After consideration of comments received, we are finalizing our
proposed work RVUs for CPT code 88321, 88323, and 88325. We are also
finalizing the proposed direct PE inputs, with the addition of 1 minute
of clinical labor time as detailed above for CPT code 88321. We note as
well that we are finalizing the replacement of eosin solution with
eosin stain, as detailed in the PE section of this final rule (see
section II.A. of this final rule).
(48) Immunohistochemistry (CPT Codes 88341, 88342, 88344, and 88350)
In the CY 2014 PFS final rule with comment period (78 FR 74341), we
assigned a status indicator of I (Not valid for Medicare purposes) to
CPT codes 88342 and 88343 and instead created two G-codes, G0461 and
G0462, to report immunohistochemistry services. We did this, in part,
to avoid creating incentives for overutilization.
For CY 2015, the CPT coding was revised with the creation of two
new CPT codes, 88341 and 88344, the revision of CPT code 88342 and the
deletion of CPT code 88343. In the past for similar procedures in this
family, the RUC recommended a work RVU for the add-on code (CPT code
88364) that was 60 percent of the work RVU for the base code (CPT code
88365). In the CY 2015 PFS final rule with comment period, we stated
that the relative resources involved in furnishing an add-on service in
this family would be reflected appropriately using the same 60 percent
metric and subsequently established an interim final work RVU of 0.42
for CPT code 88341, which was 60 percent of the work RVU of 0.70 for
the base CPT code 88342. In the CY 2016 PFS proposed rule, we revised
the add-on codes from 60 percent to 76 percent of the base code and
subsequently proposed a work RVU of 0.53 for CPT code 88341. However,
we inadvertently published work RVUs for CPT code 88341 in Addendum B
on the CMS Web site without explicitly discussing it in the preamble
text. In the CY 2016 PFS final rule with comment period, we maintained
the CY 2015 work RVU of 0.53 for CPT code 88341 as interim final for CY
2016 and requested public comment. Also, in the CY 2016 PFS final rule
with comment period, we

[[Page 80327]]

established an interim final work RVU of 0.70 for CPT codes 88342 and
88344.
Comment on the CY 2016 PFS final rule with comment period: Several
commenters objected to a standard discount for the physician work
involved in pathology add-on services and urged us to accept the RUC-
recommend work RVU of 0.65 for CPT code 88341.
Response in the CY 2017 PFS proposed rule: We responded to the
comments by stating our appreciation of the commenters' concerns
regarding a standard discount; however, we believed that it was
reasonable to estimate work RVUs for a base and an add-on code, and to
recognize efficiencies between them, by looking at how similar
efficiencies are reflected in work RVUs for other PFS services. Also we
noted that the intravascular codes for which we initially established
our base/add-on code relationship for CPT codes 88346 and 88350 were
deleted in CY 2016 and replaced with two new codes; CPT codes 37252 and
37253. The relationship between CPT codes 37252 and 37253 represents a
20 percent discount for the add-on code as the base CPT code 37252 has
a work RVU of 1.80 and CPT code 37253 has a work RVU of 1.44. As CPT
codes 37252 and 37253 replaced the codes on which our discounts for
base and add-on codes were based (please see the CY 2016 PFS final rule
with comment period (80 FR 70972) for a detailed discussion), we
believed it would be appropriate to maintain the same 20 percent
relationship for CPT codes 88346 and 88350. Therefore, for CY 2017, we
proposed a work RVU of 0.56 for CPT code 88341, which represents 80
percent of the work RVU of 0.70 for the base code. For CY 2016, we
finalized a work RVU of 0.56 for CPT code 88350 which, represented 76
percent of the work RVU of 0.74 for the base code. To maintain
consistency within this code family, for CY 2017 we proposed to revalue
CPT code 88350 using the 20 percent discount discussed above. To value
CPT code 88350, we multiplied the work RVU of 0.74 for CPT code 88346
by 80 percent, and then subtracted the product from 0.74, resulting in
a work RVU of 0.59 for CPT code 88350. For CY 2017, we proposed a work
RVU of 0.59 for CPT code 88350.
The following is a summary of the comments we received regarding
our proposed valuations for the Immunohistochemistry family:
Comments: Several commenters stated concerns regarding the level of
reimbursement these pathology codes would receive if CMS reduced the
work RVUs as proposed. The commenters stated the reduced reimbursement
would force pathologists to decrease the number of technical staff,
which would interfere with pathologists' ability to perform these
services accurately and timely.
The RUC stated the CY 2017 proposed work RVUs for CPT codes 88341
and 88350 do not represent the work involved in furnishing the
procedure and present a rank order anomaly for other services. The RUC
also stated that the services furnished by CPT codes 37252 and 37253,
which we used to establish the relationship between the base code and
the add-on code, are not medically comparable services to CPT codes
88341 and 88350. Additionally, the RUC stated each pathology service
has individual intensities and complexities. Specifically, for
additional immunohistochemistry services represented by add-on CPT
codes 88341 and 88350, each antibody is evaluated separately on
different slides and each additional service is separate and distinct.
Lastly, the RUC stated its approach of evaluating the actual work
associated with each unique base and each unique add-on service is far
more accurate, rational, and responsive to the specific circumstances
than holding codes equal to a fixed discount from the base code.
Applying ratio comparisons and fixed discounts to arrive at a work
relative value will continue to create inter-specialty rank order
anomalies of physician work RVUs.
Another commenter noted there were RUC surveys that evaluated
physician work differentials between the base codes and the add-on
codes for pathology services. The commenter offered CPT codes 88333
(Pathology consultation during surgery; cytologic examination (e.g.,
touch prep, squash prep), initial site) and 88334 (Pathology
consultation during surgery; cytologic examination (e.g., touch prep,
squash prep), each additional site (List separately in addition to code
for primary procedure)) and CPT codes 88331 (Pathology consultation
during surgery; first tissue block, with frozen section(s), single
specimen) and 88332 (Pathology consultation during surgery; each
additional tissue block with frozen section(s) (List separately in
addition to code for primary procedure) as examples for consideration.
Response: We appreciate commenters' concern regarding the level of
reimbursement and will continue to consider input from the medical
community on this issue through evaluation of CPT coding changes and
associated RUC recommendations, as well as feedback received through
public comments, as we value these services through future notice and
comment rulemaking. We also note that the PFS is a relative value
system and, as such, values services across all specialties. We believe
it is important that there are accurate comparisons between codes in
different families.
As discussed in detail in previous proposed and final rules, we
continue to believe the metric we use to value add-on codes relative to
their base codes is appropriate and representative of the work involved
and note that there is no rank order anomaly within this particular
code family. In response to the commenter's statement that there should
be no comparison of intravascular ultrasound services to any pathology
service, we continue to believe any difference in work RVUs for codes
describing different kinds of services should reflect the relative
differences in time and intensity involved in furnishing the services.
Therefore, we believe that it is imperative that we can compare the
assumptions regarding overall work between any two codes, regardless of
their characteristics.
We appreciate commenters' concerns regarding a standard discount,
and we do not consider the use of a particular increment to establish a
new standard. Instead, we reiterate that we believe that it is
reasonable to estimate work RVUs for a base and an add-on code, and to
recognize efficiencies between them, by looking at how similar
efficiencies are reflected in work RVUs for other PFS services. We
appreciate the commenters' concerns regarding the time ratio
methodologies and have responded to these concerns about our
methodology in section II.L of this final rule.
Therefore, for CY 2017 we are finalizing a work RVU of 0.56, 0.70,
0.70, and 0.59 for CPT codes 88341, 88342, 88344 and 88350,
respectively.
(49) Morphometric Analysis (CPT Codes 88364, 88365, 88367, 88368, 88369
and 88373)
For CY 2015, the CPT Editorial Panel revised the code descriptors
for the in situ hybridization procedures, CPT codes 88365, 88367 and
88368, to specify ``each separately identifiable probe per block.''
Additionally, three new add-on codes (CPT codes 88364, 88369 and 88373)
were created to specify ``each additional separately identifiable probe
per slide.'' Some of the add-on codes in this family had RUC-
recommended work RVUs that were 60 percent of the work RVU of the base
procedure. We believed this accurately reflected the resources used in
furnishing these add-on codes and

[[Page 80328]]

subsequently established interim final work RVUs of 0.53 for CPT code
88364 (60 percent of the work RVU of CPT code 88365); 0.53 for CPT code
88369 (60 percent of the work RVU of CPT code 88368); and 0.43 for CPT
code 88373 (60 percent of the work RVU of CPT code 88367).
For CY 2016, the RUC re-reviewed these services due to the
specialty society's initially low survey response rate. In our review
of these codes, we noticed that the latest RUC recommendation was
identical to the RUC recommendation provided for CY 2015. Therefore, we
proposed to retain the CY 2015 work RVUs and work time for CPT codes
88367 and 88368 for CY 2016. For CPT code 88365 we finalized a work RVU
of 0.88 for CY 2016. For CPT codes 88364 and 88369, we increased the
work RVUs for both of these add-on codes from 0.53 to 0.67, which
reflected 76 percent of the work RVUs of the base procedures for these
services. However, we inadvertently omitted the rationale for this
revision to the work RVUs in the preamble to CY 2016 proposed rule.
Consequently, we maintained the CY 2015 interim final values of the
work RVU of 0.67 for CPT codes 88464 and 88369 and sought comment on
these values for CY 2016. For CPT code 88373 we finalized a work RVU of
0.43.
Comment on the CY 2016 PFS final rule with comment period: A few
commenters stated their objection to our use of a standard discount for
pathology add-on services and for suggesting that each service is
separate and unique. Commenters also stated there should be no
comparison of intravascular ultrasound services to morphometric
analysis, immunohistochemistry, immunofluorescence, or any pathology
service.
Response in the CY 2017 PFS proposed rule: In reviewing the RUC
recommended base/add-on relationships between several pathology codes,
we continue to believe the base/add-on code time relationships for
pathology services are appropriate and have not been presented with any
compelling evidence that conflicts with the RUC-recommended
relationships. However, as we stated above, the intravascular codes we
initially examined in revaluing CPT codes 88364 and 88369 were deleted
in CY 2016 and replaced with CPT codes 37252 and 37253. For the reasons
stated above we continue to believe this 20 percent discount
relationship between the base and add-on code accurately reflects the
work involved in furnishing these services. Therefore, for CY 2017, we
are proposing a work RVU of 0.70 for CPT codes 88364 and 88369 which
represents a 20 percent discount from the base code. As the
relationship between the base code and add-on code now represents a 20
percent difference we are proposing to revalue CPT code 88373 at 0.58
work RVUs.
In the CY 2017 proposed rule, we proposed a work RVU of 0.58 for
CPT code 88373.
The following is a summary of the comments we received regarding
our proposed valuation of the Morphometric Analysis codes:
Comments: The RUC stated appreciation for the proposed increase in
work RVUs for CPT codes 88364 and 88369 although it stated the increase
still does not represent the proper work RVU for the work involved and
presents a rank order anomaly relative to other services. The RUC,
along with other commenters, stated the services described by CPT codes
37252 and 37253 are not comparable medical services to those furnished
by CPT codes 88364 and 88369, and there should be no comparison of
intravascular ultrasound services to any pathology services.
The RUC also stated that although some medical procedures and
services may present efficiencies between base and add-on services,
this is not the case for CPT codes 88364 and 88369, as each pathology
service is individual so that any rational comparison of the physician
work of intravascular ultrasound services with pathology services is
impossible. The RUC also stated that no pathology add-on service can be
presumed to have a discount in physician work from the base service.
Another commenter stated for CPT code 88373, it is irrational to
assume that second and subsequent services designated by convention as
``add-on'' services require a reduction in resources relative to the
corresponding initial service.
Another commenter noted that in the CY 2017 proposed rule, CMS
incorrectly stated it was utilizing a RUC recommendation specific to
these codes. According to the CY 2015 Final Rule (79 FR 67548), the
codes on which CMS based its discount were CPT codes 88334, 88335,
88177, and 88172. The commenter states the distinction between the
codes cited in the CY 2015 final rule, CPT codes 88334, 88335, 88177,
88172, and the new add-on codes, CPT codes 88364, 88369 and 88373, is
that the discount factor is specific to services for which a diagnosis
has already been furnished. For the new codes to which CMS applied this
discount, no such corresponding interpretative diagnosis has been made.
The same commenter stated for morphometric codes, the pathologist
is reviewing a second, unique and distinct probe with an entirely
different signal than that of its base code, and the work involved with
these add-on services requires the same level of intensity and time as
their base codes.
The commenter also stated that pathology consultation and
cytopathology evaluation codes were clinically different and are not
valid proxies to identify efficiencies for the new add-on codes.
Response: We do not agree that there are rank order anomalies
within this code family, and we note that this code family was valued
within itself and not in relation to other services within the PFS. In
response to the commenter's statement that there should be no
comparison of intravascular ultrasound services to any pathology
service as discussed above, we continue to believe it is valid to
compare services across the PFS when determining appropriate values.
We also continue to believe that it is reasonable to recognize
efficiencies between them a base and an add-on code. In reviewing the
RUC-recommended base/add-on relationships between several pathology
codes, we continue to believe the base/add-on code time relationships
for pathology services are appropriate and have not been presented with
any persuasive evidence or rationale that conflicts with the RUC-
recommended relationships.
We agree with the commenter that the designation ``add-on'' does
not automatically imply a reduction; however, in the case of these
similar pathology services, we continue to believe using the same
valuation metrics is valid. Therefore, for CY 2017, we are finalizing a
work RVU of 0.70, 0.73, 0.88, 0.70 and 0.58 for CPT codes 88364, 88367,
88368, 88369 and 88373, respectively.
(50) Liver Elastography (CPT Code 91200)
For CY 2016, we received a RUC recommendation of 0.27 work RVUs for
CPT code 91200. After careful review of the recommendation, we
established the RUC-recommended work RVU and direct PE inputs as
interim final for CY 2016.
Comment on the CY 2016 PFS final rule with comment period: A few
commenters requested that we reconsider the level of payment assigned
to this service when furnished in a nonfacility setting, stating that
the

[[Page 80329]]

code met the definition for the potentially misvalued code list as
there is a significant difference in payment between sites of service.
The commenters also asked us to reconsider the assigned 50 percent
utilization rate for the FibroScan equipment in this procedure as the
current utilization rate would translate to over 50 procedures per
week. Instead, the commenters suggested the typical number of
procedures done per week ranges between 15 and 25 and requested we
adopt a 25 percent utilization rate which corresponds to that number of
procedures.
Response in the CY 2017 PFS proposed rule: We refer commenters to
the CY 2016 final rule with comment period (80 FR 71057-71058) where we
discussed and addressed the comparison of the PFS payment amount to the
OPPS payment amount for CPT 91200. For the commenter's statement about
the utilization rate, we have previously addressed the accuracy of
these default assumptions as they apply to particular equipment
resources and particular services. In the CY 2008 PFS proposed rule (72
FR 38132), we discussed the 50 percent utilization assumption and
acknowledged that the default 50 percent usage assumption is unlikely
to capture the actual usage rates for all equipment. However, we stated
that we did not believe that we had strong empirical evidence to
support any alternative approaches. We indicated that we would continue
to monitor the appropriateness of the equipment utilization assumption,
and evaluate whether changes should be proposed in light of the data
available. The commenters did not provide any verifiable data
suggesting a lower utilization rate. Therefore, for CY 2017 we proposed
a work RVU of 0.27 for CPT code 91200, consistent with the CY 2016
interim final value, and we continued to explore and solicit comments
regarding publically available data sources to identify the most
accurate equipment utilization rate assumptions possible. We also noted
that following the publication of the CY 2016 PFS final rule with
comment period (80 FR 70886) there was an inconsistency in the Work
Time file published on the CMS Web site. For CPT code 91200 the RUC
recommended 16 minutes total service time whereas our file reflected 18
minutes total time for the service. For CY 2017, we proposed to update
the Work Time file to reflect the RUC's recommendation, which is 16
minutes for CPT code 91200.
The following is a summary of the comments we received regarding
our proposed valuation of CPT code 91200.
Comment: Many commenters disagreed with the proposed valuation of
CPT code 91200, suggesting that the $34 payment rate in the nonfacility
setting for CY 2016 underestimated the resource cost of the procedure.
Commenters stated that this code is a first-line method used to assess
fibrosis scores in patients with chronic liver disease, especially
those with chronic Hepatitis C, and that the current reimbursement was
not sufficient to cover the cost of providing the service. Some
commenters compared the use of the Fibroscan device in CPT code 91200
to more expensive and more invasive liver biopsies, or compared the
cost of the procedure to the treatment provided in hospital-based
payment systems. Commenters urged CMS to increase the valuation of CPT
code 91200 to encourage providers to adopt the use of the Fibroscan
device.
Response: We remind commenters that we are obligated by statute to
set payment rates based on the resources used to furnish the procedure,
and that as a result pricing for codes on the PFS does not necessarily
mirror pricing for codes under different payment systems. We also note
that we proposed the RUC-recommended work RVU and direct PE inputs for
CPT code 91200 without alteration.
Comment: Many of the commenters also addressed the pricing of the
Fibroscan equipment (ER101). Commenters provided CMS a range of
different prices for this equipment item, individually suggesting that
the equipment costs $120k, $130k, $140k, and $150k. One commenter
supplied an individual invoice for the Fibroscan, including the device
itself along with a CAP option, an S probe, a printer, and shipping/
maintenance costs.
Response: We appreciate the submission of additional information
regarding the proper pricing of the Fibroscan. We encourage more
commenters to include invoices with their comment submissions if they
believe that existing supplies or equipment items are undervalued, as
we have had longstanding reservations about establishing pricing based
on single invoices. In the specific case of the Fibroscan equipment, we
agree that the price should be increased based on the submitted
invoice. We are pricing ER101 at $183,390 based on a combination of the
cost of the Fibroscan itself ($131,950), the CAP option ($22,955), the
S probe ($27,950), and the printer ($495). We note that we do not
typically pay for shipping costs or maintenance costs, as equipment
maintenance costs are built into the equipment cost per minute formula.
We are also changing the name of ER101 from ``Fibroscan'' to
``Fibroscan with printer'' to reflect the fact that this pricing
incorporates a printer.
After consideration of comments received, we are finalizing our
proposed work RVUs and direct PE inputs, with the price increase to the
Fibroscan with printer equipment.
(51) Closure of Paravalvular Leak (CPT Codes 93590, 93591, and 93592)
The CPT Editorial Panel developed three new codes (two base codes
and one add-on code) to describe paravalvular leak closure procedures
that were previously reported using an unlisted code. The RUC
recommended a work RVU of 17.97 for CPT code 93591. We proposed a work
RVU of 14.50 for CPT code 93591, a direct crosswalk from CPT code
37227. We stated in the CY 2017 proposed rule that we believe that a
direct crosswalk to CPT code 37227 accurately reflected the time and
intensity described in CPT code 93591 since CPT code 37227 also
described a transcatheter procedure with similar service times.
To maintain relativity among the codes in this family, we proposed
refinements to the recommended work RVUs for CPT code 93590. The RUC
noted that the additional work associated with CPT code 93590 compared
to CPT code 93591 was due to the addition of a transseptal puncture to
access the mitral valve. The RUC identified a work RVU of 3.73 for a
transseptal puncture. Therefore, for CPT code 93590, we proposed a work
RVU of 18.23 by using our proposed work RVU of 14.50 for CPT code 93591
and adding the value of a transseptal puncture (3.73).
CPT code 93592 is an add-on code used to report placement of
additional occlusion devices for percutaneous transcatheter
paravalvular leak closure, performed in conjunction with either an
initial mitral or aortic paravalvular leak closure. The RUC recommended
a work RVU of 8.00 for this code. In the proposed rule, we stated that
we considered applying the relative increment between CPT codes 93590
and 93591; however, we believed that a direct crosswalk to CPT code
35572, with a work RVU of 6.81, more accurately reflected the time and
intensity of furnishing the service. Therefore, for CPT code 93592, we
proposed a work RVU of 6.81.
Comment: For CPT code 93591, commenters opposed CMS' assertion that
a cardiovascular intervention

[[Page 80330]]

performed in an immobile leg is comparable in intensity and patient
risk to an intervention performed in a beating, moving heart.
Commenters suggested that CMS' proposed crosswalk to CPT code 37227 was
not appropriate since CPT code 37227 is generally performed in an
outpatient setting, while CPT code 93591 is generally performed in a
facility setting due to the intensity and risk associated with the
procedure. Subsequently, commenters suggested that CMS finalize the
RUC-recommended work RVU of 17.97 for CPT code 93591.
For CPT code 93590, commenters, including the RUC, supported CMS'
proposed use of the same building block methodology used in the RUC
recommendations, by proposing to apply a work RVU of 3.73 to the base
code value of 93591. However, commenters suggested that CMS apply the
value of a transeptal puncture to the RUC-recommended value for CPT
code 93591, and therefore, finalize the RUC-recommended work RVU of
21.70 for CPT code 93590.
For CPT code 93592, commenters, including the RUC, disagreed with
CMS' proposed comparison of CPT code 93592 to CPT code 35572 (Harvest
of femoropopliteal vein, 1 segment, for vascular reconstruction
procedure (e.g., aortic valve services)). Commenters stated that CMS's
proposed crosswalk is inappropriate and does not recognize the
intensity and skill level needed to place a device to close a
paravalvular leak in a moving, beating heart, frequently in patients
with heart failure. Commenters stated that CPT code 35572 was only
similar to CPT code 93592 in that both procedures are cardiovascular in
nature. Commenters also stated that surgical harvest of the lower
extremity vein is not clinically similar to the transcatheter
percutaneous structural heart therapies.
Response: We thank the commenters for their feedback on our
proposal. After consideration of the comments received, we are
finalizing the RUC-recommended work RVUs for each of the codes in this
family. Therefore, we are finalizing a work RVU of 21.70 for CPT code
93590, a work RVU of 17.97 for CPT code 93591, and a work RVU of 8.00
for CPT code 93592.
(52) Electroencephalogram (EEG) (CPT Codes 95812, 95813, and 95957)
In February 2016, the RUC submitted recommendations for work and
direct PE inputs for CPT codes 95812, 95813, and 95957. We proposed to
use the RUC-recommended physician work and direct PE inputs for CPT
code 95957 and to use the RUC-recommended work RVUs for CPT codes 95812
and 95813.
In the CY 2016 PFS final rule with comment period (80 FR 70886), we
finalized direct PE input refinements for several clinical labor times
for CPT codes 95812 and 95813. The RUC's February 2016 direct PE
summary of recommendations indicated that the specialty society expert
panel disagreed with CMS' refinements to clinical labor time for these
two codes. The RUC recommended 62 minutes for clinical labor task
``perform procedure'' for CPT code 95812 and 96 minutes for the same
clinical labor task for CPT code 95813, similar to the values
recommended by the RUC in April 2014.
We proposed to maintain the CMS-refined CY 2016 PE inputs for
clinical labor task ``perform procedure'' for CPT codes 95812 (50
minutes) and 95813 (80 minutes), since the RUC's PE summary of
recommendations stated that CPT code 95812 required 50 minutes of
clinical labor time for EEG recording, and CPT code 95813 required 80
minutes of clinical labor time for the same clinical labor task.
We did not receive any comments on our proposals for this family of
codes. Therefore, for CY 2017, we are finalizing our proposed direct PE
inputs for these codes without modifications. We are also finalizing
for CY 2017 work RVUs of 1.08 for CPT code 95812, 1.63 for CPT code
95813, 1.98 for CPT code 95957.
(53) Analysis of Neurostimulator Pulse Generator System (CPT Codes
95971, 95972)
CPT codes 95971 and 95972 were established as interim final
following the CY 2016 final rule with comment period. For CY 2017, we
proposed to maintain their work RVUs and direct PE inputs.
Comment: A commenter expressed support for the proposal to maintain
the current work and PE RVUs, stating that these codes were revalued in
2015 and there was no reason to make any changes.
Response: We appreciate the support from the commenter.
After consideration of comments received, we are finalizing our
proposed work RVUs and proposed direct PE inputs for CPT codes 95971
and 95972.
(54) Patient, Caregiver-focused Health Risk Assessment (CPT Codes 96160
and 96161)
In October 2015, the CPT Editorial Panel created two new PE-only
CPT codes, 96160 (Administration of patient-focused health risk
assessment instrument (e.g., health hazard appraisal) with scoring and
documentation, per standardized instrument) and 96161 (Administration
of caregiver-focused health risk assessment instrument (e.g.,
depression inventory) for the benefit of the patient, with scoring and
documentation, per standardized instrument). For CPT code 96160, we
proposed the RUC-recommended direct PE inputs. For CPT code 96161, the
service is furnished to a patient who may not be a Medicare
beneficiary, and therefore, we did not believe the code would be
eligible for Medicare payment. We proposed to assign a procedure status
of I (Not valid for Medicare purposes) for CPT code 96161.
We noted that we believed that CPT code 96160 describes a service
that is frequently reasonable and necessary in the treatment of illness
or injury, such as when there has been a change in health status.
However, when the service described by CPT code 96160 is explicitly
included in another service being furnished, such as the Annual
Wellness Visit (AWV), this code should not be billed separately, much
like other codes that describe services included in codes with broader
descriptions. We also noted that this service should not be billed
separately if furnished as a preventive service as it would describe a
non-covered service. However, we also solicited comment on whether this
service may be better categorized as an add-on code and welcomed
stakeholder input regarding whether or not there are circumstances when
this service might be furnished as a stand-alone service.
Comment: Many commenters recommended that CMS should recognize and
make separate payment for CPT code 96160, as proposed, as well as 96161
using the RUC-recommended values. Several of these commenters argued
that the medical community has recognized that health risk assessment
of caregivers is an integral part of ongoing medical care for patients
with particular needs. These commenters offered several examples where
such an assessment is integral to treating patients, such as:
Assessment of maternal depression in the active care of
infants,
Assessment of parental mental health as part of evaluating
a child's functioning,
Assessment of caretaker conditions as indicated where
atypical parent/child interactions are observed during care,
Assessment of caregivers as part of care management for
adults whose physical or cognitive status renders them incapable of
independent living and dependent on another adult caregiver. Some
examples might be intellectually disabled adults, seriously

[[Page 80331]]

disabled military veterans and adults with significant musculoskeletal
or central nervous system impairments.
Because commenters noted that these assessments were generally
administered during E/M services, they were receptive to making both
CPT codes 96160 and 96161 add-on codes to E/M services.
Response: After considering comments, we believe that CPT codes
96160 and 96161 describe services that, in particular cases, can be
necessary components of services furnished to Medicare beneficiaries.
While we recognize that in many cases we have previously assigned non-
payment indicators to codes that describe interactions with caregivers,
we also note that we have also recognized that in current medical
practice, practitioner interaction with caregivers is an integral part
of treatment for some patients. Accordingly, the descriptions for
several payable codes under the PFS include direct interactions between
practitioners and caregivers.
In developing our proposal regarding the payment disposition of
this code, we noted that it singularly described a service administered
to a caregiver. However, based on public comments, including the
receptivity to our assignment of add-on code status, we understand that
in actual practice, this service is integrated with E/M visits under
particular circumstances. Consequently, we believe the appropriate
payment status for the code should be determined by looking at the
overall service as described by the two codes together. We agree with
commenters, then, that there are circumstances where this service is an
essential part of a service to a Medicare beneficiary. Therefore, we
are assigning an active payment status to both codes for CY 2017. We
are also establishing use of the RUC recommended values for these
codes. We are also assigning an add-on code status to both of these
services. As add-on codes, CPT codes 96160 and 96161 describe
additional resource components of a broader service furnished to the
patient that are not accounted for in the valuation of the base code.
(55) Reflectance Confocal Microscopy (CPT Codes 96931, 96932, 96933,
96934, 96935, and 96936)
For CY 2015, the CPT Editorial Panel established six new Category I
codes to describe reflectance confocal microscopy (RCM) for imaging of
skin. For CPT codes 96931 and 96933, the specialty society and the RUC
agreed that the physician work required for both codes were identical,
and therefore, should be valued the same. The RUC recommended a work
RVU of 0.80 for CPT codes 96931 and 96933 based on the 25th percentile
of the survey. Based on the similarity of the services being performed
in CPT codes 96931 and 96933 and the identical intra-service times of
96931, 96933 and 88305, the key reference code from the survey, we
believe a direct crosswalk from CPT code 88305 to CPT codes 96931 and
96933 would more accurately reflect the work involved in furnishing the
procedure. Therefore, for CY 2017, we proposed a work RVU of 0.75 for
CPT codes 96931 and 96933. In addition, we proposed removing 3 minutes
of preservice time from CPT codes 96931 and 96933 since it is not
included in CPT code 88305 and as a result, we did not believe it was
appropriate in CPT codes 96931 and 96933.
For CPT codes 96934 and 96936, the specialty society and the RUC
agreed that the physician work required for both codes were identical,
and therefore, should be valued the same. In its recommendation, the
RUC stated that it believed the survey respondents somewhat
overestimated the work for CPT code 96934 with the 25th percentile
yielding a work RVU of 0.79. Consequently, the RUC reviewed the survey
results from CPT code 96936 and agreed that the 25th percentile work
RVU of 0.76 accurately accounted for the work involved for the service.
Therefore, the RUC recommended a work RVU of 0.76 for CPT codes 96934
and 96936.
We believe that the incremental difference between the RUC-
recommended values for the base and add-on codes accurately captures
the difference in work between the code pairs. However, because we
valued the base codes differently than the RUC, we proposed values for
the add-on codes that maintain the RUC's 0.04 increment instead of the
RUC-recommended values. Therefore we proposed a work RVU of 0.71 for
CPT codes 96934 and 96936.
We also proposed to reduce the preservice clinical labor for
``Patient clinical information and questionnaire reviewed by
technologist, order from physician confirmed and exam protocoled by
physician'' for CPT codes 96934 and 93936 as this work is performed in
the two base CPT codes 93931 and 93933. We proposed to reduce the
service period clinical labor for ``Prepare and position patient/
monitor patient/set up IV'' from 2 to 1 minute for CPT codes 93934 and
93936 since we believed that less positioning time is needed with
subsequent lesions. We proposed to refine the service period clinical
labor for ``Other Clinical Activity--Review imaging with interpreting
physician'' to zero minutes for CPT codes 96933 and 96936 as these are
interpretation and report only codes and not image acquisition.
Comment: Several commenters, including the RUC, objected to the
proposed valuations for CPT codes 96931, 96933, 96934, and 96936. The
RUC disagreed with pre-service time being removed from a survey code
simply due to a key reference code not also having pre-service time.
The RUC stated CPT codes 96931 and 96933 are distinct procedures from
CPT codes 88305 and the CMS proposal to remove 3 minutes of pre-time
from the base RCM codes was grounded on faulty logic. The RUC stated
its agreement with the specialty society that 3 minutes of preservice
time was necessary for the physician to review clinical history and
referral information. The RUC further stated with the 3 minutes of pre-
service time in its recommendation for the RCM base codes were
appropriately in line with top key reference CPT code 88305 and urged
CMS to accept the survey 25th percentile work RVUs for CPT codes 96931,
96933, 96934, and 96936. Other commenters stated there were very
significant differences in the technologies used and the work involved
between the procedures of CPT code 88305, the key reference code, and
CPT codes 96931 and 96933, with CPT codes 96931 and 96933 being more
complex procedures.
One commenter stated CMS incorrectly removed technician time for
``Other Clinical Activity--Review imaging with interpreting physician''
for CPT codes 96933 and 96936 noting the technician still must review
the imaging with the interpreting physician and urged CMS to accept the
RUC recommendations.
Response: After consideration of comments received, we agree with
the commenters and will finalize the RUC-recommended work RVUs of 0.80,
0.80, 0.76, and 0.76 for CPT codes 96931, 96933, 96934 and 96936;
respectively. We will also restore the 3 minutes of preservice time to
CPT codes 96931 and 96933.
(56) Evaluative Procedures for Physical Therapy and Occupational
Therapy (CPT Codes 97161, 97162, 97163, 97164, 97165, 97166, 97167,
97168)
For CY 2017, the CPT Editorial Panel deleted four CPT codes (97001,
97002, 97003, and 97004) and created eight new CPT codes (97161-97168)
to describe the evaluative procedures furnished by physical therapists
and

[[Page 80332]]

occupational therapists. There are three new codes, stratified by
complexity, to replace a single CPT code 97001, for physical therapy
(PT) evaluation, and three new codes, also stratified by complexity, to
replace a single code CPT code 97003, for occupational therapy (OT)
evaluation, and one new code each to replace the re-evaluation codes
for physical and occupational therapy, CPT codes 97002 and 97004. Table
23 includes the long descriptors and the required components of each of
the eight new CPT codes for the PT and OT services.
The CPT Editorial Panel's creation of the new codes for PT and OT
evaluative procedures grew out of a CPT workgroup that was originally
convened in January 2012 when contemplating major revision of the
Physical Medicine and Rehabilitation CPT section of codes in response
to our nomination of therapy codes as potentially misvalued codes,
including CPT code 97001 (and, as a result, all four codes in the
family) in the CY 2012 PFS proposed rule.
In reviewing the eight new CPT codes for evaluative procedures, the
HCPAC forwarded recommendations for work RVUs and direct PE inputs for
each code. Currently, CPT codes 97001 and 97003 both have a work RVU of
1.20, and CPT codes 97002 and 97004 both have a work RVU of 0.60. These
CPT codes have reflected the same work RVUs since CY 1998 when we
accepted the HCPAC values during CY 1998 rulemaking.
i. Valuation of Evaluation Codes
In the CY 2017 PFS proposed rule, we noted that the HCPAC submitted
work RVU recommendations for each of the six new PT and OT evaluation
codes. These recommendations are intended to be work neutral relative
to the valuation for the previous single evaluation code for PT and OT,
respectively. However, that assessment for each family of codes is
dependent on the accuracy of the utilization forecast for the different
complexity levels within the PT or OT family. As used in this section,
work neutrality is distinct from the budget neutrality that is applied
broadly in the PFS. Specifically, work neutrality is intended to
reflect that despite changes in coding, the overall amount of work RVUs
for a set of services is held constant from one year to the next. For
example, if a service is reported using a single code with a work RVU
of 2.0 for one year but that same service would be reported using two
codes, one for ``simple'' and another for ``complex'' in the subsequent
year valued at 1.0 and 3.0 respectively, work neutrality could only be
attained if exactly half the services were reported using each of the
two new codes. If more than half of the services were reported using
the ``simple'' code, then there would be fewer overall work RVUs. If
more than half of the services were reported using the ``complex''
code, then there would be more overall work RVUs. Therefore, work
neutrality can only be assessed with an understanding of the relative
frequency of how often particular codes will be reported.
The HCPAC recommended a work RVU of 0.75 for CPT code 97161, a work
RVU of 1.18 for CPT code 97162, and a work RVU of 1.5 for CPT code
97163. The PT specialty society projected that the moderate complexity
evaluation code would be reported 50 percent of the time because it is
the typical evaluation, and the CPT codes for the low and high
complexity evaluations are each expected to be billed 25 percent of the
time. The HCPAC-recommended work RVU of 1.18 for CPT code 97162
represents the survey median with 30 minutes of intraservice time, 10
minutes of preservice time, and 15 minutes postservice time. The HCPAC
notes this work value is appropriately ranked between levels 2 and 3 of
the E/M office visit codes for new patients.
The HCPAC recommended a work RVU of 0.88 for CPT code 97165, a work
RVU of 1.20 for CPT code 97166, and a work RVU of 1.70 for CPT code
97167. For the OT codes, work neutrality would be achieved only with a
projected utilization in which the low complexity evaluation is billed
50 percent of the time; the moderate complexity evaluation is billed 40
percent of the time, and the high complexity evaluation only billed 10
percent of the time. For purposes of calculating work neutrality, the
HCPAC recommended assuming that the low complexity code will be most
frequently reported even though the HCPAC-recommended work RVU of 1.20
and 45 minutes of intraservice time for moderate complexity code is
identical to that of the current OT evaluation code. The HCPAC believes
that the work RVU of 1.20 is appropriately ranked between 99202 and
99203, levels 2 and 3 for E/M office visits for new outpatients.
ii. Valuation of Evaluation Codes and Discussion of PAMA
In our review of the HCPAC recommendations, we noted the work
neutrality and the inherent reliance on the utilization assumptions. We
considered the three complexity levels for the PT evaluations and the
three complexity levels for the OT evaluations; and we also considered
the evaluation services described by the codes as a whole. The varying
work RVUs and the dependence on utilization for each complexity level
to ensure work neutrality in the PT and OT code families make it
difficult for us evaluate the HCPAC's recommended values or to predict
with a high degree of certainty whether physical and occupational
therapists will actually bill for these services at the same rate
forecast by their respective specialty societies.
We were concerned that the coding stratification in the PT and OT
evaluation codes may result in upcoding incentives, especially while
physical and occupational therapists gain familiarity and expertise in
the differential coding of the new PT and OT evaluation codes that now
include the typical face-to-face times and new required components that
are not enumerated in the current codes. We were also concerned that
stratified payment rates may provide, in some cases, a payment
incentive to therapists to upcode to a higher complexity level than was
actually furnished to receive a higher payment.
We understood that there may be multiple reasons for the CPT
Editorial Panel to stratify coding for OT and PT evaluation codes based
on complexity. We also noted that the codes will be used by payers in
addition to Medicare, and other payers may have direct interest in
making such differential payment based on complexity of OT and PT
evaluation. Given our concerns regarding appropriate valuation, work
neutrality, and potential upcoding, however, we did not believe that
making different payment based on the reported complexity for these
services is, at current, advantageous for Medicare or Medicare
beneficiaries.
Given the advantages inherent and public interest in using CPT
codes once they become part of the code set, we proposed to adopt the
new CPT codes for use in Medicare for CY 2017. However, given our
concerns about appropriate pricing and payment for the stratified
services, we proposed to price the services described by these
stratified codes as a group instead of individually. To do that, we
proposed to utilize the authority in section 220(f) of the Protecting
Access to Medicare Act (PAMA), which revised section 1848(c)(2)(C) of
the Act to authorize the Secretary to determine RVUs for groups of
services, rather than determining RVUs at the individual service level.
We believed that using this authority instead of proposing to make
payment based on Medicare G-codes will preserve consistency in the code
set

[[Page 80333]]

across payers, thus lessening burden on providers, while retaining
flexibilities that are beneficial to Medicare.
We proposed a work RVU of 1.20 for both the PT and the OT
evaluation groups of services. We proposed this work RVU because we
believed it best represents the typical PT and OT evaluation. This is
the value recommended by the HCPAC for the OT moderate complexity
evaluation and nearly the same work RVU for corresponding PT evaluation
(1.18). Additionally, a work RVU of 1.20 is the long-standing value for
the current evaluation codes, CPT codes 97001 and 97003, and thus,
assures work neutrality without reliance on particular assumptions
about utilization, which we believed was the intent of the HCPAC
recommendation.
Because we proposed to use the same work RVU for the six evaluation
codes, we are not addressing any additional concerns about the
utilization assumptions recommended to us. Because we proposed the same
work values for each code in the family, there will be no ratesetting
impact to work neutrality. As such, we are not revising the utilization
crosswalks as projected by the respective therapy specialties to
achieve work neutrality. However, were we to value each code in the PT
or OT evaluation families individually, we would seek objective data
from stakeholders to support the utilization crosswalks, particularly
those for the OT family in which the low-level complexity evaluation is
depicted as typical and the high complexity is projected to be billed
infrequently at 10 percent of the overall number of OT evaluations.
We proposed to use the direct PE inputs forwarded by the HCPAC
(with the refinements described below) for the moderate complexity PT
and OT evaluations in the development of PE RVUs for the PT and OT
codes as a group of services. For the PT codes, we proposed to use the
recommended inputs for the moderate complexity code for the direct PE
inputs of all three codes based on its assumption as the typical
service. Our proposed direct PE inputs reflect the recommended values
minus 2 minutes of physical therapist assistant (PTA) time in the
service period because we believe that PTA tasks to administer certain
assessment tools are appropriately included as part of the physical
therapist's work and the time of the PTA to explain and score self-
reported outcome measures is not separately included in the clinical
labor of other codes. We proposed to include the recommended four
sheets of laser paper without an association to a specific equipment
item, but we solicited comment regarding the paper's use.
For the OT evaluation codes, we considered proposing to use the
direct PE inputs for the low complexity evaluation because the OT
specialty organization believes it represents the typical OT evaluation
service with a projected 50 percent utilization rate. However, we
proposed to use the moderate-level direct inputs instead, because the
direct PE for this level is based on a vignette that is valued with the
same intraservice time, 45 minutes, as the current code, CPT code
97003. Consequently, we proposed to use the recommended direct PE
inputs for the moderate complexity code for use in developing PE RVUs
for this group of services.
Our proposed direct PE inputs reflect the recommended values minus
2 minutes of occupational therapist assistant (OTA) time in the service
period because we believe that OTA tasks to administer certain
assessment tools are appropriately included as part of the occupational
therapist's work and the time of the OTA to explain and score self-
reported outcome measures is not separately included in the clinical
labor of other codes. We also rounded up the recommended 6.8 minutes to
7 minutes to represent the time the OTA assists the occupational
therapist during the intraservice time period. For the Vision Kit
equipment item, our proposed price reflects the submitted invoice that
clearly defined a kit.
iii. Valuation of Re-evaluation Codes
The recommendations the HCPAC sent to us for the PT and OT re-
evaluation codes are not work neutral. For the new PT re-evaluation
code, CPT code 97164, the HCPAC recommended a work RVU of 0.75 compared
to the work RVU of 0.60 for CPT code 97002. This recommended work RVU
falls between the 25th percentile of the survey and the survey's median
value and was based on a direct crosswalk to CPT code 95992 for
canalith repositioning with 20 minutes intraservice time and 10 minutes
immediate postservice time. The HCPAC supported this 0.15 work RVU
increase based on an anomalous relationship between PT services and E/M
office visit codes for established patients, noting that physician E/M
codes have historically been used as a relative comparison. The HCPAC
stated its recommendation of a work RVU of 0.75 for CPT code 97164
appropriately ranks it between the key reference codes for this
service, CPT codes 99212 and 99213, levels 2 and 3 E/M office-visit
codes for established patients.
The HCPAC provided a work RVU of 0.80 for the OT re-evaluation
code, CPT code 97168, based on the 25th percentile of the survey, which
represents an increase over the current work RVU of 0.60 for CPT code
97004. This work value includes 30 minutes of intraservice time, 5
minutes preservice time, and 10 minutes immediate postservice time. The
HCPAC noted that the increase in work compared to the PT re-evaluation
code (0.75) is because the occupational therapist spends more time
observing and assessing the patient and, in general, the OT patient
typically has more functional and cognitive disabilities. The HCPAC
recommendation notes that the 0.80 work RVU recommendation
appropriately ranks it between the level 1 and 2 E/M office-visit codes
for new patients.
The HCPAC's recommended increases to work RVUs for the PT and OT
re-evaluation codes are not work neutral. We are unclear why the HCPAC
did not maintain work neutrality for the OT and PT re-evaluation codes
since maintaining work neutrality was important to the establishment of
the six new evaluation codes. We proposed to maintain the overall work
RVUs for these services by proposing a work RVU of 0.60 for CPT codes
97164 and 97168, consistent with the work RVUs for the deleted re-
evaluation codes. We solicited comments from stakeholders on whether
there are reasons that the re-evaluation codes should be revalued
without regard to work neutrality.
We proposed the HCPAC-recommended direct PE inputs for CPT code
97164 with a reduction in time for the PTA by 1 minute (from 5 to 4) in
the service period--the line for ``Other Clinical Activity''--because
the time to explain and score the self-reported outcome measure (for
example, Oswestry) is not separately included in the clinical labor of
other codes.
We proposed the HCPAC-recommended direct PE inputs for CPT code
97168 with a reduction in time for the OTA by 1 minute (from 3 to 2) in
the service period--the line for ``Other Clinical Activity''--for the
same reason we proposed to reduce the corresponding line for PTAs--
because the time to explain and score any patient-self-administered
functional and other standardized outcome measure is not separately
included in the clinical labor of other codes.
Because the new CPT code descriptors contain new coding
requirements for each complexity level, we solicited comment from the
PT and

[[Page 80334]]

OT specialty organizations, as well as other stakeholders to clarify
how therapists will be educated to distinguish the required complexity
level components and the selection of the number of elements that
impact the plan of care. For example, for the OT codes, we invited
comment on how to define performance deficits, what process the
occupational therapist uses to identify the number of these performance
deficits that result in activity limitations, and performance factors
needed for each complexity level. For the PT codes, we sought more
information about how the physical therapist differentiates the number
of personal factors that actually affect the plan of care. We were also
interested in understanding more about how the physical therapist
selects the number of elements from any of the body structures and
functions, activity limitations, and participation restrictions to make
sure there is no duplication during the physical therapist's
examination of body systems.
The following is summary of the comments we received:
Comment: Several commenters disagreed with our proposal to accept
the new CPT codes for PT and OT evaluations and re-evaluations and
urged us to keep the current four-code set. A few of these commenters
noted our proposal to accept the stratified code sets for PT and OT
evaluations would increase the administrative burden associated with
documentation and education training of therapists, billers and coders.
Other commenters believed that CMS should first implement the new
complexity-defined CPT code set on a demonstration or pilot project
basis before we apply it nationally. One commenter proposed that,
rather than accepting the new CPT eight-code set with varying
descriptors for each PT and OT complexity level, we adopt just two
codes that both the PT and OT disciplines could use: a code for PT/OT
evaluation and another for PT/OT re-evaluation. Another commenter told
us that ``implementation of the complex scheme for determining the
evaluation level will excessively complicate patient evaluations where
clinicians will require more mental effort to meet the demands of the
documentation with less time and attention directed at treating the
patient.'' One commenter suggested that instead of implementing the
stratified code sets, CMS should develop an alternative coding and
payment model for therapy services and recommended that we create a
value-based payment program, consistent with the Triple Aim of health
care, which includes reliable and valid outcome and quality measures to
demonstrate the outcome and value of therapy.
Response: We thank the commenters for voicing their concerns about
our adoption of the new CPT codes for PT and OT evaluative procedures
and their alternative coding suggestions. However, we note that we do
not have the authority to change CPT code descriptors or use deleted
codes without creating G-codes to do so. We also note that adopting a
demonstration or pilot program is not a typical CMS payment policy
response to the creation of new CPT codes or code sets. After
considering these comments, we continue to believe that our proposal to
adopt the eight new CPT codes for use in Medicare for CY 2017, rather
than retain the current coding structure by creating G-codes, is the
best option given the advantages inherent and public interest in using
the CPT codes once they become part of the code set. As such, we are
finalizing our proposal to adopt new CPT codes 97161-97168 for PT and
OT evaluations and re-evaluations.
Comment: Many commenters objected to our proposal to use the PAMA
authority to price the services described by the stratified sets of PT
and OT evaluation codes as a group instead of individually and asked us
to accept or consider the HCPAC work RVU values for each of these six
evaluation services. Some commenters expressed concern that we ignored
the HCPAC recommendations and proposed to maintain the work RVU of
1.20, since the codes have not been reviewed for this purposes in
nearly 20 years. Other commenters stated that CMS, by valuing the PT
and OT evaluation complexity levels with the same work RVUs, was
failing to appropriately align cost and quality as mandated in the ACA
and MACRA.
Because we proposed the same values, a few commenters were
concerned that we failed to discuss the difference in the PT and OT
evaluation services. These commenters told us that the HCPAC
recommendations included higher work RVUs for the OT services because
they reflected greater intraservice times from the surveys, and these
times led, in part, to the HCPAC's belief that the typical patient
receiving OT services is more complex and intense to treat than the
patient receiving PT services. The HCPAC and the OT specialty society
urged us to consider the increase in work RVUs for the OT evaluative
services, indicating in their comments that while the HCPAC
recommendations for the PT evaluations were work-neutral, those for the
OT evaluations were not. The HCPAC requested that we consider the
difference in PT services versus OT services.
Some commenters presumed that our proposal to value the work the
same for each evaluation complexity level was temporary. Another
commenter expressed hope that we did not intend to equally value the PT
high complexity evaluation the same as the low complexity one in
perpetuity. Several commenters requested that CMS describe our future
plans to revisit these code sets and asked that the future proposal for
these payment amounts be subject to public comment. One of these
commenters that favored keeping the current code structure urged us not
to adopt the new CPT codes until we are ready to differentiate payments
based on the complexity of the provided service.
Some commenters told us that our lack of payment stratification for
the three PT and three OT evaluation codes would likely prompt coding
and billing behavioral change by some therapists and other providers of
therapy services. One of these commenters claimed that assigning the
same work RVU to each evaluation complexity level would cause some
providers not to adhere to the new coding stratification which could
result in inaccurate data on the levels being reported. Another
commenter stated that the lack of payment stratification to reflect the
therapist's time and expertise at each complexity level could signal to
therapists that the accurate coding of evaluations is of diminished
interest to CMS. Other commenters stated that the failure to recognize
payment stratification between the complexity levels would be
detrimental to patient care and the practice of therapy, for example,
by reducing incentives for therapists to thoroughly evaluate patients
with multiple and complex conditions who fall into the high complexity
evaluation.
Response: After a review of the comments, we continue to believe
that using the PAMA RVU authority to value the PT and OT evaluation
codes as a group of services is appropriate. Given our concerns about
appropriate pricing and payment for the PT and OT stratified evaluation
services as described in the CY 2017 proposed rule, we are finalizing
our proposal to use the PAMA authority to value services as groups
rather than individually--valuing each complexity level at 1.2 work
RVUs for the PT and OT family of evaluation codes for CY 2017. We
believe this policy has advantages for the Medicare program. It limits
the incentives for and consequences of

[[Page 80335]]

upcoding by therapists and providers, especially as therapists become
more familiar with the new set of codes. Additionally, the policy
assures work neutrality for these PT and OT code families while
allowing us to collect and analyze utilization data of the complexity
levels for possible future rulemaking.
We understand commenters' concerns about the possibility that the
absence of payment stratification in the complexity levels of the PT
and OT evaluations could have an effect on some therapists' coding
behavior in for these services in CY 2017. However, we are also
concerned with the implication that financial incentives are the
primary drivers for accurate coding for a significant number of
therapists, and if that is the case, we believe that implementing
stratified coding would likely encourage upcoding since that is
consistent with the financial incentives. We believe that the
implementation of these new PT and OT code sets carries with it an
inherent change for the therapists furnishing the services since there
will be three complexity levels to replace just one and each new code
contains newly defined necessary components. We also believe that it is
premature to predict how therapists will code and bill the new
complexity levels before therapists gain familiarity with the new
codes.
Comment: We received several comments on utilization assumptions
inherent to the HCPAC recommendations. Several commenters questioned
why we did not treat the HCPAC-recommended utilization assumptions for
the PT and OT complexity-stratified evaluation code sets as we have
historically treated other codes sets that come to us from the HCPAC or
RUC; that is, using the utilization assumptions provided in the
recommendations. The HCPAC explained that if the assumptions are
overestimated, the HCPAC or RUC will examine and determine whether to
recommend reductions.
We received several comments from stakeholders in response to our
statement in the proposed rule that we would request additional
objective data to support the utilization crosswalks, especially for
the OT codes, if we were to value the codes individually for the PT and
OT evaluation complexity levels. In its comments, the OT specialty
society explained that their frequency estimations of the three
complexity levels were based on the most recent utilization frequency
data from the 2014 Medicare utilization from the five percent sample
file. The OT specialty society also stated that it defined the
complexity levels using certain groups of diagnoses and patient types.
The PT specialty society stated that because its survey process
included a broad cross-section of therapists working in the various
Medicare settings, it believed its utilization projections for the low,
moderate and high complexity evaluation were representative. Many
commenters told us because some therapists may not initially code the
complexity levels correctly, that we would need to consider an entire
year of utilization data to ensure its accuracy.
Response: We appreciate the views expressed and the information
that the commenters forwarded to us. However, we continue to have
concerns that therapists, particularly occupational therapists, will
not bill with the same utilization frequencies forecast by their
specialty societies for the low, moderate, and high complexity
evaluations as described in the CY 2017 proposed rule. In other words,
we are concerned with the possibility that we would establish rates
(including for purposes of PFS budget neutrality) that rely on the
national organizations' assessment of what ought to be billed, but
Medicare spending and subsequent PFS budget neutrality assumptions will
reflect actual billing given the financial incentives inherent in
stratified payment. Should we propose to value the evaluation codes
individually in future rulemaking, we would seek additional objective
data at that time. We agree that an entire year of data is likely
needed to appropriately analyze the utilization of these evaluation
services. We appreciate that our historical practice regarding
significant revision of CPT coding scheme has required us to make
significant assumptions regarding utilization for new codes. We note
that in many cases, we have not accepted the assumptions recommended by
specialty societies and the RUC and that we were not pricing groups of
services together in the past.
Comment: Several commenters expressed concern about the new PT and
OT CPT code descriptors, specifically, that each descriptor includes
minimal coding requirements. Several commenters expressed skepticism
that therapists will be able to report the new codes accurately--one of
these commenters believes the new codes rely on subjective clinical
reasoning and decision making that will lead to further significant
coding and audit concerns for CMS. Several commenters told us that they
believe the true complexity of evaluating patients cannot be solely
based on personal factors, comorbidities, performance deficits, or time
requirements. One of these commenters noted that some patients with
multiple comorbidities and body structures involved are not
complicated, while others with few comorbidities and body structures
involved are deceptively very complex, difficult to diagnose and treat.
Another commenter specifically recommended that each PT and OT
evaluation complexity level should have the same timeframes, as well as
the same component requirements. A few commenters voiced concern about
how CMS and our contractors will note these multiple required
components of each CPT code. One commenter noted that an evaluation may
have characteristics that fall between two complexity levels and told
us that it should be up to the clinician to determine which level is
most appropriate. A few commenters noted that the new detailed
requirements that dictate the level of each code's definition may cause
confusion for physical and occupational therapists, especially as they
begin to navigate the new codes.
Response: We appreciate the commenters' concerns about new code
descriptors that detail the minimal required components for each of the
eight new PT and OT evaluative procedures. We realize that it may take
time to train therapists about the various required components of each
new PT and OT evaluative procedure code and we have addressed this
training in the comment and response below. We also appreciate the
commenters' concern that the evaluative process is likely more complex
than the component parts comprising each code's new coding
requirements; however, as noted in the CY 2017 proposed rule, we
proposed to adopt the new CPT codes for PT and OT evaluative procedures
rather than propose a different coding structure using G-codes. We
would like to clarify for the commenters that were concerned about
``time requirements'' in the new PT and OT CPT code descriptors for
evaluative procedures that these ``typical times'' are included as a
frame of reference and do not represent a minimum coding requirement.
Just as the typical times included for each E/M code represent the
physician face-to-face time with the patient, the typical times in the
new PT and OT CPT codes represent the typical face-to-face time of the
physical or occupational therapist with the patient. Regarding the
commenter's concern about evaluations that fall between two complexity
levels, we would note general coding principles applicable to all
codes--that the therapist should select the evaluation complexity level
that best

[[Page 80336]]

represents the furnished service and for which the medical necessity is
clearly documented.
Comment: Many commenters requested that we delay documentation
requirements for the new PT and OT evaluative procedure codes; several
commenters requested a one year reprieve from application of medical
review and audit requirements; and a few commenters requested that we
delay the implementation of the new CPT codes until CY 2018. Most of
these delay requests, commenters told us, were related to the time
needed to educate therapists about the new codes. Most of these
commenters who asked us not to implement new documentation requirements
also supported payment stratification of the complexity levels for the
PT and OT evaluation complexity levels. Concerned about the proposed
lack of payment stratification, the PT specialty society noted in its
comments that it asked CPT to postpone the codes for CPT 2017, but CPT
denied the request. In its comments, the PT society, along with a few
other stakeholders, also asked CMS to delay implementing the new CPT
codes for CY 2017 ``if there is any way possible that does not disrupt
patient care.''
A few commenters say they will need a delay of six months, at a
minimum, to train therapists, since all new descriptors include various
required elements and the typical time for each PT and OT complexity
level and the re-evaluation codes. The majority of commenters, though,
indicated they would need a year for their educational efforts to be
successful. In addition to therapists, a few commenters told us they
would have to educate coders and billers in the use of the new CPT
codes. A few commenters noted the time to implement these new codes
into their billing systems was too short.
The PT and OT specialty societies each told us about their plans to
educate their therapist members and nonmembers to ensure coding
accuracy. Each therapy association has already begun this training,
some of which will include webinars, self-paced online courses,
frequently asked questions, documentation resources, published
articles, etc.
Some commenters asked CMS to work with various stakeholders and to
either establish guidelines or assist in educating therapists about the
new codes through Open Door Forums, MLN articles, etc. Additionally,
they also wanted to work with CMS on LCDs established by contractors.
One commenter stated that CMS must provide clear guidance regarding the
selection of the appropriate level of evaluation services provided by
physical and occupational therapists and the associated documentation
requirements to ensure consistency and appropriate reporting of these
services.
Several commenters asked us to consider a one-year reprieve from
the payment consequences of medical review and audit requirements that
address lack of documentation to support the complexity level of the
code billed.
Response: We understand that implementing the new code sets for PT
and OT evaluative procedures will require time for therapists to be
educated in their proper use. We would like to remind those requesting
we assist in writing guidelines that the CPT manual PM&R subsections
for PT and OT Evaluations contain official CPT guidelines. We
understand the many requests for delay of new documentation
requirements during the initial year of their use. As such, for CY
2017, we will delay changes to our current manual instructions for
documentation for evaluations and re-evaluations in the Medicare
Benefits Policy Manual (MBPM), chapter 15, section 220.3.
We understand and appreciate that the PT and OT specialty societies
are already underway in their educational efforts of therapists, as it
has been our past experience with the implementation of other CPT codes
and code sets that the leading educational role is assumed by the
specialty societies responsible for the code changes.
Comment: We received many comments objecting to our proposal to
maintain a work RVU of 0.60 for the re-evaluation codes. Many
commenters--including therapy specialty societies and organization
representing therapy providers and private practice physical and
occupational therapists, among other stakeholders--disagreed with our
proposal to maintain the work RVUs for the PT and OT re-evaluation
codes and expressed their disappointment that we did not consider or
accept the HCPAC recommendations for increased work RVUs of 0.75 for PT
(CPT code 97164) and 0.8 for OT (CPT code 97168).
One commenter supported increasing the work RVUs, but suggested
that the PT and OT re-evaluation codes should be equally valued for the
relative work, PE and MP RVUs. This same commenter contended that
because the patients treated by the PT and OT disciplines for hand
rehabilitation are the same; that is, have the same functional and
cognitive deficits, the same time and expertise of both physical and
occupational therapists is required to perform a thorough re-
evaluation. The commenter recommended that both re-evaluations reflect
the 30-minute typical time that is inherent to the OT re-evaluation
code.
Several commenters reminded us that the work RVU recommendations
forwarded to us were not considered work neutral because the HCPAC
accepted the PT and OT specialty societies' beliefs as compelling
evidence that the practice of PT and OT have each significantly changed
over the past two decades.
Some commenters reasoned that we should accept the HCPAC-
recommended work RVUs for these codes, in part, because the PT and OT
specialty societies completed the RUC-HCPAC defined survey process,
including time and intensity of the services.
Comments from the HCPAC, the PT and OT specialty societies, and a
few other stakeholders provided the rationale that the practice of PT
and OT has significantly changed since 1997, including the work of
physical therapists and occupational therapists. Some of their
rationale included: (a) advances in technology has created
opportunities for additional types of treatment approaches; and, (b)
the work RVUs for the PT and OT re-evaluation codes have not kept pace
with the relativity of increases in work RVUs of comparable E/M codes
that have historically been used as comparison: In 1997 the 0.60 work
RVUs for CPT codes 97002 and 97004 was 90 percent of that for CPT code
99213; today, it is just 62 percent. Other rationales included ones
often cited by commenters requesting increases in RVUs, including
increased patient acuity and administrative and reporting burdens.
Response: We appreciate the commenters' remarks and the rationale
forwarded in response to our request for comments. After a careful
consideration of the comments, we agree that modification of our
proposal, to recognize the change in practice since 1997 for the work
of physical and occupational therapists, is appropriate. Because we
believe that PT and OT have similar work, though, we are finalizing the
value of both codes at the same work RVUs by assigning a work RVU of
0.75--the HCPAC-recommended work RVU for the PT re-evaluation and the
PT low complexity evaluation.
We would like to take this opportunity to remind physical and
occupational therapists about our manual instructions regarding the
reporting of a both the evaluation and re-evaluation codes (MBPM,
Chapter 15, section 220). Of note, to be separately payable, the re-
evaluation requires a

[[Page 80337]]

significant change in the patient's condition or functional status that
was not anticipated in the plan of care. The MBPM full definitions
follow in Table 22.

Table 22--Full Definitions for MBPM
----------------------------------------------------------------------------------------------------------------
Therapy service Definition
----------------------------------------------------------------------------------------------------------------
EVALUATION............................. EVALUATION is a separately payable comprehensive service provided by a
clinician, as defined above, that requires professional skills to make
clinical judgments about conditions for which services are indicated
based on objective measurements and subjective evaluations of patient
performance and functional abilities. Evaluation is warranted for
example, for a new diagnosis or when a condition is treated in a new
setting. These evaluative judgments are essential to development of
the plan of care, including goals and the selection of interventions.
RE-EVALUATION.......................... RE-EVALUATION provides additional objective information not included in
other documentation. Re-evaluation is separately payable and is
periodically indicated during an episode of care when the professional
assessment of a clinician indicates a significant improvement, or
decline, or change in the patient's condition or functional status
that was not anticipated in the plan of care. Although some state
regulations and state practice acts require re-evaluation at specific
times, for Medicare payment, re-evaluations must also meet Medicare
coverage guidelines.
----------------------------------------------------------------------------------------------------------------

Comment: We received a few comments regarding our PE proposals in
the CY 2017 proposed rule for the PT and OT evaluation and re-
evaluation codes. In its comments, the PT specialty society, in
response to our PE proposal, explained, per our request, the use of the
4 sheets of paper as supply items in the PT evaluation and re-
evaluation codes. The OT specialty society noted that they accepted the
PE refinements we proposed in the proposed rule.
Response: We appreciate the comments from both the PT and OT
specialty societies. We will finalize the PE input changes as proposed
and include them in the calculation of the final PE RVUs of the PT and
OT evaluation and re-evaluation codes.
After considering the comments, in summary, we are finalizing our
proposals to (a) accept the new CPT codes 97161-97168 for PT and OT
evaluative procedures and (b) use the PAMA smoothing authority to value
the PT and OT complexity level evaluations as groups of services rather
than individually by assigning a work RVU of 1.2 to each complexity
level. We are modifying our proposal for the valuation of the PT and OT
re-evaluation codes and are finalizing a work RVU of 0.75 for each
code. Lastly, we are finalizing the PE inputs as proposed.
iv. Always Therapy Codes
It is important to note that CMS defines the codes for these
evaluative services as ``always therapy.'' This means that they always
represent therapy services regardless of who performs them and always
require a therapy modifier, GP or GO, to signify that the services are
furnished under a PT or OT plan of care, respectively. These codes will
also be subject to the therapy MPPR and to statutory therapy caps.

Table 23--CPT Long Descriptors for Physical Medicine and Rehabilitation
------------------------------------------------------------------------
CPT long descriptors for
New CPT code physical medicine and
rehabilitation
------------------------------------------------------------------------
97161.................................. Physical therapy evaluation:
low complexity, requiring
these components:
A history with no
personal factors and/or
comorbidities that impact the
plan of care;
An examination of body
system(s) using standardized
tests and measures addressing
1-2 elements from any of the
following: body structures and
functions, activity
limitations, and/or
participation restrictions;
A clinical
presentation with stable and/
or uncomplicated
characteristics; and
Clinical decision
making of low complexity using
standardized patient
assessment instrument and/or
measurable assessment of
functional outcome.
Typically, 20 minutes are spent
face-to-face with the patient
and/or family.
97162.................................. Physical therapy evaluation:
moderate complexity, requiring
these components:
A history of present
problem with 1-2 personal
factors and/or comorbidities
that impact the plan of care;
An examination of body
systems using standardized
tests and measures in
addressing a total of 3 or
more elements from any of the
following body structures and
functions, activity
limitations, and/or
participation restrictions;
An evolving clinical
presentation with changing
characteristics; and
Clinical decision
making of moderate complexity
using standardized patient
assessment instrument and/or
measurable assessment of
functional outcome.
Typically, 30 minutes are spent
face-to-face with the patient
and/or family.
97163.................................. Physical therapy evaluation:
high complexity, requiring
these components:
A history of present
problem with 3 or more
personal factors and/or
comorbidities that impact the
plan of care;
An examination of body
systems using standardized
tests and measures addressing
a total of 4 or more elements
from any of the following:
body structures and functions,
activity limitations, and/or
participation restrictions;
A clinical
presentation with unstable and
unpredictable characteristics;
and
Clinical decision
making of high complexity
using standardized patient
assessment instrument and/or
measurable assessment of
functional outcome.
Typically, 45 minutes are spent
face-to-face with the patient
and/or family.

[[Page 80338]]

97164.................................. Re-evaluation of physical
therapy established plan of
care, requiring these
components:
An examination
including a review of history
and use of standardized tests
and measures is required; and
Revised plan of care
using a standardized patient
assessment instrument and/or
measurable assessment of
functional outcome.
Typically, 20 minutes are spent
face-to-face with the patient
and/or family.
97165.................................. Occupational therapy
evaluation, low complexity,
requiring these components:
An occupational
profile and medical and
therapy history, which
includes a brief history
including review of medical
and/or therapy records
relating to the presenting
problem;
An assessment(s) that
identifies 1-3 performance
deficits (i.e., relating to
physical, cognitive, or
psychosocial skills) that
result in activity limitations
and/or participation
restrictions; and
Clinical decision
making of low complexity,
which includes an analysis of
the occupational profile,
analysis of data from problem-
focused assessment(s), and
consideration of a limited
number of treatment options.
Patient presents with no
comorbidities that affect
occupational performance.
Modification of tasks or
assistance (eg, physical or
verbal) with assessment(s) is
not necessary to enable
completion of evaluation
component.
Typically, 30 minutes are spent
face-to-face with the patient
and/or family.
97166.................................. Occupational therapy
evaluation, moderate
complexity, requiring these
components:
An occupational
profile and medical and
therapy history, which
includes an expanded review of
medical and/or therapy records
and additional review of
physical, cognitive, or
psychosocial history related
to current functional
performance;
An assessment(s) that
identifies 3-5 performance
deficits (i.e., relating to
physical, cognitive, or
psychosocial skills) that
result in activity limitations
and/or participation
restrictions; and
Clinical decision
making of moderate analytic
complexity, which includes an
analysis of the occupational
profile, analysis of data from
detailed assessment(s), and
consideration of several
treatment options. Patient may
present with comorbidities
that affect occupational
performance. Minimal to
moderate modification of tasks
or assistance (eg, physical or
verbal) with assessment(s) is
necessary to enable patient to
complete evaluation component.
Typically, 45 minutes are spent
face-to-face with the patient
and/or family.
97167.................................. Occupational therapy
evaluation, high complexity,
requiring these components:
An occupational
profile and medical and
therapy history, which
includes review of medical and/
or therapy records and
extensive additional review of
physical, cognitive, or
psychosocial history related
to current functional
performance;
An assessment(s) that
identify 5 or more performance
deficits (i.e., relating to
physical, cognitive, or
psychosocial skills) that
result in activity limitations
and/or participation
restrictions; and
A clinical decision-
making is of high analytic
complexity, which includes an
analysis of the patient
profile, analysis of data from
comprehensive assessment(s),
and consideration of multiple
treatment options. Patient
presents with comorbidities
that affect occupational
performance. Significant
modification of tasks or
assistance (eg, physical or
verbal) with assessment(s) is
necessary to enable patient to
complete evaluation component.
Typically, 60 minutes are spent
face-to-face with the patient
and/or family.
97168.................................. Re-evaluation of occupational
therapy established plan of
care, requiring these
components:
An assessment of
changes in patient functional
or medical status with revised
plan of care;
An update to the
initial occupational profile
to reflect changes in
condition or environment that
affect future interventions
and/or goals; and
A revised plan of
care. A formal reevaluation is
performed when there is a
documented change in
functional status or a
significant change to the plan
of care is required.
Typically, 30 minutes are spent
face-to-face with the patient
and/or family.
------------------------------------------------------------------------

v. Potentially Misvalued Therapy Codes
Since 2010, in addition to the codes for evaluative services, CMS
has periodically added codes that represent therapy services to the
list of potentially misvalued codes. The current list of ten therapy
codes was based on the statutory category ``codes that account for the
majority of spending under the physician fee schedule,'' as specified
in section 1848(c)(2)(K)(ii)(VII) of the Act. We understand that the
therapy specialty organizations have pursued the development of coding
changes through the CPT process for these modality and procedure
services. While we understand that, in some cases, it may take several
years to develop appropriate coding revisions, we are, in the meantime,
seeking information regarding appropriate valuation for the existing
codes. See Table 24.
Comment: We received multiple comments on our nomination of the ten
therapy codes to the potentially misvalued code list. The PT and OT
specialty societies each expressed concern that we issued the
potentially misvalued code list knowing that they are currently working
with the AMA

[[Page 80339]]

Relativity Assessment Workgroup (RAW) to survey and submit CPT changes
to certain intervention codes in the PM&R family, including some codes
on the misvalued code list. Nonetheless, the PT specialty society told
us that it will work with the RUC (as the appropriate venue) this fall
to survey and value the codes; but asked to meet with us in early 2017
to discuss their progress. The OT specialty society stated that it has
already begun work with AMA to expedite valuation surveys for relevant
codes, but also noted its intent to resume work with the RAW to replace
some of the codes on the misvalued code list, including CPT code 97535,
as soon as the misvalued code survey process is complete. In addition,
the OT specialty society noted its belief that CMS staff attendance at
the RAW condoned their timeline for proceeding with various PM&R code
revisions.
A few commenters believe the codes on the potentially misvalued
code list are already valued correctly as the PE inputs for many
therapy codes, including those defined by 15-minute intervals, have
already been adjusted by the PEAC/RUC/HCPAC to account for efficiencies
when billed with other therapy codes. Several commenters cautioned that
any review must also consider that all of these codes are already
subject to a 50 percent MPPR reduction. One commenter believes the work
of CPT code 97140 is undervalued compared to other codes since it
requires the more skilled therapist using manual techniques to touch
the patient.
Response: We will include a valuation discussion during CY 2018
rulemaking of those codes for which we receive RUC recommendations by/
at its February 2017 meeting.

Table 24--Potentially Misvalued Codes Identified Through High
Expenditure by Specialty Screen
------------------------------------------------------------------------
HCPCS code Short descriptor
------------------------------------------------------------------------
97032............................. Electrical stimulation.
97035............................. Ultrasound therapy.
97110............................. Therapeutic exercises.
97112............................. Neuromuscular reeducation.
97113............................. Aquatic therapy/exercises.
97116............................. Gait training therapy.
97140............................. Manual therapy 1/regions.
97530............................. Therapeutic activities.
97535............................. Self care mngment training.
G0283............................. Elec stim other than wound.
------------------------------------------------------------------------

(57) Valuation of Services Where Moderate Sedation is an Inherent Part
of the Procedure and Valuation of Moderate Sedation Services (CPT Codes
99151, 99152, 99153, 99155, 99156, and 99157; and HCPCS Code G0500)
In the CY 2015 PFS proposed rule (79 FR 40349), we noted that it
appeared that practice patterns for endoscopic procedures were
changing. Anesthesia services are increasingly being separately
reported for endoscopic procedures, meaning that resource costs
associated with sedation were no longer incurred by the practitioner
reporting the procedure. Subsequently, in the CY 2016 PFS proposed rule
(80 FR 41707), we solicited public comment and recommendations on
approaches to address the appropriate valuation of moderate sedation
related to the approximately 400 diagnostic and therapeutic procedures
for which the CPT Editorial Panel has determined that moderate sedation
is an inherent part of furnishing the service. The CPT Editorial Panel
created separate codes for reporting moderate sedation services (see
Table 25).

Table 25--Moderate Sedation Codes and Descriptors
------------------------------------------------------------------------
CPT/HCPCS code Descriptor
------------------------------------------------------------------------
99151.............................. Moderate sedation services provided
by the same physician or other
qualified health care professional
performing the diagnostic or
therapeutic service that the
sedation supports, requiring the
presence of an independent trained
observer to assist in the
monitoring of the patient's level
of consciousness and physiological
status; initial 15 minutes of
intra-service time, patient
younger than 5 years of age.
99152.............................. Moderate sedation services provided
by the same physician or other
qualified health care professional
performing the diagnostic or
therapeutic service that the
sedation supports, requiring the
presence of an independent trained
observer to assist in the
monitoring of the patient's level
of consciousness and physiological
status; initial 15 minutes of
intra-service time, patient age 5
years or older.
99153.............................. Moderate sedation services provided
by the same physician or other
qualified health care professional
performing the diagnostic or
therapeutic service that the
sedation supports, requiring the
presence of an independent trained
observer to assist in the
monitoring of the patient's level
of consciousness and physiological
status; each additional 15 minutes
of intra-service time (List
separately in addition to code for
primary service).
99155.............................. Moderate sedation services provided
by a physician or other qualified
health care professional other
than the physician or other
qualified health care professional
performing the diagnostic or
therapeutic service that the
sedation supports; initial 15
minutes of intra-service time,
patient younger than 5 years of
age.
99156.............................. Moderate sedation services provided
by a physician or other qualified
health care professional other
than the physician or other
qualified health care professional
performing the diagnostic or
therapeutic service that the
sedation supports; initial 15
minutes of intra-service time,
patient age 5 years or older.
99157.............................. Moderate sedation services provided
by a physician or other qualified
health care professional other
than the physician or other
qualified health care professional
performing the diagnostic or
therapeutic service that the
sedation supports; each additional
15 minutes intra-service time
(List separately in addition to
code for primary service).
------------------------------------------------------------------------

For the newly created moderate sedation CPT codes, we proposed to
use the RUC-recommended work RVUs for CPT codes 99151, 99152, 99155,
and 99157. We stated in the CY 2017 proposed rule that CPT codes 99151
and 99152 make a distinction between moderate sedation services
furnished to patients younger than 5 years of age and patients 5 years
or older, with CPT codes 99155 and 99156 making a similar distinction.
The RUC recommendations included a work RVU increment of 0.25 between
CPT codes 99151 and 99152. For CPT code 99156, we proposed a work RVU
of 1.65 to maintain the 0.25 increment relative to CPT code 99155 (a
RUC-recommended work RVU of 1.90) and maintain relativity among the CPT
codes in this family. We proposed to use the RUC-recommended direct PE
inputs for all six codes.
We stated in the CY 2017 proposed rule that when moderate sedation
is reported for Medicare beneficiaries, we expect that it would most
frequently be reported using the code that describes moderate sedation
furnished by the same person who also performs the primary procedure
for patients 5 years

[[Page 80340]]

of age or older. Under the new coding structure, these moderate
sedation services would be reported using CPT code 99152, for which we
proposed a work RVU of 0.25, consistent with the RUC recommendations
for this code. Stakeholders presented information that illustrated that
the specialty group survey data regarding the work involved in
furnishing moderate sedation described by CPT code 99152 showed a
significant bimodal distribution between procedural services furnished
by gastroenterologists (GI) and those services furnished by other
specialties. The GI societies' survey data reported a median valuation
of 0.10 work RVUs for moderate sedation furnished by the same person
furnishing the base procedure. Given the significant volume of moderate
sedation furnished by GI practitioners and the significant difference
in RVUs reported in the survey data, we proposed to make payment using
a GI endoscopy-specific moderate sedation code (HCPCS code G0500) that
would be used in lieu of the new CPT moderate sedation coding for use
with other services.
G0500: moderate sedation services provided by the same
physician or other qualified health care professional performing a
gastrointestinal endoscopic service (excluding biliary procedures) that
sedation supports, requiring the presence of an independent trained
observer to assist in the monitoring of the patient's level of
consciousness and physiological status; initial 15 minutes of intra-
service time; patient age 5 years or older.
We proposed to value HCPCS code G0500 at 0.10 work RVUs based on
the median survey result for GI respondents in the survey data. We
proposed that when moderate sedation services are furnished by the same
practitioner reporting the GI endoscopy procedure, practitioners would
report the sedation services using HCPCS code G0500 instead of CPT code
99152. In all other cases, we proposed that practitioners would report
moderate sedation using one of the new moderate sedation CPT codes
consistent with CPT guidance. This would include the full range of
codes for those furnishing moderate sedation with the remaining (non-GI
endoscopy) base procedures, as well as for the other circumstances
during which moderate sedation is furnished along with a GI endoscopy
(for example, to a patient under 5 years of age or for a biliary
procedure, the endoscopist furnishing moderate sedation should not use
HCPCS code G0500, but instead use the appropriate CPT code.
In addition to proposing work RVUs for the new codes used to
separately report moderate sedation, we stated in the proposed rule
that the RUC provided recommendations that valued the procedural
services without moderate sedation. However, the RUC recommended
removing fewer RVUs from the procedures than it recommended for valuing
the moderate sedation services that were removed from the procedure
codes. In other words, the RUC recommended that overall payments for
these procedures should be increased now that practitioners would be
required to report the sedation services that were previously included
as inherent parts of the procedures. We stated in the proposed rule
that we believe that if we were to use the RUC recommendations for
revaluation of the procedural services without refinement, the RVUs
currently attributable to the redundant payment for sedation services
when anesthesia is separately reported would be used exclusively to
increase overall payment for these services. We refer readers to
section II.D.5. of this final rule, which includes a more extensive
discussion of our general principle that overall resource costs for
procedures that include moderate sedation do not inherently change
based solely on changes in coding.
To account for the separate billing of moderate sedation services,
we proposed to maintain current values for the procedure codes less the
work RVUs associated with the most frequently reported corresponding
moderate sedation code so that practitioners furnishing the moderate
sedation services previously considered to be inherent in the procedure
would have no change in overall work RVUs. Since we proposed 0.10 work
RVUs for moderate sedation for the GI endoscopy procedures, we proposed
a corresponding 0.10 reduction in work RVUs for these same procedures.
For all other Appendix G procedures that currently include moderate
sedation as an inherent part of the procedure, we proposed to remove
0.25 work RVUs from the current values.
We received 22 comments from medical professionals, ambulatory
surgical centers (ASCs), manufacturers, and professional medical
specialty societies representing radiation oncology, brachytherapy,
colon and rectal surgeons, certified registered nurse anesthetists
(CRNAs), pediatrics, cardiology, thorasic surgery, general surgery,
gastroenterology, emergency medicine, interventional radiology, and
vascular surgery. Commenters were generally supportive of CMS'
proposals related to valuation of the new moderate sedation codes. A
few commenters disagreed with our proposed refinements for one of the
new moderate sedation CPT codes. While most commenters were supportive
of CMS' proposal to use a methodology to revalue the procedural
services without moderate sedation, some commenters suggested that we
should revalue certain procedures differently (for example, apply a
lower work RVU reduction or make no reduction). A few commenters were
opposed to separate reporting of moderate sedation and suggested
alternatives for CMS to consider. Our responses to commenters' specific
issues are included below.
Comment: Many commenters expressed support for CMS' proposal to
accept the RUC's recommendations for new moderate sedation CPT codes
99151, 99152, 99153, 99155, and 99157. Several commenters, including
the RUC and medical specialty societies, disagreed with CMS' proposal
to value CPT code 99156 at 1.65 work RVUs. Commenters requested that
CMS finalize the RUC-recommended work RVU of 1.84 (the 25th percentile
survey result). Commenters stated that there were clinical differences
in the typical patients that receive services that would be reported
using CPT code 99156, disagreeing with CMS' proposal to reduce the work
RVU for CPT code 99156 to maintain relativity among the code pairs in
this family. Commenters suggested that CPT code 99156 would be used to
report moderate sedation services that are currently reported using CPT
code 99149. Commenters stated that CPT code 99149 was typically
performed in the emergency department (approximately 58 percent of the
time), indicating that the typical patient is either acutely ill or
injured, and that moderate sedation services are typically performed
without support staff, which commenters suggested further justified a
work RVU of 1.84 for CPT code 99156.
Response: The code descriptors for each of the new moderate
sedation CPT codes make distinctions between the ages of the patients
and the clinical staff involved in furnishing the moderate sedation
services. The typical patient vignettes used in the specialty
societies' surveys did not indicate clinical differences between
patients receiving moderate sedation services reported using CPT code
99156 compared to services reported with CPT code 99155. Additionally,
the typical patient vignettes for CPT codes 99151 and 99152 did not
indicate clinical differences in the patients. We continue to believe
that the work RVU increment of 0.25 should be maintained between CPT
codes 99155 and 99156 since these

[[Page 80341]]

codes have the same younger than age 5/older than age 5 dynamic as
described by CPT codes 99151 and 99152.
Therefore, for CY 2017, we are finalizing work RVUs for the
moderate sedation codes as follows:
Work RVU of 0.50 for CPT code 99151;
Work RVU of 0.25 for CPT code 99152;
Work RVU of 1.90 for CPT code 99155;
Work RVU of 1.65 for CPT code 99156; and
Work RVU of 1.25 for CPT code 99157.
We note that CPT code 99153 is a PE-only code and we are finalizing
the proposed PE inputs for CPT code 99153, as well as finalizing the
proposed PE inputs for all other codes in this family without
modification.
Comment: While many commenters supported use of a methodological
approach to revaluing Appendix G procedural services, some commenters
disagreed with CMS' proposed refinements to the RUC's recommended
methodology. Commenters suggested that the RUC's approach was
consistent with how the services were originally valued and was budget
neutral within these services. The RUC, along with several commenters
representing specialty medical societies, requested that CMS use the
same RUC-approved two-tier methodology for removing work RVUs
associated with the work of moderate sedation from Appendix G services
based on whether the code was assigned to one of two preservice time
packages used by the RUC in developing recommendations. Using the same
two-tier methodology, the RUC suggested removal of 0.10 work RVUs for
some GI services and 0.19 work RVUs from other GI services, depending
on the RUC's assignment of pre-service time.
Response: We understand that some stakeholders would prefer that we
use the RUC's recommendations so that the RVUs currently attributable
to the redundant payment for sedation services when anesthesia is
separately reported would be used exclusively to increase overall
payment for these services. We also understand that the RUC assumes
that the amount of pre-service time for particular services may reflect
a different level of preparation required for sedation services.
However, we continue to believe that the overall resource costs for the
procedures including moderate sedation do not inherently change based
solely on changes in coding, so we do not believe that our assignment
of overall work RVUs should increase in cases where the moderate
sedation is performed by the proceduralists, as previously assumed.
Therefore, we believe that a different amount of work RVUs should be
removed from the Appendix G services only in cases where the typical
moderate sedation code also has a different amount of assigned work
RVUs, such as the case with codes that would be reported with G0500. In
other words, we believe that there should be a direct relationship, for
each code, between the work RVUs attributable to moderate sedation,
regardless of whether it is automatically included in payment for a
given procedure (at current) or separately reported (as proposed).
Comment: A few commenters expressed concerns that the proposed
revaluation methodology would disturb the relativity of many of the
Appendix G codes, along with the increasing administrative burden by
requiring separate reporting of the procedural and moderate sedation
services. Other commenters suggested that CMS consider alternatives
including only addressing revaluation of Appendix G services where
moderate sedation is no longer inherent or only those procedural
services reported with separate anesthesia services the majority of the
time.
Response: We appreciate the concerns of commenters regarding both
the issues of relativity within families of codes, as well as concerns
regarding administrative burden. However, we believe that it serves
relativity to maintain the overall work RVUs for each of the services
when reported with moderate sedation, which would be typical for many
of these codes. While we understand the value in reducing the number of
codes required to be reported for payment under the PFS, we also
believe that it is important that the coding be granular enough to
allow us to identify which services are furnished to Medicare
beneficiaries by which practitioners. It is also clear to us that the
accuracy of the assumption of moderate sedation as inherent for
particular procedures may change over time, as we have seen reflected
in the claims data. We do not believe that a shifting set of services
where moderate sedation values are alternatively included or not
included in the valuation of particular codes based on annual analysis
of claims data would be likely to be administratively easier for
practitioners.
Comment: A few commenters requested that CMS not finalize its
proposal to reduce the work RVUs for certain procedures. Some
commenters indicated that certain codes identified in Appendix G were
valued before Appendix G was established, or the work of moderate
sedation was not included in the valuation of certain procedures.
Response: We appreciate the commenters' feedback regarding our
proposals. We remind stakeholders that the potentially misvalued code
process is intended to improve the accuracy of the RVUs assigned to
particular codes. We welcome feedback from interested individuals,
stakeholders, and specialty societies regarding the valuation of
specific codes for consideration in future rulemaking.
Comment: A few commenters stated that CMS did not provide a
rationale to support that moderate sedation furnished with GI endoscopy
services required less work than moderate sedation furnished with other
Appendix G procedures.
Response: Our proposal was based on the GI societies' survey data
included in the RUC recommendations that reported a median valuation of
0.10 work RVUs for moderate sedation furnished by the same person
furnishing the base procedure.
Comment: A few commenters suggested that creation of HCPCS code
G0500 would cause confusion among practitioners since the new CPT codes
developed to report moderate sedation do not differentiate between GI
and non-GI procedures. One commenter stated that HCPCS code G0500 is
time based, and therefore, to report the code, at least 50 percent of
the time (7.5 minutes) is required, but the GI subset of data that CMS
accepted to create the HCPCS code G0500 indicates an intraservice time
of 5 minutes. The commenter went on to state that it would appear that
a majority of the GI endoscopists would never be able to report HCPCS
code G0500.
Response: We expect that practitioners will report the appropriate
CPT or HCPCS code that most accurately describes the services performed
during a patient encounter, including those services performed
concurrently and in support of a procedural service consistent with CPT
guidance. We note that the commenter refers to the time for moderate
sedation in the survey data, while the time thresholds for the moderate
sedation codes are intended to match the intraservice time of the
procedure itself. We reviewed the intraservice time assumptions for the
procedure codes, and only one includes an intraservice time as low as
7.5 minutes and none lower. Table 26 identifies the GI endoscopic
services for which HCPCS code G0500 will be used to report moderate
sedation services (available in the ``downloads'' section of the PFS

[[Page 80342]]

Web site at https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html).
Comment: Several commenters disagreed with CMS' proposal to revalue
Appendix G esophageal dilation, biliary endoscopy, and ERCP procedures
minus 0.25 work RVUs instead of minus 0.10 work RVUs, similar to other
endoscopy services identified in Appendix G. Commenters requested that
CMS only reduce these procedural services with a 0.10 work RVU
reduction, and allow reporting of moderate sedation using HCPCS code
G0500, similar to other endoscopy procedures identified in Appendix G.
Response: While we continue to believe that the moderate sedation
work for Appendix G esophageal dilation, biliary endoscopy, and ERCP
procedures is more extensive than for other endoscopy procedures
identified in Appendix G, for CY 2017, after considering the comments,
we are finalizing a revaluation of certain esophageal dilation, biliary
endoscopy, and ERCP procedures minus 0.10 work RVUs instead of the 0.25
work RVU reduction as proposed (see Table 26 for additional
information). We will continue to monitor claims data related to
separately billed anesthesia services performed in conjunction with
these procedures to inform future rulemaking related to the valuation
of these codes. We are also modifying the code descriptor for HCPCS
code G0500 to reflect these changes. Therefore, we are finalizing the
descriptor for HCPCS code G0500 as:
G0500: Moderate sedation services provided by the same
physician or other qualified health care professional performing a
gastrointestinal endoscopic service that sedation supports, requiring
the presence of an independent trained observer to assist in the
monitoring of the patient's level of consciousness and physiological
status; initial 15 minutes of intra-service time; patient age 5 years
or older. (additional time may be reported with 99153, as appropriate).
Comment: Some commenters requested that CMS provide practitioners
and providers with instructions on use of the newly created moderate
sedation codes, allow for additional time to implement the coding
changes, and provide MACs appropriate claims processing instructions
specific to these codes.
Response: We plan to issue appropriate claims processing
instructions to the local MACs. We do not believe that an
implementation delay is necessary since the new CPT and HCPCS codes
will be effective January 1, 2017 and available for use by
practitioners and providers at that time.
In summary, after consideration of the comments, we are finalizing
our proposed modifications to maintain the current values for the
procedure codes less the work RVUs associated with the most frequently
reported corresponding moderate sedation code. Practitioners furnishing
the moderate sedation services previously considered to be inherent in
the procedure will have no change in overall work RVUs. Since we are
finalizing a work RVU of 0.10 (HCPCS code G0500) for moderate sedation
for the GI endoscopy procedures, we are finalizing a corresponding 0.10
reduction in work RVUs for the corresponding procedural services. For
all other Appendix G procedures that currently include moderate
sedation as an inherent part of the procedure, we are finalizing a 0.25
work RVU reduction from the current values.
Table 26 lists the CY 2016 work RVUs for each applicable service
and our proposed and final CY 2017 refined work RVUs using the
finalized revaluation methodology described above. Additionally, the
table identifies the GI endoscopic services for which HCPCS code G0500
will be used to report moderate sedation services (available in the
``downloads'' section of the PFS Web site at https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html).

Table 26--Valuations for Services Minus Moderate Sedation
----------------------------------------------------------------------------------------------------------------
CY 2017 Use HCPCS code G0500 to
CPT code CY 2016 work proposed work CY 2017 final report moderate sedation
RVU RVU work RVU (Y/N)
----------------------------------------------------------------------------------------------------------------
10030............................... 3.00 2.75 2.75 N
19298............................... 6.00 5.75 5.75 N
20982............................... 7.27 7.02 7.02 N
20983............................... 7.13 6.88 6.88 N
22510............................... 8.15 7.90 7.90 N
22511............................... 7.58 7.33 7.33 N
22512............................... 4.00 4.00 4.00 N
22513............................... 8.90 8.65 8.65 N
22514............................... 8.24 7.99 7.99 N
22515............................... 4.00 4.00 4.00 N
22526............................... 6.10 5.85 5.85 N
22527............................... 3.03 3.03 3.03 N
31615............................... 2.09 1.84 1.84 N
31622............................... 2.78 2.53 2.53 N
31623............................... 2.88 2.63 2.63 N
31624............................... 2.88 2.63 2.63 N
31625............................... 3.36 3.11 3.11 N
31626............................... 4.16 3.91 3.91 N
31627............................... 2.00 2.00 2.00 N
31628............................... 3.80 3.55 3.55 N
31629............................... 4.00 3.75 3.75 N
31632............................... 1.03 1.03 1.03 N
31633............................... 1.32 1.32 1.32 N
31634............................... 4.00 3.75 3.75 N
31635............................... 3.67 3.42 3.42 N
31645............................... 3.16 2.91 2.91 N

[[Page 80343]]

31646............................... 2.72 2.47 2.47 N
31647............................... 4.40 4.15 4.15 N
31648............................... 4.20 3.95 3.95 N
31649............................... 1.44 1.44 1.44 N
31651............................... 1.58 1.58 1.58 N
31652............................... 4.71 4.46 4.46 N
31653............................... 5.21 4.96 4.96 N
31654............................... 1.40 1.40 1.40 N
31660............................... 4.25 4.00 4.00 N
31661............................... 4.50 4.25 4.25 N
31725............................... 1.96 1.71 1.71 N
32405............................... 1.93 1.68 1.68 N
32550............................... 4.17 3.92 3.92 N
32551............................... 3.29 3.04 3.04 N
32553............................... 3.80 3.55 3.55 N
33010............................... 2.24 1.99 1.99 N
33011............................... 2.24 1.99 1.99 N
33206............................... 7.39 7.14 7.14 N
33207............................... 8.05 7.80 7.80 N
33208............................... 8.77 8.52 8.52 N
33210............................... 3.30 3.05 3.05 N
33211............................... 3.39 3.14 3.14 N
33212............................... 5.26 5.01 5.01 N
33213............................... 5.53 5.28 5.28 N
33214............................... 7.84 7.59 7.59 N
33216............................... 5.87 5.62 5.62 N
33217............................... 5.84 5.59 5.59 N
33218............................... 6.07 5.82 5.82 N
33220............................... 6.15 5.90 5.90 N
33221............................... 5.80 5.55 5.55 N
33222............................... 5.10 4.85 4.85 N
33223............................... 6.55 6.30 6.30 N
33227............................... 5.50 5.25 5.25 N
33228............................... 5.77 5.52 5.52 N
33229............................... 6.04 5.79 5.79 N
33230............................... 6.32 6.07 6.07 N
33231............................... 6.59 6.34 6.34 N
33233............................... 3.39 3.14 3.14 N
33234............................... 7.91 7.66 7.66 N
33235............................... 10.15 9.90 9.90 N
33240............................... 6.05 5.80 5.80 N
33241............................... 3.29 3.04 3.04 N
33244............................... 13.99 13.74 13.74 N
33249............................... 15.17 14.92 14.92 N
33262............................... 6.06 5.81 5.81 N
33263............................... 6.33 6.08 6.08 N
33264............................... 6.60 6.35 6.35 N
33282............................... 3.50 3.25 3.25 N
33284............................... 3.00 2.75 2.75 N
33990............................... 8.15 7.90 7.90 N
33991............................... 11.88 11.63 11.63 N
33992............................... 4.00 3.75 3.75 N
33993............................... 3.51 3.26 3.26 N
35471............................... 10.05 9.80 9.80 N
35472............................... 6.90 6.65 6.65 N
35475............................... 6.60 6.35 6.35 N
35476............................... 5.10 4.85 4.85 N
36010............................... 2.43 2.18 2.18 N
36140............................... 2.01 1.76 1.76 N
36147............................... 3.72 3.47 3.47 N
36148............................... 1.00 1.00 1.00 N
36200............................... 3.02 2.77 2.77 N
36221............................... 4.17 3.92 3.92 N
36222............................... 5.53 5.28 5.28 N
36223............................... 6.00 5.75 5.75 N
36224............................... 6.50 6.25 6.25 N
36225............................... 6.00 5.75 5.75 N
36226............................... 6.50 6.25 6.25 N

[[Page 80344]]

36227............................... 2.09 2.09 2.09 N
36228............................... 4.25 4.25 4.25 N
36245............................... 4.90 4.65 4.65 N
36246............................... 5.27 5.02 5.02 N
36247............................... 6.29 6.04 6.04 N
36248............................... 1.01 1.01 1.01 N
36251............................... 5.35 5.10 5.10 N
36252............................... 6.99 6.74 6.74 N
36253............................... 7.55 7.30 7.30 N
36254............................... 8.15 7.90 7.90 N
36481............................... 6.98 6.73 6.73 N
36555............................... 2.68 2.43 2.43 N
36557............................... 5.14 4.89 4.89 N
36558............................... 4.84 4.59 4.59 N
36560............................... 6.29 6.04 6.04 N
36561............................... 6.04 5.79 5.79 N
36563............................... 6.24 5.99 5.99 N
36565............................... 6.04 5.79 5.79 N
36566............................... 6.54 6.29 6.29 N
36568............................... 1.92 1.67 1.67 N
36570............................... 5.36 5.11 5.11 N
36571............................... 5.34 5.09 5.09 N
36576............................... 3.24 2.99 2.99 N
36578............................... 3.54 3.29 3.29 N
36581............................... 3.48 3.23 3.23 N
36582............................... 5.24 4.99 4.99 N
36583............................... 5.29 5.04 5.04 N
36585............................... 4.84 4.59 4.59 N
36590............................... 3.35 3.10 3.10 N
36870............................... 5.20 4.95 4.95 N
37183............................... 7.99 7.74 7.74 N
37184............................... 8.66 8.41 8.41 N
37185............................... 3.28 3.28 3.28 N
37186............................... 4.92 4.92 4.92 N
37187............................... 8.03 7.78 7.78 N
37188............................... 5.71 5.46 5.46 N
37191............................... 4.71 4.46 4.46 N
37192............................... 7.35 7.10 7.10 N
37193............................... 7.35 7.10 7.10 N
37197............................... 6.29 6.04 6.04 N
37211............................... 8.00 7.75 7.75 N
37212............................... 7.06 6.81 6.81 N
37213............................... 5.00 4.75 4.75 N
37214............................... 2.74 2.49 2.49 N
37215............................... 18.00 17.75 17.75 N
37216............................... 0.00 0.00 0.00 N
37218............................... 15.00 14.75 14.75 N
37220............................... 8.15 7.90 7.90 N
37221............................... 10.00 9.75 9.75 N
37222............................... 3.73 3.73 3.73 N
37223............................... 4.25 4.25 4.25 N
37224............................... 9.00 8.75 8.75 N
37225............................... 12.00 11.75 11.75 N
37226............................... 10.49 10.24 10.24 N
37227............................... 14.50 14.25 14.25 N
37228............................... 11.00 10.75 10.75 N
37229............................... 14.05 13.80 13.80 N
37230............................... 13.80 13.55 13.55 N
37231............................... 15.00 14.75 14.75 N
37232............................... 4.00 4.00 4.00 N
37233............................... 6.50 6.50 6.50 N
37234............................... 5.50 5.50 5.50 N
37235............................... 7.80 7.80 7.80 N
37236............................... 9.00 8.75 8.75 N
37237............................... 4.25 4.25 4.25 N
37238............................... 6.29 6.04 6.04 N
37239............................... 2.97 2.97 2.97 N
37241............................... 9.00 8.75 8.75 N

[[Page 80345]]

37242............................... 10.05 9.80 9.80 N
37243............................... 11.99 11.74 11.74 N
37244............................... 14.00 13.75 13.75 N
37252............................... 1.80 1.80 1.80 N
37253............................... 1.44 1.44 1.44 N
43200............................... 1.52 1.42 1.42 Y
43201............................... 1.82 1.72 1.72 Y
43202............................... 1.82 1.72 1.72 Y
43204............................... 2.43 2.33 2.33 Y
43205............................... 2.54 2.44 2.44 Y
43206............................... 2.39 2.29 2.29 Y
43211............................... 4.30 4.20 4.20 Y
43212............................... 3.50 3.40 3.40 Y
43213............................... 4.73 4.63 4.63 Y
43214............................... 3.50 3.40 3.40 Y
43215............................... 2.54 2.44 2.44 Y
43216............................... 2.40 2.30 2.30 Y
43217............................... 2.90 2.80 2.80 Y
43220............................... 2.10 2.00 2.00 Y
43226............................... 2.34 2.24 2.24 Y
43227............................... 2.99 2.89 2.89 Y
43229............................... 3.59 3.49 3.49 Y
43231............................... 2.90 2.80 2.80 Y
43232............................... 3.69 3.59 3.59 Y
43233............................... 4.17 4.07 4.07 Y
43235............................... 2.19 2.09 2.09 Y
43236............................... 2.49 2.39 2.39 Y
43237............................... 3.57 3.47 3.47 Y
43238............................... 4.26 4.16 4.16 Y
43239............................... 2.49 2.39 2.39 Y
43240............................... 7.25 7.15 7.15 Y
43241............................... 2.59 2.49 2.49 Y
43242............................... 4.83 4.73 4.73 Y
43243............................... 4.37 4.27 4.27 Y
43244............................... 4.50 4.40 4.40 Y
43245............................... 3.18 3.08 3.08 Y
43246............................... 3.66 3.56 3.56 Y
43247............................... 3.21 3.11 3.11 Y
43248............................... 3.01 2.91 2.91 Y
43249............................... 2.77 2.67 2.67 Y
43250............................... 3.07 2.97 2.97 Y
43251............................... 3.57 3.47 3.47 Y
43252............................... 3.06 2.96 2.96 Y
43253............................... 4.83 4.73 4.73 Y
43254............................... 4.97 4.87 4.87 Y
43255............................... 3.66 3.56 3.56 Y
43257............................... 4.25 4.15 4.15 Y
43259............................... 4.14 4.04 4.04 Y
43260............................... 5.95 5.70 5.85 Y
43261............................... 6.25 6.00 6.15 Y
43262............................... 6.60 6.35 6.50 Y
43263............................... 6.60 6.35 6.50 Y
43264............................... 6.73 6.48 6.63 Y
43265............................... 8.03 7.78 7.93 Y
43266............................... 4.17 3.92 3.92 N
43270............................... 4.26 4.01 4.01 N
43273............................... 2.24 2.24 2.24 N
43274............................... 8.58 8.33 8.48 Y
43275............................... 6.96 6.71 6.86 Y
43276............................... 8.94 8.69 8.84 Y
43277............................... 7.00 6.75 6.90 Y
43278............................... 8.02 7.77 7.92 Y
43450............................... 1.38 1.13 1.28 Y
43453............................... 1.51 1.26 1.41 Y
44360............................... 2.59 2.49 2.49 Y
44361............................... 2.87 2.77 2.77 Y
44363............................... 3.49 3.39 3.39 Y
44364............................... 3.73 3.63 3.63 Y

[[Page 80346]]

44365............................... 3.31 3.21 3.21 Y
44366............................... 4.40 4.30 4.30 Y
44369............................... 4.51 4.41 4.41 Y
44370............................... 4.79 4.69 4.69 Y
44372............................... 4.40 4.30 4.30 Y
44373............................... 3.49 3.39 3.39 Y
44376............................... 5.25 5.15 5.15 Y
44377............................... 5.52 5.42 5.42 Y
44378............................... 7.12 7.02 7.02 Y
44379............................... 7.46 7.36 7.36 Y
44380............................... 0.97 0.87 0.87 Y
44381............................... 1.48 1.38 1.38 Y
44382............................... 1.27 1.17 1.17 Y
44384............................... 2.95 2.85 2.85 Y
44385............................... 1.30 1.20 1.20 Y
44386............................... 1.60 1.50 1.50 Y
44388............................... 2.82 2.72 2.72 Y
44388-53............................ 1.41 1.36 1.36 Y
44389............................... 3.12 3.02 3.02 Y
44390............................... 3.84 3.74 3.74 Y
44391............................... 4.22 4.12 4.12 Y
44392............................... 3.63 3.53 3.53 Y
44394............................... 4.13 4.03 4.03 Y
44401............................... 4.44 4.34 4.34 Y
44402............................... 4.80 4.70 4.70 Y
44403............................... 5.60 5.50 5.50 Y
44404............................... 3.12 3.02 3.02 Y
44405............................... 3.33 3.23 3.23 Y
44406............................... 4.20 4.10 4.10 Y
44407............................... 5.06 4.96 4.96 Y
44408............................... 4.24 4.14 4.14 Y
44500............................... 0.49 0.39 0.39 Y
45303............................... 1.50 1.40 1.40 Y
45305............................... 1.25 1.15 1.15 Y
45307............................... 1.70 1.60 1.60 Y
45308............................... 1.40 1.30 1.30 Y
45309............................... 1.50 1.40 1.40 Y
45315............................... 1.80 1.70 1.70 Y
45317............................... 2.00 1.90 1.90 Y
45320............................... 1.78 1.68 1.68 Y
45321............................... 1.75 1.65 1.65 Y
45327............................... 2.00 1.90 1.90 Y
45332............................... 1.86 1.76 1.76 Y
45333............................... 1.65 1.55 1.55 Y
45334............................... 2.10 2.00 2.00 Y
45335............................... 1.14 1.04 1.04 Y
45337............................... 2.20 2.10 2.10 Y
45338............................... 2.15 2.05 2.05 Y
45340............................... 1.35 1.25 1.25 Y
45341............................... 2.22 2.12 2.12 Y
45342............................... 3.08 2.98 2.98 Y
45346............................... 2.91 2.81 2.81 Y
45347............................... 2.82 2.72 2.72 Y
45349............................... 3.62 3.52 3.52 Y
45350............................... 1.78 1.68 1.68 Y
45378............................... 3.36 3.26 3.26 Y
45378-53............................ 1.68 1.63 1.63 Y
45379............................... 4.38 4.28 4.28 Y
45380............................... 3.66 3.56 3.56 Y
45381............................... 3.66 3.56 3.56 Y
45382............................... 4.76 4.66 4.66 Y
45384............................... 4.17 4.07 4.07 Y
45385............................... 4.67 4.57 4.57 Y
45386............................... 3.87 3.77 3.77 Y
45388............................... 4.98 4.88 4.88 Y
45389............................... 5.34 5.24 5.24 Y
45390............................... 6.14 6.04 6.04 Y
45391............................... 4.74 4.64 4.64 Y

[[Page 80347]]

45392............................... 5.60 5.50 5.50 Y
45393............................... 4.78 4.68 4.68 Y
45398............................... 4.30 4.20 4.20 Y
47000............................... 1.90 1.65 1.65 N
47382............................... 15.22 14.97 14.97 N
47383............................... 9.13 8.88 8.88 N
47532............................... 4.25 4.25 4.25 N
47533............................... 6.00 5.38 5.38 N
47534............................... 8.03 7.60 7.60 N
47535............................... 4.50 3.95 3.95 N
47536............................... 2.88 2.61 2.61 N
47538............................... 6.60 4.75 4.75 N
47539............................... 9.00 8.75 8.75 N
47540............................... 10.75 9.03 9.03 N
47541............................... 5.61 5.38 6.75 N
47542............................... 2.50 2.85 2.85 N
47543............................... 3.07 3.00 3.00 N
47544............................... 4.29 3.28 3.28 N
49405............................... 4.25 4.00 4.00 N
49406............................... 4.25 4.00 4.00 N
49407............................... 4.50 4.25 4.25 N
49411............................... 3.82 3.57 3.57 N
49418............................... 4.21 3.96 3.96 N
49440............................... 4.18 3.93 3.93 N
49441............................... 4.77 4.52 4.52 N
49442............................... 4.00 3.75 3.75 N
49446............................... 3.31 3.06 3.06 N
50200............................... 2.63 2.38 2.38 N
50382............................... 5.50 5.25 5.25 N
50384............................... 5.00 4.75 4.75 N
50385............................... 4.44 4.19 4.19 N
50386............................... 3.30 3.05 3.05 N
50387............................... 2.00 1.75 1.75 N
50430............................... 3.15 2.90 2.90 N
50432............................... 4.25 4.00 4.00 N
50433............................... 5.30 5.05 5.05 N
50434............................... 4.00 3.75 3.75 N
50592............................... 6.80 6.55 6.55 N
50593............................... 9.13 8.88 8.88 N
50606............................... 3.16 3.16 3.16 N
50693............................... 4.21 3.96 3.96 N
50694............................... 5.50 5.25 5.25 N
50695............................... 7.05 6.80 6.80 N
50705............................... 4.03 4.03 4.03 N
50706............................... 3.80 3.80 3.80 N
57155............................... 5.40 5.15 5.15 N
66720............................... 5.00 4.75 4.75 N
69300............................... 6.69 6.44 6.44 N
77371............................... 0.00 0.00 0.00 N
77600............................... 1.56 1.31 1.31 N
77605............................... 2.09 1.84 1.84 N
77610............................... 1.56 1.31 1.31 N
77615............................... 2.09 1.84 1.84 N
92920............................... 10.10 9.85 9.85 N
92921............................... 0.00 0.00 0.00 N
92924............................... 11.99 11.74 11.74 N
92925............................... 0.00 0.00 0.00 N
92928............................... 11.21 10.96 10.96 N
92929............................... 0.00 0.00 0.00 N
92933............................... 12.54 12.29 12.29 N
92934............................... 0.00 0.00 0.00 N
92937............................... 11.20 10.95 10.95 N
92938............................... 0.00 0.00 0.00 N
92941............................... 12.56 12.31 12.31 N
92943............................... 12.56 12.31 12.31 N
92944............................... 0.00 0.00 0.00 N
92953............................... 0.23 0.01 0.01 N
92960............................... 2.25 2.00 2.00 N

[[Page 80348]]

92961............................... 4.59 4.34 4.34 N
92973............................... 3.28 3.28 3.28 N
92974............................... 3.00 3.00 3.00 N
92975............................... 7.24 6.99 6.99 N
92978............................... 0.00 0.00 0.00 N
92979............................... 0.00 0.00 0.00 N
92986............................... 22.85 22.60 22.60 N
92987............................... 23.63 23.38 23.38 N
93312............................... 2.55 2.30 2.30 N
93313............................... 0.51 0.26 0.26 N
93314............................... 2.10 1.85 1.85 N
93315............................... 2.94 2.69 2.69 N
93316............................... 0.85 0.60 0.60 N
93317............................... 2.09 1.84 1.84 N
93318............................... 2.40 2.15 2.15 N
93451............................... 2.72 2.47 2.47 N
93452............................... 4.75 4.50 4.50 N
93453............................... 6.24 5.99 5.99 N
93454............................... 4.79 4.54 4.54 N
93455............................... 5.54 5.29 5.29 N
93456............................... 6.15 5.90 5.90 N
93457............................... 6.89 6.64 6.64 N
93458............................... 5.85 5.60 5.60 N
93459............................... 6.60 6.35 6.35 N
93460............................... 7.35 7.10 7.10 N
93461............................... 8.10 7.85 7.85 N
93462............................... 3.73 3.73 3.73 N
93463............................... 2.00 2.00 2.00 N
93464............................... 1.80 1.80 1.80 N
93505............................... 4.37 4.12 4.12 N
93530............................... 4.22 3.97 3.97 N
93561............................... 0.50 0.25 0.25 N
93562............................... 0.16 0.01 0.01 N
93563............................... 1.11 1.11 1.11 N
93564............................... 1.13 1.13 1.13 N
93565............................... 0.86 0.86 0.86 N
93566............................... 0.86 0.86 0.86 N
93567............................... 0.97 0.97 0.97 N
93568............................... 0.88 0.88 0.88 N
93571............................... 0.00 0.00 0.00 N
93572............................... 0.00 0.00 0.00 N
93582............................... 12.56 12.31 12.31 N
93583............................... 14.00 13.75 13.75 N
93609............................... 0.00 0.00 0.00 N
93613............................... 6.99 6.99 6.99 N
93615............................... 0.99 0.74 0.74 N
93616............................... 1.49 1.24 1.24 N
93618............................... 4.25 4.00 4.00 N
93619............................... 7.31 7.06 7.06 N
93620............................... 11.57 11.32 11.32 N
93621............................... 0.00 0.00 0.00 N
93622............................... 0.00 0.00 0.00 N
93624............................... 4.80 4.55 4.55 N
93640............................... 3.51 3.26 3.26 N
93641............................... 5.92 5.67 5.67 N
93642............................... 4.88 4.63 4.63 N
93644............................... 3.29 3.04 3.04 N
93650............................... 10.49 10.24 10.24 N
93653............................... 15.00 14.75 14.75 N
93654............................... 20.00 19.75 19.75 N
93655............................... 7.50 7.50 7.50 N
93656............................... 20.02 19.77 19.77 N
93657............................... 7.50 7.50 7.50 N
94011............................... 2.00 1.75 1.75 N
94012............................... 3.10 2.85 2.85 N
94013............................... 0.66 0.41 0.41 N
96440............................... 2.37 2.12 2.12 N
G0105............................... 3.36 3.26 3.26 Y

[[Page 80349]]

G0105-53............................ 1.68 1.63 1.63 Y
G0121............................... 3.36 3.26 3.26 Y
G0121-53............................ 1.68 1.63 1.63 Y
G0341............................... 6.98 6.98 6.98 N
----------------------------------------------------------------------------------------------------------------

(58) Prolonged Evaluation and Management Services (CPT Codes 99354,
99358, and 99359)
We previously received RUC recommendations for face-to-face and
non-face-to-face prolonged E/M services. In response to the request for
public comments in the CY 2016 PFS proposed rule about improving
payment accuracy for cognitive services, commenters suggested that we
consider making separate payment for CPT codes 99358 and 99359. As
reflected in section II.E, we proposed to make separate payment for
these services.
We also proposed values for services in this family of codes based
on the RUC-recommended values, including for CPT code 99354, which
would increase the current work RVU to 2.33. Likewise, we proposed to
adopt the RUC-recommended work RVU of 2.10 for CPT code 99358 and 1.00
for CPT code 99359.
Comment: One commenter recommended that CMS develop separate
payment for a modifier and new G-codes that would account for
additional non-face-to-face time spent on circumstances that fell
outside that of a typical level-4 patient.
Response: We appreciate the recommendation and will consider coding
alternatives in future rulemaking.
Comment: Many commenters were very supportive of CMS' proposal to
pay separately for CPT codes 99258 and 99359, and to increase the
current work RVU for CPT code 99354.
Response: We thank commenters for their support, and are finalizing
the values as proposed.
(59) Complex Chronic Care Management Services (CPT Codes 99487 and
99489)
We received RUC recommendations for CPT codes 99487 and 99489
following the October 2012 RUC meeting, however we considered these
services bundled and did not make separate payment. For CY 2017, we
proposed to change the procedure status for CPT codes 99487 and 99489
from B (bundled) to A (active), see II.E, and proposed to adopt the
RUC-recommended work RVUs of 1.00 for CPT code 99487 and 0.50 for CPT
code 99489, as well as direct PE inputs consistent with the RUC
recommendations.
We received no comments on the valuation of CPT codes 99487 and
99489; therefore, we are finalizing as proposed.
(60) Prostate Biopsy, Any Method (HCPCS Code G0416)
The College of American Pathologists and the American Society of
Cytopathology formed an expert panel to make recommendations at the
October 2015 RUC meeting to determine an appropriate work RVU for HCPCS
code G0416, as they believed that the survey results were invalid. The
panel made several arguments to the RUC in recommending a higher work
RVU under the RUC's ``compelling evidence'' standard. These arguments
were: (1) That incorrect assumptions were made in previous valuations;
(2) the value of HCPCS code G0416 remained constant while the code
descriptors changed over the years; and (3) the ``anomalous
relationship'' between HCPCS code G0416 and CPT code 88305 (Level IV--
Surgical pathology, gross and microscopic examination). The expert
panel recommended a work RVU of 4.00 based on a crosswalk from CPT code
38240 (Hematopoietic progenitor cell (HPC); allogeneic transplantation
per donor). The RUC agreed with the recommendation of the expert panel.
We believed HCPCS code G0416 should not be valued as a direct
crosswalk from CPT code 38240. Instead, since code G0416 describes
services that would otherwise be reported using CPT code 88305 we
believed that G0416 should be valued relative to CPT code 88305. To
value HCPCS code G0416, we used the intra-service time ratio between
HCPCS code G0416 and CPT code 88305 to arrive at a work RVU of 3.60. To
further support this method, we noted that the IWPUT for HCPCS code
G0416 with a work RVU of 3.60 is the same as CPT code 88305. Using the
RUC-recommended RVU of 4.00 results in a higher IWPUT, and we did not
believe there is a difference in work intensity between these codes.
Therefore for CY 2017, we proposed a work RVU of 3.60 for HCPCS code
G0416.
Comment: A few commenters, including the RUC, stated their
objection to the methodology used in proposing a value for this HCPCS
code along with the proposed work RVU. The RUC stated its disagreement
with what it called a formulaic approach of multiplying time by
intensity to arrive at a value for this code. The RUC, along with other
commenters, also urged CMS to accept the compelling evidence that G0416
and 88305 have an anomalous relationship as a pathologist may examine
30-60 slides when furnishing HCPCS code G0416 whereas only one slide is
examined with CPT code 88305. The commenters also noted that CMS had
previously stated its belief that the typical number of specimens
evaluated for prostate biopsies was between 10 and 12, and therefore,
would value the typical G0416 at 9.00 RVUs (0.75 x 12), if the number
of specimens were used rather than a time ratio.
Response: We continue to believe HCPCS code G0416 should not be
valued as a direct crosswalk from CPT code 38240. CPT code 38240
involves the intense monitoring of a patient's reactions to a critical
infusion of cellular material. This process does not allow the
physician to leave the patient. We do not believe the time, effort, and
intensity required of this procedure is similar to a physician
reviewing slides. While examining slides, it is possible for the
physician to stop, refer to references, complete other tasks, and
return to the slides. Thus the service does not have analogous or
comparable intensity.
We believe the vignette for CPT code 88305 typically involves, by
definition, two blocks and resulting slides. Based upon that rationale,
CMS values each block (and resulting slides) as worth a work RVU of
0.375. Valuing the RVUs on a per block basis, then a sextant

[[Page 80350]]

(typical 10-12 blocks or slides) would result in 5 times 0.375 to 6
times 0.375. Therefore, for CY 2017 we are finalizing a work RVU of
3.60 for HCPCS G0416.
(61) Resource-Intensive Services (HCPCS Code G0501)
As discussed in section II.E. of this final rule, we proposed to
establish payment for services furnished to patients with mobility-
related disabilities, through a new add-on G-code, to be billable with
office/outpatient E/M and TCM codes. Based on our analysis of the
resources typically involved in furnishing office visits to patients
with these needs (especially including the typical additional
practitioner and staff time), we believed that the physician work and
time for HCPCS code G0501 was most accurately valued through a direct
crosswalk from CPT code 99212 (Level 2 office or other outpatient visit
for the evaluation and management of an established patient).
Therefore, we proposed a work RVU of 0.48 and a physician time of 16
minutes for HCPCS code G0501. We sought comment on whether these work
and time values accurately capture the additional physician work
typically involved in furnishing services to patients with mobility
impairments.
We believed that a direct crosswalk to the clinical staff time
associated with CPT code 99212, which is 27 minutes of LN/LPN/MTA
(L037D) accurately represented the additional clinical staff time
required to furnish an outpatient office visit or TCM to a patient with
a mobility-related disability. We also proposed to include as direct PE
inputs 27 minutes for a stretcher (EF018) and a high/low table (EF028),
and 27 minutes for new equipment inputs associated with the following:
A patient lift system, wheelchair accessible scale, and padded leg
support positioning system. These items were included in the CY 2017
proposed direct PE input database. We sought comments on whether these
inputs are appropriate, and whether any additional inputs are typically
used in treating patients with mobility impairments.
Comment: Many commenters supported the proposed valuation of G0501
and recommend we finalize as proposed, while others had questions or
concerns about the crosswalk and the inputs.
Response: As noted in section II.E.6. of this final rule, we are
not finalizing payment for HCPCS code G0501 for CY 2017. We will
continue to welcome recommendations from stakeholders on methods for
improving the payment accuracy of services for individuals with
disabilities.
Comment: Several commenters noted that the Americans with
Disabilities Act (ADA) provides federal tax credits for certain
physicians to help cover the cost of specialized equipment for patients
with mobility-related disabilities.
Response: We remind practitioners that there are existing IRS tax
credits and deductions to assist business with complying with the ADA.
More information on these tax credits is available at https://www.ada.gov/taxcred.htm.
(62) Behavioral Health Integration: Psychiatric Collaborative Care
Model (HCPCS Codes G0502, G0503, and G0504) and General Behavioral
Health Integration (HCPCS Code G0507)
For CY 2017, we proposed to establish and make separate Medicare
payment using four new HCPCS G-codes, G0502 (Initial psychiatric
collaborative care management, first 70 minutes in the first calendar
month of behavioral health care manager activities, in consultation
with a psychiatric consultant, and directed by the treating physician
or other qualified health care professional), G0503 (Subsequent
psychiatric collaborative care management, first 60 minutes in a
subsequent month of behavioral health care manager activities, in
consultation with a psychiatric consultant, and directed by the
treating physician or other qualified health care professional), G0504
(Initial or subsequent psychiatric collaborative care management, each
additional 30 minutes in a calendar month of behavioral health care
manager activities, in consultation with a psychiatric consultant, and
directed by the treating physician or other qualified health care
professional), and G0507 (Care management services for behavioral
health conditions, at least 20 minutes of clinical staff time, directed
by a physician or other qualified health care professional time, per
calendar month) for collaborative care and care management for
beneficiaries with behavioral health conditions, as detailed in section
II.E of this final rule. To value HCPCS codes G0502, G0503, and G0504,
we proposed to base the portion of the work RVU that accounts for the
work of the treating physician or other qualified health care
professional on a direct crosswalk to the proposed work values for the
complex CCM codes, CPT codes 99487 and 99489. To value the portion of
the work RVU that accounts for the psychiatric consultant, we estimated
10 minutes of psychiatric consultant time per patient per month and a
work RVU of 0.42, based on the per minute work RVUs for the highest
volume codes typically billed by psychiatrists, since the resource
costs of the consultant's work is being paid to the primary
practitioner. Since the behavioral health care manager in the services
described by HCPCS codes G0502, G0503, and G0504 should have
specialized training in behavioral health, we proposed a new clinical
labor type for the behavioral health care manager, L057B, at $0.57 per
minute, based on the rates for genetic counselors in the direct PE
input database. We solicited comment on all aspects of these proposed
valuations.
Comment: Some commenters stated that the work of the psychiatric
consultant should be valued at least the same as the primary care
practitioner. Commenters noted that the crosswalk to CPT code 90836 was
inaccurate, as the work of the psychiatric consultant would not be
similar to psychotherapy but instead be similar to E/M services.
Commenters recommended that CMS value the work of the psychiatric
consultant through a crosswalk to a level-4 outpatient E/M, such as CPT
codes 99204 or 99214.
Response: We thank commenters for their response and for providing
CMS with additional perspectives on appropriate valuation of the work
furnished by the psychiatric consultant. We note that for HCPCS codes
G0502, G0503, and G0504, Medicare is making payment to the billing
practitioner on the basis that he or she is incurring the costs
associated with retaining the psychiatric consultant. In general, we
consider such costs to be appropriately categorized under the PE RVUs,
regardless of the degree of expertise for that particular contributor.
Historically these costs have been included in the calculation of PE
RVUs and incorporated as costs based on a national per minute payment
rate for that kind of labor instead of varying based on which service
is furnished. However, we recognize the unique nature of the services
described by this code, especially with regard to the potential
inclusion of the work of a physician as PE. We also recognize that the
work of the psychiatrist under this model of care more closely
resembles E/M work than that of psychotherapy, although not necessarily
the work associated with a level-4 office visit. Therefore, for CY
2017, we are finalizing work RVUs for these services that reflect the
per minute intensity of E/M services instead of psychotherapy for the
portion of the overall work RVU attributable to the psychiatric
consultant.

[[Page 80351]]

We welcome any information on the best way to account for the work,
time, and practice expense resource costs associated with two
physicians when one physician is typically incurring the resource costs
of another. We are particularly interested in information regarding how
CoCM might apply for beneficiaries receiving care in an institutional
or inpatient setting.
We believe that the work associated with the billing practitioner
would overall be greater than the work associated with the psychiatric
consultant. The work of the billing practitioner includes services such
as broader care management, direction of the care manager, and by
``incident to'' rules, the general supervision of other staff, while
the psychiatric consultant primarily conducts review work. Therefore,
in allocating differential portion of the work RVU to each
practitioner, we believe the work RVU associated with the billing
practitioner should be greater than the work RVU associated with the
psychiatric consultant.
After considering these comments, we are finalizing total work RVUs
of 1.70 for G0502, 1.53 for G0503, and 0.82 for G0504. These RVUs
include 0.52 for the psychiatric consultant based on a crosswalk to the
work per minute of a level three established patient office visit.
Comment: One commenter urged CMS to consider the forthcoming RUC
recommendations.
Response: We thank the commenter for their suggestion and will
evaluate the RUC's recommendation according to our established review
process in future rulemaking.
Comment: A few commenters requested that CMS increase the facility
setting PE RVUs, as patients in this setting are more complex, and
therefore, the care manager would need to be more experienced. The
extra costs in terms of clinical staff, commenters stated, would offset
the decrease in other kinds of PE associated with the facility setting.
Response: The clinical labor costs for PFS are generally included
in the nonfacility rate but not included in the facility rate under the
PFS, because applicable payment for the clinical labor costs would be
made under the appropriate institutional payment system, like the OPPS.
Historically we have not developed separate work RVUs for the facility
and the non-facility setting for the same codes. The only cases where
we have differentiated work between an institutional and a non-
institutional setting are when the HCPCS codes delineate between them,
for example site specific codes describing E/M services furnished in an
inpatient hospital setting versus those services furnished in an office
setting. For this reason, we are not developing separate facility and
non-facility work RVUs here.
Comment: With regard to G0503, a few commenters stated that the
allocation of 60 minutes is inappropriate because a comprehensive
follow up would take longer than 60 minutes.
Response: As these are temporary codes designed to facilitate one
year of separate payment prior to receiving a RUC recommendations
through CMS' standard process and we continue to believe that 60
minutes would be typical of the time involved, we will not be making
adjustments to the time values at this time. We remind commenters that
PFS direct PE inputs are used for calculation of rates that we believe
reflect the typical case for a service, and are not intended to be
instructive to providers as to what is permitted under the code or what
should be furnished in any particular case. We also wish to remind
commenters that we have longstanding interest in robust extant data
sources regarding times, and as these services continue to be furnished
to Medicare beneficiaries, we would encourage stakeholders to develop
sets of such data that we could potentially use in valuation, among
other things.
Comment: One commenter recommended that CMS pay separately for
tools, such as multidimensional mental health monitoring tools, to
assist practitioners in data analysis.
Response: The CoCM model does not make reference to any specific
health monitoring tools; therefore, we will not be including those as
direct PE inputs in our valuation of these services.
To value HCPCS code G0507, we proposed a work RVU of 0.61 based on
a direct crosswalk from CPT code 99490 (Chronic care management
services). We recognize that the services described by CPT code 99490
are distinct from those furnished under the CoCM and we believe that
these also vary based on different kinds of BHI care. We note that
there are relatively few existing codes that describe these kinds of
services over a calendar month. We also believe that the resources
associated with CPT code 99490 may vary based on the ways different
practitioners furnish the service. Until we have more information about
how the services described by G0507 are typically furnished, we believe
valuation based on an estimate of the typical resources would be most
appropriate. To account for the care manager minutes in the direct PE
inputs for HCPCS code G0507, we proposed to use clinical labor type
L045C, which is the labor type for social workers/psychologists and has
a rate of $0.45 per minute.
Comment: Many commenters stated that 20 minutes of care manager
time over the course of a month was an inaccurate representation of the
resource costs incurred when furnishing BHI services, and that a longer
duration was needed to fully reflect the time and resources associated
with providing this care. A few commenters stated that CMS should
create an add-on code for HCPCS code G0507 to account for any
additional time.
Response: We proposed HCPCS code G0507 to make separate payment for
other kinds of BHI and we are concerned that an increased time
threshold may not be typical across the range of services captured by
G0507 and may present an additional barrier to appropriate utilization
for some models of care. We continue to be interested in information
from stakeholders regarding other models of BHI, including those that
have longer associated times than are accurately captured by HCPCS code
G0507.
Comment: A few commenters recommended that CMS include the same
clinical staff in HCPCS code G0507 as is included in HCPCS codes G0502,
G0503, and G0504 because the complexity in care management would likely
to be consistent across all four codes.
Response: We agree with commenters, and will finalize 20 minutes of
behavioral health care manager, L057B, time for HCPCS code G0507.
After considering these comments, we are finalizing a total work
RVU of 0.61 for G0507.
(63) Comprehensive Assessment and Care Planning for Patients With
Cognitive Impairment (HCPCS Code G0505)
For CY 2017, we proposed to create and pay separately for new HCPCS
code G0505 (Cognition and functional assessment using standardized
instruments with development of recorded care plan for the patient with
cognitive impairment, history face-to-face obtained from patient and/or
caregiver, in office or other outpatient setting or home or domiciliary
or rest home), see II.E for further discussion. Based on similarities
between work intensity and time, we believe that the physician work and
time for this code would be accurately valued by combining the work
RVUs from CPT code 99204 (Level 4 office or other outpatient visit for
the evaluation and

[[Page 80352]]

management of a new patient) and half the work RVUs for HCPCS code
G0181 (Physician supervision of a patient receiving Medicare-covered
services furnished by a participating home health agency (patient not
present) requiring complex and multidisciplinary care modalities
involving regular physician development and/or revision of care plans,
review of subsequent reports of patient status, review of laboratory
and other studies, communication (including telephone calls) with other
health care professionals involved in the patient's care, integration
of new information into the medical treatment plan and/or adjustment of
medical therapy, within a calendar month, 30 minutes or more).
Therefore, we proposed a work RVU of 3.30.
For direct PE inputs we proposed 70 total minutes of time for RN/
LPN/MTA (L037D). We believed this was typical based on information from
several specialty societies representing practitioners who typically
furnish this service and report, it, when appropriate, using E/M codes.
We solicited comment on these valuation assumptions and welcomed
additional information on the work and direct PE associated with
furnishing this service.
Comment: One commenter stated that to more accurately reflect the
reality of the case complexity involved in assessment and care planning
for patients with cognitive impairment, that the work RVU should be
based on at least a Level 5 office visit with recognition that the work
required is likely 1.5 times to two times greater than a Level 5 visit.
Furthermore, the commenter stated that 120 minutes was a more
appropriate time value. Many other commenters encouraged CMS to accept
the RUC-recommended values for this code, presented at the April 2016
RUC meeting. The AMA RUC submitted the recommendation of a work RVU of
3.44 as part of its public comment.
Response: After reviewing values recommended by the RUC in its
comment, we are persuaded that many elements of its valuation
accurately capture the resource costs associated with the provision of
this service. Therefore, we are finalizing the physician work and time
values in consideration of these comments as recommended. We are
finalizing a work RVU of 3.44 as recommended by the RUC. We are
removing 2 minutes of the 6 recommended clinical staff time for the
task ``Gather and review X-ray, lab, pathology reports and prepare for
physician review; conduct initial phone call for preliminary assessment
of cognitive function; identify caregiver and explain assessment'' as
we believe 4 minutes is a more typical time associated with this task.
(64) Comprehensive Assessment and Care Planning for Patients Requiring
Chronic Care Management (HCPCS Code G0506)
For CY 2017, we proposed to make payment for the resource costs of
comprehensive assessment and care planning for patients requiring CCM
services through HCPCS code G0506 as an add-on code to be billed with
the initiating visit for CCM for patients that require extensive
assessment and care planning (see section II.E). In valuing this code,
we believed that a crosswalk to half the work and time values of HCPCS
code G0181 (Physician supervision of a patient receiving Medicare-
covered services provided by a participating home health agency
(patient not present) requiring complex and multidisciplinary care
modalities involving regular physician development and/or revision of
care plans, review of subsequent reports of patient status, review of
laboratory and other studies, communication (including telephone calls)
with other health care professionals involved in the patient's care,
integration of new information into the medical treatment plan and/or
adjustment of medical therapy, within a calendar month, 30 minutes or
more) accurately accounts for the time and intensity of the work
associated with furnishing this service over and above the work
accounted for as part of the separately billed initiating visit.
Therefore, we proposed a work RVU of 0.87 and 29 minutes of physician
time. We also proposed 36 minutes for a RN/LPN/MTA (L037D) as the only
direct PE input for this service.
Comment: Many commenters supported the proposed work and PE values.
Response: We thank commenters for supporting physician work and PE
inputs for G0506 and we are finalizing as proposed.
(65) Telehealth Consultation for a Patient Requiring Critical Care
Services (HCPCS Codes G0508and G0509)
As discussed in section II.C, we proposed use of new HCPCS G-codes,
G0508 (Telehealth consultation, critical care, physicians typically
spend 60 minutes communicating with the patient via telehealth
(initial) and G0509 (Telehealth consultation, critical care, physicians
typically spend 50 minutes communicating with the patient via
telehealth (subsequent)), to report telehealth consultations for a
patient requiring critical care services, such as a stroke patient. We
noted that due to limited coding granularity for high-intensity
cognitive services, in the PFS, we did not believe there is an
intuitive crosswalk code for ideal estimation of the work and time
values for G0508. In general, we believed that the overall work for
G0508 is not as great as 99291 (Critical care, evaluation and
management of the critically ill or critically injured patient; first
30-74 minutes) but that the service involves more work than HCPCS code
G0427 (Telehealth consultation, emergency department or initial
inpatient, typically 70 minutes or more communicating with the patient
via telehealth). We believe that G0508 is most accurately valued by a
crosswalk to the work RVU and physician intra-service time of CPT code
38240 (Hematopoietic progenitor cell (HPC); allogeneic transplantation
per donor). Therefore, we proposed a work RVU of 4.0 and solicited
comment on the accuracy of these assumptions. We did not believe that
direct PE inputs would typically be involved with furnishing this
service from the distant site. For G0509 we proposed a work RVU of 3.86
based on a crosswalk from G0427. We believed that G0427 has similar
overall work intensity to G0509 and has a similar intraservice time. We
also believed that no direct PE inputs would typically be associated
with furnishing this service from the distant site.
Comment: Many commenters supported the proposal, saying the codes
will improve patient outcomes and quality of care.
Response: We thank commenters for their support. We are finalizing
the work RVUs for new HCPCS codes G0508 and G0509 as proposed.
Comment: A few commenters encouraged CMS to recognize critical care
as a telehealth service rather than create G-codes to facilitate
payment. Commenters also stated that the complex nature of patients
requiring critical care services necessitates the codes be billed more
than once per day.
Response: We continue to believe that the telehealth consultation
model, including the limit on billing more than once per day, is more
appropriate than the model used to describe the in-person critical care
E/Ms. In general we believe that the complex nature of patients
requiring critical care is described by in-person critical care E/Ms,
which includes services that cannot be furnished via remote
communication technology. Furthermore, we believe that the telehealth
consultation model, including the limit on billing more than

[[Page 80353]]

once per day, appropriately captures the kind of work described as
remote, critical consultations for critical care patients.
Comment: A few commenters suggested that CMS clarify that the
consulting doctor could communicate with staff or family members if the
patient was unable to communicate.
Response: We appreciate the comments and, in order to make it clear
that the consultation could include conversations with other providers
and caregivers if the patient is unable to communicate, we will
finalize the following code descriptors:
G0508: Telehealth consultation, critical care, physicians
typically spend 60 minutes communicating with the patient and providers
via telehealth (initial).
G0509: Telehealth consultation, critical care, physicians
typically spend 50 minutes communicating with the patient and providers
via telehealth (subsequent).

TABLE 27--Finalized CY 2017 Work RVUs for New, Revised and Potentially Misvalued Codes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed CY Final CY 2017
HCPCS Code Long Descriptor CY 2016 Work RVU 2017 Work RVU Work RVU CMS Work time refinement
--------------------------------------------------------------------------------------------------------------------------------------------------------
00740............................... Anesthesia for upper 0.00 0.00 0.00 No.
gastrointestinal endoscopic
procedures, endoscope
introduced proximal to
duodenum.
00810............................... Anesthesia for lower 0.00 0.00 0.00 No.
intestinal endoscopic
procedures, endoscope
introduced distal to
duodenum.
10035............................... Placement of soft tissue 1.70 1.70 1.70 No.
localization device(s) (eg,
clip, metallic pellet, wire/
needle, radioactive seeds),
percutaneous, including
imaging guidance; first
lesion.
10036............................... Placement of soft tissue 0.85 0.85 0.85 No.
localization device(s) (eg,
clip, metallic pellet, wire/
needle, radioactive seeds),
percutaneous, including
imaging guidance; each
additional lesion.
11730............................... Avulsion of nail plate, 1.10 1.05 1.05 No.
partial or complete,
simple; single.
11732............................... Avulsion of nail plate, 0.44 0.38 0.38 Yes.
partial or complete,
simple; each additional
nail plate.
20245............................... Biopsy, bone, open; deep 8.95 6.00 6.00 No.
(eg, humerus, ischium,
femur).
20550............................... Injection(s); single tendon 0.75 0.75 0.75 No.
sheath, or ligament,
aponeurosis (eg, plantar
``fascia'').
20552............................... Injection(s); single or 0.66 0.66 0.66 No.
multiple trigger point(s),
1 or 2 muscle(s).
20553............................... Injection(s); single or 0.75 0.75 0.75 No.
multiple trigger point(s),
3 or more muscles.
22853............................... Insertion of interbody NEW 4.25 4.25 No.
biomechanical device(s)
(eg, synthetic cage, mesh)
with integral anterior
instrumentation for device
anchoring (eg, screws,
flanges) when performed to
intervertebral disc space
in conjunction with
interbody arthrodesis, each
interspace.
22854............................... Insertion of intervertebral NEW 5.50 5.50 No.
biomechanical device(s)
(eg, synthetic cage, mesh)
with integral anterior
instrumentation for device
anchoring (eg, screws,
flanges) when performed to
vertebral corpectomy(ies)
(vertebral body resection,
partial or complete)
defect, in conjunction with
interbody arthrodesis, each
contiguous defect.
22859............................... Insertion of intervertebral NEW 5.50 5.50 No.
biomechanical device(s)
(eg, synthetic cage, mesh,
methylmethacrylate) to
intervertebral disc space
or vertebral body defect
without interbody
arthrodesis, each
contiguous defect.
22867............................... Insertion of interlaminar/ NEW 13.50 13.50 No.
interspinous process
stabilization/distraction
device, without fusion,
including image guidance
when performed, with open
decompression, lumbar;
single level.
22868............................... Insertion of interlaminar/ NEW 4.00 4.00 No.
interspinous process
stabilization/distraction
device, without fusion,
including image guidance
when performed, with open
decompression, lumbar;
second level.
22869............................... Insertion of interlaminar/ NEW 7.03 7.03 No.
interspinous process
stabilization/distraction
device, without open
decompression or fusion,
including image guidance
when performed, lumbar;
single level.
22870............................... Insertion of interlaminar/ NEW 2.34 2.34 No.
interspinous process
stabilization/distraction
device, without open
decompression or fusion,
including image guidance
when performed, lumbar;
second level.
26356............................... Repair or advancement, 9.56 9.56 9.56 No.
flexor tendon, in zone 2
digital flexor tendon
sheath (eg, no man's land);
primary, without free
graft, each tendon.
26357............................... Repair or advancement, 10.53 11.00 11.00 No.
flexor tendon, in zone 2
digital flexor tendon
sheath (eg, no man's land);
secondary, without free
graft, each tendon.

[[Page 80354]]

26358............................... Repair or advancement, 12.13 12.60 12.60 No.
flexor tendon, in zone 2
digital flexor tendon
sheath (eg, no man's land);
secondary, with free graft
(includes obtaining graft),
each tendon.
27197............................... Closed treatment of NEW 1.53 1.53 Yes.
posterior pelvic ring
fracture(s),
dislocation(s), diastasis
or subluxation of the
ilium, sacroiliac joint,
and/or sacrum, with or
without anterior pelvic
ring fracture(s) and/or
dislocation(s) of the pubic
symphysis and/or superior/
inferior rami, unilateral
or bilateral; without
manipulation.
27198............................... Closed treatment of NEW 4.75 4.75 Yes.
posterior pelvic ring
fracture(s),
dislocation(s), diastasis
or subluxation of the
ilium, sacroiliac joint,
and/or sacrum, with or
without anterior pelvic
ring fracture(s) and/or
dislocation(s) of the pubic
symphysis and/or superior/
inferior rami, unilateral
or bilateral; with
manipulation, requiring
more than local anesthesia
(i.e., general anesthesia,
moderate sedation, spinal/
epidural).
28289............................... Hallux rigidus correction 8.31 6.90 6.90 No.
with cheilectomy,
debridement and capsular
release of the first
metatarsophalangeal joint.
28291............................... Hallux rigidus correction NEW 7.81 8.01 No.
with cheilectomy,
debridement and capsular
release of the first
metatarsophalangeal joint;
with implant.
28292............................... Correction, hallux valgus 9.05 7.44 7.44 No.
(bunion), with or without
sesamoidectomy; Keller,
McBride, or Mayo type
procedure.
28295............................... Correction, hallux valgus NEW 8.25 8.57 No.
(bunionectomy), with
sesamoidectomy, when
performed; with proximal
metatarsal osteotomy, any
method.
28296............................... Correction, hallux valgus 8.35 8.25 8.25 No.
(bunion), with or without
sesamoidectomy; with
metatarsal osteotomy (eg,
Mitchell, Chevron, or
concentric type procedures).
28297............................... Correction, hallux valgus 9.43 9.29 9.29 No.
(bunion), with or without
sesamoidectomy; Lapidus-
type procedure.
28298............................... Correction, hallux valgus 8.13 7.75 7.75 No.
(bunion), with or without
sesamoidectomy; by phalanx
osteotomy.
28299............................... Correction, hallux valgus 11.57 9.29 9.29 No.
(bunion), with or without
sesamoidectomy; by double
osteotomy.
31500............................... Intubation, endotracheal, 2.33 2.66 3.00 No.
emergency procedure.
31551............................... Laryngoplasty; for laryngeal NEW 21.50 21.50 No.
stenosis, with graft,
without indwelling stent
placement, younger than 12
years of age.
31552............................... Laryngoplasty; for laryngeal NEW 20.50 20.50 No.
stenosis, with graft,
without indwelling stent
placement, age 12 years or
older.
31553............................... Laryngoplasty; for laryngeal NEW 22.00 22.00 No.
stenosis, with graft, with
indwelling stent placement,
younger than 12 years of
age.
31554............................... Laryngoplasty; for laryngeal NEW 22.00 22.00 No.
stenosis, with graft, with
indwelling stent placement,
age 12 years or older.
31572............................... Laryngoscopy, flexible; with NEW 3.01 3.01 No.
ablation or destruction of
lesion(s) with laser,
unilateral.
31573............................... Laryngoscopy, flexible; with NEW 2.43 2.43 No.
therapeutic injection(s)
(eg, chemodenervation agent
or corticosteroid, injected
percutaneous, transoral, or
via endoscope channel),
unilateral.
31574............................... Laryngoscopy, flexible; with NEW 2.43 2.43 No.
injection(s) for
augmentation (eg,
percutaneous, transoral),
unilateral.
31575............................... Laryngoscopy, flexible 1.10 0.94 0.94 No.
fiberoptic; diagnostic.
31576............................... Laryngoscopy, flexible 1.97 1.89 1.89 No.
fiberoptic; with biopsy.
31577............................... Laryngoscopy, flexible 2.47 2.19 2.19 No.
fiberoptic; with removal of
foreign body.
31578............................... Laryngoscopy, flexible 2.84 2.43 2.43 No.
fiberoptic; with removal of
lesion.
31579............................... Laryngoscopy, flexible or 2.26 1.88 1.88 No.
rigid fiberoptic, with
stroboscopy.
31580............................... Laryngoplasty; for laryngeal 14.66 14.60 14.60 No.
web, 2-stage, with keel
insertion and removal.
31584............................... Laryngoplasty; with open 20.47 17.58 17.58 No.
reduction of fracture.
31587............................... Laryngoplasty, cricoid split 15.27 15.27 15.27 No.
31591............................... Laryngoplasty, NEW 13.56 13.56 No.
medialization; unilateral.
31592............................... Cricotracheal resection..... NEW 25.00 25.00 No.

[[Page 80355]]

33340............................... Percutaneous transcatheter NEW 13.00 14.00 No.
closure of the left atrial
appendage with endocardial
implant, including
fluoroscopy, transseptal
puncture, catheter
placement(s), left atrial
angiography, left atrial
appendage angiography, when
performed, and radiological
supervision and
interpretation.
33390............................... Valvuloplasty, aortic valve, NEW 35.00 35.00 No.
open, with cardiopulmonary
bypass; simple (i.e.,
valvotomy, debridement,
debulking and/or simple
commissural resuspension).
33391............................... Valvuloplasty, aortic valve, NEW 41.50 41.50 No.
open, with cardiopulmonary
bypass; complex (eg,
leaflet extension, leaflet
resection, leaflet
reconstruction or
annuloplasty).
36440............................... Push transfusion, blood, 2 1.03 1.03 1.03 No.
years or younger.
36450............................... Exchange transfusion, blood; 2.23 3.50 3.50 No.
newborn.
36455............................... Exchange transfusion, blood; 2.43 2.43 2.43 No.
other than newborn.
36456............................... Partial exchange NEW 2.00 2.00 No.
transfusion, blood, plasma
or crystalloid
necessitating the skill of
a physician or other
qualified health care
professional, newborn.
36473............................... Endovenous ablation therapy NEW 3.50 3.50 No.
of incompetent vein,
extremity, inclusive of all
imaging guidance and
monitoring, percutaneous,
mechanochemical; first vein
treated.
36474............................... Endovenous ablation therapy NEW 1.75 1.75 No.
of incompetent vein,
extremity, inclusive of all
imaging guidance and
monitoring, percutaneous,
mechanochemical; subsequent
vein(s) treated in a single
extremity, each through
separate access sites.
36901............................... Introduction of needle(s) NEW 2.82 2.82 No.
and/or catheter(s),
dialysis circuit, with
diagnostic angiography of
the dialysis circuit,
including all direct
puncture(s) and catheter
placement(s), injection(s)
of contrast, all necessary
imaging from the arterial
anastomosis and adjacent
artery through entire
venous outflow including
the inferior or superior
vena cava, fluoroscopic
guidance, radiologic
supervision and
interpretation and image
documentation and report.
36902............................... Introduction of needle(s) NEW 4.24 4.24 No.
and/or catheter(s),
dialysis circuit, with
diagnostic angiography of
the dialysis circuit,
including all direct
puncture(s) and catheter
placement(s), injection(s)
of contrast, all necessary
imaging from the arterial
anastomosis and adjacent
artery through entire
venous outflow including
the inferior or superior
vena cava, fluoroscopic
guidance, radiologic
supervision and
interpretation and image
documentation and report;
with transluminal balloon
angioplasty, peripheral
dialysis segment, including
all imaging and
radiological supervision
and interpretation
necessary to perform the
angioplasty.
36903............................... Introduction of needle(s) NEW 5.85 5.85 No.
and/or catheter(s),
dialysis circuit, with
diagnostic angiography of
the dialysis circuit,
including all direct
puncture(s) and catheter
placement(s), injection(s)
of contrast, all necessary
imaging from the arterial
anastomosis and adjacent
artery through entire
venous outflow including
the inferior or superior
vena cava, fluoroscopic
guidance, radiologic
supervision and
interpretation and image
documentation and report;
with transcatheter
placement of intravascular
stent(s) peripheral
dialysis segment, including
all imaging and
radiological supervision
and interpretation
necessary to perform the
stenting, and all
angioplasty within the
peripheral dialysis segment.
36904............................... Percutaneous transluminal NEW 6.73 6.73 No.
mechanical thrombectomy and/
or infusion for
thrombolysis, dialysis
circuit, any method,
including all imaging and
radiological supervision
and interpretation,
diagnostic angiography,
fluoroscopic guidance,
catheter placement(s), and
intraprocedural
pharmacological
thrombolytic injection(s).

[[Page 80356]]

36905............................... Percutaneous transluminal NEW 8.46 8.46 No.
mechanical thrombectomy and/
or infusion for
thrombolysis, dialysis
circuit, any method,
including all imaging and
radiological supervision
and interpretation,
diagnostic angiography,
fluoroscopic guidance,
catheter placement(s), and
intraprocedural
pharmacological
thrombolytic injection(s);
with transluminal balloon
angioplasty, peripheral
dialysis segment, including
all imaging and
radiological supervision
and interpretation
necessary to perform the
angioplasty.
36906............................... Percutaneous transluminal NEW 9.88 9.88 No.
mechanical thrombectomy and/
or infusion for
thrombolysis, dialysis
circuit, any method,
including all imaging and
radiological supervision
and interpretation,
diagnostic angiography,
fluoroscopic guidance,
catheter placement(s), and
intraprocedural
pharmacological
thrombolytic injection(s);
with transcatheter
placement of an
intravascular stent(s),
peripheral dialysis
segment, including all
imaging and radiological
supervision and
interpretation to perform
the stenting and all
angioplasty within the
peripheral dialysis circuit.
36907............................... Transluminal balloon NEW 2.48 2.48 No.
angioplasty, central
dialysis segment, performed
through dialysis circuit,
including all imaging and
radiological supervision
and interpretation required
to perform the angioplasty.
36908............................... Transcatheter placement of NEW 3.73 3.73 No.
an intravascular stent(s),
central dialysis segment,
performed through dialysis
circuit, including all
imaging and radiological
supervision and
interpretation required to
perform the stenting, and
all angioplasty in the
central dialysis segment.
36909............................... Dialysis circuit permanent NEW 3.48 3.48 No.
vascular embolization or
occlusion (including main
circuit or any accessory
veins), endovascular,
including all imaging and
radiological supervision
and interpretation
necessary to complete the
intervention.
37246............................... Transluminal balloon NEW 7.00 7.00 No.
angioplasty (except lower
extremity artery(s) for
occlusive disease,
intracranial, coronary,
pulmonary, or dialysis
circuit), open or
percutaneous, including all
imaging and radiological
supervision and
interpretation necessary to
perform the angioplasty
within the same artery;
initial artery.
37247............................... Transluminal balloon NEW 3.50 3.50 No.
angioplasty (except lower
extremity artery(s) for
occlusive disease,
intracranial, coronary,
pulmonary, or dialysis
circuit), open or
percutaneous, including all
imaging and radiological
supervision and
interpretation necessary to
perform the angioplasty
within the same artery;
each additional artery.
37248............................... Transluminal balloon NEW 6.00 6.00 No.
angioplasty (except
dialysis circuit), open or
percutaneous, including all
imaging and radiological
supervision and
interpretation necessary to
perform the angioplasty
within the same vein;
initial vein.
37249............................... Transluminal balloon NEW 2.97 2.97 No.
angioplasty (except
dialysis circuit), open or
percutaneous, including all
imaging and radiological
supervision and
interpretation necessary to
perform the angioplasty
within the same vein; each
additional vein.
41530............................... Submucosal ablation of the 3.50 3.50 3.50 No.
tongue base,
radiofrequency, 1 or more
sites, per session.
43210............................... Esophagogastroduodenoscopy, 7.75 7.75 7.75 No.
flexible, transoral; with
esophagogastric
fundoplasty, partial or
complete, includes
duodenoscopy when performed.
43284............................... Laparoscopy, surgical, NEW 9.03 10.13 No.
esophageal sphincter
augmentation procedure,
placement of sphincter
augmentation device (i.e.,
magnetic band), including
cruroplasty when performed.
43285............................... Removal of esophageal NEW 9.37 10.47 No.
sphincter augmentation
device.
47531............................... Injection procedure for 1.80 1.30 1.30 No.
cholangiography,
percutaneous, complete
diagnostic procedure
including imaging guidance
(eg, ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation; existing
access.

[[Page 80357]]

47532............................... Injection procedure for 4.25 4.25 4.25 No.
cholangiography,
percutaneous, complete
diagnostic procedure
including imaging guidance
(eg, ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation; new access
(eg, percutaneous
transhepatic cholangiogram).
47533............................... Placement of biliary 6.00 5.38 5.38 No.
drainage catheter,
percutaneous, including
diagnostic cholangiography
when performed, imaging
guidance (eg, ultrasound
and/or fluoroscopy), and
all associated radiological
supervision and
interpretation; external.
47534............................... Placement of biliary 8.03 7.60 7.60 No.
drainage catheter,
percutaneous, including
diagnostic cholangiography
when performed, imaging
guidance (eg, ultrasound
and/or fluoroscopy), and
all associated radiological
supervision and
interpretation; internal-
external.
47535............................... Conversion of external 4.50 3.95 3.95 No.
biliary drainage catheter
to internal-external
biliary drainage catheter,
percutaneous, including
diagnostic cholangiography
when performed, imaging
guidance (eg, fluoroscopy),
and all associated
radiological supervision
and interpretation.
47536............................... Exchange of biliary drainage 2.88 2.61 2.61 No.
catheter (eg, external,
internal-external, or
conversion of internal-
external to external only),
percutaneous, including
diagnostic cholangiography
when performed, imaging
guidance (eg, fluoroscopy),
and all associated
radiological supervision
and interpretation.
47537............................... Removal of biliary drainage 1.83 1.84 1.84 No.
catheter, percutaneous,
requiring fluoroscopic
guidance (eg, with
concurrent indwelling
biliary stents), including
diagnostic cholangiography
when performed, imaging
guidance (eg, fluoroscopy),
and all associated
radiological supervision
and interpretation.
47538............................... Placement of stent(s) into a 6.60 4.75 4.75 No.
bile duct, percutaneous,
including diagnostic
cholangiography, imaging
guidance (eg, fluoroscopy
and/or ultrasound), balloon
dilation, catheter
exchange(s) and catheter
removal(s) when performed,
and all associated
radiological supervision
and interpretation, each
stent; existing access.
47539............................... Placement of stent(s) into a 9.00 8.75 8.75 No.
bile duct, percutaneous,
including diagnostic
cholangiography, imaging
guidance (eg, fluoroscopy
and/or ultrasound), balloon
dilation, catheter
exchange(s) and catheter
removal(s) when performed,
and all associated
radiological supervision
and interpretation, each
stent; new access, without
placement of separate
biliary drainage catheter.
47540............................... Placement of stent(s) into a 10.75 9.03 9.03 No.
bile duct, percutaneous,
including diagnostic
cholangiography, imaging
guidance (eg, fluoroscopy
and/or ultrasound), balloon
dilation, catheter
exchange(s) and catheter
removal(s) when performed,
and all associated
radiological supervision
and interpretation, each
stent; new access, with
placement of separate
biliary drainage catheter
(eg, external or internal-
external).
47541............................... Placement of access through 5.61 5.38 6.75 No.
the biliary tree and into
small bowel to assist with
an endoscopic biliary
procedure (eg, rendezvous
procedure), percutaneous,
including diagnostic
cholangiography when
performed, imaging guidance
(eg, ultrasound and/or
fluoroscopy), and all
associated radiological
supervision and
interpretation, new access.
47542............................... Balloon dilation of biliary 2.50 2.85 2.85 No.
duct(s) or of ampulla
(sphincteroplasty),
percutaneous, including
imaging guidance (eg,
fluoroscopy), and all
associated radiological
supervision and
interpretation, each duct.
47543............................... Endoluminal biopsy(ies) of 3.07 3.00 3.00 No.
biliary tree, percutaneous,
any method(s) (eg, brush,
forceps, and/or needle),
including imaging guidance
(eg, fluoroscopy), and all
associated radiological
supervision and
interpretation, single or
multiple.

[[Page 80358]]

47544............................... Removal of calculi/debris 4.29 3.28 3.28 No.
from biliary duct(s) and/or
gallbladder, percutaneous,
including destruction of
calculi by any method (eg,
mechanical,
electrohydraulic,
lithotripsy) when
performed, imaging guidance
(eg, fluoroscopy), and all
associated radiological
supervision and
interpretation.
49185............................... Sclerotherapy of a fluid 2.35 2.35 2.35 No.
collection (eg, lymphocele,
cyst, or seroma),
percutaneous, including
contrast injection(s),
sclerosant injection(s),
diagnostic study, imaging
guidance (eg, ultrasound,
fluoroscopy) and
radiological supervision
and interpretation when
performed.
50606............................... Endoluminal biopsy of ureter 3.16 3.16 3.16 No.
and/or renal pelvis, non-
endoscopic, including
imaging guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation.
50705............................... Ureteral embolization or 4.03 4.03 4.03 No.
occlusion, including
imaging guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation.
50706............................... Balloon dilation, ureteral 3.80 3.80 3.80 No.
stricture, including
imaging guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation.
51700............................... Bladder irrigation, simple, 0.88 0.60 0.60 No.
lavage and/or instillation.
51701............................... Insertion of non-indwelling 0.50 0.50 0.50 No.
bladder catheter (eg,
straight catheterization
for residual urine).
51702............................... Insertion of temporary 0.50 0.50 0.50 No.
indwelling bladder
catheter; simple (eg,
Foley).
51703............................... Insertion of temporary 1.47 1.47 1.47 No.
indwelling bladder
catheter; complicated (eg,
altered anatomy, fractured
catheter/balloon).
51720............................... Bladder instillation of 1.50 0.87 0.87 No.
anticarcinogenic agent
(including retention time).
51784............................... Electromyography studies 1.53 0.75 0.75 No.
(EMG) of anal or urethral
sphincter, other than
needle, any technique.
52000............................... Cystourethroscopy (separate 2.23 1.53 1.53 No.
procedure).
55700............................... Biopsy, prostate; needle or 2.58 2.06 2.50 No.
punch, single or multiple,
any approach.
55866............................... Laparoscopy, surgical 21.36 21.36 26.80 No.
prostatectomy, retropubic
radical, including nerve
sparing, includes robotic
assistance, when performed.
58555............................... Hysteroscopy, diagnostic 3.33 2.65 2.65 No.
(separate procedure).
58558............................... Hysteroscopy, surgical; with 4.74 4.17 4.17 No.
sampling (biopsy) of
endometrium and/or
polypectomy, with or
without D & C.
58559............................... Hysteroscopy, surgical; with 6.16 5.20 5.20 No.
lysis of intrauterine
adhesions (any method).
58560............................... Hysteroscopy, surgical; with 6.99 5.75 5.75 No.
division or resection of
intrauterine septum (any
method).
58561............................... Hysteroscopy, surgical; with 9.99 6.60 6.60 No.
removal of leiomyomata.
58562............................... Hysteroscopy, surgical; with 5.20 4.00 4.00 No.
removal of impacted foreign
body.
58563............................... Hysteroscopy, surgical; with 6.16 4.47 4.47 No.
endometrial ablation (eg,
endometrial resection,
electrosurgical ablation,
thermoablation).
58674............................... Laparoscopy, surgical, NEW 14.08 14.08 No.
ablation of uterine
fibroid(s) including
intraoperative ultrasound
guidance and monitoring,
radiofrequency.
61640............................... Balloon dilatation of N N N No.
intracranial vasospasm,
percutaneous; initial
vessel.
61641............................... Balloon dilatation of N N N No.
intracranial vasospasm,
percutaneous; each
additional vessel in same
vascular family.
61642............................... Balloon dilatation of N N N No.
intracranial vasospasm,
percutaneous; each
additional vessel in
different vascular family.
61645............................... Percutaneous arterial 15.00 15.00 15.00 No.
transluminal mechanical
thrombectomy and/or
infusion for thrombolysis,
intracranial, any method,
including diagnostic
angiography, fluoroscopic
guidance, catheter
placement, and
intraprocedural
pharmacological
thrombolytic injection(s).

[[Page 80359]]

61650............................... Endovascular intracranial 10.00 10.00 10.00 No.
prolonged administration of
pharmacologic agent(s)
other than for
thrombolysis, arterial,
including catheter
placement, diagnostic
angiography, and imaging
guidance; initial vascular
territory.
61651............................... Endovascular intracranial 4.25 4.25 4.25 No.
prolonged administration of
pharmacologic agent(s)
other than for
thrombolysis, arterial,
including catheter
placement, diagnostic
angiography, and imaging
guidance; each additional
vascular territory.
62320............................... Injection(s), of diagnostic NEW 1.80 1.80 No.
or therapeutic substance(s)
(eg, anesthetic,
antispasmodic, opioid,
steroid, other solution),
not including neurolytic
substances, including
needle or catheter
placement, interlaminar
epidural or subarachnoid,
cervical or thoracic;
without imaging guidance.
62321............................... Injection(s), of diagnostic NEW 1.95 1.95 No.
or therapeutic substance(s)
(eg, anesthetic,
antispasmodic, opioid,
steroid, other solution),
not including neurolytic
substances, including
needle or catheter
placement, interlaminar
epidural or subarachnoid,
cervical or thoracic; with
imaging guidance (i.e.,
fluoroscopy or CT).
62322............................... Injection(s), of diagnostic NEW 1.55 1.55 No.
or therapeutic substance(s)
(eg, anesthetic,
antispasmodic, opioid,
steroid, other solution),
not including neurolytic
substances, including
needle or catheter
placement, interlaminar
epidural or subarachnoid,
lumbar or sacral (caudal);
without imaging guidance.
62323............................... Injection(s), of diagnostic NEW 1.80 1.80 No.
or therapeutic substance(s)
(eg, anesthetic,
antispasmodic, opioid,
steroid, other solution),
not including neurolytic
substances, including
needle or catheter
placement, interlaminar
epidural or subarachnoid,
lumbar or sacral (caudal);
with imaging guidance
(i.e., fluoroscopy or CT).
62324............................... Injection(s), including NEW 1.89 1.89 No.
indwelling catheter
placement, continuous
infusion or intermittent
bolus, of diagnostic or
therapeutic substance(s)
(eg, anesthetic,
antispasmodic, opioid,
steroid, other solution),
not including neurolytic
substances, interlaminar
epidural or subarachnoid,
cervical or thoracic;
without imaging guidance.
62325............................... Injection(s), including NEW 2.20 2.20 No.
indwelling catheter
placement, continuous
infusion or intermittent
bolus, of diagnostic or
therapeutic substance(s)
(eg, anesthetic,
antispasmodic, opioid,
steroid, other solution),
not including neurolytic
substances, interlaminar
epidural or subarachnoid,
cervical or thoracic; with
imaging guidance (i.e.,
fluoroscopy or CT).
62326............................... Injection(s), including NEW 1.78 1.78 No.
indwelling catheter
placement, continuous
infusion or intermittent
bolus, of diagnostic or
therapeutic substance(s)
(eg, anesthetic,
antispasmodic, opioid,
steroid, other solution),
not including neurolytic
substances, interlaminar
epidural or subarachnoid,
lumbar or sacral (caudal);
without imaging guidance.
62327............................... Injection(s), including NEW 1.90 1.90 No.
indwelling catheter
placement, continuous
infusion or intermittent
bolus, of diagnostic or
therapeutic substance(s)
(eg, anesthetic,
antispasmodic, opioid,
steroid, other solution),
not including neurolytic
substances, interlaminar
epidural or subarachnoid,
lumbar or sacral (caudal);
with imaging guidance
(i.e., fluoroscopy or CT).
62380............................... Endoscopic decompression of NEW 9.09 C No.
spinal cord, nerve root(s),
including laminotomy,
partial facetectomy,
foraminotomy, discectomy
and/or excision of
herniated intervertebral
disc; 1 interspace, lumbar.
64461............................... Paravertebral block (PVB) 1.75 1.75 1.75 No.
(paraspinous block),
thoracic; single injection
site (includes imaging
guidance, when performed).
64462............................... Paravertebral block (PVB) 1.10 1.10 1.10 No.
(paraspinous block),
thoracic; second and any
additional injection
site(s) (includes imaging
guidance, when performed).

[[Page 80360]]

64463............................... Paravertebral block (PVB) 1.81 1.81 1.90 No.
(paraspinous block),
thoracic; continuous
infusion by catheter
(includes imaging guidance,
when performed).
64553............................... Percutaneous implantation of 2.36 2.36 2.36 No.
neurostimulator electrode
array; cranial nerve.
64555............................... Percutaneous implantation of 2.32 2.32 2.32 No.
neurostimulator electrode
array; peripheral nerve
(excludes sacral nerve).
64566............................... Posterior tibial 0.60 0.60 0.60 No.
neurostimulation,
percutaneous needle
electrode, single
treatment, includes
programming.
65778............................... Placement of amniotic 1.00 1.00 1.00 No.
membrane on the ocular
surface; without sutures.
65779............................... Placement of amniotic 2.50 2.50 2.50 No.
membrane on the ocular
surface; single layer,
sutured.
65780............................... Ocular surface 7.81 7.81 7.81 No.
reconstruction; amniotic
membrane transplantation,
multiple layers.
65855............................... Trabeculoplasty by laser 2.66 3.00 3.00 No.
surgery.
66170............................... Fistulization of sclera for 11.27 13.94 13.94 No.
glaucoma; trabeculectomy ab
externo in absence of
previous surgery.
66172............................... Fistulization of sclera for 12.57 14.84 14.84 No.
glaucoma; trabeculectomy ab
externo with scarring from
previous ocular surgery or
trauma (includes injection
of antifibrotic agents).
67101............................... Repair of retinal 8.80 3.50 3.50 No.
detachment, 1 or more
sessions; cryotherapy or
diathermy, including
drainage of subretinal
fluid, when performed.
67105............................... Repair of retinal 8.53 3.39 3.39 No.
detachment, 1 or more
sessions; photocoagulation,
including drainage of
subretinal fluid, when
performed.
67107............................... Repair of retinal 14.06 16.00 16.00 No.
detachment; scleral
buckling (such as lamellar
scleral dissection,
imbrication or encircling
procedure), including, when
performed, implant,
cryotherapy,
photocoagulation, and
drainage of subretinal
fluid.
67108............................... Repair of retinal 15.19 17.13 17.13 No.
detachment; with
vitrectomy, any method,
including, when performed,
air or gas tamponade, focal
endolaser photocoagulation,
cryotherapy, drainage of
subretinal fluid, scleral
buckling, and/or removal of
lens by same technique.
67110............................... Repair of retinal 8.31 10.25 10.25 No.
detachment; by injection of
air or other gas (eg,
pneumatic retinopexy).
67113............................... Repair of complex retinal 19.00 19.00 19.00 No.
detachment (eg,
proliferative
vitreoretinopathy, stage C-
1 or greater, diabetic
traction retinal
detachment, retinopathy of
prematurity, retinal tear
of greater than 90
degrees), with vitrectomy
and membrane peeling,
including, when performed,
air, gas, or silicone oil
tamponade, cryotherapy,
endolaser photocoagulation,
drainage of subretinal
fluid, scleral buckling,
and/or removal of lens.
67227............................... Destruction of extensive or 3.50 3.50 3.50 No.
progressive retinopathy
(eg, diabetic retinopathy),
cryotherapy, diathermy.
67228............................... Treatment of extensive or 4.39 4.39 4.39 No.
progressive retinopathy
(eg, diabetic retinopathy),
photocoagulation.
70540............................... Magnetic resonance (eg, 1.35 1.35 1.35 No.
proton) imaging, orbit,
face, and/or neck; without
contrast material(s).
70542............................... Magnetic resonance (eg, 1.62 1.62 1.62 No.
proton) imaging, orbit,
face, and/or neck; with
contrast material(s).
70543............................... Magnetic resonance (eg, 2.15 2.15 2.15 No.
proton) imaging, orbit,
face, and/or neck; without
contrast material(s),
followed by contrast
material(s) and further
sequences.
72170............................... Radiologic examination, 0.17 0.17 0.17 No.
pelvis; 1 or 2 views.
73501............................... Radiologic examination, hip, 0.18 0.18 0.18 No.
unilateral, with pelvis
when performed; 1 view.
73502............................... Radiologic examination, hip, 0.22 0.22 0.22 No.
unilateral, with pelvis
when performed; 2-3 views.
73503............................... Radiologic examination, hip, 0.27 0.27 0.27 No.
unilateral, with pelvis
when performed; minimum of
4 views.
73521............................... Radiologic examination, 0.22 0.22 0.22 No.
hips, bilateral, with
pelvis when performed; 2
views.
73522............................... Radiologic examination, 0.29 0.29 0.29 No.
hips, bilateral, with
pelvis when performed; 3-4
views.
73523............................... Radiologic examination, 0.31 0.31 0.31 No.
hips, bilateral, with
pelvis when performed;
minimum of 5 views.

[[Page 80361]]

73551............................... Radiologic examination, 0.16 0.16 0.16 No.
femur; 1 view.
73552............................... Radiologic examination, 0.18 0.18 0.18 No.
femur; minimum 2 views.
74712............................... Magnetic resonance (eg, 3.00 3.00 3.00 No.
proton) imaging, fetal,
including placental and
maternal pelvic imaging
when performed; single or
first gestation.
74713............................... Magnetic resonance (eg, 1.78 1.85 1.85 No.
proton) imaging, fetal,
including placental and
maternal pelvic imaging
when performed; each
additional gestation.
76706............................... Ultrasound, abdominal aorta, NEW 0.55 0.55 No.
real time with image
documentation, screening
study for abdominal aortic
aneurysm.
77001............................... Fluoroscopic guidance for 0.38 0.38 0.38 No.
central venous access
device placement,
replacement (catheter only
or complete), or removal
(includes fluoroscopic
guidance for vascular
access and catheter
manipulation, any necessary
contrast injections through
access site or catheter
with related venography
radiologic supervision and
interpretation, and
radiographic documentation
of final catheter position).
77002............................... Fluoroscopic guidance for 0.54 0.38 0.54 No.
needle placement (eg,
biopsy, aspiration,
injection, localization
device).
77003............................... Fluoroscopic guidance and 0.60 0.38 0.60 No.
localization of needle or
catheter tip for spine or
paraspinous diagnostic or
therapeutic injection
procedures (epidural or
subarachnoid).
77065/G0206......................... Diagnostic mammography, NEW 0.81 0.81 No.
including computer-aided
detection (CAD) when
performed; unilateral.
77066/G0204......................... Diagnostic mammography, NEW 1.00 1.00 No.
including computer-aided
detection (CAD) when
performed; bilateral.
77067/G0202......................... Screening mammography, NEW 0.76 0.76 No.
bilateral (2-view study of
each breast), including
computer-aided detection
(CAD) when performed.
77332............................... Treatment devices, design 0.54 0.45 0.45 No.
and construction; simple
(simple block, simple
bolus).
77333............................... Treatment devices, design 0.84 0.75 0.75 No.
and construction;
intermediate (multiple
blocks, stents, bite
blocks, special bolus).
77334............................... Treatment devices, design 1.24 1.15 1.15 No.
and construction; complex
(irregular blocks, special
shields, compensators,
wedges, molds or casts).
77470............................... Special treatment procedure 2.09 2.03 2.03 No.
(eg, total body
irradiation, hemibody
radiation, per oral or
endocavitary irradiation).
77778............................... Interstitial radiation 8.00 8.00 8.78 No.
source application,
complex, includes
supervision, handling,
loading of radiation
source, when performed.
77790............................... Supervision, handling, 0.00 0.00 0.00 No.
loading of radiation source.
78264............................... Gastric emptying imaging 0.74 0.79 0.79 No.
study (eg, solid, liquid,
or both).
78265............................... Gastric emptying imaging 0.98 0.98 0.98 No.
study (eg, solid, liquid,
or both); with small bowel
transit.
78266............................... Gastric emptying imaging 1.08 1.08 1.08 No.
study (eg, solid, liquid,
or both); with small bowel
and colon transit, multiple
days.
88104............................... Cytopathology, fluids, 0.56 0.56 0.56 No.
washings or brushings,
except cervical or vaginal;
smears with interpretation.
88106............................... Cytopathology, fluids, 0.37 0.37 0.37 No.
washings or brushings,
except cervical or vaginal;
simple filter method with
interpretation.
88108............................... Cytopathology, concentration 0.44 0.44 0.44 No.
technique, smears and
interpretation (eg,
Saccomanno technique).
88112............................... Cytopathology, selective 0.56 0.56 0.56 No.
cellular enhancement
technique with
interpretation (eg, liquid
based slide preparation
method), except cervical or
vaginal.
88160............................... Cytopathology, smears, any 0.50 0.50 0.50 No.
other source; screening and
interpretation.
88161............................... Cytopathology, smears, any 0.50 0.50 0.50 No.
other source; preparation,
screening and
interpretation.
88162............................... Cytopathology, smears, any 0.76 0.76 0.76 No.
other source; extended
study involving over 5
slides and/or multiple
stains.
88184............................... Flow cytometry, cell 0.00 0.00 0.00 No.
surface, cytoplasmic, or
nuclear marker, technical
component only; first
marker.
88185............................... Flow cytometry, cell 0.00 0.00 0.00 No.
surface, cytoplasmic, or
nuclear marker, technical
component only; each
additional marker.
88187............................... Flow cytometry, 1.36 0.74 0.74 No.
interpretation; 2 to 8
markers.

[[Page 80362]]

88188............................... Flow cytometry, 1.69 1.20 1.20 No.
interpretation; 9 to 15
markers.
88189............................... Flow cytometry, 2.23 1.70 1.70 No.
interpretation; 16 or more
markers.
88321............................... Consultation and report on 1.63 1.63 1.63 No.
referred slides prepared
elsewhere.
88323............................... Consultation and report on 1.83 1.83 1.83 No.
referred material requiring
preparation of slides.
88325............................... Consultation, comprehensive, 2.50 2.85 2.85 No.
with review of records and
specimens, with report on
referred material.
88341............................... Immunohistochemistry or 0.53 0.56 0.56 No.
immunocytochemistry, per
specimen; each additional
single antibody stain
procedure (List separately
in addition to code for
primary procedure).
88342............................... Immunohistochemistry or 0.70 0.70 0.70 No.
immunocytochemistry, per
specimen; initial single
antibody stain procedure.
88344............................... Immunohistochemistry or 0.77 0.77 0.77 No.
immunocytochemistry, per
specimen; each multiplex
antibody stain procedure.
88350............................... Immunofluorescence, per 0.56 0.59 0.59 No.
specimen; each additional
single antibody stain
procedure.
88364............................... In situ hybridization (eg, 0.67 0.70 0.70 No.
FISH), per specimen; each
additional single probe
stain procedure.
88369............................... Morphometric analysis, in 0.67 0.70 0.70 No.
situ hybridization
(quantitative or semi-
quantitative), manual, per
specimen; each additional
single probe stain
procedure.
91110............................... Gastrointestinal tract 3.64 2.49 2.49 No.
imaging, intraluminal (eg,
capsule endoscopy),
esophagus through ileum,
with interpretation and
report.
91111............................... Gastrointestinal tract 1.00 1.00 1.00 No.
imaging, intraluminal (eg,
capsule endoscopy),
esophagus with
interpretation and report.
91200............................... Liver elastography, 0.27 0.27 0.27 No.
mechanically induced shear
wave (eg, vibration),
without imaging, with
interpretation and report.
92132............................... Scanning computerized 0.35 0.30 0.30 No.
ophthalmic diagnostic
imaging, anterior segment,
with interpretation and
report, unilateral or
bilateral.
92133............................... Scanning computerized 0.50 0.40 0.40 No.
ophthalmic diagnostic
imaging, posterior segment,
with interpretation and
report, unilateral or
bilateral; optic nerve.
92134............................... Scanning computerized 0.50 0.45 0.45 No.
ophthalmic diagnostic
imaging, posterior segment,
with interpretation and
report, unilateral or
bilateral; retina.
92235............................... Fluorescein angiography 0.81 0.75 0.75 No.
(includes multiframe
imaging) with
interpretation and report.
92240............................... Indocyanine-green 1.10 0.80 0.80 No.
angiography (includes
multiframe imaging) with
interpretation and report.
92250............................... Fundus photography with 0.44 0.40 0.40 No.
interpretation and report.
92242............................... Fluorescein angiography and NEW 0.95 0.95 No.
indocyanine-green
angiography (includes
multiframe imaging)
performed at the same
patient encounter with
interpretation and report,
unilateral or bilateral.
93050............................... Arterial pressure waveform 0.17 0.17 0.17 No.
analysis for assessment of
central arterial pressures,
includes obtaining
waveform(s), digitization
and application of
nonlinear mathematical
transformations to
determine central arterial
pressures and augmentation
index, with interpretation
and report, upper extremity
artery, non-invasive.
93590............................... Percutaneous transcatheter NEW 18.23 21.70 No.
closure of paravalvular
leak; initial occlusion
device, mitral valve.
93591............................... Percutaneous transcatheter NEW 14.50 17.97 No.
closure of paravalvular
leak; initial occlusion
device, aortic valve.
93592............................... Percutaneous transcatheter NEW 6.81 8.00 No.
closure of paravalvular
leak; each additional
occlusion device (list
separately in addition to
code for primary service).
95144............................... Professional services for 0.06 0.06 0.06 No.
the supervision of
preparation and provision
of antigens for allergen
immunotherapy, single dose
vial(s) (specify number of
vials).
95165............................... Professional services for 0.06 0.06 0.06 No.
the supervision of
preparation and provision
of antigens for allergen
immunotherapy; single or
multiple antigens (specify
number of doses).
95812............................... Electroencephalogram (EEG) 1.08 1.08 1.08 No.
extended monitoring; 41-60
minutes.

[[Page 80363]]

95813............................... Electroencephalogram (EEG) 1.73 1.63 1.63 No.
extended monitoring;
greater than 1 hour.
95957............................... Digital analysis of 1.98 1.98 1.98 No.
electroencephalogram (EEG)
(eg, for epileptic spike
analysis).
95971............................... Electronic analysis of 0.78 0.78 0.78 No.
implanted neurostimulator
pulse generator system (eg,
rate, pulse amplitude,
pulse duration,
configuration of wave form,
battery status, electrode
selectability, output
modulation, cycling,
impedance and patient
compliance measurements);
simple spinal cord, or
peripheral (i.e.,
peripheral nerve, sacral
nerve, neuromuscular)
neurostimulator pulse
generator/transmitter, with
intraoperative or
subsequent programming.
95972............................... Electronic analysis of 0.80 0.80 0.80 No.
implanted neurostimulator
pulse generator system (eg,
rate, pulse amplitude,
pulse duration,
configuration of wave form,
battery status, electrode
selectability, output
modulation, cycling,
impedance and patient
compliance measurements);
complex spinal cord, or
peripheral (i.e.,
peripheral nerve, sacral
nerve, neuromuscular)
(except cranial nerve)
neurostimulator pulse
generator/transmitter, with
intraoperative or
subsequent programming.
96160............................... Administration of patient- NEW 0.00 0.00 No.
focused health risk
assessment instrument (eg,
health hazard appraisal)
with scoring and
documentation, per
standardized instrument.
96161............................... Administration of caregiver- NEW I 0.00 No.
focused health risk
assessment instrument (eg,
depression inventory) for
the benefit of the patient,
with scoring and
documentation, per
standardized instrument.
96931............................... Reflectance confocal 0.00 0.75 0.80 No.
microscopy (RCM) for
cellular and sub-cellular
imaging of skin; image
acquisition and
interpretation and report,
first lesion.
96932............................... Reflectance confocal 0.00 0.00 0.00 No.
microscopy (RCM) for
cellular and sub-cellular
imaging of skin; image
acquisition only, first
lesion.
96933............................... Reflectance confocal 0.00 0.75 0.80 No.
microscopy (RCM) for
cellular and sub-cellular
imaging of skin;
interpretation and report
only, first lesion.
96934............................... Reflectance confocal 0.00 0.71 0.76 No.
microscopy (RCM) for
cellular and sub-cellular
imaging of skin; image
acquisition and
interpretation and report,
each additional lesion.
96935............................... Reflectance confocal 0.00 0.00 0.00 No.
microscopy (RCM) for
cellular and sub-cellular
imaging of skin; image
acquisition only, each
additional lesion.
96936............................... Reflectance confocal 0.00 0.71 0.76 No.
microscopy (RCM) for
cellular and sub-cellular
imaging of skin;
interpretation and report
only, each additional
lesion.
97161............................... Physical therapy evaluation; NEW 1.20 1.20 Yes.
low complexity.
97162............................... Physical therapy evaluation; NEW 1.20 1.20 No.
moderate complexity.
97163............................... Physical therapy evaluation; NEW 1.20 1.20 Yes.
high complexity.
97164............................... Reevaluation of physical NEW 0.60 0.75 No.
therapy established plan of
care.
97165............................... Occupational therapy NEW 1.20 1.20 Yes.
evaluation; low complexity.
97166............................... Occupational therapy NEW 1.20 1.20 No.
evaluation; moderate
complexity.
97167............................... Occupational therapy NEW 1.20 1.20 Yes.
evaluation; high complexity.
97168............................... Reevaluation of occupational NEW 0.60 0.75 No.
therapy care/established
plan of care.
99151............................... Moderate sedation services NEW 0.50 0.50 No.
provided by the same
physician or other
qualified health care
professional performing the
diagnostic or therapeutic
service that the sedation
supports, requiring the
presence of an independent
trained observer to assist
in the monitoring of the
patient's level of
consciousness and
physiological status;
initial 15 minutes of intra-
service time, patient
younger than 5 years of age.

[[Page 80364]]

99152............................... Moderate sedation services NEW 0.25 0.25 No.
provided by the same
physician or other
qualified health care
professional performing the
diagnostic or therapeutic
service that the sedation
supports, requiring the
presence of an independent
trained observer to assist
in the monitoring of the
patient's level of
consciousness and
physiological status;
initial 15 minutes of intra-
service time, patient age 5
years or older.
99153............................... Moderate sedation services NEW 0.00 0.00 No.
provided by the same
physician or other
qualified health care
professional performing the
diagnostic or therapeutic
service that the sedation
supports, requiring the
presence of an independent
trained observer to assist
in the monitoring of the
patient's level of
consciousness and
physiological status; each
additional 15 minutes of
intra-service time.
99155............................... Moderate sedation services NEW 1.90 1.90 No.
provided by a physician or
other qualified health care
professional other than the
physician or other
qualified health care
professional performing the
diagnostic or therapeutic
service that the sedation
supports; initial 15
minutes of intra-service
time, patient younger than
5 years of age.
99156............................... Moderate sedation services NEW 1.65 1.65 No.
provided by a physician or
other qualified health care
professional other than the
physician or other
qualified health care
professional performing the
diagnostic or therapeutic
service that the sedation
supports; initial 15
minutes of intra-service
time, patient age 5 years
or older.
99157............................... Moderate sedation services NEW 1.25 1.25 No.
provided by a physician or
other qualified health care
professional other than the
physician or other
qualified health care
professional performing the
diagnostic or therapeutic
service that the sedation
supports; each additional
15 minutes intra-service
time.
99354............................... Prolonged evaluation and 1.77 2.33 2.33 No.
management or psychotherapy
service(s) (beyond the
typical service time of the
primary procedure) in the
office or other outpatient
setting requiring direct
patient contact beyond the
usual service; first hour.
99358............................... Prolonged evaluation and 2.10 2.10 2.10 No.
management service before
and/or after direct patient
care; first hour.
99359............................... Prolonged evaluation and 1.00 1.00 1.00 No.
management service before
and/or after direct patient
care; each additional 30
minutes.
99487............................... Complex chronic care 0.00 1.00 1.00 No.
management services, with
the following required
elements: multiple (two or
more) chronic conditions
expected to last at least
12 months, or until the
death of the patient,
chronic conditions place
the patient at significant
risk of death, acute
exacerbation/
decompensation, or
functional decline,
establishment or
substantial revision of a
comprehensive care plan,
moderate or high complexity
medical decision making; 60
minutes of clinical staff
time directed by a
physician or other
qualified health care
professional, per calendar
month;
99489............................... Complex chronic care 0.00 0.50 0.50 No.
management services, with
the following required
elements: multiple (two or
more) chronic conditions
expected to last at least
12 months, or until the
death of the patient,
chronic conditions place
the patient at significant
risk of death, acute
exacerbation/
decompensation, or
functional decline,
establishment or
substantial revision of a
comprehensive care plan,
moderate or high complexity
medical decision making; 60
minutes of clinical staff
time directed by a
physician or other
qualified health care
professional, per calendar
month.; each additional 30
minutes of clinical staff
time directed by a
physician or other
qualified health care
professional, per calendar
month.
G0416............................... Surgical pathology, gross 3.09 3.60 3.60 No.
and microscopic
examinations, for prostate
needle biopsy, any method.

[[Page 80365]]

G0500............................... Moderate sedation services NEW 0.10 0.10 No.
provided by the same
physician or other
qualified health care
professional performing a
gastrointestinal endoscopic
service that sedation
supports, requiring the
presence of an independent
trained observer to assist
in the monitoring of the
patient's level of
consciousness and
physiological status;
initial 15 minutes of intra-
service time; patient age 5
years or older. (additional
time may be reported with
99153, as appropriate).
G0501............................... Resource-intensive services NEW 0.48 B No.
for patients for whom the
use of specialized mobility-
assistive technology (such
as adjustable height chairs
or tables, patient lift,
and adjustable padded leg
supports) is medically
necessary and used during
the provision of an office/
outpatient, evaluation and
management visit. (List
separately in addition to
primary service).
G0502............................... Initial psychiatric NEW 1.59 1.70 No.
collaborative care
management, first 70
minutes in the first
calendar month of
behavioral health care
manager activities, in
consultation with a
psychiatric consultant, and
directed by the treating
physician or other
qualified health care
professional, with the
following required
elements:.
outreach to and
engagement in treatment of
a patient directed by the
treating physician or other
qualified health care
professional;.
initial assessment
of the patient, including
administration of validated
rating scales, with the
development of an
individualized treatment
plan;.
review by the
psychiatric consultant with
modifications of the plan
if recommended;.
entering patient in
a registry and tracking
patient follow-up and
progress using the
registry, with appropriate
documentation, and
participation in weekly
caseload consultation with
the psychiatric consultant;
and.
provision of brief
interventions using
evidence-based techniques
such as behavioral
activation, motivational
interviewing, and other
focused treatment
strategies..
G0503............................... Subsequent psychiatric NEW 1.42 1.53 No.
collaborative care
management, first 60
minutes in a subsequent
month of behavioral health
care manager activities, in
consultation with a
psychiatric consultant, and
directed by the treating
physician or other
qualified health care
professional, with the
following required
elements: tracking
patient follow-up and
progress using the
registry, with appropriate
documentation;
participation in
weekly caseload
consultation with the
psychiatric consultant;.
ongoing
collaboration with and
coordination of the
patient's mental health
care with the treating
physician or other
qualified health care
professional and any other
treating mental health
providers;.
additional review
of progress and
recommendations for changes
in treatment, as indicated,
including medications,
based on recommendations
provided by the psychiatric
consultant;.
provision of brief
interventions using
evidence-based techniques
such as behavioral
activation, motivational
interviewing, and other
focused treatment
strategies;.
monitoring of
patient outcomes using
validated rating scales;
and relapse prevention
planning with patients as
they achieve remission of
symptoms and/or other
treatment goals and are
prepared for discharge from
active treatment..

[[Page 80366]]

G0504............................... Initial or subsequent NEW 0.71 0.82 No.
psychiatric collaborative
care management, each
additional 30 minutes in a
calendar month of
behavioral health care
manager activities, in
consultation with a
psychiatric consultant, and
directed by the treating
physician or other
qualified health care
professional (List
separately in addition to
code for primary
procedure). (Use GPPP3 in
conjunction with GPPP1,
GPPP2).
G0505............................... Cognition and functional NEW 3.30 3.44 Yes.
assessment using
standardized instruments
with development of
recorded care plan for the
patient with cognitive
impairment, history
obtained from patient and/
or caregiver, in office or
other outpatient setting or
home or domiciliary or rest
home.
G0506............................... Comprehensive assessment of NEW 0.87 0.87 No.
and care planning for
patients requiring chronic
care management services.
(List separately in
addition to primary monthly
care management service).
G0507............................... Care management services for NEW 0.61 0.61 No.
behavioral health
conditions, at least 20
minutes of clinical staff
time, directed by a
physician or other
qualified health care
professional, per calendar
month, with the following
required elements:
Initial assessment
or follow-up monitoring,
including the use of
applicable validated rating
scales;.
Behavioral health
care planning in relation
to behavioral/psychiatric
health problems, including
revision for patients who
are not progressing or
whose status changes;.
Facilitating and
coordinating treatment such
as psychotherapy,
pharmacotherapy, counseling
and/or psychiatric
consultation; and.
Continuity of care
with a designated member of
the care team.
G0508............................... Telehealth consultation, NEW 4.00 4.00 No.
critical care, initial,
physicians typically spend
60 minutes communicating
with the patient and
providers via telehealth.
G0509............................... Telehealth consultation, NEW 3.86 3.86 No.
critical care, subsequent,
physicians typically spend
50 minutes communicating
with the patient and
providers via telehealth.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 80367]]

Table 28--CY 2017 Final Rule Direct PE Refinement Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
RUC
HCPCS code Input code Labor activity recommendation CMS Direct
HCPCS code description Input code description NF/F (where or current value refinement Comment costs
applicable) (min or qty) (min or qty) change
--------------------------------------------------------------------------------------------------------------------------------------------------------
11732..... Remove nail EF015........... mayo stand..... NF ............... 0 8 G1: See preamble 0.01
plate add-on. text.
11732..... Remove nail EF031........... table, power... NF ............... 7 8 E15: Refined 0.02
plate add-on. equipment time
to conform to
changes in
clinical labor
time.
11732..... Remove nail EQ137........... instrument NF ............... 0 8 G1: See preamble 0.02
plate add-on. pack, basic text.
($500-$1499).
11732..... Remove nail EQ168........... light, exam.... NF ............... 7 8 E15: Refined 0.00
plate add-on. equipment time
to conform to
changes in
clinical labor
time.
11732..... Remove nail L037D........... RN/LPN/MTA..... NF Assist 7 8 G1: See preamble 0.37
plate add-on. physician in text.
performing
procedure.
11732..... Remove nail SC031........... needle, 30g.... NF ............... 1 0 S9: Add-on code. -0.34
plate add-on. Additional
supplies not
typical; see
preamble text.
11732..... Remove nail SC051........... syringe 10-12ml NF ............... 1 0 S9: Add-on code. -0.18
plate add-on. Additional
supplies not
typical; see
preamble text.
11732..... Remove nail SG067........... penrose drain NF ............... 1 0 S9: Add-on code. -0.50
plate add-on. (0.25in x 4in). Additional
supplies not
typical; see
preamble text.
11732..... Remove nail SH047........... lidocaine 1%-2% NF ............... 10 0 S9: Add-on code. -0.35
plate add-on. inj Additional
(Xylocaine). supplies not
typical; see
preamble text.
11732..... Remove nail SH064........... silver NF ............... 0.5 0 S9: Add-on code. -0.08
plate add-on. sulfadiazene Additional
cream supplies not
(Silvadene). typical; see
preamble text.
11732..... Remove nail SJ053........... swab-pad, NF ............... 2 1 S9: Add-on code. -0.01
plate add-on. alcohol. Additional
supplies not
typical; see
preamble text.
27197..... Clsd tx pelvic L037D........... RN/LPN/MTA..... F 99212 27 2 0 G1: See preamble -19.98
ring fx. minutes. text.
27197..... Clsd tx pelvic L037D........... RN/LPN/MTA..... F 99213 36 1 0 G1: See preamble -13.32
ring fx. minutes. text.
27198..... Clsd tx pelvic L037D........... RN/LPN/MTA..... F 99212 27 1 0 G1: See preamble -9.99
ring fx. minutes. text.
27198..... Clsd tx pelvic L037D........... RN/LPN/MTA..... F 99213 36 2 0 G1: See preamble -26.64
ring fx. minutes. text.
31551..... Laryngoplasty EQ137........... instrument F ............... 138 129 E5: Refined -0.02
laryngeal sten. pack, basic equipment time
($500-$1499). to conform to
established
policies for
surgical
instrument packs.
31551..... Laryngoplasty EQ167........... light source, F ............... 0 108 E13: Equipment 3.00
laryngeal sten. xenon. item replaces
another item;
see preamble
text EQ170.
31551..... Laryngoplasty ES031........... video system, F ............... 0 108 E19: Refined 13.97
laryngeal sten. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31551..... Laryngoplasty ES060........... Video-flexible F ............... 198 0 G1: See preamble -62.98
laryngeal sten. laryngoscope text.
system.
31551..... Laryngoplasty ES063........... rhinolaryngosco F ............... 0 189 E4: Refined 8.76
laryngeal sten. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31552..... Laryngoplasty EQ137........... instrument F ............... 138 129 E5: Refined -0.02
laryngeal sten. pack, basic equipment time
($500-$1499). to conform to
established
policies for
surgical
instrument packs.
31552..... Laryngoplasty EQ167........... light source, F ............... 0 108 E13: Equipment 3.00
laryngeal sten. xenon. item replaces
another item;
see preamble
text EQ170.
31552..... Laryngoplasty ES031........... video system, F ............... 0 108 E19: Refined 13.97
laryngeal sten. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31552..... Laryngoplasty ES060........... Video-flexible F ............... 198 0 G1: See preamble -62.98
laryngeal sten. laryngoscope text.
system.
31552..... Laryngoplasty ES063........... rhinolaryngosco F ............... 0 189 E4: Refined 8.76
laryngeal sten. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31553..... Laryngoplasty EQ137........... instrument F ............... 138 129 E5: Refined -0.02
laryngeal sten. pack, basic equipment time
($500-$1499). to conform to
established
policies for
surgical
instrument packs.

[[Page 80368]]

31553..... Laryngoplasty EQ167........... light source, F ............... 0 108 E13: Equipment 3.00
laryngeal sten. xenon. item replaces
another item;
see preamble
text EQ170.
31553..... Laryngoplasty ES031........... video system, F ............... 0 108 E19: Refined 13.97
laryngeal sten. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31553..... Laryngoplasty ES060........... Video-flexible F ............... 198 0 G1: See preamble -62.98
laryngeal sten. laryngoscope text.
system.
31553..... Laryngoplasty ES063........... rhinolaryngosco F ............... 0 189 E4: Refined 8.76
laryngeal sten. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31554..... Laryngoplasty EQ137........... instrument F ............... 138 129 E5: Refined -0.02
laryngeal sten. pack, basic equipment time
($500-$1499). to conform to
established
policies for
surgical
instrument packs.
31554..... Laryngoplasty EQ167........... light source, F ............... 0 108 E13: Equipment 3.00
laryngeal sten. xenon. item replaces
another item;
see preamble
text EQ170.
31554..... Laryngoplasty ES031........... video system, F ............... 0 108 E19: Refined 13.97
laryngeal sten. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31554..... Laryngoplasty ES060........... Video-flexible F ............... 198 0 G1: See preamble -62.98
laryngeal sten. laryngoscope text.
system.
31554..... Laryngoplasty ES063........... rhinolaryngosco F ............... 0 189 E4: Refined 8.76
laryngeal sten. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31572..... Largsc w/laser EQ167........... light source, NF ............... 0 38 E19: Refined 1.05
dstrj les. xenon. equipment time
to conform to
established
policies for
scope
accessories.
31572..... Largsc w/laser ES031........... video system, NF ............... 0 38 E19: Refined 4.92
dstrj les. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31572..... Largsc w/laser ES061........... Video-flexible NF ............... 59 0 G1: See preamble -14.89
dstrj les. channeled text.
laryngoscope
system.
31572..... Largsc w/laser ES064........... rhinolaryngosco NF ............... 0 65 E4: Refined 3.39
dstrj les. pe, flexible, equipment time
video, to conform to
channeled. established
policies for
scopes.
31572..... Largsc w/laser SF029........... laser tip, bare NF ............... 0 1 S8: Supply item 150.00
dstrj les. (single use). replaces another
item; see
preamble SF030.
31572..... Largsc w/laser SF030........... laser tip, NF ............... 1 0 S7: Supply item -850.00
dstrj les. diffuser fiber. replaced by
another item;
see preamble
SF029.
31573..... Largsc w/ther EQ167........... light source, NF ............... 0 33 E19: Refined 0.92
injection. xenon. equipment time
to conform to
established
policies for
scope
accessories.
31573..... Largsc w/ther ES031........... video system, NF ............... 0 33 E19: Refined 4.27
injection. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31573..... Largsc w/ther ES061........... Video-flexible NF ............... 54 0 G1: See preamble -13.63
injection. channeled text.
laryngoscope
system.
31573..... Largsc w/ther ES064........... rhinolaryngosco NF ............... 0 60 E4: Refined 3.13
injection. pe, flexible, equipment time
video, to conform to
channeled. established
policies for
scopes.
31574..... Largsc w/njx EQ167........... light source, NF ............... 0 33 E19: Refined 0.92
augmentation. xenon. equipment time
to conform to
established
policies for
scope
accessories.
31574..... Largsc w/njx ES031........... video system, NF ............... 0 33 E19: Refined 4.27
augmentation. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.

[[Page 80369]]

31574..... Largsc w/njx ES060........... Video-flexible NF ............... 60 0 G1: See preamble -19.09
augmentation. laryngoscope text.
system.
31574..... Largsc w/njx ES063........... rhinolaryngosco NF ............... 0 60 E4: Refined 2.78
augmentation. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31575..... Diagnostic EF008........... chair with NF ............... 23 21 E15: Refined -0.02
laryngoscopy. headrest, equipment time
exam, to conform to
reclining. changes in
clinical labor
time.
31575..... Diagnostic EQ167........... light source, NF ............... 0 18 E19: Refined 0.50
laryngoscopy. xenon. equipment time
to conform to
established
policies for
scope
accessories.
31575..... Diagnostic EQ170........... light, NF ............... 23 21 E15: Refined -0.02
laryngoscopy. fiberoptic equipment time
headlight w- to conform to
source. changes in
clinical labor
time.
31575..... Diagnostic EQ234........... suction and NF ............... 23 21 E15: Refined -0.02
laryngoscopy. pressure equipment time
cabinet, ENT to conform to
(SMR). changes in
clinical labor
time.
31575..... Diagnostic ES031........... video system, NF ............... 0 18 E19: Refined 2.33
laryngoscopy. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31575..... Diagnostic ES060........... Video-flexible NF ............... 44 0 G1: See preamble -14.00
laryngoscopy. laryngoscope text.
system.
31575..... Diagnostic ES063........... rhinolaryngosco NF ............... 0 47 E4: Refined 2.18
laryngoscopy. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31575..... Diagnostic L037D........... RN/LPN/MTA..... NF Clean room/ 3 1 G1: See preamble -0.74
laryngoscopy. equipment by text.
physician
staff.
31576..... Laryngoscopy EQ167........... light source, NF ............... 0 28 E19: Refined 0.78
with biopsy. xenon. equipment time
to conform to
established
policies for
scope
accessories.
31576..... Laryngoscopy ES031........... video system, NF ............... 0 28 E19: Refined 3.62
with biopsy. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31576..... Laryngoscopy ES061........... Video-flexible NF ............... 55 0 G1: See preamble -13.88
with biopsy. channeled text.
laryngoscope
system.
31576..... Laryngoscopy ES064........... rhinolaryngosco NF ............... 0 55 E4: Refined 2.87
with biopsy. pe, flexible, equipment time
video, to conform to
channeled. established
policies for
scopes.
31577..... Remove foreign EF008........... chair with NF ............... 99 96 E15: Refined -0.03
body larynx. headrest, equipment time
exam, to conform to
reclining. changes in
clinical labor
time.
31577..... Remove foreign EF015........... mayo stand..... NF ............... 99 96 E15: Refined 0.00
body larynx. equipment time
to conform to
changes in
clinical labor
time.
31577..... Remove foreign EQ137........... instrument NF ............... 40 39 E15: Refined 0.00
body larynx. pack, basic equipment time
($500-$1499). to conform to
changes in
clinical labor
time.
31577..... Remove foreign EQ167........... light source, NF ............... 0 30 E19: Refined 0.83
body larynx. xenon. equipment time
to conform to
established
policies for
scope
accessories.
31577..... Remove foreign EQ170........... light, NF ............... 99 96 E15: Refined -0.02
body larynx. fiberoptic equipment time
headlight w- to conform to
source. changes in
clinical labor
time.
31577..... Remove foreign EQ234........... suction and NF ............... 99 96 E15: Refined -0.03
body larynx. pressure equipment time
cabinet, ENT to conform to
(SMR). changes in
clinical labor
time.
31577..... Remove foreign ES031........... video system, NF ............... 0 30 E19: Refined 3.88
body larynx. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31577..... Remove foreign ES061........... Video-flexible NF ............... 54 0 G1: See preamble -13.63
body larynx. channeled text.
laryngoscope
system.
31577..... Remove foreign ES064........... rhinolaryngosco NF ............... 0 59 E4: Refined 3.08
body larynx. pe, flexible, equipment time
video, to conform to
channeled. established
policies for
scopes.

[[Page 80370]]

31577..... Remove foreign L037D........... RN/LPN/MTA..... NF Clean room/ 3 1 G1: See preamble -0.74
body larynx. equipment by text.
physician
staff.
31577..... Remove foreign L037D........... RN/LPN/MTA..... NF Obtain vital 3 2 L17: Clinical -0.37
body larynx. signs. labor task
redundant with
clinical labor
task ``Assist
physician in
performing the
procedure''
(L041B).
31578..... Removal of EQ167........... light source, NF ............... 0 33 E19: Refined 0.92
larynx lesion. xenon. equipment time
to conform to
established
policies for
scope
accessories.
31578..... Removal of ES031........... video system, NF ............... 0 33 E19: Refined 4.27
larynx lesion. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31578..... Removal of ES061........... Video-flexible NF ............... 54 0 G1: See preamble -13.63
larynx lesion. channeled text.
laryngoscope
system.
31578..... Removal of ES064........... rhinolaryngosco NF ............... 0 60 E4: Refined 3.13
larynx lesion. pe, flexible, equipment time
video, to conform to
channeled. established
policies for
scopes.
31579..... Diagnostic EF008........... chair with NF ............... 31 28 E15: Refined -0.03
laryngoscopy. headrest, equipment time
exam, to conform to
reclining. changes in
clinical labor
time.
31579..... Diagnostic EF015........... mayo stand..... NF ............... 31 28 E15: Refined 0.00
laryngoscopy. equipment time
to conform to
changes in
clinical labor
time.
31579..... Diagnostic EQ167........... light source, NF ............... 0 25 E19: Refined 0.69
laryngoscopy. xenon. equipment time
to conform to
established
policies for
scope
accessories.
31579..... Diagnostic EQ170........... light, NF ............... 31 28 E15: Refined -0.02
laryngoscopy. fiberoptic equipment time
headlight w- to conform to
source. changes in
clinical labor
time.
31579..... Diagnostic EQ234........... suction and NF ............... 31 28 E15: Refined -0.03
laryngoscopy. pressure equipment time
cabinet, ENT to conform to
(SMR). changes in
clinical labor
time.
31579..... Diagnostic ES031........... video system, NF ............... 0 25 E19: Refined 3.23
laryngoscopy. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31579..... Diagnostic ES063........... rhinolaryngosco NF ............... 0 54 E4: Refined 2.50
laryngoscopy. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31579..... Diagnostic ES065........... stroboscopy NF ............... 49 44 E19: Refined -0.33
laryngoscopy. system. equipment time
to conform to
established
policies for
scope
accessories.
31579..... Diagnostic L037D........... RN/LPN/MTA..... NF Clean room/ 3 1 G1: See preamble -0.74
laryngoscopy. equipment by text.
physician
staff.
31579..... Diagnostic L037D........... RN/LPN/MTA..... NF Obtain vital 3 2 L17: Clinical -0.37
laryngoscopy. signs. labor task
redundant with
clinical labor
task ``Assist
physician in
performing the
procedure''
(L041B).
31580..... Revision of EQ137........... instrument F ............... 138 129 E5: Refined -0.02
larynx. pack, basic equipment time
($500-$1499). to conform to
established
policies for
surgical
instrument packs.
31580..... Revision of EQ167........... light source, F ............... 0 108 E13: Equipment 3.00
larynx. xenon. item replaces
another item;
see preamble
text EQ170.
31580..... Revision of ES031........... video system, F ............... 0 108 E19: Refined 13.97
larynx. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31580..... Revision of ES060........... Video-flexible F ............... 198 0 G1: See preamble -62.98
larynx. laryngoscope text.
system.

[[Page 80371]]

31580..... Revision of ES063........... rhinolaryngosco F ............... 0 189 E4: Refined 8.76
larynx. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31584..... Treat larynx EQ137........... instrument F ............... 138 129 E5: Refined -0.02
fracture. pack, basic equipment time
($500-$1499). to conform to
established
policies for
surgical
instrument packs.
31584..... Treat larynx EQ167........... light source, F ............... 0 108 E13: Equipment 3.00
fracture. xenon. item replaces
another item;
see preamble
text EQ170.
31584..... Treat larynx ES031........... video system, F ............... 0 108 E19: Refined 13.97
fracture. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31584..... Treat larynx ES060........... Video-flexible F ............... 198 0 G1: See preamble -62.98
fracture. laryngoscope text.
system.
31584..... Treat larynx ES063........... rhinolaryngosco F ............... 0 189 E4: Refined 8.76
fracture. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31587..... Revision of EQ137........... instrument F ............... 138 129 E5: Refined -0.02
larynx. pack, basic equipment time
($500-$1499). to conform to
established
policies for
surgical
instrument packs.
31587..... Revision of EQ167........... light source, F ............... 0 108 E13: Equipment 3.00
larynx. xenon. item replaces
another item;
see preamble
text EQ170.
31587..... Revision of ES031........... video system, F ............... 0 108 E19: Refined 13.97
larynx. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31587..... Revision of ES060........... Video-flexible F ............... 198 0 G1: See preamble -62.98
larynx. laryngoscope text.
system.
31587..... Revision of ES063........... rhinolaryngosco F ............... 0 189 E4: Refined 8.76
larynx. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31591..... Laryngoplasty EQ137........... instrument F ............... 138 129 E5: Refined -0.02
medialization. pack, basic equipment time
($500-$1499). to conform to
established
policies for
surgical
instrument packs.
31591..... Laryngoplasty EQ167........... light source, F ............... 0 108 E13: Equipment 3.00
medialization. xenon. item replaces
another item;
see preamble
text EQ170.
31591..... Laryngoplasty ES031........... video system, F ............... 0 108 E19: Refined 13.97
medialization. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31591..... Laryngoplasty ES060........... Video-flexible F ............... 198 0 G1: See preamble -62.98
medialization. laryngoscope text.
system.
31591..... Laryngoplasty ES063........... rhinolaryngosco F ............... 0 189 E4: Refined 8.76
medialization. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
31592..... Cricotracheal EQ137........... instrument F ............... 138 129 E5: Refined -0.02
resection. pack, basic equipment time
($500-$1499). to conform to
established
policies for
surgical
instrument packs.
31592..... Cricotracheal EQ167........... light source, F ............... 0 108 E13: Equipment 3.00
resection. xenon. item replaces
another item;
see preamble
text EQ170.
31592..... Cricotracheal ES031........... video system, F ............... 0 108 E19: Refined 13.97
resection. endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scope
printer, cart). accessories.
31592..... Cricotracheal ES060........... Video-flexible F ............... 198 0 G1: See preamble -62.98
resection. laryngoscope text.
system.
31592..... Cricotracheal ES063........... rhinolaryngosco F ............... 0 189 E4: Refined 8.76
resection. pe, flexible, equipment time
video, non- to conform to
channeled. established
policies for
scopes.
36473..... Endovenous EF014........... light, surgical NF ............... 0 48 E13: Equipment 0.48
mchnchem 1st item replaces
vein. another item;
see preamble
text EL015.
36473..... Endovenous EF031........... table, power... NF ............... 0 48 E13: Equipment 0.78
mchnchem 1st item replaces
vein. another item;
see preamble
text EL015.

[[Page 80372]]

36473..... Endovenous EL015........... room, NF ............... 39 0 E12: Equipment -54.67
mchnchem 1st ultrasound, item replaced by
vein. general. another item;
see preamble
text EQ250.
36473..... Endovenous EQ250........... ultrasound NF ............... 0 48 E13: Equipment 5.58
mchnchem 1st unit, portable. item replaces
vein. another item;
see preamble
text EL015.
36473..... Endovenous L037D........... RN/LPN/MTA..... NF Prepare room, 2 0 G1: See preamble -0.74
mchnchem 1st equipment, text.
vein. supplies.
36473..... Endovenous L054A........... Vascular NF Availability of 2 0 G1: See preamble -1.08
mchnchem 1st Technologist. prior images text.
vein. confirmed.
36473..... Endovenous L054A........... Vascular NF Exam documents 1 0 G1: See preamble -0.54
mchnchem 1st Technologist. scanned into U/ text.
vein. S machine.
Exam completed
in RIS system
to generate
billing
process and to
populate
images into
Radiologist
work queue.
36473..... Endovenous L054A........... Vascular NF Patient 2 0 G1: See preamble -1.08
mchnchem 1st Technologist. clinical text.
vein. information
and
questionnaire
reviewed by
technologist,
order from
physician
confirmed and
exam
protocoled by
radiologist.
36473..... Endovenous L054A........... Vascular NF Review 2 0 G1: See preamble -1.08
mchnchem 1st Technologist. examination text.
vein. with
interpreting
MD.
36473..... Endovenous L054A........... Vascular NF Technologist 2 0 G1: See preamble -1.08
mchnchem 1st Technologist. QCs images in text.
vein. PACS, checking
all images,
reformats, and
dose page.
36473..... Endovenous SA016........... kit, guidewire NF ............... 1 0 S3: Supply not -23.00
mchnchem 1st introducer typically used
vein. (Micro-Stick). in this service.
36473..... Endovenous SH108........... Sotradecol NF ............... 2 1 S6: Refined -110.20
mchnchem 1st Sclerosing supply quantity
vein. Agent. to what is
typical for the
procedure.
36474..... Endovenous EF014........... light, surgical NF ............... 0 30 E13: Equipment 0.30
mchnchem add-on. item replaces
another item;
see preamble
text EL015.
36474..... Endovenous EF031........... table, power... NF ............... 0 30 E13: Equipment 0.49
mchnchem add-on. item replaces
another item;
see preamble
text EL015.
36474..... Endovenous EL015........... room, NF ............... 30 0 E12: Equipment -42.05
mchnchem add-on. ultrasound, item replaced by
general. another item;
see preamble
text EQ250.
36474..... Endovenous EQ250........... ultrasound NF ............... 0 30 E13: Equipment 3.49
mchnchem add-on. unit, portable. item replaces
another item;
see preamble
text EL015.
36474..... Endovenous SH108........... Sotradecol NF ............... 2 1 S6: Refined -110.20
mchnchem add-on. Sclerosing supply quantity
Agent. to what is
typical for the
procedure.
36901..... Intro cath ED050........... PACS NF ............... 54 52 E15: Refined -0.04
dialysis Workstation equipment time
circuit. Proxy. to conform to
changes in
clinical labor
time.
36901..... Intro cath EL011........... room, NF ............... 37 35 E15: Refined -10.51
dialysis angiography. equipment time
circuit. to conform to
changes in
clinical labor
time.
36901..... Intro cath L037D........... RN/LPN/MTA..... NF Prepare and 5 3 G1: See preamble -0.74
dialysis position pt/ text.
circuit. monitor pt/set
up IV.
36901..... Intro cath SJ041........... povidone soln NF ............... 60 0 S7: Supply item -0.48
dialysis (Betadine). replaced by
circuit. another item;
see preamble
SJ088.

[[Page 80373]]

36901..... Intro cath SJ088........... swab, patient NF ............... 0 2 S8: Supply item 3.62
dialysis prep, 3.0 ml replaces another
circuit. (chloraprep). item; see
preamble SJ041.
36902..... Intro cath ED050........... PACS NF ............... 69 67 E15: Refined -0.04
dialysis Workstation equipment time
circuit. Proxy. to conform to
changes in
clinical labor
time.
36902..... Intro cath EL011........... room, NF ............... 52 50 E15: Refined -10.51
dialysis angiography. equipment time
circuit. to conform to
changes in
clinical labor
time.
36902..... Intro cath L037D........... RN/LPN/MTA..... NF Prepare and 5 3 G1: See preamble -0.74
dialysis position pt/ text.
circuit. monitor pt/set
up IV.
36902..... Intro cath SJ041........... povidone soln NF ............... 60 0 S7: Supply item -0.48
dialysis (Betadine). replaced by
circuit. another item;
see preamble.
36902..... Intro cath SJ088........... swab, patient NF ............... 0 2 S8: Supply item 3.62
dialysis prep, 3.0 ml replaces another
circuit. (chloraprep). item; see
preamble.
36903..... Intro cath ED050........... PACS NF ............... 79 77 E15: Refined -0.04
dialysis Workstation equipment time
circuit. Proxy. to conform to
changes in
clinical labor
time.
36903..... Intro cath EL011........... room, NF ............... 62 60 E15: Refined -10.51
dialysis angiography. equipment time
circuit. to conform to
changes in
clinical labor
time.
36903..... Intro cath L037D........... RN/LPN/MTA..... NF Prepare and 5 3 G1: See preamble -0.74
dialysis position pt/ text.
circuit. monitor pt/set
up IV.
36903..... Intro cath SJ041........... povidone soln NF ............... 60 0 S7: Supply item -0.48
dialysis (Betadine). replaced by
circuit. another item;
see preamble.
36903..... Intro cath SJ088........... swab, patient NF ............... 0 2 S8: Supply item 3.62
dialysis prep, 3.0 ml replaces another
circuit. (chloraprep). item; see
preamble.
36904..... Thrmbc/nfs ED050........... PACS NF ............... 89 87 E15: Refined -0.04
dialysis Workstation equipment time
circuit. Proxy. to conform to
changes in
clinical labor
time.
36904..... Thrmbc/nfs EL011........... room, NF ............... 72 70 E15: Refined -10.51
dialysis angiography. equipment time
circuit. to conform to
changes in
clinical labor
time.
36904..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Complete pre- 3 0 L3: Refined -1.11
dialysis service clinical labor
circuit. diagnostic and time to conform
referral forms. with identical
labor activity
in other codes
in the family.
36904..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Coordinate pre- 6 3 L3: Refined -1.11
dialysis surgery clinical labor
circuit. services. time to conform
with identical
labor activity
in other codes
in the family.
36904..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Follow-up phone 6 0 L3: Refined -2.22
dialysis calls and clinical labor
circuit. prescriptions. time to conform
with identical
labor activity
in other codes
in the family.
36904..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Schedule space 6 3 L3: Refined -1.11
dialysis and equipment clinical labor
circuit. in facility. time to conform
with identical
labor activity
in other codes
in the family.
36904..... Thrmbc/nfs L037D........... RN/LPN/MTA..... NF Coordinate pre- 6 3 L3: Refined -1.11
dialysis surgery clinical labor
circuit. services. time to conform
with identical
labor activity
in other codes
in the family.
36904..... Thrmbc/nfs L037D........... RN/LPN/MTA..... NF Follow-up phone 6 3 L3: Refined -1.11
dialysis calls and clinical labor
circuit. prescriptions. time to conform
with identical
labor activity
in other codes
in the family.
36904..... Thrmbc/nfs L037D........... RN/LPN/MTA..... NF Prepare and 5 3 G1: See preamble -0.74
dialysis position pt/ text.
circuit. monitor pt/set
up IV.
36904..... Thrmbc/nfs SD032........... catheter, NF ............... 1 0 S2: Supply -101.75
dialysis thrombectomy- removed due to
circuit. Fogarty. redundancy when
used together
with supply
SA015.
36904..... Thrmbc/nfs SD136........... vascular sheath NF ............... 2 1 S2: Supply -20.50
dialysis removed due to
circuit. redundancy when
used together
with supply
SA015.
36904..... Thrmbc/nfs SJ041........... povidone soln NF ............... 60 0 S7: Supply item -0.48
dialysis (Betadine). replaced by
circuit. another item;
see preamble.
36904..... Thrmbc/nfs SJ088........... swab, patient NF ............... 0 2 S8: Supply item 3.62
dialysis prep, 3.0 ml replaces another
circuit. (chloraprep). item; see
preamble.
36905..... Thrmbc/nfs ED050........... PACS NF ............... 104 102 E15: Refined -0.04
dialysis Workstation equipment time
circuit. Proxy. to conform to
changes in
clinical labor
time.

[[Page 80374]]

36905..... Thrmbc/nfs EL011........... room, NF ............... 87 85 E15: Refined -10.51
dialysis angiography. equipment time
circuit. to conform to
changes in
clinical labor
time.
36905..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Complete pre- 3 0 L3: Refined -1.11
dialysis service clinical labor
circuit. diagnostic and time to conform
referral forms. with identical
labor activity
in other codes
in the family.
36905..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Coordinate pre- 6 3 L3: Refined -1.11
dialysis surgery clinical labor
circuit. services. time to conform
with identical
labor activity
in other codes
in the family.
36905..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Follow-up phone 6 0 L3: Refined -2.22
dialysis calls and clinical labor
circuit. prescriptions. time to conform
with identical
labor activity
in other codes
in the family.
36905..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Schedule space 6 3 L3: Refined -1.11
dialysis and equipment clinical labor
circuit. in facility. time to conform
with identical
labor activity
in other codes
in the family.
36905..... Thrmbc/nfs L037D........... RN/LPN/MTA..... NF Coordinate pre- 6 3 L3: Refined -1.11
dialysis surgery clinical labor
circuit. services. time to conform
with identical
labor activity
in other codes
in the family.
36905..... Thrmbc/nfs L037D........... RN/LPN/MTA..... NF Follow-up phone 6 3 L3: Refined -1.11
dialysis calls and clinical labor
circuit. prescriptions. time to conform
with identical
labor activity
in other codes
in the family.
36905..... Thrmbc/nfs L037D........... RN/LPN/MTA..... NF Prepare and 5 3 G1: See preamble -0.74
dialysis position pt/ text.
circuit. monitor pt/set
up IV.
36905..... Thrmbc/nfs SD032........... catheter, NF ............... 1 0 S2: Supply -101.75
dialysis thrombectomy- removed due to
circuit. Fogarty. redundancy when
used together
with supply
SA015.
36905..... Thrmbc/nfs SD136........... vascular sheath NF ............... 2 1 S2: Supply -20.50
dialysis removed due to
circuit. redundancy when
used together
with supply
SA015.
36905..... Thrmbc/nfs SJ041........... povidone soln NF ............... 60 0 S7: Supply item -0.48
dialysis (Betadine). replaced by
circuit. another item;
see preamble.
36905..... Thrmbc/nfs SJ088........... swab, patient NF ............... 0 2 S8: Supply item 3.62
dialysis prep, 3.0 ml replaces another
circuit. (chloraprep). item; see
preamble.
36906..... Thrmbc/nfs ED050........... PACS NF ............... 119 117 E15: Refined -0.04
dialysis Workstation equipment time
circuit. Proxy. to conform to
changes in
clinical labor
time.
36906..... Thrmbc/nfs EL011........... room, NF ............... 102 100 E15: Refined -10.51
dialysis angiography. equipment time
circuit. to conform to
changes in
clinical labor
time.
36906..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Complete pre- 3 0 L3: Refined -1.11
dialysis service clinical labor
circuit. diagnostic and time to conform
referral forms. with identical
labor activity
in other codes
in the family.
36906..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Coordinate pre- 6 3 L3: Refined -1.11
dialysis surgery clinical labor
circuit. services. time to conform
with identical
labor activity
in other codes
in the family.
36906..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Follow-up phone 6 0 L3: Refined -2.22
dialysis calls and clinical labor
circuit. prescriptions. time to conform
with identical
labor activity
in other codes
in the family.
36906..... Thrmbc/nfs L037D........... RN/LPN/MTA..... F Schedule space 6 3 L3: Refined -1.11
dialysis and equipment clinical labor
circuit. in facility. time to conform
with identical
labor activity
in other codes
in the family.
36906..... Thrmbc/nfs L037D........... RN/LPN/MTA..... NF Coordinate pre- 6 3 L3: Refined -1.11
dialysis surgery clinical labor
circuit. services. time to conform
with identical
labor activity
in other codes
in the family.
36906..... Thrmbc/nfs L037D........... RN/LPN/MTA..... NF Follow-up phone 6 3 L3: Refined -1.11
dialysis calls and clinical labor
circuit. prescriptions. time to conform
with identical
labor activity
in other codes
in the family.

[[Page 80375]]

36906..... Thrmbc/nfs L037D........... RN/LPN/MTA..... NF Prepare and 5 3 G1: See preamble -0.74
dialysis position pt/ text.
circuit. monitor pt/set
up IV.
36906..... Thrmbc/nfs SD032........... catheter, NF ............... 1 0 S2: Supply -101.75
dialysis thrombectomy- removed due to
circuit. Fogarty. redundancy when
used together
with supply
SA015.
36906..... Thrmbc/nfs SD136........... vascular sheath NF ............... 2 1 S2: Supply -20.50
dialysis removed due to
circuit. redundancy when
used together
with supply
SA015.
36906..... Thrmbc/nfs SJ041........... povidone soln NF ............... 60 0 S7: Supply item -0.48
dialysis (Betadine). replaced by
circuit. another item;
see preamble.
36906..... Thrmbc/nfs SJ088........... swab, patient NF ............... 0 2 S8: Supply item 3.62
dialysis prep, 3.0 ml replaces another
circuit. (chloraprep). item; see
preamble.
37246..... Trluml balo ED050........... PACS NF ............... 91 89 E15: Refined -0.04
angiop 1st art. Workstation equipment time
Proxy. to conform to
changes in
clinical labor
time.
37246..... Trluml balo EL011........... room, NF ............... 72 70 E15: Refined -10.51
angiop 1st art. angiography. equipment time
to conform to
changes in
clinical labor
time.
37246..... Trluml balo L037D........... RN/LPN/MTA..... NF Prepare and 5 3 G1: See preamble -0.74
angiop 1st art. position text.
patient/
monitor
patient/set up
IV.
37248..... Trluml balo ED050........... PACS NF ............... 91 89 E15: Refined -0.04
angiop 1st vein. Workstation equipment time
Proxy. to conform to
changes in
clinical labor
time.
37248..... Trluml balo EL011........... room, NF ............... 72 70 E15: Refined -10.51
angiop 1st vein. angiography. equipment time
to conform to
changes in
clinical labor
time.
37248..... Trluml balo L037D........... RN/LPN/MTA..... NF Prepare and 5 3 G1: See preamble -0.74
angiop 1st vein. position text.
patient/
monitor
patient/set up
IV.
47531..... Injection for ED050........... PACS NF ............... 51 46 E18: Refined -0.11
cholangiogram. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy.
47531..... Injection for EF018........... stretcher...... NF ............... 87 82 E6: Refined -0.03
cholangiogram. equipment time
to conform to
established
policies for
equipment with
4x monitoring
time.
47531..... Injection for EF027........... table, NF ............... 87 82 E6: Refined -0.01
cholangiogram. instrument, equipment time
mobile. to conform to
established
policies for
equipment with
4x monitoring
time.
47531..... Injection for EL011........... room, NF ............... 27 24 E15: Refined -15.76
cholangiogram. angiography. equipment time
to conform to
changes in
clinical labor
time.
47531..... Injection for EQ011........... ECG, 3-channel NF ............... 87 82 E6: Refined -0.07
cholangiogram. (with SpO2, equipment time
NIBP, temp, to conform to
resp). established
policies for
equipment with
4x monitoring
time.
47531..... Injection for EQ032........... IV infusion NF ............... 87 82 E6: Refined -0.03
cholangiogram. pump. equipment time
to conform to
established
policies for
equipment with
4x monitoring
time.
47531..... Injection for EQ168........... light, exam.... NF ............... 51 40 E1: Refined -0.05
cholangiogram. equipment time
to conform to
established
policies for non-
highly technical
equipment.
47531..... Injection for L037D........... RN/LPN/MTA..... NF Assist 15 0 L11: Removed -5.55
cholangiogram. physician in clinical labor
performing associated with
procedure. moderate
sedation;
moderate
sedation not
typical for this
procedure.
47531..... Injection for L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
cholangiogram. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47531..... Injection for L051A........... RN............. NF Sedate/Apply 2 0 L11: Removed -1.02
cholangiogram. anesthesia. clinical labor
associated with
moderate
sedation;
moderate
sedation not
typical for this
procedure.
47532..... Injection for ED050........... PACS NF ............... 34 76 E18: Refined 0.92
cholangiogram. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy MS minutes
backed out input.

[[Page 80376]]

47532..... Injection for EF018........... stretcher...... NF ............... 190 187 G1: See preamble -0.02
cholangiogram. text MS minutes
backed out input.
47532..... Injection for EF027........... table, NF ............... 190 187 G1: See preamble 0.00
cholangiogram. instrument, text MS minutes
mobile. backed out input.
47532..... Injection for EL011........... room, NF ............... 57 54 E15: Refined -15.76
cholangiogram. angiography. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47532..... Injection for EQ011........... ECG, 3-channel NF ............... 190 187 G1: See preamble -0.04
cholangiogram. (with SpO2, text MS minutes
NIBP, temp, backed out input.
resp).
47532..... Injection for EQ032........... IV infusion NF ............... 190 187 G1: See preamble -0.02
cholangiogram. pump. text MS minutes
backed out input.
47532..... Injection for EQ168........... light, exam.... NF ............... 34 70 E1: Refined 0.16
cholangiogram. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47532..... Injection for EQ250........... ultrasound NF ............... 34 70 E1: Refined 4.18
cholangiogram. unit, portable. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47532..... Injection for L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
cholangiogram. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47532..... Injection for L051A........... RN............. NF Assist 45 0 G1: See preamble -22.95
cholangiogram. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47532..... Injection for L051A........... RN............. NF Monitor pt. 15 0 G1: See preamble -7.65
cholangiogram. following text MS minutes
moderate backed out input.
sedation.
47532..... Injection for L051A........... RN............. NF Sedate/Apply 2 0 G1: See preamble -1.02
cholangiogram. anesthesia. text MS minutes
backed out input.
47532..... Injection for SA044........... pack, conscious NF ............... 1 0 G1: See preamble -17.31
cholangiogram. sedation. text MS supply
backed out input.
47533..... Plmt biliary ED050........... PACS NF ............... 34 91 E18: Refined 1.26
drainage cath. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy MS minutes
backed out input.
47533..... Plmt biliary EF018........... stretcher...... NF ............... 190 187 G1: See preamble -0.02
drainage cath. text MS minutes
backed out input.
47533..... Plmt biliary EF027........... table, NF ............... 190 187 G1: See preamble 0.00
drainage cath. instrument, text MS minutes
mobile. backed out input.
47533..... Plmt biliary EL011........... room, NF ............... 72 69 E15: Refined -15.76
drainage cath. angiography. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47533..... Plmt biliary EQ011........... ECG, 3-channel NF ............... 190 187 G1: See preamble -0.04
drainage cath. (with SpO2, text MS minutes
NIBP, temp, backed out input.
resp).
47533..... Plmt biliary EQ032........... IV infusion NF ............... 190 187 G1: See preamble -0.02
drainage cath. pump. text MS minutes
backed out input.
47533..... Plmt biliary EQ168........... light, exam.... NF ............... 34 85 E1: Refined 0.22
drainage cath. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47533..... Plmt biliary EQ250........... ultrasound NF ............... 34 85 E1: Refined 5.93
drainage cath. unit, portable. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47533..... Plmt biliary L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
drainage cath. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47533..... Plmt biliary L051A........... RN............. NF Assist 60 0 G1: See preamble -30.60
drainage cath. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47533..... Plmt biliary L051A........... RN............. NF Monitor pt. 15 0 G1: See preamble -7.65
drainage cath. following text MS minutes
moderate backed out input.
sedation.

[[Page 80377]]

47533..... Plmt biliary L051A........... RN............. NF Sedate/Apply 2 0 G1: See preamble -1.02
drainage cath. anesthesia. text MS minutes
backed out input.
47533..... Plmt biliary SA044........... pack, conscious NF ............... 1 0 G1: See preamble -17.31
drainage cath. sedation. text MS supply
backed out input.
47534..... Plmt biliary ED050........... PACS NF ............... 34 99 E18: Refined 1.43
drainage cath. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy MS minutes
backed out input.
47534..... Plmt biliary EF018........... stretcher...... NF ............... 190 187 G1: See preamble -0.02
drainage cath. text MS minutes
backed out input.
47534..... Plmt biliary EF027........... table, NF ............... 190 187 G1: See preamble 0.00
drainage cath. instrument, text MS minutes
mobile. backed out input.
47534..... Plmt biliary EL011........... room, NF ............... 80 77 E15: Refined -15.76
drainage cath. angiography. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47534..... Plmt biliary EQ011........... ECG, 3-channel NF ............... 190 187 G1: See preamble -0.04
drainage cath. (with SpO2, text MS minutes
NIBP, temp, backed out input.
resp).
47534..... Plmt biliary EQ032........... IV infusion NF ............... 190 187 G1: See preamble -0.02
drainage cath. pump. text MS minutes
backed out input.
47534..... Plmt biliary EQ168........... light, exam.... NF ............... 34 93 E1: Refined 0.26
drainage cath. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47534..... Plmt biliary EQ250........... ultrasound NF ............... 34 93 E1: Refined 6.86
drainage cath. unit, portable. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47534..... Plmt biliary L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
drainage cath. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47534..... Plmt biliary L051A........... RN............. NF Assist 68 0 G1: See preamble -34.68
drainage cath. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47534..... Plmt biliary L051A........... RN............. NF Monitor pt. 15 0 G1: See preamble -7.65
drainage cath. following text MS minutes
moderate backed out input.
sedation.
47534..... Plmt biliary L051A........... RN............. NF Sedate/Apply 2 0 G1: See preamble -1.02
drainage cath. anesthesia. text MS minutes
backed out input.
47534..... Plmt biliary SA044........... pack, conscious NF ............... 1 0 G1: See preamble -17.31
drainage cath. sedation. text MS supply
backed out input.
47535..... Conversion ext ED050........... PACS NF ............... 34 76 E18: Refined 0.92
bil drg cath. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy MS minutes
backed out input.
47535..... Conversion ext EF018........... stretcher...... NF ............... 190 187 G1: See preamble -0.02
bil drg cath. text MS minutes
backed out input.
47535..... Conversion ext EF027........... table, NF ............... 190 187 G1: See preamble 0.00
bil drg cath. instrument, text MS minutes
mobile. backed out input.
47535..... Conversion ext EL011........... room, NF ............... 57 54 E15: Refined -15.76
bil drg cath. angiography. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47535..... Conversion ext EQ011........... ECG, 3-channel NF ............... 190 187 G1: See preamble -0.04
bil drg cath. (with SpO2, text MS minutes
NIBP, temp, backed out input.
resp).
47535..... Conversion ext EQ032........... IV infusion NF ............... 190 187 G1: See preamble -0.02
bil drg cath. pump. text MS minutes
backed out input.
47535..... Conversion ext EQ168........... light, exam.... NF ............... 34 70 E1: Refined 0.16
bil drg cath. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47535..... Conversion ext L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
bil drg cath. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47535..... Conversion ext L051A........... RN............. NF Assist 45 0 G1: See preamble -22.95
bil drg cath. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47535..... Conversion ext L051A........... RN............. NF Monitor pt. 15 0 G1: See preamble -7.65
bil drg cath. following text MS minutes
moderate backed out input.
sedation.
47535..... Conversion ext L051A........... RN............. NF Sedate/Apply 2 0 G1: See preamble -1.02
bil drg cath. anesthesia. text MS minutes
backed out input.
47535..... Conversion ext SA044........... pack, conscious NF ............... 1 0 G1: See preamble -17.31
bil drg cath. sedation. text MS supply
backed out input.

[[Page 80378]]

47536..... Exchange biliary ED050........... PACS NF ............... 34 51 E18: Refined 0.37
drg cath. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy MS minutes
backed out input.
47536..... Exchange biliary EF018........... stretcher...... NF ............... 70 67 G1: See preamble -0.02
drg cath. text MS minutes
backed out input.
47536..... Exchange biliary EF027........... table, NF ............... 70 67 G1: See preamble 0.00
drg cath. instrument, text MS minutes
mobile. backed out input.
47536..... Exchange biliary EL011........... room, NF ............... 32 29 E15: Refined -15.76
drg cath. angiography. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47536..... Exchange biliary EQ011........... ECG, 3-channel NF ............... 70 67 G1: See preamble -0.04
drg cath. (with SpO2, text MS minutes
NIBP, temp, backed out input.
resp).
47536..... Exchange biliary EQ032........... IV infusion NF ............... 70 67 G1: See preamble -0.02
drg cath. pump. text MS minutes
backed out input.
47536..... Exchange biliary EQ168........... light, exam.... NF ............... 34 45 E1: Refined 0.05
drg cath. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47536..... Exchange biliary L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
drg cath. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47536..... Exchange biliary L051A........... RN............. NF Assist 20 0 G1: See preamble -10.20
drg cath. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47536..... Exchange biliary L051A........... RN............. NF Monitor pt. 15 0 G1: See preamble -7.65
drg cath. following text MS minutes
moderate backed out input.
sedation.
47536..... Exchange biliary L051A........... RN............. NF Sedate/Apply 2 0 G1: See preamble -1.02
drg cath. anesthesia. text MS minutes
backed out input.
47536..... Exchange biliary SA044........... pack, conscious NF ............... 1 0 G1: See preamble -17.31
drg cath. sedation. text MS supply
backed out input.
47537..... Removal biliary ED050........... PACS NF ............... 51 46 E18: Refined -0.11
drg cath. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy.
47537..... Removal biliary EF018........... stretcher...... NF ............... 87 82 G1: See preamble -0.03
drg cath. text.
47537..... Removal biliary EF027........... table, NF ............... 87 82 G1: See preamble -0.01
drg cath. instrument, text.
mobile.
47537..... Removal biliary EL011........... room, NF ............... 27 24 E15: Refined -15.76
drg cath. angiography. equipment time
to conform to
changes in
clinical labor
time.
47537..... Removal biliary EQ011........... ECG, 3-channel NF ............... 87 82 G1: See preamble -0.07
drg cath. (with SpO2, text.
NIBP, temp,
resp).
47537..... Removal biliary EQ032........... IV infusion NF ............... 87 82 G1: See preamble -0.03
drg cath. pump. text.
47537..... Removal biliary EQ168........... light, exam.... NF ............... 51 40 E1: Refined -0.05
drg cath. equipment time
to conform to
established
policies for non-
highly technical
equipment.
47537..... Removal biliary L037D........... RN/LPN/MTA..... NF Assist 15 0 L11: Removed -5.55
drg cath. physician in clinical labor
performing associated with
procedure. moderate
sedation;
moderate
sedation not
typical for this
procedure.
47537..... Removal biliary L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
drg cath. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47537..... Removal biliary L051A........... RN............. NF Sedate/Apply 2 0 L11: Removed -1.02
drg cath. anesthesia. clinical labor
associated with
moderate
sedation;
moderate
sedation not
typical for this
procedure.
47538..... Perq plmt bile ED050........... PACS NF ............... 34 84 E18: Refined 1.10
duct stent. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy MS minutes
backed out input.

[[Page 80379]]

47538..... Perq plmt bile EF018........... stretcher...... NF ............... 190 187 G1: See preamble -0.02
duct stent. text MS minutes
backed out input.
47538..... Perq plmt bile EF027........... table, NF ............... 190 187 G1: See preamble 0.00
duct stent. instrument, text MS minutes
mobile. backed out input.
47538..... Perq plmt bile EL011........... room, NF ............... 65 62 E15: Refined -15.76
duct stent. angiography. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47538..... Perq plmt bile EQ011........... ECG, 3-channel NF ............... 190 187 G1: See preamble -0.04
duct stent. (with SpO2, text MS minutes
NIBP, temp, backed out input.
resp).
47538..... Perq plmt bile EQ032........... IV infusion NF ............... 190 187 G1: See preamble -0.02
duct stent. pump. text MS minutes
backed out input.
47538..... Perq plmt bile EQ168........... light, exam.... NF ............... 34 78 E1: Refined 0.19
duct stent. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47538..... Perq plmt bile L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
duct stent. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47538..... Perq plmt bile L051A........... RN............. NF Assist 53 0 G1: See preamble -27.03
duct stent. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47538..... Perq plmt bile L051A........... RN............. NF Monitor pt. 15 0 G1: See preamble -7.65
duct stent. following text MS minutes
moderate backed out input.
sedation.
47538..... Perq plmt bile L051A........... RN............. NF Sedate/Apply 2 0 G1: See preamble -1.02
duct stent. anesthesia. text MS minutes
backed out input.
47538..... Perq plmt bile SA044........... pack, conscious NF ............... 1 0 G1: See preamble -17.31
duct stent. sedation. text MS supply
backed out input.
47538..... Perq plmt bile SD150........... catheter, NF ............... 0 2 S8: Supply item 130.00
duct stent. balloon replaces another
ureteral item; see
(Dowd). preamble.
47538..... Perq plmt bile SD152........... catheter, NF ............... 2 0 S7: Supply item -487.00
duct stent. balloon, PTA. replaced by
another item;
see preamble.
47539..... Perq plmt bile ED050........... PACS NF ............... 34 106 E18: Refined 1.59
duct stent. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy MS minutes
backed out input.
47539..... Perq plmt bile EF018........... stretcher...... NF ............... 190 187 G1: See preamble -0.02
duct stent. text MS minutes
backed out input.
47539..... Perq plmt bile EF027........... table, NF ............... 190 187 G1: See preamble 0.00
duct stent. instrument, text MS minutes
mobile. backed out input.
47539..... Perq plmt bile EL011........... room, NF ............... 87 84 E15: Refined -15.76
duct stent. angiography. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47539..... Perq plmt bile EQ011........... ECG, 3-channel NF ............... 190 187 G1: See preamble -0.04
duct stent. (with SpO2, text MS minutes
NIBP, temp, backed out input.
resp).
47539..... Perq plmt bile EQ032........... IV infusion NF ............... 190 187 G1: See preamble -0.02
duct stent. pump. text MS minutes
backed out input.
47539..... Perq plmt bile EQ168........... light, exam.... NF ............... 34 100 E1: Refined 0.29
duct stent. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47539..... Perq plmt bile EQ250........... ultrasound NF ............... 34 100 E15: Refined 7.67
duct stent. unit, portable. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47539..... Perq plmt bile L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
duct stent. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47539..... Perq plmt bile L051A........... RN............. NF Assist 75 0 G1: See preamble -38.25
duct stent. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47539..... Perq plmt bile L051A........... RN............. NF Monitor pt. 15 0 G1: See preamble -7.65
duct stent. following text MS minutes
moderate backed out input.
sedation.
47539..... Perq plmt bile L051A........... RN............. NF Sedate/Apply 2 0 G1: See preamble -1.02
duct stent. anesthesia. text MS minutes
backed out input.
47539..... Perq plmt bile SA044........... pack, conscious NF ............... 1 0 G1: See preamble -17.31
duct stent. sedation. text MS supply
backed out input.
47539..... Perq plmt bile SD150........... catheter, NF ............... 0 2 S8: Supply item 130.00
duct stent. balloon replaces another
ureteral item; see
(Dowd). preamble.
47539..... Perq plmt bile SD152........... catheter, NF ............... 2 0 S7: Supply item -487.00
duct stent. balloon, PTA. replaced by
another item;
see preamble.

[[Page 80380]]

47540..... Perq plmt bile ED050........... PACS NF ............... 34 116 E18: Refined 1.81
duct stent. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy MS minutes
backed out input.
47540..... Perq plmt bile EF018........... stretcher...... NF ............... 190 187 G1: See preamble -0.02
duct stent. text MS minutes
backed out input.
47540..... Perq plmt bile EF027........... table, NF ............... 190 187 G1: See preamble 0.00
duct stent. instrument, text MS minutes
mobile. backed out input.
47540..... Perq plmt bile EL011........... room, NF ............... 97 94 E15: Refined -15.76
duct stent. angiography. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47540..... Perq plmt bile EQ011........... ECG, 3-channel NF ............... 190 187 G1: See preamble -0.04
duct stent. (with SpO2, text MS minutes
NIBP, temp, backed out input.
resp).
47540..... Perq plmt bile EQ032........... IV infusion NF ............... 190 187 G1: See preamble -0.02
duct stent. pump. text MS minutes
backed out input.
47540..... Perq plmt bile EQ168........... light, exam.... NF ............... 34 110 E1: Refined 0.33
duct stent. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47540..... Perq plmt bile EQ250........... ultrasound NF ............... 34 110 E15: Refined 8.83
duct stent. unit, portable. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47540..... Perq plmt bile L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
duct stent. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47540..... Perq plmt bile L051A........... RN............. NF Assist 85 0 G1: See preamble -43.35
duct stent. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47540..... Perq plmt bile L051A........... RN............. NF Monitor pt. 15 0 G1: See preamble -7.65
duct stent. following text MS minutes
moderate backed out input.
sedation.
47540..... Perq plmt bile L051A........... RN............. NF Sedate/Apply 2 0 G1: See preamble -1.02
duct stent. anesthesia. text MS minutes
backed out input.
47540..... Perq plmt bile SA044........... pack, conscious NF ............... 1 0 G1: See preamble -17.31
duct stent. sedation. text MS supply
backed out input.
47540..... Perq plmt bile SD150........... catheter, NF ............... 0 2 S8: Supply item 130.00
duct stent. balloon replaces another
ureteral item; see
(Dowd). preamble SD152.
47540..... Perq plmt bile SD152........... catheter, NF ............... 2 0 S7: Supply item -487.00
duct stent. balloon, PTA. replaced by
another item;
see preamble
SD150.
47541..... Plmt access bil ED050........... PACS NF ............... 34 91 E18: Refined 1.26
tree sm bwl. Workstation equipment time
Proxy. to conform to
established
policies for
PACS Workstation
Proxy MS minutes
backed out input.
47541..... Plmt access bil EF018........... stretcher...... NF ............... 190 187 G1: See preamble -0.02
tree sm bwl. text MS minutes
backed out input.
47541..... Plmt access bil EF027........... table, NF ............... 190 187 G1: See preamble 0.00
tree sm bwl. instrument, text MS minutes
mobile. backed out input.
47541..... Plmt access bil EL011........... room, NF ............... 72 69 E15: Refined -15.76
tree sm bwl. angiography. equipment time
to conform to
changes in
clinical labor
time MS minutes
backed out input.
47541..... Plmt access bil EQ011........... ECG, 3-channel NF ............... 190 187 G1: See preamble -0.04
tree sm bwl. (with SpO2, text MS minutes
NIBP, temp, backed out input.
resp).
47541..... Plmt access bil EQ032........... IV infusion NF ............... 190 187 G1: See preamble -0.02
tree sm bwl. pump. text MS minutes
backed out input.
47541..... Plmt access bil EQ168........... light, exam.... NF ............... 34 85 E1: Refined 0.22
tree sm bwl. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.

[[Page 80381]]

47541..... Plmt access bil EQ250........... ultrasound NF ............... 34 85 E1: Refined 5.93
tree sm bwl. unit, portable. equipment time
to conform to
established
policies for non-
highly technical
equipment MS
minutes backed
out input.
47541..... Plmt access bil L041B........... Radiologic NF Clean room/ 6 3 L1: Refined time -1.23
tree sm bwl. Technologist. equipment by to standard for
physician this clinical
staff. labor task.
47541..... Plmt access bil L051A........... RN............. NF Assist 60 0 G1: See preamble -30.60
tree sm bwl. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47541..... Plmt access bil L051A........... RN............. NF Monitor pt. 15 0 G1: See preamble -7.65
tree sm bwl. following text MS minutes
moderate backed out input.
sedation.
47541..... Plmt access bil L051A........... RN............. NF Sedate/Apply 2 0 G1: See preamble -1.02
tree sm bwl. anesthesia. text MS minutes
backed out input.
47541..... Plmt access bil SA044........... pack, conscious NF ............... 1 0 G1: See preamble -17.31
tree sm bwl. sedation. text MS supply
backed out input.
47542..... Dilate biliary EF018........... stretcher...... NF ............... 30 0 G1: See preamble -0.15
duct/ampulla. text MS minutes
backed out input.
47542..... Dilate biliary EF027........... table, NF ............... 30 0 G1: See preamble -0.04
duct/ampulla. instrument, text MS minutes
mobile. backed out input.
47542..... Dilate biliary EQ011........... ECG, 3-channel NF ............... 30 0 G1: See preamble -0.42
duct/ampulla. (with Sp02, text MS minutes
NIBP, temp, backed out input.
resp).
47542..... Dilate biliary EQ032........... IV infusion NF ............... 30 0 G1: See preamble -0.19
duct/ampulla. pump. text MS minutes
backed out input.
47542..... Dilate biliary L051A........... RN............. NF Assist 30 0 G1: See preamble -15.30
duct/ampulla. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47542..... Dilate biliary SD150........... catheter, NF ............... 0 1 S8: Supply item 65.00
duct/ampulla. balloon replaces another
ureteral item; see
(Dowd). preamble.
47542..... Dilate biliary SD152........... catheter, NF ............... 1 0 S7: Supply item -243.50
duct/ampulla. balloon, PTA. replaced by
another item;
see preamble.
47543..... Endoluminal bx EF018........... stretcher...... NF ............... 30 0 G1: See preamble -0.15
biliary tree. text MS minutes
backed out input.
47543..... Endoluminal bx EF027........... table, NF ............... 30 0 G1: See preamble -0.04
biliary tree. instrument, text MS minutes
mobile. backed out input.
47543..... Endoluminal bx EQ011........... ECG, 3-channel NF ............... 30 0 G1: See preamble -0.42
biliary tree. (with Sp02, text MS minutes
NIBP, temp, backed out input.
resp).
47543..... Endoluminal bx EQ032........... IV infusion NF ............... 30 0 G1: See preamble -0.19
biliary tree. pump. text MS minutes
backed out input.
47543..... Endoluminal bx L051A........... RN............. NF Assist 30 0 G1: See preamble -15.30
biliary tree. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47543..... Endoluminal bx SD315........... Stone basket... NF ............... 1 0 G1: See preamble -417.00
biliary tree. text.
47544..... Removal duct EF018........... stretcher...... NF ............... 45 0 G1: See preamble -0.23
glbldr calculi. text MS minutes
backed out input.
47544..... Removal duct EF027........... table, NF ............... 45 0 G1: See preamble -0.06
glbldr calculi. instrument, text MS minutes
mobile. backed out input.
47544..... Removal duct EQ011........... ECG, 3-channel NF ............... 45 0 G1: See preamble -0.63
glbldr calculi. (with Sp02, text MS minutes
NIBP, temp, backed out input.
resp).
47544..... Removal duct EQ032........... IV infusion NF ............... 45 0 G1: See preamble -0.28
glbldr calculi. pump. text MS minutes
backed out input.
47544..... Removal duct L051A........... RN............. NF Assist 45 0 G1: See preamble -22.95
glbldr calculi. Physician in text MS minutes
Performing backed out input.
Procedure (CS).
47544..... Removal duct SD150........... catheter, NF ............... 0 1 S8: Supply item 65.00
glbldr calculi. balloon replaces another
ureteral item; see
(Dowd). preamble.
47544..... Removal duct SD152........... catheter, NF ............... 1 0 S7: Supply item -243.50
glbldr calculi. balloon, PTA. replaced by
another item;
see preamble.
47544..... Removal duct SD315........... Stone basket... NF ............... 0 1 G1: See preamble 417.00
glbldr calculi. text.
50606..... Endoluminal bx EL011........... room, NF ............... 46 47 G1: See preamble 5.25
urtr rnl plvs. angiography. text.
50705..... Ureteral EL011........... room, NF ............... 61 62 G1: See preamble 5.25
embolization/ angiography. text.
occl.
50706..... Balloon dilate EL011........... room, NF ............... 61 62 G1: See preamble 5.25
urtrl strix. angiography. text.
51700..... Irrigation of SD024........... catheter, Foley NF ............... 0 1 S8: Supply item 7.82
bladder. replaces another
item; see
preamble SD030.
51700..... Irrigation of SD030........... catheter, NF ............... 1 0 S7: Supply item -1.70
bladder. straight. replaced by
another item;
see preamble
SD024.
51700..... Irrigation of SJ031........... leg or urinary NF ............... 0 1 S8: Supply item 3.08
bladder. drainage bag. replaces another
item; see
preamble SD030.
51701..... Insert bladder SD024........... catheter, Foley NF ............... 1 0 S7: Supply item -7.82
catheter. replaced by
another item;
see preamble
SD030.

[[Page 80382]]

51701..... Insert bladder SD030........... catheter, NF ............... 0 1 S8: Supply item 1.70
catheter. straight. replaces another
item; see
preamble SD024.
51701..... Insert bladder SJ031........... leg or urinary NF ............... 1 0 S7: Supply item -3.08
catheter. drainage bag. replaced by
another item;
see preamble
SD030.
52000..... Cystoscopy...... EF027........... table, NF ............... 17 22 E4: Refined 0.01
instrument, equipment time
mobile. to conform to
established
policies for
scopes.
52000..... Cystoscopy...... EF031........... table, power... NF ............... 17 22 E4: Refined 0.08
equipment time
to conform to
established
policies for
scopes.
52000..... Cystoscopy...... EQ167........... light source, NF ............... 17 22 E4: Refined 0.14
xenon. equipment time
to conform to
established
policies for
scopes.
52000..... Cystoscopy...... ES031........... video system, NF ............... 17 22 E4: Refined 0.65
endoscopy equipment time
(processor, to conform to
digital established
capture, policies for
monitor, scopes.
printer, cart).
58555..... Hysteroscopy dx L037D........... RN/LPN/MTA..... F Conduct phone 0 3 L1: Refined time 1.11
sep proc. calls/call in to standard for
prescriptions. this clinical
labor task.
58558..... Hysteroscopy EQ235........... suction machine NF ............... 51 0 E9: Equipment -0.10
biopsy. (Gomco). removed due to
redundancy when
used together
with equipment
EQ378.
58558..... Hysteroscopy SA123........... Hysteroscopic NF ............... 0 1 G1: See preamble 320.00
biopsy. fluid text.
management
tubing kit.
58558..... Hysteroscopy SD009........... canister, NF ............... 1 0 S1: Duplicative; -3.91
biopsy. suction. supply is
included in
EQ378.
58558..... Hysteroscopy SD031........... catheter, NF ............... 1 0 S1: Duplicative; -0.62
biopsy. suction. supply is
included in
EQ378.
58562..... Hysteroscopy L037D........... RN/LPN/MTA..... F Conduct phone 0 3 L1: Refined time 1.11
remove fb. calls/call in to standard for
prescriptions. this clinical
labor task.
62321..... Njx interlaminar EF018........... stretcher...... NF ............... 73 75 E1: Refined 0.01
crv/thrc. equipment time
to conform to
established
policies for non-
highly technical
equipment.
62321..... Njx interlaminar EQ211........... pulse oximeter NF ............... 73 75 E1: Refined 0.01
crv/thrc. w-printer. equipment time
to conform to
established
policies for non-
highly technical
equipment.
62323..... Njx interlaminar EF018........... stretcher...... NF ............... 73 75 E1: Refined 0.01
lmbr/sac. equipment time
to conform to
established
policies for non-
highly technical
equipment.
62323..... Njx interlaminar EQ211........... pulse oximeter NF ............... 73 75 E1: Refined 0.01
lmbr/sac. w-printer. equipment time
to conform to
established
policies for non-
highly technical
equipment.
62325..... Njx interlaminar EF018........... stretcher...... NF ............... 73 75 E1: Refined 0.01
crv/thrc. equipment time
to conform to
established
policies for non-
highly technical
equipment.
62325..... Njx interlaminar EQ211........... pulse oximeter NF ............... 73 75 E1: Refined 0.01
crv/thrc. w-printer. equipment time
to conform to
established
policies for non-
highly technical
equipment.
62327..... Njx interlaminar EF018........... stretcher...... NF ............... 73 75 E1: Refined 0.01
lmbr/sac. equipment time
to conform to
established
policies for non-
highly technical
equipment.
62327..... Njx interlaminar EQ211........... pulse oximeter NF ............... 73 75 E1: Refined 0.01
lmbr/sac. w-printer. equipment time
to conform to
established
policies for non-
highly technical
equipment.
70540..... Mri orbit/face/ ED053........... Professional NF ............... 24 22 E18: Refined -0.12
neck w/o dye. PACS equipment time
Workstation. to conform to
established
policies for
PACS Workstation
Proxy.

[[Page 80383]]

70542..... Mri orbit/face/ ED053........... Professional NF ............... 25 23 E18: Refined -0.12
neck w/dye. PACS equipment time
Workstation. to conform to
established
policies for
PACS Workstation
Proxy.
70543..... Mri orbt/fac/nck ED053........... Professional NF ............... 30 28 E18: Refined -0.12
w/o &w/dye. PACS equipment time
Workstation. to conform to
established
policies for
PACS Workstation
Proxy.
77001..... Fluoroguide for ED050........... PACS NF ............... 27 25 E15: Refined -0.04
vein device. Workstation equipment time
Proxy. to conform to
changes in
clinical labor
time.
77001..... Fluoroguide for EL014........... room, NF ............... 24 22 E15: Refined -2.79
vein device. radiographic- equipment time
fluoroscopic. to conform to
changes in
clinical labor
time.
77001..... Fluoroguide for L041B........... Radiologic NF Prepare room, 2 0 L6: Add-on code. -0.82
vein device. Technologist. equipment, Additional time
supplies. for clinical
labor task not
typical; see
preamble text.
77002..... Needle ED050........... PACS NF ............... 27 25 E15: Refined -0.04
localization by Workstation equipment time
xray. Proxy. to conform to
changes in
clinical labor
time.
77002..... Needle EL014........... room, NF ............... 24 22 E15: Refined -2.79
localization by radiographic- equipment time
xray. fluoroscopic. to conform to
changes in
clinical labor
time.
77002..... Needle L041B........... Radiologic NF Prepare room, 2 0 L6: Add-on code. -0.82
localization by Technologist. equipment, Additional time
xray. supplies. for clinical
labor task not
typical; see
preamble text.
77003..... Fluoroguide for ED050........... PACS NF ............... 27 25 E15: Refined -0.04
spine inject. Workstation equipment time
Proxy. to conform to
changes in
clinical labor
time.
77003..... Fluoroguide for EL014........... room, NF ............... 24 22 E15: Refined -2.79
spine inject. radiographic- equipment time
fluoroscopic. to conform to
changes in
clinical labor
time.
77003..... Fluoroguide for L041B........... Radiologic NF Prepare room, 2 0 L6: Add-on code. -0.82
spine inject. Technologist. equipment, Additional time
supplies. for clinical
labor task not
typical; see
preamble text.
88184..... Flowcytometry/tc L033A........... Lab Technician. NF Clean room/ 2 1 L1: Refined time -0.33
1 marker. equipment to standard for
following this clinical
procedure labor task.
(including any
equipment
maintenance
that must be
done after the
procedure).
88184..... Flowcytometry/tc L033A........... Lab Technician. NF Enter data into 4 0 G6: Indirect -1.32
1 marker. laboratory Practice Expense
information input and/or not
system, individually
multiparameter allocable to a
analyses and particular
field data patient for a
entry, particular
complete service.
quality
assurance
documentation.
88184..... Flowcytometry/tc L045A........... Cytotechnologis NF Instrument 15 13 L3: Refined -0.90
1 marker. t. start-up, clinical labor
quality time to conform
control with identical
functions, labor activity
calibration, in other codes
centrifugation in the family.
, maintaining
specimen
tracking, logs
and labeling.
88184..... Flowcytometry/tc L045A........... Cytotechnologis NF Load specimen 10 7 L3: Refined -1.35
1 marker. t. into flow clinical labor
cytometer, run time to conform
specimen, with identical
monitor data labor activity
acquisition, in other codes
and data in the family.
modeling, and
unload flow
cytometer.
88184..... Flowcytometry/tc L045A........... Cytotechnologis NF Print out 5 2 L1: Refined time -1.35
1 marker. t. histograms, to standard for
assemble this clinical
materials with labor task.
paperwork to
pathologists.
88184..... Flowcytometry/tc SL186........... antibody, flow NF ............... 1.6 1 G1: See preamble -5.10
1 marker. cytometry text.
(each test).

[[Page 80384]]

88185..... Flowcytometry/tc L033A........... Lab Technician. NF Enter data into 1 0 G6: Indirect -0.33
add-on. laboratory Practice Expense
information input and/or not
system, individually
multiparameter allocable to a
analyses and particular
field data patient for a
entry, particular
complete service.
quality
assurance
documentation.
88185..... Flowcytometry/tc SL089........... lysing reagent NF ............... 3 2 G1: See preamble -4.49
add-on. (FACS). text.
88185..... Flowcytometry/tc SL186........... antibody, flow NF ............... 1.6 1 G1: See preamble -5.10
add-on. cytometry text.
(each test).
88321..... Microslide L037B........... Histotechnologi NF Assemble and 1 0 L2: Clinical -0.37
consultation. st. deliver slides labor task
with paperwork redundant with
to clinical labor
pathologists. task.
88321..... Microslide L037B........... Histotechnologi NF Complete 0 1 L3: Refined 0.37
consultation. st. workload clinical labor
recording time to conform
logs. Collate with identical
slides and labor activity
paperwork. in other codes
Deliver to in the family.
pathologist.
88323..... Microslide L037B........... Histotechnologi NF Assemble and 1 0 L2: Clinical -0.37
consultation. st. deliver slides labor task
with paperwork redundant with
to clinical labor
pathologists. task.
88323..... Microslide L037B........... Histotechnologi NF Clean equipment 1 0 L2: Clinical -0.37
consultation. st. while labor task
performing redundant with
service. clinical labor
task.
88323..... Microslide L037B........... Histotechnologi NF Complete 0 1 G1: See preamble 0.37
consultation. st. workload text.
recording
logs. Collate
slides and
paperwork.
Deliver to
pathologist.
88323..... Microslide SL135........... stain, NF ............... 32 16 G1: See preamble -0.70
consultation. hematoxylin. text.
88325..... Comprehensive L037B........... Histotechnologi NF Assemble and 1 0 L2: Clinical -0.37
review of data. st. deliver slides labor task
with paperwork redundant with
to clinical labor
pathologists. task.
88325..... Comprehensive L037B........... Histotechnologi NF Clean Equipment 1 0 L2: Clinical -0.37
review of data. st. while labor task
performing redundant with
service. clinical labor
task.
88325..... Comprehensive L037B........... Histotechnologi NF Complete 0 1 G1: See preamble 0.37
review of data. st. workload text.
recording
logs. Collate
slides and
paperwork.
Deliver to
pathologist.
88325..... Comprehensive SL135........... stain, NF ............... 32 16 G1: See preamble -0.70
review of data. hematoxylin. text.
95812..... EEG 41-60 EF003........... bedroom NF ............... 108 99 E1: Refined -0.05
minutes. furniture equipment time
(hospital bed, to conform to
table, established
reclining policies for non-
chair). highly technical
equipment.
95812..... EEG 41-60 EQ017........... EEG, digital, NF ............... 108 99 E1: Refined -1.32
minutes. prolonged equipment time
testing system to conform to
(computer w- established
remote camera). policies for non-
highly technical
equipment.
95812..... EEG 41-60 L047B........... REEGT.......... NF Perform 62 50 G1: See preamble -5.64
minutes. procedure. text.
95813..... EEG over 1 hour. EF003........... bedroom NF ............... 142 129 E1: Refined -0.08
furniture equipment time
(hospital bed, to conform to
table, established
reclining policies for non-
chair). highly technical
equipment.
95813..... EEG over 1 hour. EQ017........... EEG, digital, NF ............... 142 129 E1: Refined -1.91
prolonged equipment time
testing system to conform to
(computer w- established
remote camera). policies for non-
highly technical
equipment.
95813..... EEG over 1 hour. L047B........... REEGT.......... NF Perform 96 80 G1: See preamble -7.52
procedure. text.
96933..... Rcm celulr L042A........... RN/LPN......... NF Review imaging 2 0 G1: See preamble -0.84
subcelulr img with text.
skn. interpreting
physician.
96934..... Rcm celulr EF031........... table, power... NF ............... 32 31 E1: Refined -0.02
subcelulr img equipment time
skn. to conform to
established
policies for non-
highly technical
equipment.

[[Page 80385]]

96934..... Rcm celulr EQ168........... light, exam.... NF ............... 32 31 E1: Refined 0.00
subcelulr img equipment time
skn. to conform to
established
policies for non-
highly technical
equipment.
96934..... Rcm celulr ES056........... reflectance NF ............... 32 31 E1: Refined -0.37
subcelulr img confocal equipment time
skn. imaging system. to conform to
established
policies for non-
highly technical
equipment.
96934..... Rcm celulr L042A........... RN/LPN......... NF Patient 2 0 L6: Add-on code. -0.84
subcelulr img clinical Additional time
skn. information for clinical
and labor task not
questionnaire typical; see
reviewed by preamble text.
technologist,
order from
physician
confirmed and
exam
protocoled by
radiologist.
96934..... Rcm celulr L042A........... RN/LPN......... NF Prepare and 2 1 L6: Add-on code. -0.42
subcelulr img position pt/ Additional time
skn. monitor pt/set for clinical
up IV. labor task not
typical; see
preamble text.
96934..... Rcm celulr L042A........... RN/LPN......... NF Review imaging 2 1 G1: See preamble -0.42
subcelulr img with text.
skn. interpreting
physician.
96935..... Rcm celulr EF031........... table, power... NF ............... 32 31 E1: Refined -0.02
subcelulr img equipment time
skn. to conform to
established
policies for non-
highly technical
equipment.
96935..... Rcm celulr EQ168........... light, exam.... NF ............... 32 31 E1: Refined 0.00
subcelulr img equipment time
skn. to conform to
established
policies for non-
highly technical
equipment.
96935..... Rcm celulr ES056........... reflectance NF ............... 32 31 E1: Refined -0.37
subcelulr img confocal equipment time
skn. imaging system. to conform to
established
policies for non-
highly technical
equipment.
96935..... Rcm celulr L042A........... RN/LPN......... NF Patient 2 0 L6: Add-on code. -0.84
subcelulr img clinical Additional time
skn. information for clinical
and labor task not
questionnaire typical; see
reviewed by preamble text.
technologist,
order from
physician
confirmed and
exam
protocoled by
radiologist.
96935..... Rcm celulr L042A........... RN/LPN......... NF Prepare and 2 1 L6: Add-on code. -0.42
subcelulr img position pt/ Additional time
skn. monitor pt/set for clinical
up IV. labor task not
typical; see
preamble text.
96935..... Rcm celulr L042A........... RN/LPN......... NF Review imaging 2 0 G1: See preamble -0.84
subcelulr img with text.
skn. interpreting
physician.
97161..... Pt eval low EF028........... table, mat, hi- NF ............... 13 20 E11: Refined 0.07
complex 20 min. lo, 6 x 8 equipment time
platform. to conform with
other codes in
the family.
97161..... Pt eval low EQ219........... rehab and NF ............... 5 10 E11: Refined 0.89
complex 20 min. testing system equipment time
(BTE primus). to conform with
other codes in
the family.
97161..... Pt eval low EQ243........... treadmill...... NF ............... 5 3 E11: Refined -0.03
complex 20 min. equipment time
to conform with
other codes in
the family.
97161..... Pt eval low L023A........... Physical NF Prepare and 0 2 L3: Refined 0.46
complex 20 min. Therapy Aide. position pt/ clinical labor
monitor pt/set time to conform
up IV. with identical
labor activity
in other codes
in the family.
97161..... Pt eval low L039B........... Physical NF Assist physical 5 10 L3: Refined 1.95
complex 20 min. Therapy therapist with clinical labor
Assistant. exam/ time to conform
evaluation, with identical
obtain records/ labor activity
measures. in other codes
in the family.
97161..... Pt eval low L039B........... Physical NF Conduct phone 0 3 L3: Refined 1.17
complex 20 min. Therapy calls/call in clinical labor
Assistant. prescriptions. time to conform
with identical
labor activity
in other codes
in the family.
97161..... Pt eval low L039B........... Physical NF Obtain/record 5 8 L3: Refined 1.17
complex 20 min. Therapy medical and clinical labor
Assistant. medication time to conform
history, self with identical
assessment labor activity
tools, and in other codes
fall screening in the family.
for PT review.
97161..... Pt eval low L039B........... Physical NF Obtain vital 3 5 L3: Refined 0.78
complex 20 min. Therapy signs. clinical labor
Assistant. time to conform
with identical
labor activity
in other codes
in the family.
97162..... Pt eval mod L039B........... Physical NF Obtain/record 10 8 G1: See preamble -0.78
complex 30 min. Therapy medical and text.
Assistant. medication
history, self
assessment
tools, and
fall screening
for PT review.

[[Page 80386]]

97163..... Pt eval high EF028........... table, mat, hi- NF ............... 30 20 E11: Refined -0.10
complex 45 min. lo, 6 x 8 equipment time
platform. to conform with
other codes in
the family.
97163..... Pt eval high EQ148........... kit, hand NF ............... 5 2 E11: Refined -0.01
complex 45 min. dexterity, equipment time
sensory, to conform with
strength. other codes in
the family.
97163..... Pt eval high EQ201........... parallel bars, NF ............... 5 0 E11: Refined -0.02
complex 45 min. platform equipment time
mounted. to conform with
other codes in
the family.
97163..... Pt eval high EQ243........... treadmill...... NF ............... 0 3 E11: Refined 0.04
complex 45 min. equipment time
to conform with
other codes in
the family.
97163..... Pt eval high L039B........... Physical NF Assist physical 15 10 L3: Refined -1.95
complex 45 min. Therapy therapist with clinical labor
Assistant. exam/ time to conform
evaluation, with identical
obtain records/ labor activity
measures. in other codes
in the family.
97163..... Pt eval high L039B........... Physical NF Obtain/record 12 8 L3: Refined -1.56
complex 45 min. Therapy medical and clinical labor
Assistant. medication time to conform
history, self with identical
assessment labor activity
tools, and in other codes
fall screening in the family.
for PT review.
97163..... Pt eval high SM022........... sanitizing NF ............... 6 5 S5: Refined -0.05
complex 45 min. cloth-wipe supply quantity
(surface, to conform with
instruments, other codes in
equipment). the family.
97164..... Pt re-eval est L039B........... Physical NF Obtain/record 5 4 G1: See preamble -0.39
plan care. Therapy medical and text.
Assistant. medication
history, self
assessment
tools, and
fall screening
for PT review.
97165..... Ot eval low EF033........... table, NF ............... 0 10 E11: Refined 0.05
complex 20 min. treatment, hi- equipment time
lo. to conform with
other codes in
the family.
97165..... Ot eval low EL002........... environmental NF ............... 10 11 E11: Refined 0.11
complex 20 min. module--kitche equipment time
n. to conform with
other codes in
the family.
97165..... Ot eval low EQ068........... balance NF ............... 0 8 E11: Refined 0.43
complex 20 min. assessment- equipment time
retraining to conform with
system other codes in
(Balance the family.
Master).
97165..... Ot eval low EQ143........... kit, ADL....... NF ............... 8 11 E11: Refined 0.00
complex 20 min. equipment time
to conform with
other codes in
the family.
97165..... Ot eval low EQ151........... kit, motor NF ............... 2 3 E11: Refined 0.00
complex 20 min. coordination. equipment time
to conform with
other codes in
the family.
97165..... Ot eval low EQ152........... kit, sensory... NF ............... 2 3 E11: Refined 0.00
complex 20 min. equipment time
to conform with
other codes in
the family.
97165..... Ot eval low ES057........... environmental NF ............... 0 10 E11: Refined 0.64
complex 20 min. module--bathro equipment time
om. to conform with
other codes in
the family.
97165..... Ot eval low ES058........... kit, vision.... NF ............... 0 3 E11: Refined 0.00
complex 20 min. equipment time
to conform with
other codes in
the family.
97165..... Ot eval low L039B........... Physical NF Assist 5 7 L3: Refined 0.78
complex 20 min. Therapy physician in clinical labor
Assistant. performing time to conform
procedure with identical
(15%). labor activity
in other codes
in the family.
97165..... Ot eval low L039B........... Physical NF Obtain 4 6 L3: Refined 0.78
complex 20 min. Therapy measurements. clinical labor
Assistant. time to conform
with identical
labor activity
in other codes
in the family.
97165..... Ot eval low L039B........... Physical NF Obtain vital 3 5 L3: Refined 0.78
complex 20 min. Therapy signs. clinical labor
Assistant. time to conform
with identical
labor activity
in other codes
in the family.
97166..... Ot eval mod L039B........... Physical NF Obtain 8 6 G1: See preamble -0.78
complex 30 min. Therapy measurements. text.
Assistant.
97167..... Ot eval high EF033........... table, NF ............... 15 10 E11: Refined -0.03
complex 45 min. treatment, hi- equipment time
lo. to conform with
other codes in
the family.
97167..... Ot eval high EL002........... environmental NF ............... 14 11 E11: Refined -0.34
complex 45 min. module--kitche equipment time
n. to conform with
other codes in
the family.
97167..... Ot eval high EQ068........... balance NF ............... 0 8 E11: Refined 0.43
complex 45 min. assessment- equipment time
retraining to conform with
system other codes in
(Balance the family.
Master).
97167..... Ot eval high EQ117........... evaluation NF ............... 5 4 E11: Refined -0.07
complex 45 min. system for equipment time
upper to conform with
extremity-hand other codes in
(Greenleaf). the family.

[[Page 80387]]

97167..... Ot eval high EQ143........... kit, ADL....... NF ............... 15 11 E11: Refined -0.01
complex 45 min. equipment time
to conform with
other codes in
the family.
97167..... Ot eval high EQ185........... neurobehavioral NF ............... 11 0 E11: Refined -0.59
complex 45 min. status equipment time
instrument. to conform with
other codes in
the family.
97167..... Ot eval high EQ219........... rehab and NF ............... 5 3 E11: Refined -0.36
complex 45 min. testing system equipment time
(BTE primus). to conform with
other codes in
the family.
97167..... Ot eval high ES057........... environmental NF ............... 14 10 E11: Refined -0.26
complex 45 min. module -- equipment time
bathroom. to conform with
other codes in
the family.
97167..... Ot eval high L039B........... Physical NF Assist 9 7 L3: Refined -0.78
complex 45 min. Therapy physician in clinical labor
Assistant. performing time to conform
procedure with identical
(15%). labor activity
in other codes
in the family.
97167..... Ot eval high L039B........... Physical NF Obtain 12 6 L3: Refined -2.34
complex 45 min. Therapy measurements. clinical labor
Assistant. time to conform
with identical
labor activity
in other codes
in the family.
97168..... Ot re-eval est L039B........... Physical NF Obtain 3 2 G1: See preamble -0.39
plan care. Therapy measurements. text.
Assistant.
G0416..... Prostate biopsy, SL063........... eosin y........ NF ............... 48 0 S7: Supply item -38.45
any mthd. replaced by
another item;
see preamble
SL201.
G0416..... Prostate biopsy, SL201........... stain, eosin... NF ............... 0 48 S8: Supply item 3.24
any mthd. replaces another
item; see
preamble SL063.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 80388]]

Table 29--CY 2017 Final Rule No PE Refinement Table
------------------------------------------------------------------------
HCPCS Code Short Descriptor
------------------------------------------------------------------------
00740..................................... Anesth upper gi visualize.
00810..................................... Anesth low intestine scope.
11730..................................... Removal of nail plate.
19298..................................... Place breast rad tube/caths.
20245..................................... Bone biopsy excisional.
20550..................................... Inj tendon sheath/ligament.
20552..................................... Inj trigger point 1/2 muscl.
20553..................................... Inject trigger points 3/>.
20982..................................... Ablate bone tumor(s) perq.
20983..................................... Ablate bone tumor(s) perq.
22512..................................... Vertebroplasty addl inject.
22515..................................... Perq vertebral augmentation.
22526..................................... Idet single level.
22527..................................... Idet 1 or more levels.
22853..................................... Insj biomechanical device.
22854..................................... Insj biomechanical device.
22859..................................... Insj biomechanical device.
22867..................................... Insj stablj dev w/dcmprn.
22868..................................... Insj stablj dev w/dcmprn.
22869..................................... Insj stablj dev w/o dcmprn.
22870..................................... Insj stablj dev w/o dcmprn.
28289..................................... Repair hallux rigidus.
28291..................................... Corrj halux rigdus w/implt.
28292..................................... Correction of bunion.
28295..................................... Correction hallux valgus.
28296..................................... Correction of bunion.
28297..................................... Correction of bunion.
28298..................................... Correction of bunion.
28299..................................... Correction of bunion.
31615..................................... Visualization of windpipe.
31622..................................... Dx bronchoscope/wash.
31623..................................... Dx bronchoscope/brush.
31624..................................... Dx bronchoscope/lavage.
31625..................................... Bronchoscopy w/biopsy(s).
31626..................................... Bronchoscopy w/markers.
31627..................................... Navigational bronchoscopy.
31628..................................... Bronchoscopy/lung bx each.
31629..................................... Bronchoscopy/needle bx each.
31632..................................... Bronchoscopy/lung bx addl.
31633..................................... Bronchoscopy/needle bx addl.
31634..................................... Bronch w/balloon occlusion.
31635..................................... Bronchoscopy w/fb removal.
31645..................................... Bronchoscopy clear airways.
31646..................................... Bronchoscopy reclear airway.
31652..................................... Bronch ebus samplng 1/2
node.
31653..................................... Bronch ebus samplng 3/ node.
31654..................................... Bronch ebus ivntj perph les.
32405..................................... Percut bx lung/mediastinum.
32550..................................... Insert pleural cath.
32553..................................... Ins mark thor for rt perq.
33340..................................... Perq clsr tcat l atr apndge.
33390..................................... Valvuloplasty aortic valve.
33391..................................... Valvuloplasty aortic valve.
35471..................................... Repair arterial blockage.
35472..................................... Repair arterial blockage.
35475..................................... Repair arterial blockage.
35476..................................... Repair venous blockage.
36010..................................... Place catheter in vein.
36140..................................... Establish access to artery.
36147..................................... Access av dial grft for
eval.
36148..................................... Access av dial grft for
proc.
36200..................................... Place catheter in aorta.
36227..................................... Place cath xtrnl carotid.
36228..................................... Place cath intracranial art.
36245..................................... Ins cath abd/l-ext art 1st.
36246..................................... Ins cath abd/l-ext art 2nd.
36247..................................... Ins cath abd/l-ext art 3rd.
36248..................................... Ins cath abd/l-ext art addl.
36481..................................... Insertion of catheter vein.
36555..................................... Insert non-tunnel cv cath.
36557..................................... Insert tunneled cv cath.
36558..................................... Insert tunneled cv cath.
36560..................................... Insert tunneled cv cath.
36561..................................... Insert tunneled cv cath.
36563..................................... Insert tunneled cv cath.
36565..................................... Insert tunneled cv cath.
36566..................................... Insert tunneled cv cath.
36568..................................... Insert picc cath.
36570..................................... Insert picvad cath.
36571..................................... Insert picvad cath.
36576..................................... Repair tunneled cv cath.
36578..................................... Replace tunneled cv cath.
36581..................................... Replace tunneled cv cath.
36582..................................... Replace tunneled cv cath.
36583..................................... Replace tunneled cv cath.
36585..................................... Replace picvad cath.
36590..................................... Removal tunneled cv cath.
36870..................................... Percut thrombect av fistula.
36907..................................... Balo angiop ctr dialysis
seg.
36908..................................... Stent plmt ctr dialysis seg.
36909..................................... Dialysis circuit embolj.
37183..................................... Remove hepatic shunt (tips).
37185..................................... Prim art m-thrmbc sbsq vsl.
37186..................................... Sec art thrombectomy add-on.
37193..................................... Rem endovas vena cava
filter.
37222..................................... Iliac revasc add-on.
37223..................................... Iliac revasc w/stent add-on.
37232..................................... Tib/per revasc add-on.
37233..................................... Tibper revasc w/ather add-
on.
37234..................................... Revsc opn/prq tib/pero
stent.
37235..................................... Tib/per revasc stnt & ather.
37237..................................... Open/perq place stent ea
add.
37239..................................... Open/perq place stent ea
add.
37247..................................... Trluml balo angiop addl art.
37249..................................... Trluml balo angiop addl
vein.
37252..................................... Intrvasc us noncoronary 1st.
37253..................................... Intrvasc us noncoronary
addl.
43200..................................... Esophagoscopy flexible
brush.
43201..................................... Esoph scope w/submucous inj.
43202..................................... Esophagoscopy flex biopsy.
43206..................................... Esoph optical
endomicroscopy.
43213..................................... Esophagoscopy retro balloon.
43215..................................... Esophagoscopy flex remove
fb.
43216..................................... Esophagoscopy lesion
removal.
43217..................................... Esophagoscopy snare les
remv.
43220..................................... Esophagoscopy balloon <30mm.
43226..................................... Esoph endoscopy dilation.
43227..................................... Esophagoscopy control bleed.
43229..................................... Esophagoscopy lesion ablate.
43231..................................... Esophagoscop ultrasound
exam.
43232..................................... Esophagoscopy w/us needle
bx.
43235..................................... Egd diagnostic brush wash.
43236..................................... Uppr gi scope w/submuc inj.
43239..................................... Egd biopsy single/multiple.
43245..................................... Egd dilate stricture.
43247..................................... Egd remove foreign body.
43248..................................... Egd guide wire insertion.
43249..................................... Esoph egd dilation <30 mm.
43250..................................... Egd cautery tumor polyp.
43251..................................... Egd remove lesion snare.
43252..................................... Egd optical endomicroscopy.
43255..................................... Egd control bleeding any.
43270..................................... Egd lesion ablation.
43284..................................... Laps esophgl sphnctr agmntj.
43285..................................... Rmvl esophgl sphnctr dev.
43450..................................... Dilate esophagus 1/mult
pass.
43453..................................... Dilate esophagus.
44380..................................... Small bowel endoscopy br/wa.
44381..................................... Small bowel endoscopy br/wa.
44382..................................... Small bowel endoscopy.
44385..................................... Endoscopy of bowel pouch.
44386..................................... Endoscopy bowel pouch/biop.
44388..................................... Colonoscopy thru stoma spx.
44389..................................... Colonoscopy with biopsy.
44390..................................... Colonoscopy for foreign
body.
44391..................................... Colonoscopy for bleeding.
44392..................................... Colonoscopy & polypectomy.
44394..................................... Colonoscopy w/snare.
44401..................................... Colonoscopy with ablation.
44404..................................... Colonoscopy w/injection.
44405..................................... Colonoscopy w/dilation.
45303..................................... Proctosigmoidoscopy dilate.
45305..................................... Proctosigmoidoscopy w/bx.
45307..................................... Proctosigmoidoscopy fb.
45308..................................... Proctosigmoidoscopy removal.
45309..................................... Proctosigmoidoscopy removal.
45315..................................... Proctosigmoidoscopy removal.
45317..................................... Proctosigmoidoscopy bleed.

[[Page 80389]]

45320..................................... Proctosigmoidoscopy ablate.
45332..................................... Sigmoidoscopy w/fb removal.
45333..................................... Sigmoidoscopy & polypectomy.
45334..................................... Sigmoidoscopy for bleeding.
45335..................................... Sigmoidoscopy w/submuc inj.
45338..................................... Sigmoidoscopy w/tumr remove.
45340..................................... Sig w/tndsc balloon
dilation.
45346..................................... Sigmoidoscopy w/ablation.
45350..................................... Sgmdsc w/band ligation.
45378..................................... Diagnostic colonoscopy.
45379..................................... Colonoscopy w/fb removal.
45380..................................... Colonoscopy and biopsy.
45381..................................... Colonoscopy submucous njx.
45382..................................... Colonoscopy w/control bleed.
45384..................................... Colonoscopy w/lesion
removal.
45385..................................... Colonoscopy w/lesion
removal.
45386..................................... Colonoscopy w/balloon dilat.
45388..................................... Colonoscopy w/ablation.
45398..................................... Colonoscopy w/band ligation.
47000..................................... Needle biopsy of liver.
47382..................................... Percut ablate liver rf.
47383..................................... Perq abltj lvr cryoablation.
49411..................................... Ins mark abd/pel for rt
perq.
49446..................................... Change g-tube to g-j perc.
50200..................................... Renal biopsy perq.
50592..................................... Perc rf ablate renal tumor.
50593..................................... Perc cryo ablate renal tum.
51702..................................... Insert temp bladder cath.
51703..................................... Insert bladder cath complex.
51720..................................... Treatment of bladder lesion.
51784..................................... Anal/urinary muscle study.
55700..................................... Biopsy of prostate.
57155..................................... Insert uteri tandem/ovoids.
58559..................................... Hysteroscopy lysis.
58560..................................... Hysteroscopy resect septum.
58561..................................... Hysteroscopy remove myoma.
58563..................................... Hysteroscopy ablation.
58674..................................... Laps abltj uterine fibroids.
61640..................................... Dilate ic vasospasm init.
61641..................................... Dilate ic vasospasm add-on.
61642..................................... Dilate ic vasospasm add-on.
62320..................................... Njx interlaminar crv/thrc.
62322..................................... Njx interlaminar lmbr/sac.
62324..................................... Njx interlaminar crv/thrc.
62326..................................... Njx interlaminar lmbr/sac.
62380..................................... Ndsc dcmprn 1 ntrspc lumbar.
66720..................................... Destruction ciliary body.
67101..................................... Repair detached retina.
67105..................................... Repair detached retina.
69300..................................... Revise external ear.
76706..................................... Us abdl aorta screen aaa.
77332..................................... Radiation treatment aid(s).
77333..................................... Radiation treatment aid(s).
77334..................................... Radiation treatment aid(s).
77470..................................... Special radiation treatment.
77600..................................... Hyperthermia treatment.
77605..................................... Hyperthermia treatment.
77610..................................... Hyperthermia treatment.
77615..................................... Hyperthermia treatment.
91110..................................... Gi tract capsule endoscopy.
91111..................................... Esophageal capsule
endoscopy.
92132..................................... Cmptr ophth dx img ant
segmt.
92133..................................... Cmptr ophth img optic nerve.
92134..................................... Cptr ophth dx img post
segmt.
92235..................................... Eye exam with photos.
92240..................................... Icg angiography.
92242..................................... Fluorescein icg angiography.
92250..................................... Eye exam with photos.
92960..................................... Cardioversion electric ext.
93312..................................... Echo transesophageal.
93314..................................... Echo transesophageal.
93451..................................... Right heart cath.
93452..................................... Left hrt cath w/
ventrclgrphy.
93453..................................... R&l hrt cath w/
ventriclgrphy.
93454..................................... Coronary artery angio s&i.
93455..................................... Coronary art/grft angio s&i.
93456..................................... R hrt coronary artery angio.
93457..................................... R hrt art/grft angio.
93458..................................... L hrt artery/ventricle
angio.
93459..................................... L hrt art/grft angio.
93460..................................... R&l hrt art/ventricle angio.
93461..................................... R&l hrt art/ventricle angio.
93464..................................... Exercise w/hemodynamic meas.
93505..................................... Biopsy of heart lining.
93566..................................... Inject r ventr/atrial angio.
93567..................................... Inject suprvlv aortography.
93568..................................... Inject pulm art hrt cath.
93590..................................... Perq transcath cls mitral.
93591..................................... Perq transcath cls aortic.
93592..................................... Perq transcath closure each.
93642..................................... Electrophysiology
evaluation.
93644..................................... Electrophysiology
evaluation.
95144..................................... Antigen therapy services.
95165..................................... Antigen therapy services.
95957..................................... EEG digital analysis.
96160..................................... Pt-focused hlth risk assmt.
96161..................................... Caregiver health risk assmt.
96440..................................... Chemotherapy intracavitary.
96931..................................... Rcm celulr subcelulr img
skn.
96932..................................... Rcm celulr subcelulr img
skn.
96936..................................... Rcm celulr subcelulr img
skn.
99151..................................... Mod sed same phys/qhp <5
yrs.
99152..................................... Mod sed same phys/qhp 5/yrs.
99153..................................... Mod sed same phys/qhp ea.
99155..................................... Mod sed oth phys/qhp <5 yrs.
99156..................................... Mod sed oth phys/qhp 5/yrs.
99157..................................... Mod sed other phys/qhp ea.
G0341..................................... Percutaneous islet
celltrans.
------------------------------------------------------------------------

Table 30--CY 2017 Final Rule New Invoices Table
----------------------------------------------------------------------------------------------------------------
Invoices received for New Direct PE inputs
-----------------------------------------------------------------------------------------------------------------
Estimated non-
facility allowed
CPT/HCPCS codes Item name CMS code Average price Number of services for
invoices HCPCS codes
using this item
----------------------------------------------------------------------------------------------------------------
31551, 31552, 31553, 31554, rhinolaryngoscope ES063 8,000.00 1 541,537
31574, 31575, 31579, 31580, , flexible,
31584, 31587, 31591, 31592. video, non-
channeled.
31572, 31573, 31576, 31577, rhinolaryngoscope ES064 9,000.00 1 756
31578. , flexible,
video, channeled.
31576, 31577, 31578........... Disposable biopsy SD318 26.84 1 574
forceps.

[[Page 80390]]

31579......................... stroboscopy ES065 16,843.87 1 54,466
system.
31574......................... Voice SJ090 575.00 1 99
Augmentation Gel.
36473......................... Claravein Kit.... SA122 890.00 1 264
36473, 36474.................. Sotradecol SH108 110.20 1 528
Sclerosing Agent.
55700......................... Biopsy Guide..... EQ375 7,000.00 0 85,731
58558......................... Hysteroscopic SF059 629.00 2 2,677
tissue removal
device.
58558......................... Hysteroscopic EQ378 14,698.38 1 2,677
fluid management
system.
58558......................... Hysteroscopic EQ379 19,772.25 1 2,677
resection system
(control unit,
footpiece,
handpiece,
sheath, and
calibration
device).
58558......................... Hysteroscopic SA123 320.00 1 2,677
fluid management
tubing kit.
70540, 70542, 70543; over 400 Professional PACS ED053 14,616.93 9 32,571,650
additional codes. Workstation.
77332......................... knee wedge/foot EQ376 3,290.00 1 48,831
block system.
77333......................... Thermoplastic SD321 23.90 1 3,493
tissue bolus
30X30X0.3cm.
77333......................... water bath, EP120 2,350.00 1 3,493
digital control.
77333, 77334.................. Supine Breast/ EQ377 5,773.15 1 290,969
Lung Board.
77334......................... Urethane Foaming SL519 53.50 1 287,476
Agent.
88184, 88185.................. flow cytometry EQ380 14,000.00 1 1,680,252
analytics
software.
95144, 95165.................. antigen vial SK127 1.50 2 6,464,311
transport
envelope.
96161......................... Beck Depression SK128 2.26 1 1
Inventory,
Second Edition
(BDI-II).
96416......................... IV infusion pump, EQ381 2,384.45 0 116,894
ambulatory.
96931, 96932.................. Imaging Tray..... SA121 34.75 1 5
96931, 96932.................. adhesive ruler... SK125 9.95 1 5
96931, 96932, 96934, 96935.... reflectance ES056 98,500.00 1 9
confocal imaging
system.
97166, 97167, 97168........... environmental ES057 25,000.00 1 115,107
module--bathroom.
97166, 97167.................. kit, vision...... ES058 410.00 1 86,912
G0202, G0204, G0206........... PACS Mammography ED054 103,616.47 8 2,274,249
Workstation.
G0501......................... patient lift EF045 2,824.33 3 15,115,789
system.
G0501......................... wheelchair EF046 875.92 3 15,115,789
accessible scale.
G0501......................... leg positioning EF047 1,076.50 3 15,115,789
system.
No Codes...................... Chloraprep SJ091 8.48 3 0
applicator (26
ml).
No Codes...................... LED Light Source EQ382 1,915.00 1 0
(50W LED).
----------------------------------------------------------------------------------------------------------------

Table 31--CY 2017 Final Rule Existing Invoices Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
Invoices received for Existing Direct PE inputs
---------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated non-
facility allowed
CPT/HCPCS codes Item name CMS code Current price Updated price Percent change Number of services for
invoices HCPCS codes
using this item
--------------------------------------------------------------------------------------------------------------------------------------------------------
19030, 19081, 19082, 19281, room, digital EL013 168,214.00 362,935.00 116 10 2,294,862
19282, 19283, 19284, 77053, mammography.
77054, G0202, G0204, G0206.
31551, 31552, 31553, 31554, video system, ES031 33,232.50 33,391.00 0 3 1,497,130
31572, 31573, 31574, 31575, endoscopy
31576, 31577, 31578, 31579, (processor,
31580, 31584, 31587, 31591, digital capture,
31592, 190+ other codes. monitor, printer,
cart).
58555, 58562, 58563, 58565...... endoscope, rigid, ES009 4,990.50 6,207.50 24 1 672
hysteroscopy.

[[Page 80391]]

88323, 88355, 88380, 88381...... stain, eosin...... SL201 0.04 0.07 55 5 45,393
88360, 88361.................... Antibody Estrogen SL493 3.19 14.00 339 4 216,208
Receptor
monoclonal.
91110........................... kit, capsule SA005 450.00 520.00 16 1 30,464
endoscopy w-
application
supplies (M2A).
91110, 91111.................... video system, ES029 17,000.00 12,450.00 -27 1 30,586
capsule endoscopy
(software,
computer,
monitor, printer).
91111........................... kit, capsule, ESO, SA094 450.00 472.80 5 1 122
endoscopy w-
application
supplies (ESO).
91200........................... Fibroscan with ER101 124,950.00 183,390.00 47 1 6,226
printer.
95145, 95146, 95148, 95149...... antigen, venom.... SH009 16.67 20.14 21 4 50,772
95147, 95148, 95149............. antigen, venom, SH010 30.22 44.05 46 3 37,955
tri-vespid.
122 codes....................... light source, EQ167 6,723.33 7,000.00 4 1 2,149,616
xenon.
59 codes........................ fiberscope, ES020 6,301.93 4,250.00 -33 1 581,924
flexible,
rhinolaryngoscopy.
--------------------------------------------------------------------------------------------------------------------------------------------------------

M. Therapy Caps

1. Outpatient Therapy Caps for CY 2017
Section 1833(g) of the Act requires application of annual per
beneficiary limitations on the amount of expenses that can be
considered as incurred expenses for outpatient therapy services under
Medicare Part B, commonly referred to as ``therapy caps.'' There is one
therapy cap for outpatient occupational therapy (OT) services and
another separate therapy cap for physical therapy (PT) and speech-
language pathology (SLP) services combined.
The therapy caps apply to outpatient therapy services furnished in
all settings, including the previously exempted hospital setting
(effective October 1, 2012), critical access hospitals (CAHs)
(effective January 1, 2014), and Maryland hospitals paid under the
Maryland All-Payer Model (effective January 1, 2016).
The therapy cap amounts under section 1833(g) of the Act are
updated each year based on the Medicare Economic Index (MEI).
Specifically, the annual caps are calculated by updating the previous
year's cap by the MEI for the upcoming calendar year and rounding to
the nearest $10.00. Increasing the CY 2016 therapy cap of $1,960 by the
CY 2017 MEI of 1.2 percent and rounding to the nearest $10.00 results
in a CY 2017 therapy cap amount of $1,980.
An exceptions process for the therapy caps has been in effect since
January 1, 2006. Originally required by section 5107 of the Deficit
Reduction Act of 2005 (DRA), which amended section 1833(g)(5) of the
Act, the exceptions process for the therapy caps has been extended
multiple times through subsequent legislation as described in the CY
2015 PFS final rule with comment period (79 FR 67730) and most recently
extended by the MACRA. Our current authority to provide an exceptions
process for therapy caps expires on December 31, 2017.
CMS tracks each beneficiary's incurred expenses annually and counts
them towards the therapy caps by applying the PFS rate for each service
less any applicable multiple procedure payment reduction (MPPR) amount.
As required by section 1833(g)(6)(B) of the Act, added by section
603(b) of the American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-
240) and extended by subsequent legislation, the PFS-rate accrual
process is applied to outpatient therapy services furnished by CAHs
even though they are paid on a cost basis. As we explained in the CY
2016 PFS final rule, we use cost-based rates to track each
beneficiary's incurred expenses amounts for the outpatient therapy
services furnished by the Maryland hospitals paid under the Maryland
All-Payer Model, currently being tested under the authority of section
1115A of the Act. After expenses incurred for the beneficiary's
outpatient therapy services for the year have exceeded one or both of
the therapy caps, therapy suppliers and providers use the KX modifier
on claims for subsequent services to request an exception to the
therapy caps. By using the KX modifier, the therapist is attesting that
the services above the therapy caps are reasonable and necessary and
that there is documentation of medical necessity for the services in
the beneficiary's medical record. Claims for outpatient therapy
services over the caps without the KX modifier are denied.

[[Page 80392]]

Since October 1, 2012, under section 1833(g)(5)(C) of the Act as
amended by the Middle Class Tax Relief and Jobs Creation Act of 2012
(MCTRJCA) (Pub. L. 112-96), we have been required to apply a manual
medical review process to therapy claims when a beneficiary's incurred
expenses for outpatient therapy services exceed a threshold amount of
$3,700. Just as there are two separate therapy caps, there are two
separate thresholds of $3,700, one for OT services and one for PT and
SLP services combined; and incurred expenses are counted towards these
thresholds in the same manner as the caps. Under section 1833(g)(5) of
the Act, as amended by section 202(b) of the MACRA, not all claims
exceeding the therapy thresholds are subject to a manual medical review
process as they were before. Instead, since MACRA, we are permitted to
do a more targeted medical review on these claims using factors
specified in section 1833(g)(5)(E)(ii) of the Act as amended by section
202(b) of the MACRA, including targeting those therapy providers with a
high claims denial rate for therapy services or with aberrant billing
practices compared to their peers. The manual medical review process
required under section 1833(g)(5)(C) of the Act expires at the same
time as the exceptions process for therapy caps, on December 31, 2017.
For information on the manual medical review process, go to https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/TherapyCap.html

III. Other Provisions of the Final Rule for PFS

A. Chronic Care Management (CCM) and Transitional Care Management (TCM)
Supervision Requirements in Rural Health Clinics (RHCs) and Federally
Qualified Health Centers (FQHCs)

In the CY 2016 PFS final rule with comment period (80 FR 71080
through 71088), we finalized policies for payment of CCM services in
RHCs and FQHCs. Payment for CCM services in RHCs and FQHCs was
effective beginning on January 1, 2016, for RHCs and FQHCs that furnish
a minimum of 20 minutes of qualifying CCM services during a calendar
month to patients with multiple (two or more) chronic conditions that
are expected to last at least 12 months or until the death of the
patient, and that would place the patient at significant risk of death,
acute exacerbation/decompensation, or functional decline. Payment is
made when CPT code 99490 is billed alone or with other payable services
on a RHC or FQHC claim, and the rate is based on the PFS national
average non-facility payment rate. The requirement that RHC or FQHC
services be furnished face-to-face was waived for CCM services
furnished to a RHC or FQHC patient because CCM services are not
required to be furnished face-to-face.
Medicare payment for TCM services furnished by a RHC or FQHC
practitioner was effective January 1, 2013, consistent with the
effective date of payment for TCM services under the PFS (77 FR 68978
through 68994; also, see CMS-Pub. 100-02, Medicare Benefit Policy
Manual, chapter 13, section 110.4).
TCM services are billable only when furnished within 30 days of the
date of the patient's discharge from a hospital (including outpatient
observation or partial hospitalization), skilled nursing facility, or
community mental health center. Communication (direct contact,
telephone, or electronic) with the patient or caregiver must commence
within 2 business days of discharge, and a face-to-face visit must
occur within 14 days of discharge for moderate complexity decision
making (CPT code 99495), or within 7 days of discharge for high
complexity decision making (CPT code 99496). The TCM visit is billed on
the day that the TCM visit takes place, and only one TCM visit may be
paid per beneficiary for services furnished during that 30 day post-
discharge period. If the TCM visit occurs on the same day as another
billable visit, only one visit may be billed. TCM and CCM cannot be
billed during the same time period for the same patient.
In the CY 2016 PFS final rule with comment period (80 FR 71087), we
responded to comments requesting that we make an exception to the
supervision requirements for auxiliary personnel furnishing CCM and TCM
services incident to physician services in RHCs and FQHCs (80 FR
71087). Auxiliary personnel in RHCs and FQHCs furnish services incident
to a RHC or FQHC visit and include nurses, medical assistants, and
other clinical personnel who work under the direct supervision of a RHC
or FQHC practitioner. The commenters suggested that the regulatory
language be amended to be consistent with the provision in Sec.
410.26(b)(5) for CCM and TCM services under the PFS, which states that
services and supplies furnished incident to CCM and TCM services can be
furnished under general supervision of the physician (or other
practitioner) when they are provided by clinical staff. It further
specifies that the physician (or other practitioner) supervising the
auxiliary personnel need not be the same physician (or other
practitioner) upon whose professional service the incident to service
is based, but only the supervising physician (or other practitioner)
may bill Medicare for incident to services. We responded that due to
the differences between physician offices and RHCs and FQHCs in their
models of care and payment structures, we believe that the direct
supervision requirement for services furnished by auxiliary personnel
is appropriate for RHCs and FQHCs, but that we would consider changing
this in future rulemaking if RHCs and FQHCs found that requiring direct
supervision presents a barrier to furnishing CCM services.
Since payment for CCM in RHCs and FQHCs began on January 1, 2016,
some RHCs and FQHCs have informed us that, in their view, the direct
supervision requirement for auxiliary personnel has limited their
ability to furnish CCM services. Specifically, these RHCs and FQHCs
have stated that the direct supervision requirement prevented them from
entering into contracts with third party companies to provide CCM
services, especially during hours that they were not open, and that
they were unable to meet the CCM requirements within their current
staffing and budget constraints.
To bill for CCM services, RHCs and FQHCs must ensure that there is
access to care management services on a 24 hour a day, 7 day a week
basis. This includes providing the patient with a means to make timely
contact with RHC or FQHC practitioners who have access to the patient's
electronic care plan to address his or her urgent chronic care needs.
The RHC or FQHC must ensure the care plan is available electronically
at all times to anyone within the RHC or FQHC who is providing CCM
services.
Once the RHC or FQHC practitioner has initiated CCM services and
the patient has consented to receiving this service, CCM services can
be furnished by a RHC or FQHC practitioner, or by auxiliary personnel,
as defined in Sec. 410.26(a)(1), which includes nurses, medical
assistants, and other personnel working under physician supervision who
meet the requirements to provide incident to services. Auxiliary
personnel in RHCs and FQHCs must furnish services under direct
supervision, which requires that a RHC or FQHC practitioner be present
in the RHC or FQHC and immediately available to furnish assistance and
direction. The RHC or FQHC practitioner does not need to be present

[[Page 80393]]

in the room when the service is furnished.
Although many RHCs and FQHCs prefer to furnish CCM and TCM services
utilizing existing personnel, some RHCs and FQHCs would like to
contract with a third party to furnish aspects of their CCM and TCM
services, but cannot do so because of the direct supervision
requirement. Without the ability to contract with a third party, these
RHCs and FQHCs have stated that they find it difficult to meet the CCM
requirements for 24 hours a day, 7 days a week access to services.
To enable RHCs and FQHCs to effectively contract with third parties
to furnish aspects of CCM and TCM services, we proposed to revise Sec.
405.2413(a)(5) and Sec. 405.2415(a)(5) to state that services and
supplies furnished incident to CCM and TCM services can be furnished
under general supervision of a RHC or FQHC practitioner. The proposed
exception to the direct supervision requirement would apply only to
auxiliary personnel furnishing CCM or TCM incident to services, and
would not apply to any other RHC or FQHC services. The proposed
revisions for CCM and TCM services and supplies furnished by RHCs and
FQHCs are consistent with Sec. 410.26(b)(5), which allows CCM and TCM
services and supplies to be furnished by clinical staff under general
supervision when billed under the PFS.
The following is a summary of the comments we received on revising
the supervision requirements for RHCs and FQHCs to allow general
supervision for auxiliary personnel furnishing CCM or TCM services.
Comment: We received 23 comments on our proposal to allow services
and supplies furnished incident to CCM and TCM services to be furnished
under general supervision of a RHC or FQHC practitioner. All commenters
supported this change.
Response: We appreciate the support for this proposal.
Comment: One commenter urged CMS to use the Advisory Panel on
Hospital Outpatient Payment to determine RHC and FQHC supervision
levels.
Response: Auxiliary personnel in RHCs and FQHCs work under direct
supervision of a RHC or FQHC practitioner (consistent with statutory
and regulatory authority), and we proposed to make an exception for CCM
and TCM services because they are the only RHC and FQHC services that
have a non-face-to-face component. We do not foresee any additional
exceptions to this policy.
After considering the comments, we are finalizing this policy to
revise Sec. 405.2413(a)(5) and Sec. 405.2415(a)(5) to state that
services and supplies furnished incident to CCM and TCM services can be
furnished under general supervision of a RHC or FQHC practitioner.

B. FQHC-Specific Market Basket

1. Background
Section 10501(i)(3)(A) of the Affordable Care Act (Pub. L. 111-148
and Pub. L. 111-152) added section 1834(o) of the Act to establish a
payment system for the costs of FQHC services under Medicare Part B
based on prospectively set rates. In the Prospective Payment System
(PPS) for FQHC Final Rule published in the May 2, 2014 Federal Register
(79 FR 25436), CMS implemented a methodology and payment rates for the
FQHC PPS. The FQHC PPS base payment rate was determined using FQHC cost
report and claims data and was effective for FQHC payments from October
1, 2014, through December 31, 2015 (implementation year). The adjusted
base payment rate for the implementation year was $158.85 (79 FR
25455). When calculating the FQHC PPS payment, the base payment rate is
multiplied by the FQHC geographic adjustment factor (GAF) based on the
location of the FQHC, and adjusted for new patients or when an initial
preventive physical examination or annual wellness visit are furnished.
Beginning on October 1, 2014, FQHCs began to transition to the FQHC PPS
based on their cost reporting periods. As of January 1, 2016, all FQHCs
are paid under the FQHC PPS.
Section 1834(o)(2)(B)(ii) of the Act requires that the payment for
the first year after the implementation year be increased by the
percentage increase in the MEI. Therefore, in CY 2016, the FQHC PPS
base payment rate was increased by the MEI. The MEI was based on 2006
data from the American Medical Association (AMA) for self-employed
physicians and was used in the PFS Sustainable Growth Rate (SGR)
formula to determine the conversion factor for physician service
payments. (See the CY 2014 PFS final rule (78 FR 74264) for a complete
discussion of the 2006-based MEI). Section 1834(o)(2)(B)(ii) of the Act
also requires that beginning in CY 2017, the FQHC PPS base payment rate
is to be increased by the percentage increase in a market basket of
FQHC goods and services, or if such an index is not available, by the
percentage increase in the MEI.
For CY 2017, we proposed to create a 2013-based FQHC market basket.
The market basket uses Medicare cost report (MCR) data submitted by
freestanding FQHCs. In the discussion in the CY 2017 PFS proposed rule
(81 FR 46378-46386) we provided an overview of the market basket and
described the methodologies used to determine the cost categories, cost
weights, and price proxies. In addition, we compared the growth rates
of the proposed FQHC market basket to the growth rates of the MEI.
2. Overview of the FQHC Market Basket
The 2013-based FQHC market basket is a fixed-weight, Laspeyres-type
price index. A Laspeyres price index measures the change in price, over
time, of the same mix of goods and services purchased in the base
period. Any changes in the quantity or mix of goods and services (that
is, intensity) purchased over time relative to a base period are not
measured.
The index itself is constructed in three steps. First, a base
period is selected (in this final rule, the base period is CY 2013),
total base period costs are estimated for a set of mutually exclusive
and exhaustive cost categories, and the proportion of total costs that
each cost category represents is calculated. These proportions are
called cost weights. Second, each cost category is matched to an
appropriate price or wage variable, referred to as a price proxy. These
price proxies are derived from publicly available statistical series
that are published on a consistent schedule (preferably at least on a
quarterly basis). Finally, the cost weight for each cost category is
multiplied by the established price proxy index level. The sum of these
products (that is, the cost weights multiplied by their price levels)
for all cost categories yields the composite index level of the market
basket for the given time period. Repeating this step for other periods
produces a series of market basket levels over time. Dividing the
composite index level of one period by the composite index level for an
earlier period produces a rate of growth in the input price index over
that timeframe.
As previously noted, the market basket is described as a fixed-
weight index because it represents the change in price over time of a
constant mix (quantity and intensity) of goods and services needed to
furnish FQHC services. The effects on total costs resulting from
changes in the mix of goods and services purchased subsequent to the
base period are not measured. For example, a FQHC hiring more nurses to
accommodate the needs of patients would increase the volume

[[Page 80394]]

of goods and services purchased by the FQHC, but would not be factored
into the price change measured by a fixed-weight FQHC market basket.
Only when the index is rebased would changes in the quantity and
intensity be captured, with those changes being reflected in the cost
weights. Therefore, we rebase the market baskets periodically so that
the cost weights reflect a current mix of goods and services purchased
(FQHC inputs) to furnish FQHC services.
3. Creating a FQHC Market Basket
In 2015, we began researching the possibility of creating a FQHC
market basket that would be used in place of the MEI to update the FQHC
PPS base payment rate annually. A FQHC market basket should reflect the
cost structures of FQHCs while the MEI reflects the cost structures of
self-employed physician offices. At the time of implementation of the
FQHC PPS, a FQHC market basket had not been developed, and therefore,
the law stipulated that the FQHC PPS base payment rate be updated by
the MEI for the first year after implementation (CY 2016). In
subsequent years, the FQHC PPS base payment rate should be annually
updated by a FQHC market basket, if available.
The MEI cost weights were derived from data collected by the AMA on
the Physician Practice Expense Information Survey (PPIS), since
physicians, unlike other Medicare providers, are not required to
complete and submit a Medicare Cost Report. FQHCs submit expense data
annually on the Medicare Cost Report form CMS-222-92 (OMB NO: 0938-
0107), ``Independent Rural Health Clinic and Freestanding Federally
Qualified Health Center Cost Report''; therefore, we were able to
estimate relative cost weights specific to FQHCs. We define a ``major
cost weight'' as one calculated using the Medicare cost reports (for
example, FQHC practitioner compensation). However, the Medicare cost
report data allows multiple methods for reporting detailed expenses,
either in detailed cost center lines or more broadly reported in
general categories of expenses. An alternative data source is used to
disaggregate further residual costs that could not be classified into a
major cost category directly using only the Medicare Cost Report data.
We estimated the cost weights for each year 2009 through 2013 and found
the cost weights from each year to be similar, which provided
confidence in the derived cost weights.
We believe that the proposed methodologies for the FQHC market
basket better reflect the cost structure of FQHC since it captures the
scope of services that FQHCs furnish compared to the 2006-based MEI.
4. Development of Cost Categories and Cost Weights for the 2013-Based
FQHC Market Basket
a. Use of Medicare Cost Report Data
The 2013-based FQHC market basket consists of eight major cost
categories, which were derived from the CY 2013 Medicare cost reports
for freestanding FQHCs. These categories are FQHC-Practitioner
Compensation, Other Clinical Compensation, Non-Health Compensation,
Fringe Benefits, Pharmaceuticals, Fixed Capital, Moveable Capital, and
an All Other (Residual) cost category. The All Other (Residual) cost
category reflects the costs not captured in the other seven cost
categories. The CY 2013 Medicare cost reports include all FQHCs whose
cost reporting period began on or after January 1, 2013, and prior to
or on December 31, 2013. We selected CY 2013 as the base year because
the Medicare cost reports for that year were the most recent, complete
set of Medicare cost report data available for FQHCs at the time of
development of the cost share weights and proposed 2013-based FQHC
market basket. As stated above, we compared the cost share weights from
the MCR for CY 2009 through CY 2013 and the CY 2013 weights were
consistent with the weights from prior years.
The resulting 2013-based FQHC market basket cost weights reflect
Medicare allowable costs. We define Medicare allowable costs for
freestanding FQHC facilities as: Worksheet A, Columns 1 and 2, cost
centers lines 1 through 51 but excluding line 20, which is professional
liability insurance (PLI). We excluded PLI costs from the total
Medicare allowable costs because FQHCs that receive section 330 grant
funds also are eligible to apply for medical malpractice coverage under
Federally Supported Health Centers Assistance Act (FSHCAA) of 1992
(Pub. L. 102-501) and FSHCAA of 1995 (Pub. L. 104-73 amending section
224 of the Public Health Service Act).
Below we summarize how we derive the eight major cost category
weights.
(1) FQHC Practitioner Compensation: A FQHC practitioner is defined
as one of the following occupations: Physicians, NPs, PAs, CNMs,
Clinical Psychologist (CPs), and Clinical Social Worker (CSWs). Under
certain conditions, a FQHC visit also may be provided by qualified
practitioners of outpatient DSMT and MNT when the FQHC meets the
relevant program requirements for provision of these services. FQHC
Practitioner Compensation costs are derived as the sum of compensation
and other costs as reported on Worksheet A; columns 1 and 2; lines 1,
2, 3, 6, 7, 13, 14. The Medicare cost reports also captures ``Other''
compensation costs (the sum of costs reported on Worksheet A; columns 1
and 2; lines 9, 10, 11, and 15). We allocated a portion of these
compensation costs to FQHC Practitioner compensation by multiplying
this amount by the ratio of FQHC Practitioner compensation costs to the
sum of FQHC Practitioner compensation costs and Other Clinical
compensation costs. We believe that the assumption of distributing the
costs proportionally is reasonable since there is no additional detail
on the specific occupations these compensation costs represent. We also
included a proportion of Fringe Benefit costs as described in section
III.B.1.a.iv of this final rule.
(2) Other Clinical Compensation: Other Clinical Compensation
includes any health-related clinical staff who does not fall under the
definition of a FQHC practitioner from paragraph (1) (FQHC Practitioner
Compensation). Other Clinical Compensation costs are derived as the sum
of compensation and other costs as reported on Worksheet A; columns 1
and 2; lines 4, 5, and 8. Similar to the FQHC Practitioner
compensation, we also allocate a proportion of the ``Other'' Clinical
compensation costs by multiplying this amount by the ratio of Other
Clinical Compensation costs to the sum of FQHC Practitioner
Compensation costs and Other Clinical compensation costs. Given the
ambiguity in the costs reported on these lines, we believe that the
assumption of distributing the costs proportionally is reasonable since
there is no additional detail on the specific occupations these
compensation costs represent. We also include a proportion of Fringe
Benefit costs as described in section III.B.1.a.iv of this final rule.
(3) Non-Health Compensation: Non-Health Compensation includes
compensation costs for Office Staff, Housekeeping & Maintenance, and
Pharmacy. Non-Health Compensation costs are derived as the sum of
compensation costs as reported on Worksheet A; column 1 only for lines
32 and 51; and Worksheet A; both columns 1 and 2 for line 38. We only
use the costs from column 1 for housekeeping and maintenance and
pharmacy since we believe that there are considerable costs other than
compensation that could be reported for these categories. We use the
costs from both column 1

[[Page 80395]]

and column 2 for office salaries (line 38) since only salaries or
compensation should be reported on this line. We also include a
proportion of Fringe Benefit costs as described in section III.B.1.a.iv
of this final rule.
(4) Fringe Benefits: Worksheet A; columns 1 and 2; line 45 of the
Medicare cost report captures fringe benefits and payroll tax expenses.
The fringe benefit cost weight are estimated as the fringe benefits
costs divided by total Medicare allowable costs. We allocate the Fringe
Benefits cost weight to the three compensation cost categories (FQHC
practitioner compensation, other clinical compensation, and non-health
compensation) based on their relative proportions. The fringe benefits
ratio is equal to the compensation cost weight as a percent of the sum
of the compensation cost weights for all three types of workers. These
allocation ratios are 46 percent, 14 percent, and 40 percent,
respectively. Therefore, we proposed to allocate 46 percent of the
fringe benefits cost weight to the FQHC practitioner cost weight, 14
percent of the fringe benefits cost weight to the clinical compensation
cost weight, and 40 percent of the fringe benefits cost weight to the
non-health compensation cost weight. Table 32 shows the three
compensation category cost weights after the fringe benefit cost weight
is allocated for the 2013-based FQHC market basket.

Table 32--Compensation Category Cost Weights After Fringe Benefits
Allocation
------------------------------------------------------------------------
Before fringe After fringe
Cost category benefits benefits
allocation % allocation %
------------------------------------------------------------------------
FQHC Practitioner Compensation.......... 26.8 31.8
Other Clinical Compensation............. 8.1 9.5
Non-Health Compensation................. 23.1 27.4
Fringe Benefits (distribute to comp).... 10.7 0.0
------------------------------------------------------------------------

(5) Pharmaceuticals: Drugs and biologicals that are not usually
self-administered, and certain Medicare-covered preventive injectable
drugs are paid incident to a FQHC visit. Therefore, pharmaceutical
costs include the non-compensation costs reported on Worksheet A,
column 2, for the pharmacy cost center (line 51). We note that
pharmaceutical costs are not included in the MEI since pharmaceutical
costs are paid outside of the PFS.
(6) Fixed Capital: Fixed capital costs are equal to the sum of
costs for rent, interest on mortgage loans, depreciation on buildings
and fixtures, and property tax as reported on Worksheet A; columns 1
and 2; lines 26, 28, 30, and 33.
(7) Moveable Capital: Moveable capital costs are equal to the sum
of costs for depreciation of medical equipment, office equipment, and
other equipment as reported on Worksheet A; column 1 and 2; lines 19,
31, and 39.
(8) All Other (Residual): After estimating the expenses for the
seven cost categories listed above, we summed all remaining costs
together for each FQHC to come up with All Other (Residual) costs. The
costs included in the All Other (Residual) category include all costs
reported for medical supplies, transportation, allowable GME pass
through costs, facility insurance, utilities, office supplies, legal,
accounting, administrative insurance, telephone, housekeeping &
maintenance, nondescript healthcare costs, nondescript facility costs,
and nondescript administrative costs.
Although a cost weight for these categories could be obtained
directly from the costs reported in that cost center's respective line
on the cost report form, some FQHCs reported significant costs in other
(specify), or ``free form,'' lines which made it difficult to determine
the accuracy of these costs. For example, some FQHCs reported costs
only in the free form lines and not in the cost center specific lines,
while other FQHCs reported costs in both the cost center specific lines
and the free form lines. Since a majority of FQHCs used the free form
lines, relying solely on the costs reported in the cost center specific
lines for costs could lead to an inaccurate cost weights in the market
basket. For example, if a FQHC reported all other healthcare costs in
line 21 rather than breaking the healthcare costs into the detailed
cost centers (lines 17 through 20.50), then the cost weight for medical
supplies could be lower than it should be if we did not allocate the
costs reported in the free form lines to medical supplies.
Section III.B.1.b explains the method used to allocate the residual
costs to more detailed cost categories.
After we derived costs for the eight major cost categories for each
FQHC using the Medicare cost report data as previously described, we
addressed data outliers using the following steps. First, we divided
the costs for each of the eight categories by total Medicare allowable
costs for each FQHC. We then removed those FQHCs whose derived cost
weights fell in the top and bottom 5 percent of provider specific
derived cost weights. Five percent is the standard trim applied for all
CMS market basket cost weights. After these outliers were removed, we
summed the costs for each category across all remaining FQHCs. We then
divided this by the sum of total Medicare allowable costs across all
remaining FQHCs to obtain a cost weight for the 2013-based FQHC market
basket for the given category. See Table 33 for the resulting cost
weights for these major cost categories that we obtained from the
Medicare cost reports.

Table 33--Major Cost Categories as Derived From Medicare Cost Reports
------------------------------------------------------------------------
2013 FQHC
Cost category weight (%)
------------------------------------------------------------------------
FQHC Practitioner Compensation.......................... 26.8
Other Clinical Compensation............................. 8.1
Non-Health Compensation................................. 23.1
Fringe Benefits (distribute to compensation)............ 10.7
Fixed Capital........................................... 4.5
Moveable Capital........................................ 1.7
Non Salary Pharmaceuticals.............................. 5.1
All Other (Residual).................................... 20.1
------------------------------------------------------------------------
Totals may not sum to 100.0% due to rounding.

b. Derivation of Detailed Cost Categories From the All Other (Residual)
Cost Weight
The All Other Residual cost weight was derived from summing all
expenses reported on the Medicare cost report Worksheet A, columns 1
and 2 for medical supplies (line 17), transportation (line 18),
allowable GME pass through costs (line 20.50), facility

[[Page 80396]]

insurance (line 27), utilities (line 29), office supplies (line 40),
legal (line 41), accounting (line 42), administrative insurance (line
43), telephone (line 44), non-compensation housekeeping & maintenance
(line 32, column 2 only), nondescript healthcare costs (lines 21-23),
nondescript facility costs (lines 34-36), and nondescript
administrative costs (lines 46-48).
To further divide the ``All Other'' residual cost weight (20.1
percent) estimated from the CY 2013 Medicare cost report data into more
detailed cost categories, we used the relative cost shares from the
2006-based MEI for nine detailed cost categories: Utilities;
Miscellaneous Office Expenses; Telephone; Postage; Medical Equipment;
Medical Supplies; Professional, Scientific, & Technical Services;
Administrative & Facility Services; and Other Services. For example,
the Utilities cost represents 7 percent of the sum of the 2006-based
MEI ``All Other'' cost category weights; therefore, the Utilities cost
weight would represent 7 percent of the 2013-based FQHC market basket's
``All Other'' cost category (20.066 percent), yielding a ``final''
Utilities cost weight of 1.4 percent in the 2013-based FQHC market
basket (7 percent * 20.1 percent = 1.4 percent).
Table 34 shows the cost weight for each matching category from the
2006-based MEI, the percent each cost category represents of the 2006-
baesd MEI ``All Other'' cost weight, and the resulting proposed 2013-
based FQHC market basket cost weights for detailed cost categories.

Table 34--Detailed FQHC Cost Category Weights
----------------------------------------------------------------------------------------------------------------
Percent of the
2006-based MEI 2006-based MEI 2013-based
FQHC Detailed cost categories cost weights ``All other'' FQHC detailed
(%) cost weight cost weights
(%) (%)
----------------------------------------------------------------------------------------------------------------
Total All Other (Residual)...................................... 17.976 100.000 20.1
Utilities................................................... 1.266 7.0 1.4
Miscellaneous Office Expenses............................... 2.478 13.8 2.8
Telephone................................................... 1.501 8.4 1.7
Postage..................................................... 0.898 5.0 1.0
Medical Equipment........................................... 1.978 11.0 2.2
Medical supplies............................................ 1.760 9.8 2.0
Professional, Scientific, & Tech. Services.................. 2.592 14.4 2.9
Administrative & Facility Services.......................... 3.052 17.0 3.4
Other Services.............................................. 2.451 13.6 2.7
----------------------------------------------------------------------------------------------------------------

FQHCs have liberty in how and where certain costs are reported on
the Medicare cost report form CMS-222-92. We believe that, given the
ambiguity in how the data are reported for these overhead cost centers
on the FQHC cost report form, relying on the relative shares determined
from the MEI is reasonable. We believe that the revised FQHC cost
report form will allow us to better estimate the detailed cost weights
for these categories directly. We expect all FQHCs to report PPS costs
on the new form for cost report periods beginning after October 1,
2014. The following is a description of the types of expenses included
in the FQHC detailed cost categories derived from the All Other
(Residual) cost category:
Utilities: Includes expenses classified in the fuel, oil
and gas, water and sewage, and electricity industries. These types of
industries are classified in NAICS and include NAICS 2211 (Electric
power generation, transmission, and distribution), 2212 (Natural gas
distribution), and 2213 (Water, sewage, and other systems).
Miscellaneous Office Expense: Includes expenses for office
expenses not reported in other categories, miscellaneous expenses,
included but not limited to, paper (such as paper towels), printing
(such as toner for printers), miscellaneous chemicals (such as soap and
hand sanitizer).
Telephone: Includes expenses classified in NAICS 517
(Telecommunications) and NAICS 518 (Internet service providers), and
NAICS 515 (Cable and other subscription programming). Telephone
service, which is one component of the Telecommunications expenses,
accounts for the majority of the expenditures in this cost category.
Postage: Includes expenses classified in NAICS 491 (Postal
services) and NAICS 492 (Courier services).
Medical Equipment Expenses: Includes the expenses related
to maintenance contracts, and the leases or rental of medical equipment
used in diagnosis or treatment of patients. It would also include the
expenses for any medical equipment that was purchased in a single year
and not financed.
Medical Supplies Expenses: Includes the expenses related
to medical supplies such as sterile gloves, needles, bandages, specimen
containers, and catheters. We note that the Medical Supply cost
category does not include expenses related to pharmaceuticals (drugs
and biologicals).
Professional, Scientific, & Technical Services: Includes
the expenses for any professional services purchased from an outside
agency or party and could include fees including but not limited to,
legal, marketing, professional association memberships, licensure fees,
journal fees, continuing education.
Administrative & Facility Services: Includes the expenses
for any administrative and facility services purchased from an outside
agency or party and could include fees including but not limited to,
accounting, billing, office management services, security services,
transportation services, landscaping, or professional car upkeep.
Other Services: Includes other service expenses including,
but not limited to, nonresidential maintenance and repair, machinery
repair, janitorial, and security services.
Table 35 shows the cost categories and weights for the 2013-based
FQHC market basket. The resulting cost weights include combining the
cost weights derived from the Medicare Cost Report Data (shown in Table
33), distributing the fringe benefits weight across the three
compensation cost categories (shown in Table 32), and disaggregating
the residual cost weight into detailed cost categories (shown in Table
34). Additionally, we compare the cost weights of the 2013-based FQHC
market basket to the cost weights in the 2006-based MEI, where we have
grouped the cost weights from the MEI to align with the FQHC cost
categories.

[[Page 80397]]

Table 35--Proposed FQHC Market Basket and MEI, Cost Categories, Cost Weights
----------------------------------------------------------------------------------------------------------------
2013 FQHC 2006 MEI
FQHC cost category weight (%) weight (%) MEI cost category
----------------------------------------------------------------------------------------------------------------
FQHC Market Basket............................ 100.0 100.000 MEI.
Total Compensation........................ 68.7 67.419 Total Compensation.
FQHC Practitioner Compensation........ 31.7 50.866 Physician Compensation.
Other Clinical Compensation........... 9.5 6.503 Other Clinical
Compensation.
Non-health Compensation............... 27.4 10.050 Non-health Compensation.
All Other Products........................ 16.1 14.176 All Other Products.
Utilities............................. 1.4 1.266 Utilities.
Miscellaneous Office Expenses......... 2.8 2.478 Miscellaneous Office
Expenses.
Telephone............................. 1.7 1.501 Telephone.
Postage............................... 1.0 0.898 Postage.
Medical Equipment..................... 2.2 1.978 Medical Equipment.
Medical Supplies...................... 2.0 1.760 Medical Supplies.
Professional Liability Insurance...... -- 4.295 Professional Liability
Insurance.
Pharmaceuticals....................... 5.1 -- Pharmaceuticals.
All Other Services........................ 9.0 8.095 All Other Services.
Professional, Scientific & Technical 2.9 2.592 Professional, Scientific &
Services. Technical Services.
Administrative & Facility Services.... 3.4 3.052 Administrative & Facility
Services.
Other Services........................ 2.7 2.451 Other Services.
Capital................................... 6.1 10.310 Capital.
Fixed Capital......................... 4.5 8.957 Fixed Capital.
Moveable Capital...................... 1.7 1.353 Moveable Capital.
----------------------------------------------------------------------------------------------------------------

Although the overall cost structure of the MEI, the index currently
used to update the FQHC PPS base payment, is similar to the FQHC cost
structure, there are a few key differences. First, though total
compensation costs in the FQHC market basket and the MEI are each
approximately 67-68 percent of total costs, non-health compensation
accounts for a larger share of compensation costs in the FQHC setting
than in the self-employed physician office. Likewise, physician
compensation accounts for a larger percentage of costs in the MEI than
FQHC practitioner compensation accounts for in the FQHC market basket.
Second, the FQHC market basket includes a cost category for
pharmaceuticals, while drug costs are excluded from the MEI. Drug costs
are an expense in the FQHC PPS base payment rate since drugs and
biologicals that are not usually self-administered, and certain
Medicare-covered preventive injectable drugs are paid incident to a
visit while drug costs are reimbursed separately under the PFS. Third,
as mentioned previously, PLI expenditures are excluded from the FQHC
market basket since most FQHC's PLI costs are covered under the FSHCAA,
while in the MEI the PLI costs are a significant expense for self-
employed physicians. Finally, fixed capital expenses, which include
costs such as office rent and depreciation, are about half of the share
in the FQHC market basket as they are in the MEI.
c. Selection of Price Proxies for the 2013-Based FQHC Market Basket
After establishing the 2013 cost weights for the FQHC market
basket, an appropriate price proxy was selected for each cost category.
The price proxies are chosen from a set of publicly available price
indexes that best reflect the rate of price change for each cost
category in the FQHC market basket. All of the proxies for the 2013-
based FQHC market basket are based on indexes published by the Bureau
of Labor Statistics (BLS) and are grouped into one of the following BLS
categories:
Producer Price Indexes: Producer Price Indexes (PPIs)
measure price changes for goods sold in markets other than the retail
market. PPIs are preferable price proxies for goods and services that
businesses purchase as inputs. For example, we proposed to use a PPI
for prescription drugs, rather than the Consumer Price Index (CPI) for
prescription drugs, because healthcare providers generally purchase
drugs directly from a wholesaler. The PPIs measure price changes at the
final stage of production.
Consumer Price Indexes: CPIs measure change in the prices
of final goods and services bought by the typical consumer. Because
they may not represent the price encountered by a producer, we use CPIs
only if an appropriate PPI is not available, or if the expenditures are
more like those faced by retail consumers than by purchasers of goods
at the wholesale level.
Employment Cost Indexes: Employment Cost Indexes (ECIs)
measure the rate of change in employee wage rates and employer costs
for employee benefits per hour worked. These indexes are fixed-weight
indexes and strictly measure the change in wage rates and employee
benefits per hour. Appropriately, they are not affected by shifts in
employment mix.
We evaluate the price proxies using the criteria of reliability,
timeliness, availability, and relevance. Reliability indicates that the
index is based on valid statistical methods and has low sampling
variability. Timeliness implies that the proxy is published regularly,
preferably at least once a quarter. Availability means that the proxy
is publicly available. Finally, relevance means that the proxy is
applicable and representative of the cost category weight to which it
is applied. We believe the PPIs, CPIs, and ECIs selected meet these
criteria.
Table 36 lists all price proxies for the 2013-based FQHC market
basket. Below is a detailed explanation of the price proxies for each
cost category; we note that many of the proxies for the 2013-based FQHC
market basket are the same as those used for the 2006-based MEI.
(1) FQHC Practitioner Compensation: We proposed to use the ECI for
Total Compensation for Private Industry Workers in Professional and
Related) (BLS series code CIU2010000120000I) to measure price growth of
this category. There is no specific ECI for physicians and, therefore,
similar to the MEI, we proposed to use an index that is based on
professionals that receive advanced training. We note that the 2006-
based MEI has a separate cost category for

[[Page 80398]]

Physician Wages and Salaries and Physician Benefits. For these cost
categories, the MEI uses the ECI for Wages and Salaries and ECI for
Benefits for Professional and Related Occupations.
(2) Other Clinical Compensation: We proposed to use the ECI for
Total Compensation for all Civilian Workers in Health Care and Social
Assistance (BLS series code CIU1016200000000I) to measure the price
growth of this cost category. This cost category consists of
compensation costs for Nurses, Laboratory Technicians, and all other
health staff not included in the FQHC practitioner compensation
category. Based on the clinical composition of these workers, we
believe that the ECI for health-related workers is an appropriate proxy
to measure compensation price pressures for these workers. The MEI uses
the ECI for Wages and Salaries and benefits for Hospitals.
(3) Non-health Compensation: We proposed to use the ECI for Total
Compensation for Private Industry Workers in Office and Administrative
Support (BLS series code CIU2010000220000I) to measure the price growth
of this cost category. The Non-health compensation cost weight is
predominately attributable to administrative and facility type
occupations, as reported in the data from the Medicare cost reports. We
note the MEI has a composite index of four price proxies, with the
majority of the composite index accounted for by administrative
occupations, proxied by the ECI for Wages & Salaries of Office and
Administrative Support (Private).
(4) Utilities: We proposed to use the CPI for Fuel and Utilities
(BLS series code CUUR0000SAH2) to measure the price growth of this cost
category. This is the same proxy used in the 2006-based MEI.
(5) Miscellaneous Office Expenses: We proposed to use the CPI for
All Items Less Food and Energy (BLS series code CUUR0000SA0L1E) to
measure the price growth of this cost category. We believe that using
the CPI for All Items Less Food and Energy avoids double counting of
changes in food and energy prices already captured elsewhere in the
market basket. We note the MEI does not have a separate cost category
for miscellaneous office expenses.
(6) Telephone Services: We proposed to use the CPI for Telephone
Services (BLS series code CUUR0000SEED) to measure the price growth of
this cost category. This is the same price proxy used in the 2006-based
MEI.
(7) Postage: We proposed to use the CPI for Postage (BLS series
code CUUR0000SEEC01) to measure the price growth of this cost category.
This is the same proxy used in the 2006-based MEI.
(8) Medical Equipment: We proposed to use the PPI Commodities for
Surgical and Medical Instruments (BLS series code WPU1562) as the price
proxy for this category. This is the same proxy used in the current
2006-based MEI.
(9) Medical Supplies: We proposed to use a 50/50 blended index
comprised of the PPI Commodities for Medical and Surgical Appliances
and Supplies (BLS series code WPU156301) and the CPI-U for Medical
Equipment and Supplies (BLS series code CUUR0000SEMG). The 50/50 blend
is used in all market baskets where we do not have an accurate split
available. We believe FQHCs purchase the types of supplies contained
within these proxies, including such items as bandages, dressings,
catheters, intravenous equipment, syringes, and other general
disposable medical supplies, via wholesale purchase, as well as at the
retail level. Consequently, we proposed to combine the two
aforementioned indexes to reflect those modes of purchase. This is the
same proxy used in the 2006-based MEI.
(10) Pharmaceuticals: We proposed to use the PPI Commodities for
Pharmaceuticals for Human Use, Prescription (BLS series code
WPUSI07003) to measure the price growth of this cost category. We note
the MEI does not have a separate cost category for Pharmaceuticals.
This price proxy is used to measure prices of Pharmaceuticals in other
CMS market baskets, such as 2010-based Inpatient Prospective Payment
System and 2010-based Skilled Nursing Facility market baskets.
(11) Professional, Scientific, & Technical Services: We proposed to
use the ECI for Total Compensation for Private Industry Workers in
Professional, Scientific, and Technical Services (BLS series code
CIU2015400000000I) to measure the price growth of this cost category.
This is the same proxy used in the 2006-based MEI.
(12) Administrative & Facility Services: We proposed to use the ECI
Total Compensation for Private Industry Workers in Office and
Administrative Support (BLS series code CIU2010000220000I) to measure
the price growth of this cost category. This is the same price proxy
used in the 2006-based MEI.
(13) Other Services: We proposed to use the ECI for Total
Compensation for Private Industry Workers in Service Occupations (BLS
series code CIU2010000300000I) to measure the price growth of this cost
category. This is the same price proxy used in the 2006-based MEI.
(14) Fixed Capital: We proposed to use the PPI Industry for Lessors
of Nonresidential Buildings (BLS series code PCU531120531120) to
measure the price growth of this cost category. This is the same price
proxy used in the 2006-based MEI. We believe this is an appropriate
proxy since fixed capital expenses in FQHCs should reflect inflation
for the rental and purchase of business office space.
(15) Moveable Capital: We proposed to use the PPI Commodities for
Machinery and Equipment (series code WPU11) to measure the price growth
of this cost category as this cost category represents nonmedical
moveable equipment. This is the same proxy used in the 2006-based MEI.
Table 36 lists the proposed price proxies for each cost category in
the proposed FQHC market basket.

Table 36--Cost Categories and Price Proxies for the FQHC Market Basket
------------------------------------------------------------------------
Cost category FQHC price proxies
------------------------------------------------------------------------
FQHC Practitioner Compensation......... ECI--for Total Compensation for
Private Industry Workers in
Professional and Related.
Other Clinical Compensation............ ECI--for Total Compensation for
all Civilian Workers in Health
Care and Social Assistance.
Non-health Compensation................ ECI--for Total Compensation for
Private Industry Workers in
Office and Administrative
Support.
Utilities.............................. CPI-U for Fuels and Utilities.
Miscellaneous Office Expense........... CPI-U for All Items Less Food
And Energy.
Telephone.............................. CPI-U for Telephone.
Postage................................ CP-U for Postage.

[[Page 80399]]

Medical Equipment...................... PPI Commodities for Surgical
and Medical Instruments.
Medical supplies....................... Blend: PPI Commodities for
Medical and Surgical
Appliances and Supplies and
CPI for Medical Equipment and
Supplies.
Pharmaceuticals........................ PPI Commodities for
Pharmaceuticals for Human Use,
Prescription.
Professional, Scientific, and Technical ECI--for Total Compensation for
Services. Private Industry Workers in
Professional, Scientific, and
Technical Services.
Administrative & Facility Services..... ECI--for Total Compensation for
Private Industry Workers in
Office and Administrative
Support.
Other Services......................... ECI--for Total compensation for
Private industry workers in
Service Occupations.
Fixed Capital.......................... PPI Industry--for Lessors of
nonresidential buildings.
Moveable Capital....................... PPI Commodities--for Machinery
and Equipment.
------------------------------------------------------------------------

d. Inclusion of Multi-factor Productivity in the FQHC Market Basket
Section 1834(o)(2)(B)(ii) of the Act describes the methods for
determining updates to FQHC PPS payment. After the first year of
implementation, the FQHC PPS base payment rate must be increased by the
percentage increase in the MEI. In subsequent years, the FQHC PPS base
payment rate shall be increased by the percentage increase in a market
basket of FQHC goods and services as established through regulations
or, if not available, the MEI published in the PFS final rule.
The MEI published in the PFS final rule has a productivity
adjustment. The MEI has been adjusted for changes in productivity since
its inception. In the CY 2003 PFS final rule with comment period (67 FR
80019), we implemented a change in the way the MEI was adjusted to
account for changes in productivity. In 2012, we convened the MEI
Technical Panel to review all aspects of the MEI including and the
productivity adjustment. For more information regarding the MEI
Technical Panel, see the CY 2014 PFS final rule with comment period (78
FR 74264). The MEI Technical Panel concluded in Finding 5.1 that ``such
an adjustment continues to be appropriate. This adjustment prevents
`double counting' of the effects of productivity improvements, which
would otherwise be reflected in both (i) the increase in compensation
and other input price proxies underlying the MEI, and (ii) the growth
in the number of physician services performed per unit of input
resources, which results from advances in productivity by individual
physician practices.''
We proposed to include a productivity adjustment similar to the MEI
in the FQHC market basket. We believe that applying a productivity
adjustment is appropriate because this would be consistent with the
MEI, which has an embedded productivity adjustment. We note that the
MEI Technical Panel concluded that a productivity adjustment is
appropriate for the MEI given the type of services performed in
physician's offices. Specifically, the MEI Technical Panel report
states that ``The input price increases within the MEI are reflected in
the price proxies, such as changes in wages and benefits. Wages
increase, in part, due to the ability of workers to increase the amount
of output per unit of input. Absent a productivity adjustment in the
MEI, physicians would be receiving increased payments resulting both
from their ability to increase their individual outputs and from the
productivity gains already reflected in the wage proxies used in the
index. The productivity adjustment used in the MEI ensures the
productivity gains reflected in increased outputs are not double
counted, or paid for twice. Currently, the productivity adjustment in
the MEI is based on changes in economy-wide productivity based on the
rationale that the price proxy for physician income reflects changes in
economy-wide wages. Implicitly, this assumes physicians can achieve the
same level of productivity as the average general wage earner.'' We
believe that the services performed in FQHC facilities are similar to
those covered by physician visits, and therefore, a productivity
adjustment is appropriate to avoid double counting of the effects of
productivity improvements in the FQHC market basket.
We proposed to use the most recent estimate of the 10-year moving
average of changes in annual private nonfarm business (economy-wide)
multifactor productivity (MFP), which is the same measure of MFP used
in the MEI. The BLS publishes the official measure of private nonfarm
business MFP. (See https://www.bls.gov/mfp for the published BLS
historical MFP data). For the final FQHC market basket update, we
proposed to use the most recent historical estimate of annual MFP as
published by the BLS. Generally, the most recent historical MFP
estimate is lagged two years from the payment year. Therefore, we
proposed to use the 2015 MFP as published by BLS in the CY2017 FQHC
market basket update.
We note that MFP is derived by subtracting the contribution of
labor and capital input growth from output growth. Since at the time of
the proposed rule the 2015 MFP has not been published by BLS, we rely
on a projection of MFP. The projection of MFP is currently produced by
IHS Global Insight (IGI), a national economic forecasting firm with
which CMS contracts to forecast the components of the market basket and
MFP. A complete description of the MFP projection methodology is
available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html.
Using IGI's first quarter 2016 forecast, the productivity
adjustment for CY 2017 (the 10-year moving average of MFP for the
period ending CY 2015) was projected to be 0.4 percent. If more recent
data are subsequently available (for example, a more recent estimate of
the market basket and MFP adjustment), we would use such data to
determine the CY 2017 increase in the FQHC market basket in the final
rule.
5. CY 2017 Market Basket Update: CY 2017 FQHC Market Basket Update
Compared to the MEI Update for CY 2017
For CY 2017, we proposed to use the 2013-based FQHC market basket
increase factor to update the FQHC PPS base payment rate. Consistent
with CMS practice, we estimated the market basket update for the FQHC
PPS based on the most recent forecast from IGI. Identical to the MEI,
we proposed to use the update based on the most recent historical data
available at the time of

[[Page 80400]]

publication of the final rule. For example, the final CY 2017 FQHC
update would be based on the four-quarter moving-average percent change
of the FQHC market basket through the second quarter of 2016 (based on
the final rule's statutory publication schedule).
Based on IGI's first quarter 2016 forecast with historical data
through the fourth quarter of 2015, the projected proposed FQHC market
basket increase factor for CY 2017 was 1.7 percent. This reflected a
2.1-percent increase of FQHC input prices and a 0.4-percent adjustment
for productivity. We also proposed that if more recent data are
subsequently available (for example, a more recent estimate of the
market basket or MFP) we would use such data, to determine the CY 2017
update in the final rule.
For comparison, the 2006-based MEI was projected to be 1.3 percent
in CY 2017; this estimate was based on IGI's first quarter 2016
forecast (with historical data through the fourth quarter of 2015).
Table 37 compares the proposed 2013-based FQHC market basket updates
and the proposed 2006-based MEI market basket updates for CY 2017.

Table 37--Proposed FQHC Market Basket and MEI, Cost Categories, Cost Weights, MFP, and CY 2017 Update \1\
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
FQHC cost category CY 2017 update MEI Cost category
(percent)
----------------------------------------------------------------------------------------------------------------
FQHC Market Basket............................ 1.7 1.3 MEI.
Productivity adjustment....................... 0.4 0.4 Productivity adjustment.
FQHC Market Basket (unadjusted)............... 2.1 1.7 MEI (unadjusted).
Total Compensation........................ 2.1 2.0 Total Compensation.
FQHC Practitioner Comp................ 1.9 2.0 Physician Compensation.
Other Clinical Compensation........... 1.9 2.0 Other Clinical
Compensation.
Non-health Compensation............... 2.4 2.4Non-health Compensation.
All Other Products........................ 2.6 -0.6 All Other Products.
Utilities............................. -3.9 -3.9 Utilities.
Miscellaneous Office Expenses......... 2.0 -1.7 Miscellaneous Office
Expenses.
Telephone............................. 0.4 0.4 Telephone.
Postage............................... 0.3 0.3 Postage.
Medical Equipment..................... 1.2 1.2 Medical Equipment.
Medical Supplies...................... -0.4 -0.4 Medical Supplies.
Professional Liability Insurance...... -0.4 Professional Liability
Insurance.
Pharmaceuticals....................... 7.8 Pharmaceuticals.
All Other Services........................ 2.0 2.0 All Other Services.
Professional, Scientific & Technical 1.5 1.5 Professional, Scientific &
Services. Technical Services.
Administrative & Facility Services.... 2.4 2.4 Administrative & Facility
Services.
Other Services........................ 1.9 1.9 Other Services.
Capital................................... 1.6 1.9 Capital.
Fixed Capital......................... 2.1 2.1 Fixed Capital.
Moveable Capital...................... 0.1 0.1 Moveable Capital.
----------------------------------------------------------------------------------------------------------------
\1\ Based on IGI's first quarter 2016 forecast.

For CY 2017, the proposed 2013-based FQHC market basket update (1.7
percent) is 0.4 percent higher than the 2006-based MEI (1.3 percent).
The 0.4 percentage point difference stems mostly from the inclusion of
pharmaceuticals in the FQHC market basket. This cost category and
associated price pressures are not included in the MEI.
We proposed to update the FQHC PPS base payment rate by 1.7 percent
for CY 2017 based on the 2013-based FQHC market basket. The FQHC market
basket would more accurately reflect the actual costs and scope of
services that FQHCs furnish compared to the 2006-based MEI. We invited
public comment on all aspects of the FQHC market basket proposals.
6. Summary of Comments and the Associated Responses on the Proposed
FQHC Market Basket
We received 12 comments on the proposed FQHC market-basket. The
following is a summary of the comments we received:
Comment: Commenters expressed their support for the creation of a
FQHC-specific market basket to update the FQHC PPS base payment rate
annually. We would note that of the comments received none indicated an
objection to the use of an FQHC market basket compared to the MEI.
Commenters stated that the MEI is outdated and does not appropriately
capture the cost of services that FQHCs furnish.
Response: We appreciate the commenters support for the creation of
the FQHC-specific market basket. As stated in the proposed rule, we
believe that the 2013-based FQHC market basket would more accurately
reflect the actual costs and scope of services that FQHCs furnish
compared to the 2006-based MEI.
Comment: Many commenters requested that we rebase the FQHC market
basket at the earliest possible opportunity to capture new Medicare
cost report data from the revised FQHC cost report. Commenters stated
that CMS finalized and issued a revised Medicare FQHC cost report (Form
CMS-224-14) required to be submitted by FQHCs for cost reporting
periods under Medicare's PPS methodology. The commenters stated that
the revised Medicare FQHC cost report would provide higher quality data
than the previous cost report (Form CMS-222-92).
Response: We appreciate the commenters request to use the most
appropriate and up-to-date data for the development of the FQHC market
basket. We agree with the commenters that the FQHC market basket should
be rebased using the costs as reported under the PPS, coinciding with
data reported on the revised FQHC cost report (Form CMS-224-14). The
revised cost report form must be used for all cost reports that begin
on or after October 1, 2014, which coincides with the implementation of
the FQHC PPS. We plan to update the FQHC market basket to reflect FQHC
costs paid under

[[Page 80401]]

the PPS when we have complete data from the revised cost report form
and can verify that the costs reported are accurate and reliable.
Comment: Many commenters that supported the creation of the FQHC-
specific market basket recommended some clarifications and
modifications to the proposed market basket cost-weight methodology.
Several commenters recommended that the healthcare staff costs for
``Visiting Nurse'' services be included in the ``FQHC Practitioner
Compensation'' cost category rather than in the ``Other Clinical
Compensation'' cost category, as proposed. The commenters note that
Chapter 13 of the Medicare Benefit Policy Manual includes ``visiting
nurse (RN or LPN)'' as a type of practitioner that can render a
medically necessary FQHC visit under certain conditions.
Response: As the commenters stated, the compensation costs
associated with ``Visiting Nurse'' services were allocated to the
market basket cost category for ``Other Clinical Compensation'' rather
than the market basket cost category for ``FQHC Practitioner
Compensation.'' Commenters are correct that under certain
circumstances, FQHCs can bill for a visit when an RN or LPN furnishes
visiting nurse services to a homebound patient in an area with a
shortage of home health agencies. In this situation only, the RN or LPN
would be considered a FQHC practitioner. All other services furnished
by a RN or LPN would be considered incident to a visit and not
separately billable. Since most services furnished by nurses in FQHCs
are considered incident to a FQHC visit and are not separately billable
visits, we believe that it is prudent to keep these costs allocated to
the cost category ``Other Clinical Compensation'' at this time.
Additionally, only 17 FQHCs reported costs in line 4 (Visiting
Nurse) of Worksheet A of the cost report, which is approximately 1.4
percent of all FQHCs that submitted cost reports. Had these costs been
allocated to ``FQHC Practitioner Compensation,'' the proposed ``FQHC
Practitioner Compensation'' cost share weight would essentially be
unchanged (31.9 percent if we were to include the Visiting Nurse
Compensation costs in that category compared to the proposed 31.7
percent). This small difference, based on a very small proportion of
FQHC's who report this data, would not impact the growth rate of the
FQHC market basket. Thus, we believe that changing our proposed
classification of these expenses is not necessary at this time. We will
consider this issue when we rebase and revise the FQHC market basket in
the future using the revised cost report form.
Comment: Commenters requested confirmation that compensation costs
related to FQHC services furnished by certified nurse midwives and
qualified practitioners of outpatient diabetes self-management training
(DSMT) and medical nutrition therapy (MNT) are included within the
``FQHC Practitioner Compensation'' cost category.
Response: There are no specific identified line items on Worksheet
A of the FQHC cost report form (CMS-222-92) for reporting these costs.
We believe that costs associated with these services would have been
reported in lines 9 through 11 or line 15 on Worksheet A. As explained
in 81 FR 46379, we allocate a portion of these compensation costs to
``FQHC Practitioner Compensation'' and ``Other Clinical Compensation''
by multiplying the sum of costs reported on Worksheet A lines 9 through
11 and 15, by the ratio of ``FQHC Practitioner Compensation'' costs to
the sum of ``FQHC Practitioner Compensation'' costs and ``Other
Clinical Compensation'' costs. We believe that the assumption of
distributing the costs proportionally is reasonable since there is no
additional detail on the specific occupations these compensation costs
represent. On the revised FQHC Medicare cost report (Form CMS-224-14),
these costs are separately reported on lines 29 and 33 of Worksheet A.
Therefore, when we rebase the FQHC market basket reflecting the revised
FQHC Medicare cost report form, we will be able to more directly
allocate these costs.
Comment: Commenters requested clarification whether there was an
error in the explanation of the ``nondescript administrative costs.''
Commenters stated that the proposed rule had listed the expenses
reported on lines 54-56 of Worksheet A of the cost report; however,
those particular lines capture ``costs other than FQHC'' rather than
``administrative costs.'' The commenters stated the appropriate lines
are 46-48 of Worksheet A for ``nondescript administrative costs,'' and
if so, requested that we verify this to be true and revise the line
number references in the final rule language.
Response: We thank the commenters for noting that there was an
error in the explanation of the ``nondescript administrative costs'' in
the proposed rule. We would like to clarify that the ``nondescript
administrative costs'' include expenses from lines 46-48 not lines 54-
56. The proposed rule used the correct data from the cost report, and
therefore, no changes are necessary to the computation of the cost
category weight. Rather, we are clarifying and correcting that the
nondescript administrative costs include expenses reported on Worksheet
A, lines 46-48. The expenses reported on Worksheet A, lines 54-56 were
excluded from the total costs for FQHC expenses. We apologize for the
confusion this may have caused and appreciate the opportunity to
correct this language in the final rule.
Comment: Many commenters stated that the proposed productivity
adjustment to the FQHC market basket is not justified and that absent
further study by CMS of FQHC services, it is premature to apply a
productivity adjustment to the FQHC market basket. The commenters
stated that FQHC operations are not mirror images of self-employed
physician practice operations and the argument that the adjustment is
similar to that used in the MEI to avoid double counting of effects of
productivity improvements is not warranted at this time.
Response: We respectfully disagree that a productivity adjustment
to the FQHC market basket is not warranted at this time. As discussed
in the proposed rule, the productivity adjustment included in the FQHC
market basket is based on the 10-year moving average of changes in
annual private nonfarm business (economy-wide) multifactor
productivity. We believe that FQHC services are similar to those that
would otherwise be provided by a primary care physician, mental health
professional, or other clinical care provider, which have demonstrated
the ability to achieve productivity gains consistent with the overall
economy as stated in the development of the MEI. Therefore, in order to
avoid the double counting of FQHC provider productivity, it is
necessary to include a productivity adjustment to the FQHC market
basket, consistent with inclusion of a productivity adjustment in the
MEI that is used for physician services. We believe this rationale
justifies the inclusion of a productivity adjustment in the FQHC market
basket. We will continue to evaluate whether the productivity
adjustment in the FQHC market basket (which is based on economy-wide
productivity) is the most appropriate measure.
7. Final FQHC Market Basket and Final CY 2017 Market Basket Update
After considering the public comments, we are finalizing the FQHC
market basket, as proposed. We believe that the FQHC market basket, as
proposed, more accurately reflects the actual costs and scope of
services that FQHCs furnish relative to the MEI. We

[[Page 80402]]

did not find any technical reason to refine the cost weight methodology
based on the comments received, but will consider some of these
comments in the future when we rebase the market basket based on FQHC
cost report data from the revised form CMS-224-14. We are also
finalizing our proposal to include a productivity adjustment to the
FQHC market basket update, as we did not find any compelling technical
reason that we should not implement this adjustment to the FQHC market
basket.
Table 38 shows the final 2013-based FQHC Market Basket cost
categories, cost weights, and price proxies.

Table 38--Final CY 2013-based FQHC Market Basket Cost Categories, Cost
Weights, and Price Proxies
------------------------------------------------------------------------
2013 Cost
FQHC cost category Price proxy weight (%)
------------------------------------------------------------------------
FQHC Market Basket............. ....................... 100.0
Total Compensation......... ....................... 68.7
FQHC Practitioner Comp. ECI--for Total 31.7
Compensation for
Private Industry
Workers in
Professional and
Related.
Other Clinical ECI--for Total 9.5
Compensation. Compensation for all
Civilian Workers in
Health Care and Social
Assistance.
Non-health Compensation ECI--for Total 27.4
Compensation for
Private Industry
Workers in Office and
Administrative Support.
All Other Products......... ....................... 16.1
Utilities.............. CPI-U for Fuels and 1.4
Utilities.
Miscellaneous Office CPI-U for All Items 2.8
Expenses. Less Food and Energy.
Telephone.............. CPI-U for Telephone.... 1.7
Postage................ CP-U for Postage....... 1.0
Medical Equipment...... PPI Commodities for 2.2
Surgical and Medical
Instruments.
Medical Supplies....... Blend: PPI Commodities 2.0
for Medical and
Surgical Appliances
and Supplies and CPI
for Medical Equipment
and Supplies.
Pharmaceuticals........ PPI Commodities for 5.1
Pharmaceuticals for
Human Use,
Prescription.
All Other Services......... ....................... 9.0
Professional, ECI--for Total 2.9
Scientific & Technical Compensation for
Services. Private Industry
Workers in
Professional,
Scientific, and
Technical Services.
Administrative & ECI--for Total 3.4
Facility Services. Compensation for
Private Industry
Workers in Office and
Administrative Support.
Other Services......... ECI--for Total 2.7
compensation for
Private Industry
Workers in Service
Occupations.
Capital.................... ....................... 6.1
Fixed Capital.......... PPI Industry--for 4.5
Lessors of
Nonresidential
Buildings.
Moveable Capital....... PPI Commodities--for 1.7
Machinery and
Equipment.
------------------------------------------------------------------------

We also proposed that we would use the most recent data available
to determine the final FQHC market basket and MFP update for CY 2017.
Based on IGI's third quarter 2016 forecast with historical data through
the second quarter of 2016, the final FQHC market basket increase
factor for CY 2017 is 1.8 percent. This reflects a 2.2 percent increase
of FQHC input prices and a 0.4-percent adjustment for productivity. For
comparison, the MEI increase factor for CY 2017 is 1.2 percent (a 1.6
percent MEI update and a 0.4 percent MFP adjustment); these updates
reflect the most historical data available, with historical data
through the second quarter of 2016.
Table 39 shows the final 2013-based FQHC market basket updates
compared to the proposed 2013-based FQHC market basket updates for CY
2017.

Table 39--FQHC Market Basket Final CY 2017 Update of All Cost Categories
------------------------------------------------------------------------
CY 2017
FQHC Cost category CY 2017 Final Proposed
update* (%) update (%)
------------------------------------------------------------------------
FQHC Market Basket...................... 1.8 1.7
Productivity adjustment................. 0.4 0.4
FQHC Market Basket (unadjusted)......... 2.2 2.1
Total Compensation.................. 2.0 2.1
FQHC Practitioner Compensation.. 1.6 1.9
Other Clinical Compensation..... 1.8 1.9
Non-health Compensation......... 2.5 2.4
All Other Products.................. 3.1 2.6
Utilities....................... -2.5 -3.9
Miscellaneous Office Expenses... 2.1 2.0
Telephone....................... -0.1 0.4
Postage......................... 0.5 0.3
Medical Equipment............... 1.6 1.2
Medical Supplies................ -0.6 -0.4
Professional Liability Insurance .............. ..............
Pharmaceuticals................. 8.4 7.8
All Other Services.................. 2.1 2.0
Professional, Scientific & 1.5 1.5
Technical Services.............
Administrative & Facility 2.5 2.4
Services.......................

[[Page 80403]]

Other Services.................. 2.1 1.9
Capital............................. 1.5 1.6
Fixed Capital................... 2.0 2.1
Moveable Capital................ 0.1 0.1
------------------------------------------------------------------------
* Based on historical data through the 2nd quarter 2016.
For the productivity adjustment, the 10-year moving average percent
change adjustment for CY 2017 is 0.4 percent, which is based on the
most historical data available from BLS at the time of the final rule,
and reflects annual MFP estimates through 2015.

C. Appropriate Use Criteria for Advanced Diagnostic Imaging Services

Section 218(b) of the PAMA amended Title XVIII of the Act to add
section 1834(q) of the Act directing us to establish a program to
promote the use of appropriate use criteria (AUC) for advanced
diagnostic imaging services. The CY 2016 PFS final rule with comment
period addressed the initial component of the new Medicare AUC program,
specifying applicable AUC. In that rule we established evidence-based
process and transparency requirements for the development of AUC,
defined provider-led entities (PLEs) and established the process by
which PLEs may become qualified to develop, modify or endorse AUC. The
first list of qualified PLEs were posted on the CMS Web site at the end
of June 2016 at which time their AUC libraries became specified AUC for
purposes of section 1834(q)(2)(A) of the Act.
This rule proposed requirements and processes for specification of
qualified clinical decision support mechanisms (CDSMs) under the
Medicare AUC program; the initial list of priority clinical areas; and
exceptions to the requirement that ordering professionals consult
specified applicable AUC when ordering applicable imaging services.
1. Background
AUC present information in a manner that links: A specific clinical
condition or presentation; one or more services; and, an assessment of
the appropriateness of the service(s). For purposes of this program,
AUC are a set or library of individual appropriate use criteria. Each
individual criterion is an evidence-based guideline for a particular
clinical scenario. Each scenario in turn starts with a patient's
presenting symptoms and/or condition. Evidence-based AUC for imaging
can assist clinicians in selecting the imaging study that is most
likely to improve health outcomes for patients based on their
individual clinical presentation.
AUC need to be integrated as seamlessly as possible into the
clinical workflow. CDSMs are the electronic portals through which
clinicians would access the AUC during the patient workup. While CDSMs
can be standalone applications that require direct entry of patient
information, they may be more effective when they automatically
incorporate information such as specific patient characteristics,
laboratory results, and lists of co-morbid diseases from Electronic
Health Records (EHRs) and other sources. Ideally, practitioners would
interact directly with the CDSM through their primary user interface,
thus minimizing interruption to the clinical workflow.
Consistent with definitions of CDSM by the Agency for Healthcare
Research and Quality (AHRQ) (https://www.ahrq.gov/professionals/prevention-chronic-care/decision/clinical/), and the Office
of the National Coordinator for Health Information Technology (ONC)
(https://www.healthit.gov/policy-researchers-implementers/clinical-decision-support-cds), within Health IT applications, a CDSM is a
functionality that provides persons involved in care processes with
general and person-specific information, intelligently filtered and
organized, at appropriate times, to enhance health and health care.
2. Previous CDSM Experience
In the CY 2016 PFS final rule with comment period, we included a
discussion of the Medicare Imaging Demonstration (MID), which was
required by section 135(b) of the MIPPA, in addition to independent
experiences of implementing AUC by several healthcare systems and
academic medical centers. Two key aspects of that discussion remain
relevant to the CDSM component of this program. First, AUC, and the
CDSMs through which clinicians access AUC, must be integrated into the
clinical workflow and facilitate, not obstruct, evidence-based care
delivery. For instance, a CDSM may be fully integrated with or part of
a provider's Certified EHR system, partially integrated, or entirely
outside of it. A CDSM that is external to a provider's primary user
interface could utilize an application program interface (API), a set
of protocols and tools specifying how software components should
interact, to pull relevant information into the decision support
application and provide support back to the primary interface. It could
also provide decision support, based on the pulled EHR data, via a
separate interface. By adhering to common interoperability standards,
such as the national standards advanced through certified health IT
(see 2015 edition of certification criteria available in the Federal
Register (80 FR 62601) and described in the Interoperability Standards
Advisory at https://www.healthit.gov/standards-advisory), CDSMs could
both ensure integration of patient-specific data from EHRs, and allow
clinicians to optimize the time spent using the tool.
Second, the ideal AUC is an evidence-based guide that starts with a
patient's specific clinical condition or presentation (symptoms) and
assists the clinician in the overall patient workup, treatment, and
follow-up. Imaging would appear as key nodes within the clinical
management decision tree.
Other options outside of certified EHR technology exist to access
AUC through CDSMs. Stand-alone, internet-based CDSMs are available and,
although they will not interact with EHR data, can nonetheless search
for and present AUC relevant to a patient's presenting symptoms or
condition.
In communicating an appropriateness rating to the ordering
practitioner, some CDSMs provide a scale with numeric ratings, some
output a red, yellow, or green light while others provide a dichotomous
yes or no. At this time, we do not believe there is one correct
approach to communicating the level of appropriateness to the ordering
professional. However, section 1834(q)(4)(B) of the Act requires that
information be reported on the claim form as to whether the service
would or would not adhere to the specified AUC consulted through a
particular CDSM, or whether the AUC was not applicable to

[[Page 80404]]

the service. We requested feedback from commenters regarding how
appropriateness ratings provided by CDSMs could be interpreted and
recorded for the purposes of this program. There are different views
about the comprehensiveness of AUC that should be accessible within
CDSMs. Some stakeholders believe that the CDSM should contain as
comprehensive a collection of AUC as possible, incorporating individual
criteria from across all specified AUC libraries. The intent would be
for ordering professionals to avoid the frustration, experienced and
voiced by many clinicians participating in the MID, of spending time
navigating the CDSM only to find that no criterion for their patient's
specific clinical condition exists.
Other stakeholders believe, based on decades of experience rolling
out AUC in the context of robust quality improvement programs that it
is best to start with a CDSM that contains AUC for a few clinical areas
where impact is large and evidence is strong. This would ensure that
quality AUC are developed, and that clinicians and entire care teams
could fully understand the AUC they are using, including when they do
not apply to a particular patient.
As we stated in the CY 2016 PFS final rule with comment period, we
believe there is merit to both approaches, and it has been suggested to
us that the best approach may depend on the particular care setting.
The second, ``focused'' approach may work better for a large health
system that produces and uses its own AUC. The first, ``comprehensive''
approach may in turn work better for a smaller practice with broad
image ordering patterns and fewer resources that wants to simply adopt
and start using a complete AUC system developed elsewhere. We believe a
successful program would allow flexibility, and under section 1834(q)
of the Act, we foresee a number of sets of AUC developed by different
PLEs, and an array of CDSMs from which clinicians may choose.
3. Priority Clinical Areas
We established in the CY 2016 PFS final rule with comment period
that we would identify priority clinical areas through rulemaking, and
that these may be used in the determination of outlier ordering
professionals (a future phase of the Medicare AUC program). The concept
of priority clinical areas allows us to implement an AUC program that
combines the focused and comprehensive approaches to implementation
discussed above. Although potentially large volumes of AUC (as some
PLEs have large libraries of AUC) would become specified across
clinical conditions and advanced imaging technologies, we believe this
rapid and comprehensive roll out of specified AUC should be balanced
with a more focused approach when identifying outlier ordering
professionals. We believe this will provide an opportunity for
physicians and practitioners to become familiar with AUC in identified
priority clinical areas prior to Medicare claims for those services
being part of the input for calculating outlier ordering professionals.
As we describe earlier, CDSMs are the access point for ordering
professionals to consult AUC. We believe the combination of the
comprehensive and focused approaches should be applied to CDSM
requirements as we consider a minimum floor of AUC that must be made
available to ordering professionals through qualified CDSMs. AUC that
reasonably address the entire clinical scope of priority clinical areas
could establish a minimum floor of AUC to be included in qualified
CDSMs, and the number of priority clinical areas could be expanded
through annual rulemaking and in consultation with physicians and other
stakeholders. This allows priority clinical areas to roll out
judiciously, and build over time.
4. Statutory Authority
Section 218(b) of the PAMA added a new section 1834(q) of the Act
entitled, ``Recognizing Appropriate Use Criteria for Certain Imaging
Services,'' which directs the Secretary to establish a new program to
promote the use of AUC. Section 1834(q)(3)(A) of the Act requires the
Secretary to specify qualified CDSMs that could be used by ordering
professionals to consult with specified applicable AUC for applicable
imaging services.
5. Discussion of Statutory Requirements
There are four major components of the AUC program under section
1834(q) of the Act, each with its own implementation date: (1)
Establishment of AUC by November 15, 2015 (section 1834(q)(2)); (2)
identification of mechanisms for consultation with AUC by April 1, 2016
(section 1834(q)(3)); (3) AUC consultation by ordering professionals
and reporting on AUC consultation by furnishing professionals by
January 1, 2017 (section 1834(q)(4)); and (4) annual identification of
outlier ordering professionals for services furnished after January 1,
2017 (section 1834(q)(5)). As we will discuss later in this preamble,
we did not identify mechanisms for consultation by April 1, 2016 and
will not have specified or published the list of qualified CDSMs by
January 1, 2017; therefore, ordering professionals will not be required
to consult CDSMs, and furnishing professionals will not be able to
report information on the consultation, by this date.
a. Establishment of AUC
In the CY 2016 PFS final rule with comment period, we addressed the
first component under section 1834(q)(2) of the Act--the requirements
and process for establishment and specification of applicable AUC,
along with relevant aspects of the definitions under section 1834(q)(1)
of the Act. This included defining the term PLE and finalizing
requirements for the rigorous, evidence-based process by which a PLE
would develop AUC, upon which qualification is based, as provided in
section 1834(q)(2)(B) of the Act and in the CY 2016 PFS final rule with
comment period. Using this process, once a PLE is qualified by CMS, the
AUC that are developed, modified or endorsed by the qualified PLE are
considered to be specified applicable AUC under section 1834(q)(2)(A)
of the Act. We defined the term PLE to include national professional
medical societies, health systems, hospitals, clinical practices and
collaborations of such entities such as the High Value Healthcare
Collaborative or the National Comprehensive Cancer Network. Qualified
PLEs may collaborate with third parties that they believe add value to
their development of AUC, provided such collaboration is transparent.
We expect qualified PLEs to have sufficient infrastructure, resources,
and the relevant experience to develop and maintain AUC according to
the rigorous, transparent, and evidence-based processes detailed in the
CY 2016 PFS final rule with comment period.
A timeline and process was established for PLEs to apply to become
qualified and the first list of qualified PLEs was published at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/.
b. Mechanism for AUC Consultation
The second major component of the Medicare AUC program is the
specification of qualified CDSMs that could be used by ordering
professionals for consultation with specified applicable AUC under
section 1834(q)(3) of the Act. We envision a CDSM as an interactive
tool that communicates AUC information to the user. Information
regarding the clinical

[[Page 80405]]

presentation of the patient would be incorporated into the CDSM from
another health IT system or through data entry by the ordering
professional. At a minimum, the tool would provide immediate feedback
to the ordering professional on the appropriateness of one or more
imaging services. Ideally, CDSMs would be integrated within or
seamlessly interoperable with existing health IT systems and would
automatically receive patient data from the EHR or through an API or
other connection. Such integration would minimize burden on
practitioners and avoid duplicate documentation. Also useful to
clinicians would be the ability to switch between CDSMs that can
interoperate based on common standards.
Section 1834(q)(3)(A) of the Act states that the Secretary must
specify qualified CDSMs in consultation with physicians, practitioners,
health care technology experts, and other stakeholders. This paragraph
authorizes the Secretary to specify mechanisms that could include: CDS
modules within certified EHR technology; private sector CDSMs that are
independent of certified EHR technology; and a CDSM established by the
Secretary. The Secretary did not propose to establish a CDSM at this
time.
All CDSMs must meet the requirements under section 1834(q)(3)(B) of
the Act, which specifies that a mechanism must: Make available to the
ordering professional applicable AUC and the documentation supporting
the appropriateness of the applicable imaging service that is ordered;
where there is more than one applicable appropriate use criterion
specified for an applicable imaging service, indicate the criteria it
uses for the service; determine the extent to which an applicable
imaging service that is ordered is consistent with the applicable AUC;
generate and provide to the ordering professional documentation to
demonstrate that the qualified CDSM was consulted by the ordering
professional; be updated on a timely basis to reflect revisions to the
specification of applicable AUC; meet applicable privacy and security
standards; and perform such other functions as specified by the
Secretary (which may include a requirement to provide aggregate
feedback to the ordering professional). Section 1834(q)(3)(C) of the
Act specifies that the Secretary must publish an initial list of
specified mechanisms no later than April 1, 2016, and that the
Secretary must identify on an annual basis the list of specified
qualified CDSMs.
As we explained in the CY 2016 PFS proposed rule and final rule
with comment period, implementation of many aspects of the amendments
made by section 218(b) of the PAMA requires consultation with
physicians, practitioners, and other stakeholders, and notice and
comment rulemaking. We continue to believe the PFS calendar year
rulemaking process is the most appropriate and administratively
feasible implementation vehicle. Given the timing of the PFS rulemaking
process, we were not able to include proposals in the PFS proposed rule
to begin implementation in the same year the PAMA was enacted, as we
would have had to interpret and analyze the new statutory language, and
develop proposed plans for implementation in under one month. As we did
prior to the CY 2016 PFS proposed rule when we met extensively with
stakeholders to gain insight and hear their comments and concerns about
the AUC program, we used the time prior to the CY 2017 PFS proposed
rule to meet with many of the same stakeholders but also a new group of
stakeholders specifically related to CDSMs. In addition, we are
continuing our stepwise approach to implementing this AUC program. The
first phase of the AUC program (specifying AUC including defining what
AUC are and specifying the process for developing them) was
accomplished through last year's CY 2016 PFS final rule with comment
period. For this second phase, we use the CY 2017 PFS rulemaking
process as the vehicle to establish requirements for CDSMs, and the
process to specify qualified CDSMs, in a transparent manner that allows
for stakeholder and public involvement. Therefore, the final CDSM
requirements and process for CDSMs to become qualified are included in
this CY 2017 PFS final rule.
c. AUC Consultation and Reporting
The third major component of the AUC program is in section
1834(q)(4) of the Act, Consultation with Applicable Appropriate Use
Criteria. This section establishes, beginning January 1, 2017, the
requirement for an ordering professional to consult with a qualified
CDSM when ordering an applicable imaging service that would be
furnished in an applicable setting and paid for under an applicable
payment system; and for the furnishing professional to include on the
Medicare claim information about the ordering professional's
consultation with a qualified CDSM. The statute distinguishes between
the ordering and furnishing professional, recognizing that the
professional who orders an applicable imaging service is usually not
the same professional who bills Medicare for that service when
furnished. Section 1834(q)(4)(C) of the Act provides for certain
exceptions to the AUC consultation and reporting requirements including
in the case of certain emergency services, inpatient services paid
under Medicare Part A, and ordering professionals who obtain an
exception due to a significant hardship. Section 1834(q)(4)(D) of the
Act specifies that the applicable payment systems for the AUC
consultation and reporting requirements are the PFS, hospital
outpatient prospective payment system, and the ambulatory surgical
center payment systems.
Since a list of qualified CDSMs is not yet available and will not
be available by January 1, 2017, we will not require ordering
professionals to meet this requirement by that date.
d. Identification of Outliers
The fourth component of the AUC program is in section 1834(q)(5) of
the Act, Identification of Outlier Ordering Professionals. The
identification of outlier ordering professionals under this paragraph
facilitates a prior authorization requirement for outlier professionals
beginning January 1, 2020, as specified under section 1834(q)(6) of the
Act. Although we did not propose to implement these sections in the CY
2017 PFS proposed rule, we proposed below a list of priority clinical
areas which may serve as part of the basis for identifying outlier
ordering professionals.
6. Proposals for Implementation
We proposed to amend our regulations at Sec. 414.94, ``Appropriate
Use Criteria for Certain Imaging Services.''
a. Definitions
In Sec. 414.94(b), we proposed to codify and add language to
clarify some of the definitions provided in section 1834(q) of the Act,
as well as define terms that were not defined in statute but for which
a definition would be helpful for program implementation. In this
section, we provide a description of the terms we proposed to codify to
facilitate understanding and encouraged public comment on the AUC
program.
We proposed to define CDSM under Sec. 414.94(b) as an interactive,
electronic tool for use by clinicians that communicates AUC information
to the user and assists them in making the most appropriate treatment
decision for a patient's specific clinical condition. A CDSM would
incorporate specified

[[Page 80406]]

applicable AUC sets from which an ordering professional could select. A
CDSM may be a module within or available through certified EHR
technology (as defined in section 1848(o)(4) of the Act) or private
sector mechanisms independent from certified EHR technology. If within
or available through certified EHR technology, a qualified CDSM would
incorporate relevant patient-specific information into the assessment
of the appropriateness of an applicable imaging service.
As prescribed in section 1834(q) of the Act and Sec. 414.94(b) of
our regulations, the Medicare AUC program imposes requirements only for
applicable imaging services furnished in applicable settings. Further,
as specified in section 1834(q)(4)(D) of the Act, we proposed to amend
our regulation at Sec. 414.94(b) to state that the applicable payment
systems for the Medicare AUC program are the PFS under section 1848(b)
of the Act, the prospective payment system for hospital outpatient
department services under section 1833(t) of the Act, and the
ambulatory surgical center payment systems under section 1833(i) of the
Act. Applicable payment systems are relevant to implementation of
section 1834(q)(4)(B) of the Act, entitled ``Reporting by Furnishing
Professionals.''
We remind readers that in PFS rulemaking for CY 2016 we defined
applicable imaging service in Sec. 414.94(b) as an advanced diagnostic
imaging service as defined in 1834(e)(1)(B) of the Act for which the
Secretary determines (i) One or more applicable appropriate use
criteria apply; (ii) There are one or more qualified clinical decision
support mechanisms listed; and (iii) One or more of such mechanisms is
available free of charge.
The following is a summary of the comments we received on the
definitions for CDSM and applicable payment system.
Comment: Most comments that addressed the definitions supported our
proposals. One commenter requested that in the definition of CDSM, CMS
specify that it is a tool for ``ordering clinicians.''
Response: We disagree that the regulatory definition of CDSM should
specify exactly who can use a CDSM and believe it should continue to
focus on the function and purpose of the tool. We would not want the
definition to restrict use to one type of user; however, we expect that
the ordering professional would consult the tool. We appreciate
commenters' general support of the proposed definitions.
After considering the comments, we have made no changes to the
definitions and are finalizing the language at Sec. 414.94(b) as
proposed.
b. Priority Clinical Areas
We proposed to establish a new Sec. 414.94(e)(5) to set forth the
initial list of priority clinical areas.
To compile this proposed list, we performed an analysis of Medicare
claims data using the CMS Chronic Conditions Data Warehouse (CCW) as
the primary data source. The CCW contains 100 percent of Medicare
claims for beneficiaries who are enrolled in the fee-for-service (FFS)
program. Data were derived from the CCW's 2014 Part B non-institutional
claim line file, which includes Part B services furnished during CY
2014. This is the main file containing final action claims data for
non-institutional health care providers, including physicians,
physician assistants, clinical social workers, nurse practitioners,
independent clinical laboratories, and freestanding ambulatory surgical
centers. The Part B non-institutional claim line file contains the
individual line level information from the claim and includes
Healthcare Common Procedure Coding System (HCPCS) code(s), diagnosis
code(s) using the International Classification of Diseases, Ninth
Revision (ICD-9), service dates, and Medicare payment amount. A
publicly available version of this dataset can be downloaded from the
CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/. We encouraged stakeholders to review this dataset as a
source that might help inform public comments related to the proposed
priority clinical areas.
In the CY 2016 PFS final rule with comment period, we stated that
when identifying priority clinical areas we may consider factors such
as incidence and prevalence of disease, the volume and variability of
utilization of imaging services, the strength of evidence for their
use, and applicability of the clinical area to the Medicare population
and to a variety of care settings.
Using the 2014 Medicare claims data referenced above, we ranked
ICD-9 codes by the frequency with which they were used as the primary
indication for specific imaging procedures, which in turn were
identified by the volume of individual Current Procedural Terminology
(CPT) codes for which payments were made in 2014. We extracted the top
135 ICD-9 codes from this list and formed clinically-related
categories. Next, we searched manually through an electronic list of
all ICD-9 codes to find others that would plausibly fit into each
clinical grouping. This process required subjective clinical judgment
on whether a particular ICD-9 code should be included in a given
clinical group. The top eight clinical groupings (by volume of
procedures) are what we proposed as the initial list of priority
clinical areas. The eight clinical areas account for roughly 40 percent
of part B advanced diagnostic imaging services paid for by Medicare in
2014. We are aware that some stakeholders have suggested beginning the
AUC program with no more than five priority clinical areas while others
have suggested a far greater number. We believed the proposed eight
priority clinical areas strike a reasonable balance that allows us to
focus on a significant range and volume of advanced diagnostic imaging
services.
We also considered extracting pulmonary embolism as a separate
priority clinical area from the chest pain grouping based on
stakeholder consultation and feedback. However, we decided not to
identify pulmonary embolism separately, but asked for public comment on
whether pulmonary embolism should be included as a stand-alone priority
clinical area. Based on our consultations with physicians,
practitioners and other stakeholders, as required by section
1834(q)(3)(A) of the Act, we attempted to be inclusive when grouping
ICD-9 codes into cohesive clinical areas. As an example of how we
derived the priority clinical area for low back pain, we grouped
together 10 ICD-9 codes, incorporating six from the top 135 and four
from the manual search of all ICD-9 codes. Included in this grouping
are the ICD-9 codes for displacement of lumbar intervertebral disc
without myelopathy (722.10), degeneration of lumbar of lumbosacral
intervertebral disc (722.52), intervertebral disc disorder with
myelopathy lumbar region (722.73), post-laminectomy syndrome of lumbar
region (722.83), lumbago (724.2), sciatica (724.3), thoracic or
lumbosacral neuritis or radiculitis unspecified (724.4), spinal
stenosis, lumbar region, without neurogenic claudication (724.02),
lumbosacral spondylosis without myelopathy (721.3), and spondylosis
with myelopathy lumbar region (721.42) which resulted in 1,883,617
services. To see all of the priority clinical area groupings of
diagnosis codes, a table is available on the CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/.

[[Page 80407]]

Using the above methodology, we developed and proposed eight
priority clinical areas. These reflect both the significance and the
high prevalence of some of the most disruptive diseases in the Medicare
population.

Table 40--Proposed Priority Clinical Areas With Corresponding Claims Data
----------------------------------------------------------------------------------------------------------------
Total % Total Total % Total
Proposed priority clinical area services services \1\ payments payments \1\
----------------------------------------------------------------------------------------------------------------
Chest Pain (includes angina, suspected 4,435,240.00 12 $470,395,545 14
myocardial infarction, and suspected pulmonary
embolism)......................................
Abdominal Pain (any locations and flank pain)... 2,973,331.00 8 235,424,592 7
Headache, traumatic and non-traumatic........... 2,107,868.00 6 89,382,087 3
Low back pain................................... 1,883,617.00 5 180,063,352 5
Suspected stroke................................ 1,810,514.00 5 119,574,141 4
Altered mental status........................... 1,782,794.00 5 83,296,007 3
Cancer of the lung (primary or metastatic, 1,114,303.00 3 154,872,814 5
suspected or diagnosed)........................
Cervical or neck pain........................... 1,045,381.00 3 83,899,299 3
----------------------------------------------------------------------------------------------------------------
\1\ Percentage of 2014 Part B non-institutional claim line file for advanced imaging services from Medicare
claims for beneficiaries who are enrolled in the fee-for-service (FFS) program (source: CMS Chronic Conditions
Data Warehouse).

We also engaged the CMS Alliance to Modernize Healthcare (CAMH)
Federally Funded Research and Development Center (FFRDC), the MITRE
Corporation (MITRE), to begin developing efficient and effective
processes for managing current and future health technology
assessments. MITRE generated an independent report that presents a
summary of findings from claims data from the Medicare population and
their utilization of advanced imaging procedures. Coupled with our
internal analysis, this report has assisted in identification of
proposed priority clinical areas for the Medicare AUC program for
advanced diagnostic imaging services. Analysis and methods for this
report are available at https://www.mitre.org/publications/technical-papers/claims-data-analysis-to-define-priority-clinical-areas-for-advanced.
While this year we proposed priority clinical areas based on an
analysis of claims data alone, we may use a different approach in
future rulemaking cycles. As we specified in Sec. 414.94(e) of our
regulations, we may consider factors other than volume when proposing
priority clinical areas including incidence and prevalence of disease,
variability of use of particular imaging services, strength of evidence
supporting particular imaging services and the applicability of a
clinical area to a variety of care settings and to the Medicare
population.
We encouraged public comments on this proposed initial list of
priority clinical areas, including recommendations for other clinical
areas that we should include among our list of priority clinical areas.
In particular, we were interested in comments on the above methodology
or alternate options; whether the proposed priority clinical areas are
appropriate including information on the extent to which these proposed
priority clinical areas may be represented by clinical guidelines or
AUC in the future. Furthermore, we were interested in public comments,
supported by published information, for varying levels of evidence that
exist across, as well as within priority clinical areas.
The following is a summary of the comments we received on the list
of priority clinical areas which may serve as part of the basis for
identifying outlier ordering professionals.
Comment: Many commenters addressed the proposed list of priority
clinical areas. Some commenters suggested that many of the proposed
priority clinical areas were too large and each area was too broadly
defined. Commenters expressed concerns that the proposed list does not
permit a meaningful, focused approach. As an alternative, one commenter
encouraged CMS to limit the number of priority clinical areas from
eight to four. Other commenters noted that broadly defined priority
clinical areas might result in little opportunity for a change in
behavior of ordering professionals. Commenters supported inclusion of
low back pain and headache in the list of priority clinical areas. One
commenter specifically recommended that CMS refine the proposed
clinical areas of ``low back pain'' and ``headache'' to reflect
differences between the elderly and non-elderly populations. Other
commenters noted the possibility of overlap between priority clinical
areas of headache, suspected stroke, and altered mental status, and
some commenters recommended combining such areas.
Other commenters recommended eliminating suspected stroke, altered
mental status, chest pain and abdominal pain, and creating a stand-
alone priority clinical area for suspected pulmonary embolism. For
abdominal pain, commenters were concerned that there were not high
quality AUC available to cover such a vast clinical area. For suspected
stroke, commenters were concerned that using this area for future
outlier calculations would not be beneficial as advanced imaging for
these patients may be exempt from this program under the emergency
medical conditions exception. Commenters disagreed with both suspected
stroke and altered mental status because both could fall under other
priority clinical areas and they noted there was a lack of high quality
AUC available to address them.
Some commenters encouraged and others discouraged CMS from
considering alternative priority clinical areas. Some commenters
generally asked CMS to refrain from considering other clinical areas
beyond what is listed in the CY 2017 PFS proposed rule. Other
commenters offered alternatives in both number and scope of priority
clinical areas. Other commenters suggested including musculoskeletal
(hip pain, knee pain, joint pain, shoulder pain, rotator cuff injury),
other cancers (breast, prostate), right upper quadrant pain, solitary
pulmonary nodule, pancreatitis, appendicitis, renal colic, suspected
abdominal aortic dissection, CT for minor blunt head trauma, suspected
cardiac ischemia, and hematuria. One commenter noted that the top ten
conditions for which advanced imaging is requested included low back
pain, headache, and cervical pain. Another commenter recommended that
these priority clinical areas should be phased in at a rate of two per
year, with examples of pulmonary embolism and low back pain (as areas
where strength of evidence was particularly high), which echoed other
general comments to more gradually expand the list of

[[Page 80408]]

priority clinical areas after testing and as deemed necessary.
Response: We agree that if priority clinical areas are too broadly
defined, it would not be consistent with our purpose to offer both
comprehensive and focused approaches to AUC rollout into qualified
CDSMs. We further agree that a central goal of the AUC program is to
promote appropriate ordering of advanced diagnostic imaging services.
Additionally we appreciate the points made by the commenters and see
merit in some of their recommended alternatives for priority clinical
areas as they take into account factors such as incidence and
prevalence of disease, the variability of utilization of specific
imaging services, the strength of evidence and AUC available for
consultation for a particular clinical scenario, and applicability of
each suggested alternative clinical area to the Medicare population and
to a variety of care settings, including the emergency department.
We agree with commenters that chest pain is a general symptom and
too broad for a focused priority clinical area. We further agree with
commenters that supported creating a stand-alone priority clinical area
for suspected pulmonary embolism, as discussed in detail below, and one
for coronary artery disease. Chest pain may be a clinical symptom of
underlying suspected pulmonary embolism and coronary artery disease.
There is a solid evidence base from well designed, randomized
controlled trials supporting specific protocols and guidelines that
consider different signs, symptoms and history associated with working
up a patient with suspected pulmonary embolism. There is also strong
evidence from multiple large, randomized controlled trials to guide
imaging for coronary artery disease. We note that, according to the
American Heart Association Statistical Update, coronary artery disease
is the leading cause of death among men and women in the United States.
The evidence is less robust for many other causes of chest pain.
Therefore, based on the above, we are removing chest pain as a priority
clinical area and finalizing suspected pulmonary embolism and coronary
artery disease as two distinct areas.
We recognize, along with commenters, that the proposed list of
priority clinical areas did not include scenarios specific to
musculoskeletal indications. As stated in the proposed rule, CMS also
engaged MITRE to generate an independent report, which indicates that
almost half a million advanced diagnostic imaging services were
rendered to Medicare beneficiaries in 2014 for clinical presentations
related to joint pain. Furthermore, we agree with commenters who
suggested CMS consider additional clinical areas with a reasonably
robust volume of literature on appropriate use and agree that the
strength of evidence for imaging use and relevance to the Medicare
population supports inclusion of hip pain and shoulder pain (to include
suspected rotator cuff injury) in the final list of priority clinical
areas.
In addition to commenters' support of inclusion of low back pain
and headache in the list of priority clinical areas, we also note that
the MID cites clinical research demonstrating that use of clinical
decision support was associated with a decrease in the utilization of
lumbar MRIs for low back pain and head MRIs for headache.
We are finalizing the proposed areas of low back pain and headache,
as well as cancer of the lung (primary or metastatic, suspected or
diagnosed).
We have removed altered mental status and abdominal pain based on
the concerns expressed by commenters summarized above, including the
lack of strong evidence to cover the breadth of each of these areas.
Based on the commenters' concerns we may review these areas in the
future, possibly narrowing their scope.
Regarding stroke, we acknowledge that evidence-based stroke
protocols do exist, however, we believe that it is possible that an
exception for emergency medical services may disproportionally apply to
suspected stroke so there may be a concern for using this priority
clinical area for future outlier calculations. Furthermore, there may
be some overlap of the clinical areas of suspected stroke and headache.
A strong level of evidence specific to headache is available and we
believe headache is less likely to be impacted by the emergency medical
services exception. Therefore, we are removing suspected stroke and
retaining headache in the final list of priority clinical areas. We may
consider adding suspected stroke through future rulemaking.
In response to public comments and as supported by the additional
information above and further discussion below, we have modified the
list of priority clinical areas by: (1) removing chest pain, abdominal
pain (any locations and flank pain), suspected stroke and altered
mental status; and (2) adding coronary artery disease (suspected or
diagnosed), suspected pulmonary embolism, hip pain and shoulder pain
(to include suspected rotator cuff injury). We are finalizing as
proposed the priority clinical areas of headache (traumatic and non-
traumatic), low back pain, cancer of the lung (primary or metastatic,
suspected or diagnosed), and cervical or neck pain. The final list of
priority clinical areas is as follows:
Coronary artery disease (suspected or diagnosed).
Suspected pulmonary embolism.
Headache (traumatic and non-traumatic).
Hip pain.
Low back pain.
Shoulder pain (to include suspected rotator cuff injury).
Cancer of the lung (primary or metastatic, suspected or
diagnosed).
Cervical or neck pain.
Consistent with section 1834(q) of the Act, we are not AUC
developers, and therefore, would not produce AUC tailored to the
elderly population. However, Sec. 414.94(c)(1) of our regulations
requires qualified PLEs to utilize an evidentiary review process when
developing or modifying AUC. This regulation further requires qualified
PLEs to identify AUC that are relevant to priority clinical areas, and
specifies that to be considered relevant, the AUC must reasonably
address the entire clinical scope of the corresponding priority
clinical areas. These requirements and the resulting fundamental
process ensures that AUC are evidence-based to the extent feasible as
required by section 1834(q)(1)(B) of the Act. Therefore, we expect that
qualified PLEs will undertake evidence reviews of sufficient depth and
quality to ensure that all relevant evidence-based publications in the
peer-reviewed medical literature on trials, observational studies, and
consensus statements are identified, considered and evaluated; and that
such reviews are reproducible.
We do not agree with the suggestion to reduce the total number of
priority clinical areas we proposed in CY 2017 rulemaking, and
reiterate that ordering professionals must consult AUC for all
applicable imaging services, not only those falling within a priority
clinical area. Furthermore, we anticipate that additional priority
clinical areas will be proposed in future rulemaking, and we believe
that Medicare beneficiaries will benefit as ordering professionals
become familiar with specified applicable AUC relevant to all advanced
diagnostic imaging services.
Comment: One commenter suggested diagnosimetrics--the application
of quantitative analysis to the art of disease diagnosis--as an
alternative approach to clinical assessment and reassessment, which the
commenter believed is an

[[Page 80409]]

approach that obviates the need to develop priority clinical areas.
Response: We appreciate alternative considerations for
implementation of the AUC program, but we disagree that utilization of
diagnosimetrics can eliminate completely the need to establish priority
clinical areas. We remind all commenters that we set forth the list of
priority clinical areas not only to strike a balance between the
focused and comprehensive approach to implementing the AUC program, but
also to be transparent about the areas that we anticipate will serve as
the basis for identifying outlier professionals in the future. We again
note that consultation of AUC will be required for all advanced
diagnostic imaging services regardless of whether they fall into a
priority clinical area or not.
Comment: Many commenters recommended that pulmonary embolism be
included as a stand-alone priority clinical area, based in part on high
strength of evidence from multiple, large multicenter, randomized
controlled trials (RCTs), and several commenters disagreed. The
majority of commenters in support of pulmonary embolism believed that
it should be a priority clinical area distinct from chest pain, and
further recommended that CMS remove or more narrowly determine any
priority clinical area for chest pain. In particular, one commenter did
not support inclusion of pulmonary embolism as a separate category
stating that eight areas is an appropriate number for the first year of
the program. Another commenter supplied published evidence that the
decision rules for assessing risk of pulmonary embolism have not been
shown to improve appropriate use of diagnostic imaging when compared to
clinical judgment alone. One commenter suggested having the pulmonary
embolism priority clinical area apply to CT angiograms only. We
received one comment that ``shortness of breath'' rather than
``pulmonary embolism'' be included as a stand-alone priority clinical
area.
Response: We appreciate the extensive input on this topic and we
agree with the majority of commenters, and thus, are finalizing
suspected pulmonary embolism as a priority clinical area. We not that
qualified PLEs already have AUC for suspected pulmonary embolism that
are based on large, multi-center, randomized controlled trials. These
evidence-based AUC in turn are further supported by the American Board
of Internal Medicine (ABIM) Foundation's Choosing Wisely[supreg] list
of society recommendations.
Comment: Some commenters advocated for the addition of lung cancer
screening to the list of priority clinical areas. The commenters
suggested that the inclusion of lung cancer screening would be
beneficial as there are well-defined and evidence-based criteria
outlining the population that benefits from screening examinations. One
commenter remarked on the opportunity it offers for qualified PLEs and
CDSMs to gain experience with decision support for a population
screening test which may differ from a diagnostic test.
Response: We agree with the commenter that it is important for
qualified PLEs and qualified CDSMs to interface to gain experience with
implementing specified applicable AUC into an appropriateness rating,
specifically for advanced diagnostic imaging services. We also
appreciate feedback on areas for which AUC have been developed.
However, section 1834(q)(1) of the Act limits this program to promoting
the use of AUC for advanced diagnostic imaging services, not to include
screening tests.
Comment: Several commenters explicitly raised concerns regarding
the scope, number, and frequency with which the list of priority
clinical areas would continue to grow. Many commenters noted that a
program with too many priority clinical areas would potentially
obstruct any meaningful focused approach. Other commenters either
supported or offered no objections to the proposed number of priority
clinical areas. Some commenters provided additional considerations to
impact the selection of additional priority clinical areas including
but not limited to the strength of evidence supporting the use or non-
use of a particular imaging service, the variability of use of a
particular imaging service, and the representation of a given clinical
grouping to the existing list of priority clinical areas.
Response: We recognize these concerns and reiterate that we do not
believe there is just one correct criterion to form the basis for
expanding the list of priority clinical areas over time. We agree with
commenters who encouraged us to consider the breadth and depth of
clinical scenarios within the proposed priority clinical areas, and
acknowledge the impact of priority clinical areas for calculation of
outlier ordering professionals. We expect the list of priority clinical
areas to expand over time in a judicious and stepwise manner through
consultation with physicians and other stakeholders and through the
annual notice and comment rulemaking process. We have demonstrated this
in the CY 2017 PFS proposed rule, where we solicited comments on
recommendations for additional or alternative areas to be included on
our list of priority clinical areas. We believe that the final list of
priority clinical areas is responsive and reflects the expressed needs
and concerns of most commenters.
Comment: Although several commenters generally agreed with the
approach used to identify priority clinical areas, some expressed
concern about the underlying methodology. Many commenters believed that
when we provided claims data analysis and ICD-9 diagnosis codes to
describe priority clinical areas, we only considered volume and cost of
advanced diagnostic imaging services. Some commenters requested CMS
include and/or remove ICD-9 diagnosis codes in one or more of the
supplemental tables accompanying the list of priority clinical areas.
Many commenters believed that the supplemental table encompassed what
CMS believed to be the entire clinical scope of the proposed priority
clinical area, while others believed that CMS did not explain what
constitutes a priority clinical area such as low back pain. As a
consequence, some commenters requested that CMS define priority
clinical areas to include all applicable diagnosis codes, and map those
diagnosis codes to the most recent ICD-10 diagnosis codes available.
One commenter requested that CMS confirm that the data used to
ascertain the priority clinical areas did not include services provided
in the inpatient and emergency department settings. Another commenter
questioned whether the inclusion of too many minor or common symptoms
in the data gathering process would consequently weaken the
implementation of the AUC program generally.
Response: We equally acknowledge the commenters that agreed with
our approach and those that raised concerns with our methodology.
Section 414.94(e)(2) of our regulations, as finalized in the CY 2016
PFS final rule with comment period, states that, when identifying
priority clinical areas, we will consider incidence and prevalence of
disease, the volume and variability of use of particular imaging
services, and strength of evidence supporting particular imaging
services, as well as applicability of the clinical area to a variety of
care settings and to the Medicare population. In the CY 2017 PFS
proposed rule, we proposed priority clinical areas based on an analysis
of claims data, using subjective clinical judgment on whether a

[[Page 80410]]

particular ICD-9 diagnosis code should be included in a given clinical
grouping. We remind all commenters that the supplemental table was
provided to lend insight into the extent to which a given diagnosis
code contributes to orders for advanced diagnostic imaging services,
which we used to assist us in identifying proposed priority clinical
areas. We continue to believe that the list of priority clinical areas
should reflect both the significance and high prevalence of some of the
most disruptive diseases in the Medicare population. In particular, the
claims data analysis we undertook did not include services furnished in
the inpatient setting, but did include services provided in an
emergency department as section 1834(q)(4)(C) of the Act excludes
applicable imaging services ordered for individuals with emergency
conditions as defined in section 1867(e)(1) of the Act, but does not
exclude all applicable imaging services provided in the emergency
department from the consultation requirement under this program. We
further agree with the commenters' observations that a high volume
advanced diagnostic imaging service does not by itself indicate high
rates of inappropriate testing. Therefore, we are modifying the
proposed list of priority clinical areas to more closely align with
feedback from commenters on the strength of evidence and AUC available
for clinical scenarios within a given clinical area.
Given the transition to ICD-10 in 2015 and changes in the list of
priority clinical areas, as well as factors discussed above, we clarify
that the supplemental table does not define the final list of priority
clinical areas. We expect to address the role of ICD-10 diagnosis codes
in claims based reporting, auditing and outlier identification for
priority clinical areas with rulemaking next year. We note, however,
that we believe that the list of priority clinical areas provides
sufficient guidance to CDSMs as they decide whether to apply to be a
qualified CDSM in the upcoming application cycle.
Comment: Several commenters provided alternative considerations to
methodically determine priority clinical areas, including ICD-10
diagnosis codes, CPT codes, hierarchical condition categories,
anatomical regions, variation in treatment, and quality of the
evidence. A few commenters suggested that CMS also consider the extent
to which the majority of clinical scenarios within a priority clinical
area would likely fall under the emergency medical conditions
exception, noting that there may be little impact in proposing to
address clinical areas exempt from AUC consultation. Furthermore, some
commenters requested that CMS exclude from priority clinical area
consideration those clinical scenarios for which advanced imaging tests
are rarely inappropriate, which commenters stated would reduce alert
fatigue by ordering professionals and increase focus on clinical
scenarios for which ordering professional behavior may be altered.
Response: Although this year we proposed priority clinical areas
based partly on an analysis of claims data, we also considered
stakeholder feedback and commenters' alternative considerations. We
acknowledge the merit of several acceptable alternative proposals and
believe the current definition of priority clinical areas encompasses
these considerations. We will continue to maintain close dialogue with
physicians and other stakeholders, and may use a different approach to
addressing priority clinical areas in future rulemaking cycles, as
needed.
Comment: Some commenters expressed additional concerns about the
use of diagnosis codes to help form priority clinical areas. One
commenter noted that using a diagnosis for suspected stroke should also
include other diagnoses in the priority clinical area, such as facial
numbness, slurred speech, or limb weakness. Other commenters expressed
concerns that publishing a rigid, exact mapping of ICD diagnosis codes
for each priority clinical area could give rise to ``gaming.'' Other
commenters noted that addressing priority clinical areas with diagnosis
codes is problematic because the final diagnosis code is often not
known until the advanced imaging study is completed.
Response: We recognize that these comments exemplify the confusion
and concerns expressed by many commenters about the definition of each
priority clinical area. We did not propose to set forth a diagnosis-
code based definition for each priority clinical area; rather, we will
continue to use the definition of priority clinical areas in Sec.
414.94(b) which includes clinical conditions, diseases or symptom
complexes and associated advanced diagnostic imaging services
identified by CMS through annual rulemaking and in consultation with
stakeholders which may be used in the determination of outlier ordering
professionals. In addition, we clarify that our submission of
supplemental data presenting ICD-9 diagnosis codes within each proposed
priority clinical area was intended only to explain the portion of
Medicare claims data derived from the CCW 2014 Part B non-institutional
claim line file for services furnished during CY 2014. We remind all
commenters that these data were used to calculate the total services
furnished and total payments made to those enrolled in Medicare Part B.
We included this supplemental table to be open and transparent to
stakeholders regarding the process by which we developed the proposed
list of priority clinical areas. We reiterate that our use of the ICD-9
diagnosis codes from CY 2014 claims data was solely a means for
estimating volumes of procedures, as a stepping stone in the
development of an initial list of priority clinical areas. In the event
we use claims data from 2015 or later for analyses, we will use ICD-10
codes, but will continue to assess all options for identifying and
establishing priority clinical areas and not necessarily limit
ourselves only to ICD diagnosis code analyses.
We acknowledge the alternative opinions of commenters seeking to
modify the extent of diagnosis codes in one or more priority clinical
areas. We hope to discuss further with physicians and other
stakeholders the relevance of mapping ICD diagnosis codes to priority
clinical areas as we move forward in formulating the claims reporting
implementation strategy (discussed in more detail below) and strategies
to avoid areas of concern for commenters. We clarify that ICD-9
diagnosis codes will not be used for claims reporting purposes in this
program given the 2015 transition to ICD-10. We expect that the role of
ICD-10 diagnosis codes for the purposes of claims based reporting,
auditing and outlier identification will be addressed through
rulemaking next year.
Comment: Some commenters stated that AUC consultation within
priority clinical areas include only high-quality evidence and
recommended further consideration and discussion of the level of
evidence available for AUC in each priority clinical area. One
commenter requested that CMS specify a standard for the strength of any
evidence. Many commenters offered to share their guidelines, guidance
and other expertise around AUC with CMS, and recommended that CMS
engage with them directly. Other commenters suggested that the proposed
priority clinical areas more closely align with the ABIM's Choosing
Wisely[supreg] initiative and/or the ACR's Appropriateness
Criteria[supreg]. One commenter recommended a number of evidence-based
guidelines for imaging of patients with traumatic cervical pain. In

[[Page 80411]]

conjunction with the evidence submitted to support one or more priority
clinical areas, another commenter suggested only including those
priority clinical areas for clinical scenarios for which AUC from
multiple PLEs are available.
Some commenters also shared with CMS publications that suggested a
lack of evidence-based AUC for clinical scenarios that could reasonably
fall within one or more proposed priority clinical areas. In
particular, one commenter believed that available appropriateness
criteria do not address altered mental status. Commenters generally
believed that clinical scenarios providing no appropriateness rating or
contradictory recommendations from CDSMs based on AUC using lower
grades of evidence or expert opinion would not result in significant
modifications in ordering professional behavior. A commenter suggested
CMS consider the safety margin inherent in the clinical area where
imaging for acute stroke, for example, has a narrow safety margin while
imaging for suspected rotator cuff injury has a wider safety margin.
Many commenters identified situations when the available high-quality
evidence does not cover the entire clinical scope of a priority
clinical area. In these situations, a CDSM would either cover less than
the entire clinical scope of a priority clinical area and only
incorporate AUC based on high-quality evidence or cover the entire
clinical scope and in doing so incorporate AUC based on low quality
evidence and expert opinion. These commenters cautioned against
requiring qualified CDSMs to incorporate specified applicable AUC that
encompass the entire clinical scope given the potential for forcing
consultation with AUC based on lower quality evidence. As an
alternative, a few commenters encouraged CMS to separate priority
clinical areas into those that have high quality AUC and those that do
not.
Response: We agree that priority clinical areas for which there is
little evidence would likely have little impact in changing physician
ordering behavior, and may indeed negatively impact patient care. We
expect qualified PLEs to identify and focus on that portion of the
entire clinical scope within a given priority clinical area where there
is sufficient evidence to create high quality AUC. We encourage
qualified PLEs to consider the ``safety margins'' discussed above along
with strength of evidence and other factors when developing or
modifying AUC. Furthermore, we believe that qualified CDSMs, working
with qualified PLEs, should incorporate such high quality AUC as part
of a clinical decision tree, which includes areas where imaging is
triggered by other tests.
We continue to believe that evidence grading is an essential
component of the AUC development process for all clinical areas,
including priority clinical areas. However, we acknowledge that
different grading systems may be more appropriate for different
clinical areas. As such, we will not require the use of specific
grading mechanisms and leave that decision to qualified PLEs. We
recognize that some AUC development processes could invite public
comment and include a wide range of experts and stakeholders on the
multidisciplinary AUC development team. However, we will not establish
these as requirements, and instead require under Sec. 414.94(c)(1)
that qualified PLEs post AUC along with the process they use for
developing and modifying AUC on their Web site in the public domain to
allow for review by all stakeholders.
Comment: Some commenters expressed confusion over which entity
determines whether an exam falls within a priority clinical area for
the ordering professional. Several commenters noted that determining
whether an exam falls under a priority clinical area often will not be
an easy yes-or-no decision. One commenter further expressed that this
confusion would result in physicians being expected to know if an
advanced imaging study falls within a priority clinical area, which
would further confuse clinicians about which orders require
consultation with CDSMs and which do not. Several commenters explained
that ordering professionals may not know whether they are required to
consult with AUC through a qualified CDSM at the time of order because
the diagnosis is not yet known. Another commenter raised concerns that
not all available specified applicable AUC within priority clinical
areas, especially those developed by general hospitals or by
professional societies, will be well suited for local adaptation, a
particular practice, or the patients it serves. To address these
concerns, commenters made a few recommendations to CMS. Specifically,
commenters suggested qualified PLEs should be responsible for
certifying whether an AUC set encompasses the entire scope of a
priority clinical area. Additionally, commenters recommended that CMS
develop and launch an educational campaign, including a Town Hall
meeting.
Response: We understand the commenters' concerns about the
difficulty ordering professionals may have in identifying prospectively
which clinical scenarios pertain to a priority clinical area. We remind
commenters that ordering professionals will be required to consult
specified applicable AUC through a qualified CDSM for all applicable
imaging services and will not be required to determine which applicable
imaging services fall within priority clinical areas. For the purposes
of the AUC program, priority clinical areas will be used as part of the
input to calculate outlier ordering professionals. We will address the
identification of outlier ordering professionals for this program, as
specified in section 1834(q)(5) of the Act, in future rulemaking.
Regarding local adaptation, we believe it is important to fit AUC
to local circumstances, while also ensuring a rigorous process for
doing so. However, only AUC modified by qualified PLEs can become
specified applicable AUC. Furthermore, qualified PLEs are required
under our regulation at Sec. 414.94(c)(v) to identify each appropriate
use criterion or AUC subset that is relevant to a priority clinical
area. Stakeholders should expect to see such delineations on the Web
site of the qualified PLE.
We are not launching an educational campaign at this time because
this program is only partially implemented. However, we believe that
physicians and other practitioners, through continued dialogue with us,
will continue to become more informed as implementation of this program
proceeds, and we will continue to evaluate the programmatic and
educational needs of ordering and furnishing professionals impacted by
the AUC program over time.
Comment: Many commenters expressed confusion regarding when
consultation with specified applicable AUC will be required. Some
commenters believed that consultation for all advanced diagnostic
imaging services will be required, while others believed that CMS
proposed to limit the consultation requirement to only advanced
diagnostic imaging services within priority clinical areas. Some
commenters recommended that physicians and other practitioners be
required to consult AUC only within the priority clinical areas.
Commenters believed the impact of limiting AUC consultation to only
imaging studies falling within priority clinical areas would be a
decrease in the consultation and reporting for ordering professionals.
Other commenters recommended a narrower requirement for only ordering
professionals who meet an ordering threshold or who order from a list
of

[[Page 80412]]

specified conditions within their specialty to consult AUC for only
priority clinical areas. While still other commenters recommended that
ordering professionals be required to consult AUC for advanced
diagnostic imaging services including and beyond the priority clinical
areas. Another recommendation from commenters included requiring only
some ordering professionals consult AUC for limited applicable imaging
services by imaging modality. Several commenters agreed with our
proposed definition of the applicable payment systems under which
consultation with AUC for an advanced diagnostic imaging service would
be paid.
Response: We understand commenters' confusion and expect that, in
general, the additional regulations we are finalizing in this final
rule will provide greater clarity. Section 1834(q)(4) of the Act sets
forth the requirement that ordering professionals must consult with
specified applicable AUC through a qualified CDSM for an applicable
imaging service furnished in an applicable setting and paid for under
an applicable payment system. The applicable imaging services are not
limited under the statute to any particular clinical area. Therefore,
we do not have statutory authority to limit the consultation
requirement to priority clinical areas. We reiterate that priority
clinical areas may be used in the identification of outlier ordering
professionals under a future component of this program. By starting to
identify these areas now, we believe physicians and practitioners will
have the opportunity to become familiar with AUC within identified
priority clinical areas prior to Medicare claims for those services
being part of the input for calculating outlier ordering professionals.
We further believe that AUC consultation will help to improve
appropriate utilization among all professionals and will continue to
engage stakeholders to further this shared goal.
Comment: Many commenters suggested that they agreed with the
approach of CMS to use the priority clinical areas for the purposes of
identifying outlier ordering professionals. In contrast, one commenter
expressed that denial of medical services based on criteria designed
solely to decrease the utilization of medical imaging runs counter to
the underlying goal of the AUC program under section 218(b) of the
PAMA. Commenters also generally agreed that the impact of the AUC
program could not be fully realized until after implementation;
therefore, many commenters urged CMS to collect at least one year of
data from the start of the program and use it to identify priority
clinical areas where the AUC program can help reduce variation.
Response: Although commenters appreciated the utility in defining
priority clinical areas for the purposes of identifying outlier
ordering professionals, we reiterate that we have yet to propose the
policies for the annual identification of outlier ordering
professionals, and therefore, will revisit comments on this subject in
the course of rulemaking for the CY 2018 PFS. We remind all commenters
that section 1834(q)(5) of the Act explicitly requires that the
Secretary shall use 2 years of data to identify outlier ordering
professionals for the purposes of the AUC program.
In response to comments, we are finalizing a modified list of
priority clinical areas under Sec. 414.94(e)(5) of our regulations,
making the following changes from the proposed list: (1) removed chest
pain, abdominal pain (any locations and flank pain), suspected stroke
and altered mental status; and (2) added coronary artery disease,
(suspected or diagnosed), suspected pulmonary embolism, hip pain and
shoulder pain (to include suspected rotator cuff injury). We are
finalizing the proposed priority clinical areas of headache (traumatic
and non-traumatic), low back pain, cancer of the lung (primary or
metastatic, suspected or diagnosed), and cervical or neck pain without
change.
c. CDSM Qualifications and Requirements
We proposed to add a new Sec. 414.94(g)(1) to our regulations to
establish requirements for qualified CDSMs. Section 1834(q)(3)(A)(iii)
of the Act provides relative flexibility for qualified CDSMs, and
states that they may include mechanisms that are within certified EHR
technology, private sector mechanisms that are independent from
certified EHR technology or mechanisms that are established by the
Secretary.
We believe that, at least initially, it is in the best interest of
the program to establish CDSM requirements that are not prescriptive
about specific IT standards. Rather, we proposed an approach that
focuses on the functionality and capabilities of qualified CDSMs. The
CDSM, EHR and health IT environments are constantly changing and
improving and we want to allow room for growth and innovation. However,
in the future, as more stakeholders and other entities including the
ONC, AHRQ, and relevant standards development organizations come to
consensus regarding standards for CDSMs, then we may consider pointing
to such standards as a requirement for qualified CDSMs under this
program. We believe standards would make it possible to achieve
interoperability, allowing any CDSM to incorporate any standardized AUC
and for sets of AUC to be easily interchangeable among various CDSMs.
We will continue to work with the ONC and AHRQ to facilitate movement
in this direction.
Recent work under the federally-sponsored Clinical Quality
Framework (CQF) initiative has successfully developed an integrated
approach that harmonizes standards for electronic clinical quality
measurement with those that enable shareable clinical decision support
artifacts (for example, AUC) using Fast Healthcare Interoperability
Resources (FHIR). The CQF initiative is working to support semantically
interoperable data exchange for (1) calling a service, sending patient
data to a service for clinical decision support guidance and receiving
clinical decision support guidance or quality measurement results in
return, and (2) enabling a system to consume and internally execute
decision support artifacts. The current implementation guide supports
both approaches and could be used to successfully execute and share AUC
as described in this program. As this standard is considered
sufficiently mature for widespread adoption, the ONC may consider it
for use in future editions of certification criteria for health IT.
While the current regulation requires no specific standard, the CMS and
ONC are supportive of this approach and additional information is
available at https://hl7-fhir.github.io/clinicalreasoning-module.html.
It should be noted that there are also existing deployed standards for
clinical decision support and these and emerging standards can be found
in the ONC Interoperability Standards Advisory (https://www.healthit.gov/standards-advisory).
At Sec. 414.94(g)(1), we proposed to codify in regulations the
seven requirements for qualified CDSMs set forth in section
1834(q)(3)(B)(ii) of the Act. The statute requires qualified CDSMs to
make available to the ordering professional specified applicable AUC
and the supporting documentation for the applicable imaging service
ordered. We do not interpret this requirement to mean that every
qualified CDSM must make available every specified applicable AUC. In
the CY 2016 PFS final rule with comment period, we allowed for the

[[Page 80413]]

approval of massive libraries of AUC (resulting from approvals for
qualified PLEs with comprehensive and extensive libraries), yet we
expressed our intention to establish priority clinical areas. While
there is a statutory requirement to consult AUC for each applicable
imaging service, we recognize that ordering professionals may choose to
thoroughly improve their understanding of, and focus their internal
quality improvement (QI) programs on, those priority clinical areas;
and these areas will in turn serve as the basis for future outlier
calculations.
Consistent with that approach, we proposed to add a requirement in
Sec. 414.94(g)(1)(iii) that qualified CDSMs must make available to
ordering professionals, at a minimum, specified applicable AUC that
reasonably encompass the entire clinical scope of all priority clinical
areas. We encourage and expect some CDSMs, based on the needs of the
professionals they serve, will choose to include a far more
comprehensive set of AUC going above and beyond the minimum set as we
understand many ordering professionals want such comprehensive access
to AUC. When this Medicare AUC program is fully implemented, all
ordering professionals must consult specified applicable AUC through a
qualified CDSM for every applicable imaging service that would be
furnished in an applicable setting and paid for under an applicable
payment system in order for payment to be made for the service.
However, when identifying the outlier ordering professionals who will
be subject to prior authorization beginning in 2020, we anticipate
focusing on consultation with specified applicable AUC within priority
clinical areas rather than the universe of specified applicable AUC.
The concept of priority clinical areas will allow us to implement an
AUC program that combines two approaches to implementation allowing
clinicians flexibility to either engage with a rapid rollout of
comprehensive specified applicable AUC or adopt a focused approach to
consulting AUC. Thus, they can choose their approach and select a CDSM
and AUC set(s) that fit their needs and preferences, while being sure
that each qualified CDSM will include AUC that address all priority
clinical areas.
We further proposed to add a requirement in Sec. 414.94(g)(1)(iv)
of our regulations that qualified CDSMs must be able to incorporate
specified applicable AUC from more than one qualified PLE. We believe
this approach ensures that CDSMs can expand the AUC libraries they can
provide access to represent AUC across all priority clinical areas
(consistent with the requirements under proposed Sec.
414.94(g)(1)(iii)). We do not necessarily expect that a single
qualified PLE will develop AUC addressing every priority clinical area
domain, especially since we believe that over time and through future
rulemaking, the list of priority clinical areas will expand and cross
additional clinical domains. Ensuring that qualified CDSMs are not
limited in their technology to incorporating AUC from only one
qualified PLE will help to ensure that ordering professionals will not
be in a position of consulting a CDSM that cannot offer them access to
AUC that address all priority clinical areas. As stakeholders continue
to advance CDSM technology, we look forward to standards being
developed and widely accepted so that AUC are incorporated in a
standardized format across CDSM platforms. Increasing standardization
in this area will move the industry closer to the goal of
interoperability across CDSMs and EHRs.
We also proposed to add a requirement in Sec. 414.94(g)(1)(i) that
specified applicable AUC and related documentation supporting the
appropriateness of the applicable imaging service ordered must be made
available within the qualified CDSM. For example, the ordering
professional would have immediate access to the full appropriate use
criterion, citations supporting the criterion and a summary of key
evidence supporting the criterion.
We proposed to add a requirement in Sec. 414.94(g)(1)(ii),
consistent with section 1834(q)(3)(B)(ii)(II) of the Act, that the
qualified CDSM must clearly identify the appropriate use criterion
consulted if the tool makes available more than one criterion relevant
to a consultation for a patient's specific clinical scenario. We
believe this is important since CDSMs that choose to incorporate a
comprehensive AUC library may be offering the ordering professional
access to AUC from multiple qualified PLEs. In such scenarios, it is
important that the ordering professional knows which appropriate use
criterion is being consulted and have the option to choose one over the
other if more than one criterion accessible within the CDSM applies to
the scenario.
We proposed to add a requirement in Sec. 414.94(g)(1)(v),
consistent with section 1834(q)(3)(B)(ii)(III) of the Act, that the
qualified CDSM must provide to the ordering professional a
determination, for each consultation, of the extent to which an
applicable imaging service is consistent with specified applicable AUC
or a determination of ``not applicable'' when the mechanism does not
contain a criterion that would apply to the consultation. This
determination would communicate the appropriateness of the applicable
imaging service to the ordering professional. In addition to this
determination, we also proposed that the CDSM provide the ordering
professional with a determination of ``not applicable'' when the
mechanism does not contain an appropriate use criterion applicable to
that patient's specific clinical scenario.
We proposed to add a requirement in Sec. 414.94(g)(1)(vi),
consistent with section 1834(q)(3)(B)(ii)(IV) of the Act, that the
qualified CDSM must generate and provide to the ordering professional
certification or documentation that documents which qualified CDSM was
consulted, the name and NPI of the ordering professional that consulted
the CDSM and whether the service ordered would adhere to applicable
AUC, whether the service ordered would not adhere to such criteria, or
whether such criteria was not applicable for the service ordered. We
proposed to require under Sec. 414.94(g)(1)(vi)(A) that this
certification or documentation must be issued each time an ordering
professional consults the qualified CDSM. Since Medicare claims will be
filed only for services that are rendered to beneficiaries, we will not
see CDSM consultation information on the claim form specific to imaging
services that are not ordered. We believe that for the CDSM to be able
to provide meaningful feedback to ordering professionals, information
regarding consultations that do not result in imaging is just as
important as information on consultations that do result in an order
for advanced imaging.
Thus, we proposed to require under Sec. 414.94(g)(1)(vi)(B) that
the documentation or certification provided by the qualified CDSM must
include a unique consultation identifier. This would be a unique code
issued by the CDSM that is specific to each consultation by an ordering
professional. This type of unique code may serve as a platform for
future collaboration and aggregation of consultation data across CDSMs.
In addition, at some point in the future, this unique code may assist
in more seamlessly bringing Medicare data together with CDSM clinical
data to maximize quality improvement in clinical practices and to
iteratively improve the AUC itself. We proposed in Sec.
414.94(g)(1)(vii), consistent with section 1834(q)(3)(B)(ii)(V) of the
Act, that the specified applicable AUC content within qualified CDSMs
be

[[Page 80414]]

updated at least every 12 months to reflect revisions or updates made
by qualified PLEs to their AUC sets or to an individual appropriate use
criterion. We proposed 12 months as the maximum acceptable time frame
for updating content. We believed that in most cases it will be
possible to update AUC content more frequently than every 12 months,
particularly for cloud-based CDSMs. We further proposed in Sec.
414.94(g)(1)(vii)(A) that qualified CDSMs have a protocol in place to
more expeditiously remove AUC that are determined by the qualified PLE
to be potentially dangerous to patients and/or harmful if followed.
In addition, we proposed in Sec. 414.94(g)(1)(vii)(B) that
qualified CDSMs must make available for consultation specified
applicable AUC that address any new priority clinical areas within 12
months of the priority clinical area being finalized by CMS. We believe
this would allow the CDSM sufficient time to incorporate the AUC into
the CDSM. Thus, any new priority clinical areas finalized, for example,
in the CY 2018 PFS final rule that would be effective January 1, 2018,
would need to be incorporated into a qualified CDSM by January 1, 2019.
To accommodate this time frame, we would accept a not applicable
determination from a CDSM for a consultation on a priority clinical
area for dates of service through the 12-month period that ends, in
this example, on January 1, 2019. We note that all qualified CDSMs that
are approved by June 30, 2017, should be capable of supporting AUC for
all priority clinical areas that are finalized in the CY 2017 PFS final
rule.
We proposed to add a requirement in Sec. 414.94(g)(1)(viii),
consistent with section 1834(q)(3)(B)(ii)(VI) of the Act, that the
qualified mechanism must meet privacy and security standards under
applicable provisions of law. Potentially applicable laws may include
the HIPAA Privacy and Security rules.
We proposed to add a requirement in Sec. 414.94(g)(1)(ix),
consistent with section 1834(q)(3)(B)(ii)(VII) of the Act, that
qualified CDSMs must provide ordering professionals aggregate feedback
in the form of an electronic report on an annual basis (at minimum)
regarding their consultations with specified applicable AUC. Our intent
is to require records to be retained in a manner consistent with the
HIPAA Security Rule. To provide such feedback, and to make detailed
consultation information available to ordering professionals,
furnishing professionals (when they have authorized access to the
CDSM), auditors and CMS, we proposed in Sec. 414.94(g)(1)(x) that a
qualified CDSM must maintain electronic storage of clinical,
administrative and demographic information of each unique consult for a
minimum of 6 years. We believe CDSMs could fulfill this requirement in
a number of ways, including involving a third party in the storage of
information, as well as for providing feedback to ordering
professionals. We recognize that these requirements represent a minimum
floor that clinicians may choose to expand their local QI programs.
In the event requirements under Sec. 414.94(g)(1) are modified
through rulemaking during the course of a qualified CDSM's 5-year
approval cycle, we proposed in Sec. 414.94(g)(1)(xi) that the CDSM
would be required to comply with the modification(s) within 12 months
of the effective date of the modification.
The following is a summary of the comments we received on CDSM
qualifications and requirements.
Comment: We received numerous comments both for and against
including qualifying CDSMs that are freestanding, web-based and
operating outside of a certified EHR environment. Some of those
commenters pointed out CMS statements indicating that ideally a CDSM
would be seamlessly integrated into the clinical workflow, which could
be possible when the CDSM is completely integrated within an ordering
professional's EHR. Those in favor of a freestanding CDSM cited the
importance of allowing choice as there are some instances where a
freestanding mechanism may be preferred, particularly in cases of
practitioners who do not use EHR technology or when integration of a
CDSM involves high costs or other problems.
Response: Particularly in the early stages of this program, we
believe it is important to allow for the option of a freestanding
mechanism that is independent of EHR technology, which is supported by
section 1834(q)(3)(A)(iii)(II) of the Act. For some ordering
professionals, this will allow compliance with the requirements of the
program while still affording them time to make decisions regarding
EHR-integrated CDSMs. In addition, as we understand the current
marketplace, it is more likely that tools available free of charge may
initially begin as web-based tools and, we note that, in accordance
with section 1834(q)(1)(C) of the Act and as defined in Sec. 414.94(b)
of our regulations, an applicable imaging service is one for which
there is one or more qualified CDSM available free of charge.
As noted, we believe examples of CDSMs that seamlessly integrate
with EHRs, including those that operate outside of certified EHR
technology, such as those that operate in the cloud, will likely be
most effective in meeting clinicians' needs. As the market continues to
mature, we would expect to see expanded availability of easily
affordable tools that fully integrate AUC guidance with an efficient,
clinician-friendly workflow within the interface of the primary health
IT system they use in providing and documenting care.
Comment: Several comments addressed our approach to CDSM
requirements and noted that we focused on functionalities and
capabilities of a mechanism for flexibility as opposed to prescriptive
and specific IT standards. Commenters overwhelmingly favored the
approach we proposed. Commenters indicated that the current state of
CDSM technology is varied and there are not yet accepted, mature
standards available. Many of these commenters encouraged CMS to
cooperate with ONC, Health Level Seven International (HL7) and other
standards organizations to work toward identifying standards in the
near future. Some commenters, however, pointed out that the lack of
standards early in the program could lead to chaos in the market and
increase costs since CDSM developers will not have a set of standards
on which to build.
Response: We do not believe it is possible to require standards at
this time due to the lack of agreement among stakeholders regarding
which technical standards should be identified. We understand that some
CDSM developers would prefer specific guidance from us to ensure they
are building tools that meet the needs of the program; therefore, we
will continue to work with stakeholders like ONC, HL7 and other
standards organizations in an attempt to identify standards in the
future. We will continue to actively encourage and welcome the input of
stakeholders in this matter. As we expect that standards will continue
to develop, evolve and gain acceptance, we believe that if we were to
establish standards now for CDSMs, they would serve only as initial
standards and may quickly become obsolete, potentially resulting in
confusion for CDSM developers. We recommend that developers refer to
ONC's Interoperability Standards Advisory (see https://www.healthit.gov/standards-advisory) for the most up-to-date standards
available, which will likely be the basis of future development.
Comment: The majority of commenters addressed the proposal to

[[Page 80415]]

require qualified CDSMs to contain, at a minimum, AUC that encompass
the entire clinical scope of priority clinical areas. Commenters were
split regarding the proposed requirement. Some commenters suggested
that establishing a minimum scope for CDSM AUC content would add cost
and be unnecessary for CDSMs that serve specialists. They favored
allowing qualified CDSMs to determine, along with the ordering
practitioners they serve, what AUC content would be made available.
Other commenters favored requiring every CDSM to contain comprehensive
AUC. Those commenters said this was the intent of section 218(b) of the
PAMA since ordering professionals must consult for every advanced
diagnostic imaging order, and they believe a comprehensive AUC
requirement would take into account the lessons learned from the MID,
avoiding frustration of ordering practitioners who attempt to consult
AUC for imaging services and do not find relevant AUC within their
CDSM. Other commenters agreed in principle with the proposal to
establish a minimum floor of AUC but expressed concerns about the way
CMS proposed that the priority clinical areas must be addressed,
stating that the requirement that AUC encompass the entire clinical
scope of priority clinical areas is not preferred and would draw in AUC
without a strong evidence base.
Response: We understand the significance of this aspect of the
proposal, as well as the statements made by the commenters both for and
against the requirement of an AUC floor, or the minimum AUC that must
be available in a qualified CDSM, related to priority clinical areas.
We reiterate that, in alignment with statute, ordering professionals
must consult for each advanced diagnostic imaging service ordered.
Therefore, we believe many professionals will choose a qualified CDSM
that best fits their ordering patterns and clinical practice. Those
ordering a wide array of imaging services or perhaps infrequently
ordering imaging services across a broad clinical spectrum will align
themselves with a mechanism that fits their needs and contains
comprehensive specified applicable AUC in order to lessen the chances
that they find no applicable AUC when they attempt to consult for a
specific service.
Specialists may seek to align themselves with a qualified CDSM that
contains AUC more exhaustive in one area of medicine to reflect the
imaging services that they order most often.
We continue to believe that all tools should contain the specified
applicable AUC needed by the ordering professionals they serve, as well
as contain specified applicable AUC related to the priority clinical
areas, to ensure that when an ordering professional needs to consult
AUC for an imaging service, they will not have to go outside their
regular qualified CDSM for the consultation. We reiterate that we
envision choices for qualified CDSMs that allow efficient access by
ordering professionals to one or more specialty-focused specified
applicable AUC sets along with more comprehensive specified applicable
AUC sets. We believe the determination of which AUC sets are made
accessible through a given CDSM should be demand-driven by ordering
professionals, who would be choosing from a marketplace of options for
both CDSMs and AUC, all of which meet basic CMS qualifications to
ensure implementation of the statutory requirements established under
section 218(b) of the PAMA.
To balance the requirement for the minimum floor, we believe it is
important to reconsider the extent to which specified applicable AUC
encompass the entire clinical scope of priority clinical areas. We
agree that requiring the entire clinical scope may not yield
consultation of the highest quality specified applicable AUC and that
ordering professionals, particularly specialists, may not have a need
for specified applicable AUC addressing the entire clinical scope of a
priority clinical area. We do not expect this requirement to be met by
AUC that address only a narrow clinical aspect of a priority clinical
area. We believe addressing less than the entire clinical scope should
still result in AUC that robustly fill priority clinical areas. To
avoid forcing the development of AUC based on poor evidence just for
the sake of having AUC we modified this language and expect it will
enable qualified PLEs to confidently develop AUC that represent a high
level of evidence. Therefore, we agree with commenters' suggestions
that we keep the AUC floor but allow the requirement to be fulfilled if
specified applicable AUC address less than the entire scope of the
priority clinical areas and instead reasonably address the common and
important clinical scenarios within each priority clinical area. We
have included this modified language in Sec. 414.94(g)(1)(iii) and
Sec. 414.94(g)(1)(vii)(C).
Comment: We also received comments both for and against the
proposed requirement that qualified CDSMs have the ability to
incorporate specified applicable AUC from more than one qualified PLE.
Some commenters agreed with the proposal while others suggested a more
stringent requirement that the relationship between the CDSM and at
least two PLEs already be established and formalized prior to
qualifying a CDSM. Other commenters were against making this capability
a requirement. They stated that CDSMs should have the flexibility to
establish as many or as few relationships with PLEs as needed.
Response: We are concerned that removing the requirement for
qualified CDSMs to have the ability to incorporate specified applicable
AUC from more than one qualified PLE would not be in alignment with our
intention to incorporate specified applicable AUC that reasonably
address the common and important clinical scenarios within each
priority clinical area. This is important since many qualified CDSMs
will need to work with more than one qualified PLE to accomplish such a
requirement and also to align with CMS' goal to maintain flexibility of
qualified CDSMs to incorporate the best available AUC. We believe, for
now, it is appropriate to keep this requirement as a capability as
opposed to requiring that qualified CDSMs demonstrate or share with CMS
that such contracts are in place.
In future years, as greater consensus emerges around common
standards for interfacing with, uploading or otherwise referencing
content that is not already in the system being used, we expect
incorporation of AUC from a wide range of sources to become easier. We
encourage systems to build standards-based mechanisms to incorporate
external AUC and anticipate that such an approach would facilitate
meeting this requirement.
Comment: Commenters were pleased with the requirement that the CDSM
make available related documentation to specified applicable AUC
supporting the appropriateness of the imaging service ordered, and
indicated that having access to citations and evidence summaries would
be helpful.
Response: We agree with commenters and have revised this
requirement at Sec. 414.94(g)(1)(i) to increase clarity and confirm
commenters' expressed understanding that qualified CDSMs must make
available specified applicable AUC and its related supporting
documentation.
Comment: We received comments in favor of requiring the CDSM to
identify which appropriate use criterion is being consulted in the
event the mechanism includes AUC from more than one qualified PLE.
Additionally, we received comments regarding who

[[Page 80416]]

makes the determination of which AUC within the mechanism is to be
consulted. Some commenters wanted more freedom for the ordering
professional to choose at the time of the consultation which AUC should
be consulted in the event that there is more than one. Other commenters
were in favor of more consistency and not allowing consultation of
different AUC for the same clinical scenario.
Response: We agree with commenters that the capability to choose is
critically important when more than one qualified PLE's AUC are made
available within the qualified CDSM. However, we do not believe we
should be involved in determining whether the qualified CDSM chooses
which specified applicable AUC to display upon consultation or whether
the ordering practitioner should have the ability to select the
specified applicable AUC to consult.
Comment: Some commenters were concerned that the qualified CDSM
should not be required to produce documentation when the result of a
consultation is ``not applicable.'' In other words, the CDSM should not
make the determination as to whether AUC available in the mechanism are
relevant to the clinical scenario encountered by the ordering
professional. Some suggested that the ordering professional should have
the ability to notate that the result of a consultation with a CDSM was
``not applicable'' and that the programing required for a mechanism to
accurately determine ``not applicable'' could be extremely difficult
and possibly inaccurate. In contrast, other commenters believed this
ability to produce a ``not applicable'' response was very important and
suggested that such information should be provided back to the
qualified PLE to encourage future development of AUC to address that
clinical scenario. Other commenters questioned how this type of
response from the CDSM would be implemented in a clinical workflow
where the CDSM is embedded within the EHR system. In those situations,
they believed it was unnecessary to interrupt the workflow of the
ordering practitioner only to alert them that there are no AUC
available.
Response: Due to the statutory requirement that AUC consultation
occur with each advanced diagnostic imaging service ordered, we agree
with commenters that it is important for the qualified CDSM to have the
ability to return a ``not applicable'' result. This requirement will
apply to document consistently that a consultation occurred and that no
applicable AUC were found. Exactly how this ``not applicable'' response
is formulated, we believe, can be somewhat flexible. ``Not applicable''
status could occur either when the AUC scope does not match the patient
or their presentation or when no guideline exists that is appropriate
to the patient or their presentation. If this situation is the case, it
should be documented in the clinical or metadata around the particular
application or attempted application of AUC.
For example, if the system only contains AUC for ``uncomplicated
headache'' but the patient has presented with ``headache, fever, and
altered mental status'' the practitioner could make the determination
that no applicable AUC exists for the patient under consideration and
document this using a text box, check box, or drop-down menu. The
documentation that the search did not match the existing AUC and that
the practitioner agreed that the existing AUC was not applicable should
be retained. Furthermore, manual intervention by the practitioner might
not be required in all cases in which the use of AUC is not applicable.
We expect that there would be a legitimate clinical reason for
declaring a relevant AUC ``not applicable'' to the patient and that
this reason would be documented. Likewise, we expect that when no
applicable AUC exists relevant to the patient that would be similarly
documented. CDSMs should not be designed to permit the use of ``not
applicable'' overrides without a documented reason. Ideally, systems
would evaluate scenarios in which AUC were not available on a regular
basis so qualified PLEs can seek to fill in these gaps. We agree with
commenters who believe the ``not applicable'' response should be able
to occur in the background of some qualified CDSMs, such as a qualified
CDSM integrated within an EHR system. We do not foresee any problems
with this method so long as documentation is produced as a result and
the needed information is available to be provided by the ordering
professional to the furnishing professional.
To allow flexibility for situations in which the ordering
professional plays a role in the determination of ``not applicable,''
as well as those in which such determination is completely automated
within the CDSM, we have revised our proposals in Sec. 414.94(g)(1)(v)
to require qualified CDSMs only to determine the extent to which the
applicable imaging service is consistent with specified applicable AUC
with the removal of language requiring the tool to make a determination
of ``not applicable'' when it does not contain a criterion that would
apply to the consultation.
We have also revised our proposals in Sec. 414.94(g)(1)(vi) to
allow for qualified CDSMs that are embedded seamlessly into the EHR
system to provide documentation or certification of CDSM consultation
without stopping the workflow of the ordering professional. This minor
change in language requires the qualified CDSM to develop the
documentation or certification at the time of the order but will no
longer explicitly state that it has to be provided directly to the
ordering professional.
For consistency, we have made a similar change to Sec.
414.94(g)(1)(vi)(A) to allow for the documentation or certification to
be generated but not necessarily issued directly to the ordering
professional. This may be important to avoid workflow disruptions when
an ordering professional is working within their EHR environment and
the qualified CDSM working in the background does not alert the
ordering professional when they have placed an order that is
appropriate.
We have further modified Sec. 414.94(g)(1)(vi) to more clearly
state the requirements that the certification or documentation must
document which CDSM was consulted; the name and NPI of the ordering
professional that consulted the CDSM; whether the service ordered would
adhere to specified applicable AUC or whether the specified applicable
AUC consulted was not applicable to the service ordered.
Comment: Commenters generally favored requiring qualified CDSMs to
issue unique consultation identifiers, with a few commenters opposed to
the requirement until there is more interoperability. Some of the
commenters in favor of the requirements suggested that CMS should
establish a standard taxonomy so the identifier issued would be truly
unique and not risk duplication across CDSMs. A subgroup of these
commenters favored this approach to allow for CMS to match Medicare
claims for advanced imaging services with their CDSM consultations.
Response: Although we agree that establishing a unique consultation
identifier with standard taxonomy could facilitate adding more robust
data to what is available on the Medicare claim, we do not have the
repository and format for the identifiers that would be needed. We
would further need to establish how the identifier could be
meaningfully appended to the Medicare claim form. As such, it is not
feasible at this time for CMS to require qualified CDSMs to create such
a narrowly defined identifier. We are looking into options to determine
possible future

[[Page 80417]]

roles for that identifier. In the interim, we believe the requirement
should remain a functionality of qualified CDSMs. Furthermore, we are
not yet certain which standard taxonomy is best suited to the needs of
this program. We do, however, encourage stakeholders to work together
and welcome qualified CDSMs to determine amongst themselves if they
should begin issuing identifiers with an embedded taxonomy. It would
seem as though this could be valuable in the future; having one number
that provides information related to an individual CDSM consultation.
Comment: We received several comments regarding how frequently a
qualified CDSM should be required to update AUC content. Some
commenters stated that 12 months to update content was too long and we
received the suggestion of 3 months while others were comfortable
beginning with 12 months, but once the program is more established the
time should be reduced. Other commenters suggested that adherence to
the timing requirement is based primarily on the PLE and how quickly
after updating AUC the PLE provides that updated content to the CDSM.
Commenters also noted that the time it takes to update a CDSM is based
on the format of the content delivered by qualified PLEs as some CDSMs
will still have much work to do to translate the qualified PLE provided
content for use in the CDSM.
Response: We thank commenters for pointing out that our 12-month
requirement for qualified CDSMs to update AUC content was unclear with
regard to when that 12-month period would begin. We agree that the time
should begin when the qualified PLE provides updated specified
applicable AUC content to the qualified CDSM and have modified language
in Sec. 414.94(g)(1)(vii). Such updates would only take place if there
are new or updated AUC content. We understand commenters who believe a
12-month period is too long to update specified AUC and wish to clarify
that the time begins when the specified applicable AUC content is
updated. We had initially selected 12 months in an attempt to allow
CDSMs to batch updates and integrate them into the CDSM. We will
consider shortening this time period as the program continues and as
CDSMs gain more experience. We note that this 12-month requirement for
updating AUC is separate from the requirement that qualified PLEs
review AUC at least every 12 months to confirm that the AUC reflect the
latest clinical evidence.
Comment: Some commenters stated that having a protocol in place to
expeditiously remove dangerous or harmful AUC is not enough and that
this could be accomplished very quickly, even in a matter of a day.
Response: We agree that removing potentially harmful AUC is
extremely important. At this time, we do not believe we have enough
information about the types of CDSMs that will seek qualification to
know their abilities to react quickly in these situations. Again, we
believe expeditious removal is critical but we are not able to select a
specific period of time at this point because there may be large
differences in capabilities when removing AUC within one day, one week,
or one month. We expect that CDSMs will remove potentially harmful AUC
as expeditiously as possible, and will consider this issue for future
rulemaking. Additionally, CDSMs may have differing components within
their protocol to expeditiously remove potentially dangerous or harmful
AUC which could include more timely communications with users regarding
the removal through, for example, banner notices or push notifications.
Comment: Commenters proposed that CDSMs should contain AUC that
address the priority clinical areas at the time they are qualified by
CMS as opposed to allowing 12 months for CDSMs to make them available.
Response: We disagree with this comment and believe that, given the
timing of the CY 2017 PFS final rule when the first priority clinical
areas will be finalized, it is appropriate to allow for 12 months from
the date of the final rule publication for qualified CDSMs to make
available specified applicable AUC to address the priority clinical
areas. There would otherwise not be enough time for qualified CDSMs to
identify the needed specified applicable AUC and make them available
within their mechanisms by March 1, 2017--the deadline for the first
round of CDSM applications seeking CMS qualification.
Comment: We received comments requesting additional clarification
regarding the privacy and security standards that CDSMs must meet with
some commenters suggesting that CMS provide additional guidance through
subregulatory vehicles.
Response: We are not the appropriate regulatory authority to
specify privacy and security standards. However, there is existing
guidance that we believe is instructive. For those CDSMs contained
within certified EHR technology, or for which certification is sought
for purposes of achieving ``meaningful use'', ONC provided the
applicable privacy and security framework in its 2015 Edition Final
Rule Health IT Certification. See the 2015 Edition Final Rule (80 FR
62705, October 16, 2015) describing the privacy and security
certification framework and specifying standards. In addition, the
privacy and security standards set forth in the Health Insurance
Portability and Accountability Act of 1996 (HIPAA) Privacy and Security
Rules and enforced by the Office for Civil Rights (OCR) are potentially
applicable. CDSMs would also be subject to applicable state laws and
regulations regarding privacy and security.
We are finalizing our proposals without change, but will continue
to consult with other agencies and consider whether such standards may
be specified in the future.
We are finalizing our proposals without change, but will continue
to consult with other agencies and consider whether such standards may
be specified in the future.
Comment: Commenters favored the requirement for CDSMs to provide
aggregate feedback to ordering professionals. Some commenters suggested
that CMS be prescriptive regarding the format and content of the
reports providing feedback.
Response: We do not agree that we should establish standards in
feedback reporting to ordering professionals at this time. We encourage
qualified CDSMs and ordering professionals to work together to
determine the information that would be most valuable.
Comment: We received several comments regarding the proposed
requirement to electronically store CDSM consultation data for a
minimum of 6 years. Some commenters stated that 6 years is an
appropriate amount of time to store this information while others
disagreed, stating that 6 years is overly burdensome. Some commenters
are seeking greater detail surrounding exactly what data is required to
be stored while others state that consultation information should be
backed up by a third party or registry. These commenters were
particularly concerned that data would be lost if a CDSM ceased
operation.
Response: Generally, we agree that CDSM consultation data should be
backed up to ensure that the data is not lost; however, we do not agree
that we should be prescriptive at this time about how qualified CDSMs
must go about ensuring their data is stored and available for 6 years.
We believe 6 years is an appropriate amount of time across which
ordering professionals will want to assess their ordering patterns. In

[[Page 80418]]

addition, as we discussed earlier our intent to require a unique
consultation identifier, we believe there is the potential for
consultation to be very valuable from a QI perspective if aggregated
across qualified CDSMs, and provided to qualified PLEs and possibly to
CMS. Regarding the data elements that must be stored, we have not
required that qualified CDSMs collect specific data fields. Therefore,
at this time, we only have a more general requirement that includes the
storage of clinical, administrative and demographic information for
each consultation.
Comment: A commenter suggested that qualified CDSMs ensure that
ordering professionals have the opportunity to access content for
educational purposes. This would allow ordering professionals to review
information contained within the CDSM without having to link that
consultation with an order for advanced imaging services.
Response: We agree that ordering professionals would benefit from
being able to use qualified CDSMs to further their knowledge about the
appropriateness of advanced imaging services.
In response to public comments, we are finalizing the following
requirements at Sec. 414.94(g)(1):
Make available specified applicable AUC and its related
supporting documentation.
Identify the appropriate use criterion consulted if the
CDSM makes available more than one criterion relevant to a consultation
for a patient's specific clinical scenario.
Make available, at a minimum, specified applicable AUC
that reasonably address common and important clinical scenarios within
all priority clinical areas identified in paragraph (e)(5) of this
section.
Be able to incorporate specified applicable AUC from more
than one qualified PLE.
Determine, for each consultation, the extent to which the
applicable imaging service is consistent with specified applicable AUC.
Generate and provide a certification or documentation at
the time of order that documents which qualified CDSM was consulted;
the name and national provider identifier (NPI) of the ordering
professional that consulted the CDSM; whether the service ordered would
adhere to specified applicable AUC; whether the service ordered would
not adhere to specified applicable AUC; or whether the specified
applicable AUC consulted was not applicable to the service ordered.
Certification or documentation must be generated each time an ordering
professional consults a qualified CDSM and include a unique
consultation identifier generated by the CDSM.
Modifications to AUC within the CDSM must comply with the
following timeline requirements: make available updated AUC content
within 12 months from the date the qualified PLE updates AUC; and have
a protocol in place to expeditiously remove AUC determined by the
qualified PLE to be potentially dangerous to patients and/or harmful if
followed; and make available for consultation within 12 months of a
priority clinical area being finalized by CMS specified applicable AUC
that reasonably address common and important clinical scenarios within
any new priority clinical area.
Meet privacy and security standards under applicable
provisions of law.
Provide to the ordering professional aggregate feedback
regarding their consultations with specified applicable AUC in the form
of an electronic report on at least an annual basis.
Maintain electronic storage of clinical, administrative,
and demographic information of each unique consultation for a minimum
of 6 years.
Comply with modification(s) to any requirements under
paragraph (g)(1) of this section made through rulemaking within 12
months of the effective date of the modification.
Notify ordering professionals upon de-qualification.
d. Process for CDSMs To Become Qualified and Determination of Non-
Adherence
We proposed that CDSMs must apply to CMS to be specified as a
qualified CDSM. We proposed that CDSM developers who believe their
mechanisms meet the regulatory requirements must submit an application
to us that documents adherence to each of the requirements to be a
qualified CDSM.
We proposed to require in Sec. 414.94(g)(2) that CDSM developers
must submit applications to CMS for review that document adherence to
each of the CDSM requirements. Applications to be specified as a
qualified CDSM must be submitted by January 1 of a year to be reviewed
within that year's review cycle. For example, as proposed the first
applications would be accepted from the date of publication of the PFS
final rule until January 1, 2017. A determination on whether the
applicants are qualified would be made by June 30, 2017. Applications
must be submitted electronically to ImagingAUC@cms.hhs.gov. This
process and timeline mirror the qualified PLE application and approval
process and timeline. As we did for qualified PLEs, we will post a list
of all applicants that we determine to be qualified CDSMs to our Web
site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/ by
June 30. We proposed that all qualified CDSMs must reapply every 5
years and their applications must be received by January 1 during the
5th year that they are qualified CDSMs. It is important to note that,
as with PLE applications, the application for qualified CDSMs is not a
CMS form; rather it is created by the applicant. A CDSM that is
specified as qualified for the first 5-year cycle beginning on July 1,
2017, would be required to submit an application for requalification by
January 1, 2022. A determination would be made by June 30, 2022, and,
if approved, the second 5-year cycle would begin on July 1, 2022.
An example of our proposed timeline for applications and the
approval cycle is as follows:
Year 1 = July 2017 to June 2018.
Year 2 = July 2018 to June 2019.
Year 3 = July 2019 to June 2020.
Year 4 = July 2020 to June 2021.
Year 5 = July 2021 to June 2022 (reapplication is due by
January 1, 2022).
We believe it is important for us to have the ability to remove
from the list of specified qualified CDSMs a CDSM that we determine
fails to adhere to any of the qualification requirements, including
removal outside of the proposed 5-year cycle. We proposed to state
under Sec. 414.94(h) that, at any time, we may remove from the list of
qualified CDSMs a CDSM that fails to meet the criteria to be a
qualified CDSM or consider this information during the requalification
process. Such determinations may be based on public comment or our own
review and we may consult with the National Coordinator for Health
Information Technology or her designee to assess whether a qualified
CDSM continues to adhere to requirements.
We invited comments on how we could streamline and strengthen the
approval process for CDSMs in future program years. For instance, CMS
may consider a testing framework for CDSMs that would validate
adherence to specific standards that enable seamless incorporation of
AUC across CDSMs.
The following is a summary of the comments we received on the
process for CDSMs to become qualified and determination of non-
adherence.

[[Page 80419]]

Comment: Some commenters requested that CMS review and approve
qualified CDSMs more quickly. Some commenters suggested the list of
qualified CDSMs be available by April 1, 2017, rather than June 30,
2017, so as to allow ordering professionals more time to prepare for
implementation of consulting and reporting requirements on January 1,
2018. A commenter also suggested approval of certain types of systems,
such as those intended specifically for use in the emergency
department, be prioritized.
Response: We recognize and appreciate the desire to more quickly
specify the first list of qualified CDSMs. However, given the detailed
review that will be dedicated to each application along with agency
internal processes, qualification of CDSMs before June 30, 2017 is not
feasible. As with qualified PLE applications, which will be under
review at the same time, we intend to treat each applicant with the
same level of detail and attention and will not prioritize some over
others.
Comment: Some commenters cited insufficient time for CDSMs to
incorporate requirements between the release of the final CDSM
requirements, on or around November 1, 2016, and the January 1, 2017
due date for qualified CDSM applications. These commenters requested
that CMS delay the deadline and accept applications later into the year
for this first round of applicants. Due to the limited time between
finalization of CDSM requirements and the application deadline, another
commenter recommended that CDSMs be qualified based on their commitment
to support required functionality, rather than an attestation that the
existing functionality is fully implemented in a CDSM.
Response: We recognize the challenge CDSM developers may have
submitting applications by January 1, 2017, and have extended the
deadline only for the first round of applications to March 1, 2017. To
this end, CDSMs will become qualified if they provide evidence that
supports that they meet all CDSM requirements at the time of
application.
We further agree with commenters that qualification should be
available to CDSMs that demonstrate a commitment to meeting the
requirements. CDSM applicants whose applications are received by March
1, 2017 but who are not able to provide evidence that all requirements
are met at the time of application will have the opportunity to receive
preliminary qualification. Applicants eligible for a preliminary
qualification must demonstrate a commitment to meeting the requirements
by including expected dates by which each requirement is expected to be
met and information documenting how they intend to meet them.
Applicants that meet most but not all of the requirements at the time
of application will be considered only for preliminary qualification.
CDSMs that receive preliminary qualification must achieve full
qualification before the implementation of the consultation and
reporting requirements. As CDSMs move from preliminary qualification to
full qualification upon meeting the requirements, CMS will update the
information on the AUC Web site. For those who are not able to achieve
full qualification by the time of program implementation, preliminary
qualification will terminate and they will be eligible to reapply in
the next annual application cycle. For CDSMs that received preliminary
qualification and are later converted to full qualification status,
their preliminary period will be included as part of their 5-year
approval period.
We encourage CDSMs to strive to meet all requirements by the March
1, 2017 application submission deadline, or as soon thereafter as
possible, in order to receive full qualification status. We believe
this policy strikes a balance between providing sufficient time for
CDSMs to prepare for full implementation, while also providing ordering
professionals information on CDSMs' qualification status to assist them
in making procurement decisions.
Comment: Commenters recommended that CMS require CDSMs to have
already demonstrated successful implementation of the mechanism and
have established relationships in place with multiple PLEs whose AUC
already populate the mechanism.
Response: We are finalizing section 414.94(g)(2) to state that CDSM
developers must submit applications that document adherence to each
CDSM requirement in Sec. 414.94(g)(1). As such, we expect to receive
applications from CDSMs that have already established these
requirements and have experience with adhering to them. We believe that
the final requirements largely address the above comment; however, we
require that qualified CDSMs be able to incorporate specified
applicable AUC from more than one qualified PLE. Therefore, we do not
interpret this to require that qualified CDSMs must actually
incorporate AUC from more than one qualified PLE in order to become
qualified, provided concurrent requirements are also met.
Comment: A commenter suggested CMS use the qualification process to
ensure AUC specific to the needs of the elderly are incorporated into
qualified CDSMs. This commenter further recommended CMS engage
stakeholders with expertise in geriatrics when selecting AUC and CDSMs.
Response: We are confident that qualified PLEs include relevant AUC
within their libraries for the Medicare population and are supportive
of multidisciplinary teams composed of members with expertise even
beyond those required in Sec. 414.94(c)(1)(ii). As indicated in the CY
2016 PFS final rule with comment period (81 FR 71106), we encourage
teams to be larger and include other stakeholders.
Comment: Some commenters requested that CMS make all CDSM
applications public. Commenters also suggested that CMS interact with
applicants to communicate any questions or issues with the application
prior to making a qualification determination.
Response: We appreciate the interest and contributions of all
stakeholders as we implement this program and understand the desire to
learn more about CDSM applicants; however, we will not systematically
release this information. To encourage stakeholder interactions and to
assist those seeking more information about qualified CDSMs, we intend
to post basic information about each qualified CDSM on the AUC Web site
once the list is finalized. This should enable stakeholders to research
and reach out directly to qualified CDSMs to learn more about the
mechanism in support of making well informed choices moving forward.
During the review process, we intend to engage in the same type of
dialogue with CDSM applicants as we have with PLE applicants. During
the review of the first set of PLE applications, we held at least one
conference call with each applicant, often held additional calls; and
we also exchanged numerous emails to ensure questions and concerns from
both parties involved, CMS and the applicant, were addressed, discussed
and resolved as thoroughly as possible. We fully intend to engage in
the same open and transparent process for CDSM applicants as well. We
remind CDSM applicants that they may mark their applications as
containing proprietary business information and we will protect that
information to the full extent permitted by law.
Comment: Some commenters expressed concerns regarding CDSMs that
either fail to requalify after the first 5-year qualification period or
are found to no longer be adherent to CDSM requirements during the 5-
year qualification period. A commenter

[[Page 80420]]

recommended that CDSMs be temporarily suspended before being
disqualified. Other commenters recommended that CMS ensure ordering
professionals using these mechanisms not be penalized while they seek a
new mechanism for consultation. One commenter stated that the CDSM be
required to notify ordering professionals of such a disqualification.
Other commenters requested that qualification of CDSMs not be disrupted
due to standard technical updates to CDSMs made during the 5-year
qualification period.
Response: We agree that CDSM qualification should not be disrupted
due to a standard update assuming no changes are made to functionality
that result in non-adherence to the CDSM requirements in Sec.
414.94(g)(1). We agree that qualified CDSMs should be required to
notify ordering professionals in the event of disqualification and have
added this requirement under Sec. 414.94(g)(1)(xii).
Comment: Some commenters requested that CMS extend the amount of
time qualified CDSMs are qualified to allow for more time to prepare
for requalification. Other commenters recommended that CMS shorten the
qualification period to better align with the pace of change to EHR
security and interoperability standards with those of CDSMs.
Response: We believe that a 5-year qualification period for
qualified CDSMs is an appropriate timeframe at this time. As the AUC
program evolves, we could revisit this requirement through future
rulemaking should we find that a modification is warranted.
Comment: Some commenters suggested and supported CMS developing a
testing framework for CDSMs, focusing especially on interoperability,
and/or convene stakeholders for the purpose of creating such a
framework.
Response: We will continue to explore opportunities to develop a
testing framework for qualified CDSMs with ONC and other standards
groups.
Comment: Several commenters requested that CMS provide details on
the free CDSM tool required under section 218(b) of the PAMA. Another
commenter stated that all qualified CDSMs should have a free version
available.
Response: As stated in the CY 2017 PFS proposed rule, the Secretary
did not propose to establish any free CDSM at this time. Therefore, a
free CDSM would need to apply for qualification just as any other CDSM.
We disagree that all qualified CDSMs must have a free version available
as section 1834(q)(1)(C) of the Act defines the applicable imaging
services for which AUC consultation is required as those for which
there is at least one free mechanism available for AUC consultation.
There is not a requirement that every mechanism have a version
available for free.
In response to the comments, we have added language to Sec.
414.94(g)(2)(ii) delineating the process and requirements to include
preliminary qualification. The first application cycle following the
publication of this CY 2017 PFS final rule will be extended to March 1,
2017 for all CDSM applicants. As opposed to full qualification by which
CDSMs have documented how all requirements are met at the time of
application, preliminary qualification allows CDSMs to document, if not
already met, how and when such requirements are reasonably expected to
be met. The preliminary qualification period ends when we implement the
consulting and reporting requirements under this program as specified
in Sec. 414.94(g)(2)(ii)(B). We have also added Sec.
414.94(g)(1)(xii) to require qualified CDSMs to notify ordering
professionals upon de-qualification.
e. Consultation by Ordering Professional and Reporting by Furnishing
Professional
Although we continue to aggressively move forward to implement this
AUC program, ordering professionals will not be expected to consult AUC
using qualified CDSMs by January 1, 2017. At the earliest, the first
qualified CDSM(s) will be specified on June 30, 2017. We anticipate
that some ordering professionals could be able to begin consulting AUC
through qualified CDSMs very quickly as some may already be aligned
with a qualified CDSM.
We expect that furnishing professionals will be required to begin
reporting January 1, 2018. This timeframe is necessary to allow time
for ordering practitioners who are not already aligned with a qualified
CDSM to research and evaluate the qualified CDSMs so they may make an
informed decision. While there will be further rulemaking next year, we
are announcing this date because the agency expects physicians and
other stakeholders/regulated parties to begin preparing themselves to
begin reporting on that date. We will adopt procedures for capturing
this information on claims forms and the timing of the reporting
requirement through PFS rulemaking for CY 2018.
As we expect to implement the AUC consultation and reporting
requirements under section 1834(q)(4)(A) and (B) of the Act on January
1, 2018, we requested feedback from the public to include a discussion
of specific operational considerations that we should take into account
and include in such rulemaking. For example, we noted that commenters
could consider alternatives for reporting data on claims and for
seeking exceptions, as discussed below. We also requested information
on the barriers to implementation along this timeline that allows
ordering and furnishing professionals to be prepared to consult AUC and
report consultation information on the claims and whether separate
rulemaking outside of the payment rule cycle would be preferred.
Under section 1834(q)(4)(B) of the Act, Medicare claims for
applicable imaging services furnished in applicable settings can only
be paid under the applicable payment systems if certain information is
included on the claim including: which qualified CDSM was consulted by
the ordering professional for the service; whether the service, based
on the CDSM consultation, adheres to specified applicable AUC, does not
adhere to specified applicable AUC or whether no criteria in the CDSM
were applicable to the patient's clinical scenario; and, the national
provider identifier (NPI) of the ordering professional. This section
further allows payment for these services only if the claim contains
such information beginning January 1, 2017. To develop and
operationalize a meaningful solution to collecting new AUC
consultation-related information on the claims, we must diligently
evaluate our options taking into account the vast number of claims
impacted and the limitations of the legacy claims processing system.
Additionally, in the case of advanced imaging services, related claims
are already required to append certain HCPCS modifiers and G codes for
purposes of proper payments. In the recent implementation of section
218(a) of the PAMA, we established a HCPCS modifier for CT services
rendered on machines that do not meet an equipment standard. It is
important that we understand and evaluate how the additional
requirements for AUC reporting would impact the information that is
already required for advanced imaging services. Moving too quickly to
satisfy the reporting requirement could inadvertently result in
technical and operational problems that could cause delays in payments.
Section 1834(q)(4)(C) of the Act includes exceptions that allow
claims to be paid even though they do not include the information about
AUC consultation by the ordering professional. We believe

[[Page 80421]]

that, unless a statutory exception applies, an AUC consultation must
take place for every order for an applicable imaging service furnished
in an applicable setting and under an applicable payment system. We
further believe that section 1834(q)(4)(B) of the Act accounts for the
possibility that AUC may not be available in a particular qualified
CDSM to address every applicable imaging service that might be ordered;
and thus, the furnishing professional can meet the requirement to
report information on the ordering professional's AUC consultation by
indicating that AUC is not applicable to the service ordered.
We are considering the mechanisms for appending the AUC
consultation information to various types of Medicare claims and expect
to develop requirements for appending such information in the CY 2018
PFS rulemaking process. We encouraged stakeholders interested in
sharing feedback related to reporting and claims processing to do so as
part of the comment period to inform this final rule. We were
particularly interested in receiving feedback on, for example, whether
the information should be collected using HCPCS level II G codes or
HCPCS modifiers.
The following is summary of the comments we received on
consultation by ordering professionals and reporting by furnishing
professionals.
Comment: In response to our request for information about how to
reflect AUC consultation on the Medicare claim form, we received
extensive feedback. In particular, we requested feedback on using HCPCS
modifiers or HCPCS Level II G codes to identify the required
information about the consultation on the Medicare claim form. Some
commenters recognized that these options for reporting were feasible
and could capture all information needed for the claim. Some commenters
noted that the number of modifiers possible on a claim form was limited
and questioned whether all information required for reporting could be
captured by modifies. Some commenters noted that it would be difficult
for G codes to include all required information for reporting which
would necessitate multiple G codes and result in greater administrative
burden for reporting.
Some commenters noted that modifiers and G codes were not ideal
solutions and provided alternate suggestions. Several commenters
addressed use of the UB04/837i for reporting. Some noted that such
proposals would not work when more than one test is performed on the
same date of service because the form does not allow reporting by line
item. Others noted that the UB04/837i form would allow providers to
report individual line item services, but limited space on the form
prevents specific line items from being linked to other information
like an ordering professional, diagnosis code or authorization code to
each item.
Many commenters recommended the use of a specific code issued by
the CDSM that would include alphanumeric characters to represent each
of the required elements for reporting. Commenters suggested that this
code could be placed in field 23 (prior authorization field) of the
837P claim form. Another commenter recommended placing a unique
identifier in field 19 of the 1500 form. Two other suggestions included
placing the unique identifier on both the professional component and
technical component (or OPPS) claims, identifying field 63 on the 837i
form, or submitting a ``dummy'' claim with the unique identifier to
accompany all claims for applicable imaging services furnished.
A commenter suggested that the reporting requirement should apply
to providers who submit claims on a 155/837P because line item
reporting is available. We also received a comment suggesting CMS could
work with X12 to add the data to the claim more quickly through the K3
segment of the electronic claim, which is reserved for new data
required under legislation and regulation. A commenter suggested that
the reporting requirements use a framework allowing for regular
feedback to ordering professionals regarding their ordering patterns.
Another commenter suggested a simple attestation that such information
would be available to CMS upon request. A commenter recommended that
codes be modified to reflect additional costs of CDSM services.
Response: We appreciate the extensive and thoughtful information
provided in response to our request. These comments will be
instrumental in our development of claims reporting requirements.
Comment: Many commenters requested the release of claims reporting
information as quickly as possible and before rulemaking in CY 2017.
Multiple commenters insisted that reporting requirements be provided
before CDSMs apply for qualification as they need this information to
design their mechanisms and comply with the program requirements. Some
commenters requested responses to questions about precisely which codes
will be required and their specific location on the claim form.
Response: Although we have been actively working with components
throughout the agency to develop and establish claims processing
instructions and reporting details for the AUC program, given the
complexities of the Medicare legacy claims processing systems and the
extensive interactions necessary to properly develop and implement
these requirements, we intend to include them in rulemaking for the CY
2018 PFS and not earlier through subregulatory processes or alternate
rulemaking cycles. While we appreciate that CDSMs could benefit from
having information on claims reporting requirements, we note that the
information to be submitted on the claim is identified in section
1834(q)(4)(B) of the Act and CDSMs may begin preparing themselves for
reporting the following items: (1) Which qualified CDSM was consulted
by the ordering professional for the service; (2) whether the service,
based on the CDSM consultation, adheres to specified applicable AUC,
does not adhere to specified applicable AUC or whether no criteria in
the CDSM were applicable to the patient's clinical scenario; and (3)
the NPI of the ordering professional. We remind CDSMs that Sec.
414.94(g)(1)(vi) requires qualified CDSMs to generate and provide a
certification or documentation at the time of order that documents
which CDSM was consulted; the name and NPI of the ordering professional
that consulted the CDSM; whether the service ordered would adhere to
specified applicable AUC or whether the specified applicable AUC
consulted was not applicable to the service ordered. The information
qualified CDSMs must document encompasses information required for
claims reporting under section 1834(q)(4)(B) of the Act.
Comment: Some commenters requested that CMS rigorously test the
claims reporting requirements or facilitate a workgroup to engage in
this testing before reporting requirements are established and
effective. One commenter recommended that CMS have a way to account for
orders that may appear to be appropriate based on AUC consultation but
are actually duplicative and redundant.
Response: Thank you for this suggestion.
Comment: A commenter requested that CMS develop an appeals process,
and share that information in a timely manner.
Response: Appeal rights will continue to apply to claims after
implementation of this program. Changes to the appeals process are
outside the scope of this rule.

[[Page 80422]]

Comment: Some stakeholders have requested CMS provide opportunities
to involve and accept feedback from all stakeholders in the development
of the claims reporting requirements. One commenter recommended that
CMS create an agency-wide task force to work with claims standards
organizations to address all demands that will be placed on the claim
form due to AUC reporting.
Response: We appreciate the interest by stakeholders in
contributing to the development of these requirements. We are happy to
receive correspondence and feedback at any time through the AUC program
email box ImagingAUC@cms.hhs.gov, and we encourage stakeholders to
provide information to us as early as possible to help inform our
proposals for requiring claims reporting starting January 1, 2018. We
will continue to work with stakeholders as we develop reporting
requirements.
We appreciate all information shared by commenters. We will use
this feedback to inform CY 2018 rulemaking where we expect to establish
the requirements for reporting under the AUC program.
f. Exceptions to Consulting and Reporting Requirements
Section 1834(q)(4)(C) of the Act provides for certain exceptions to
the AUC consultation and reporting requirements under section
1834(q)(4)(B) of the Act. First, the statute provides for an exception
under section 1834(q)(4)(C)(i) of the Act where an applicable imaging
service is ordered for an individual with an emergency medical
condition as defined in section 1867(e)(1) of the Act. We believe this
exception is warranted because there can be situations in which a delay
in action would jeopardize the health or safety of individuals. Though
we believe they occur primarily in the emergency department, these
emergent situations could potentially arise in other settings.
Furthermore, we recognize that most encounters in an emergency
department are not for an emergency medical condition as defined in
section 1867(e)(1) of the Act.
We proposed to provide for an exception to the AUC consultation and
reporting requirements under Sec. 414.94(i)(1) for an applicable
imaging service ordered for an individual with an emergency medical
condition as defined in section 1867(e)(1) of the Act. For example, if
a patient, originally determined by the clinician to have an emergency
medical condition prior to ordering an applicable imaging service, is
later determined not to have had an emergency medical condition at that
time, the relevant claims for applicable imaging services would still
qualify for an exception. To meet the exception for an emergency
medical condition as defined in section 1867(e)(1) of the Act, the
clinician only needs to determine that the medical condition manifests
itself by acute symptoms of sufficient severity (including severe pain)
such that the absence of immediate medical attention could reasonably
be expected to result in: placing the health of the individual (or a
woman's unborn child) in serious jeopardy; serious impairment to bodily
functions; or serious dysfunction of any bodily organ or part. Orders
for advanced imaging services for beneficiaries with an emergency
medical condition as defined under section 1867(e)(1) of the Act are
excepted from the requirement to consult AUC. We intend through the CY
2018 PFS proposed rule to propose more details around how this
exception will be identified on the Medicare claim.
The second exception is under section 1834(q)(4)(ii) of the Act for
applicable imaging services ordered for an inpatient and for which
payment is made under Medicare Part A. We proposed to codify this
exception in new Sec. 414.94(i)(2). While we are including this
exception consistent with statute, we note that if payment is made
under Medicare Part A, the service would not be paid under an
applicable payment system, such that the AUC consultation and reporting
requirements under Sec. 414.94 would never apply.
The third exception is under section 1834(q)(4)(iii) of the Act for
applicable imaging services ordered by an ordering professional who the
Secretary determines, on a case-by-case basis and subject to annual
renewal, that consultation with applicable AUC would result in a
significant hardship, such as in the case of a professional practicing
in a rural area without sufficient Internet access. We proposed to
codify this exception in new Sec. 414.94(i)(3) by specifying that
ordering professionals who are granted a significant hardship exception
for purposes of the Medicare EHR Incentive Program payment adjustment
under Sec. 495.102(d)(4)(i), (ii), or (iii)(A) or (B) of our
regulations would also be granted a significant hardship exception for
purposes of the AUC consultation requirement. We proposed, to the
extent technically feasible, that the year for which the eligible
professional is excepted from the EHR Incentive Program payment
adjustment is the same year that the ordering professional is excepted
from the requirement to consult AUC through a qualified CDSM. We
proposed not to adopt the Meaningful Use significant hardship exception
under Sec. 495.102(d)(4)(iv)(C) as an exception for purposes of the
AUC consultation requirement. Therefore, ordering professionals with a
primary specialty of anesthesiology, radiology or pathology will not be
categorically excepted from AUC consultation requirements.
We believe there is substantial overlap between the eligible
professionals that would seek a hardship exception under the EHR
Incentive Program and those ordering professionals that would seek a
hardship exception under the AUC program and, as such, this proposal
would be administratively efficient. Using an existing program is the
most efficient and expeditious manner to implement the significant
hardship exception under the Medicare AUC program. We also believe it
is the only administratively feasible option for a national significant
hardship identification process that can be implemented by January 1,
2018, though we intend to revisit this option for years after 2018 as
the current EHR Incentive Program payment adjustment is set to expire
after the 2018 payment adjustment year as the Merit-Based Incentive
Payment System takes effect. In addition, below we discuss
considerations for a supplemental process to account for hardships for
ordering professionals that are not eligible to apply for a significant
hardship under the EHR Incentive Program (for example, non-physician
practitioners) and ordering professionals that incur a significant
hardship outside of the EHR Incentive Program application deadline.
The criteria for significant hardships under the EHR Incentive
Program relate to insufficient internet connectivity, extreme and
uncontrollable circumstances that prevent the EP from becoming a
meaningful EHR user, practicing for less than 2 years, practicing at
multiple locations with the inability to control the availability of
Certified EHR Technology, lack of face-to-face or telemedicine
interaction with patients or a primary specialty designation of
anesthesiology, radiology or pathology. We believe that most of these
criteria would be relevant to demonstrate a significant hardship for
ordering professionals to consult AUC. Regarding hardship exceptions
for certain specialty designations, based on Medicare claims data for
advanced imaging services from the first 6 months of 2014,
approximately 1.2 percent of those claims were for advanced imaging
services that had been ordered by a professional with one of the three

[[Page 80423]]

primary specialty designations. While their combined ordering volume is
small, we do not believe that categorical exclusion of certain
specialties of which the practitioner selected as their primary
specialty designation for Medicare enrollment would necessarily be
appropriate under the AUC program. Since eligible professionals in
these three specialties are categorically excepted from the EHR
Incentive Program payment adjustment, few of them would have applied
for an exception on the other grounds. Therefore, we must consider
another mechanism to evaluate whether ordering practitioners with these
medical specialties experience a significant hardship for purposes of
the AUC program.
We understand that there are differences between the purpose and
timing of significant hardship exceptions for the EHR Incentive Program
and the Medicare AUC program. Foremost, a significant hardship under
the EHR Incentive Program is generally based on a hardship that
occurred in a prior period, impacting meaningful EHR use that would
affect payments in a subsequent calendar year. For example, a
professional that submits an application in March 2017 and qualifies
for the hardship exception under the EHR Incentive Program would be
exempt from the EHR payment adjustment for calendar year 2018. Although
significant hardship exceptions for the EHR payment adjustment year
generally are based on the existence of a hardship in a prior period,
we believe it would be appropriate for these professionals to also
qualify for a significant hardship exception for purposes of the AUC
consultation requirement during calendar year 2018. It is also our
best, most efficient, administratively feasible means of determining
significant hardships for ordering professionals for CY 2018.
We also recognize the possibility that an ordering professional
could suffer a significant hardship during the AUC program year, and
therefore, is immediately unable to consult AUC. In addition, while
again we believe there is significant overlap, there may be
circumstances where an ordering professional is not considered to be an
eligible professional for purposes of the Medicare payment
adjustmentsunder the EHR Incentive Program (for example, an ordering
professional that is not a physician). We solicited feedback from
commenters regarding processes that could be put in place to
accommodate ordering professionals with primary specialties that
categorically receive significant hardship exceptions under the EHR
Incentive Program, real-time hardships that arise during a year, and
ordering professionals that are not eligible to apply using the EHR
Incentive Program significant hardship exception process and need to
seek a significant hardship exception for the purposes of the AUC
program. We believe this would involve only a small number of ordering
professionals. To the extent technically feasible, some possibilities
for implementing such hardship exceptions may include Medicare
Administrative Contractors granting hardships on a case-by-case basis
or establishing another mechanism to allow for self-attestation of a
significant hardship for a defined period of time (for example, a
calendar quarter or a calendar year). We intend to propose a process in
the CY 2018 PFS proposed rule.
We invited the public to comment on our proposal for ordering
professionals granted a hardship exception for the EHR Incentive
Program for payment adjustment year 2018 to also be granted a hardship
exception to the Medicare AUC program for those years. We proposed that
the year the practitioner is excepted from the EHR Incentive Program
payment adjustment is the same year that the practitioner would be
excepted from consulting AUC.
The following is a summary of the comments we received on the
proposed exceptions to consulting and reporting requirements:
Comment: Most commenters concurred that if an eligible professional
is exempt from the EHR Incentive Program payment adjustment, then the
ordering professional should also be exempt from AUC consultation for
applicable imaging services. Commenters generally were concerned that
CMS proposed a more limited set of hardship exceptions than what is
currently available under the EHR Incentive Program. For example, we
did not propose to allow certain medical specialty designations to be
exempt from CDSM consultations even though they are automatically
exempted from the EHR Incentive Program. One commenter observed that
for the purposes of the AUC program only some EHR Incentive Program
hardships may be applicable. One commenter suggested that the operation
of this exceptions process be automatic for those already enrolled in
the EHR Incentive Program hardship exception. Another commenter noted
their observation that while making the EHR Incentive Program
operational for the AUC program, it may not allow all ordering
professionals (physicians and non-physician practitioners) with a
significant hardship to seek such exceptions because the EHR Incentive
Program is limited to physicians.
Response: We disagree with the commenters suggesting that we
replicate under the AUC program all hardship exceptions under the EHR
Incentive Program, including exceptions for three medical specialty
designations. We do not believe our program is authorized to except
ordering professionals based on their specialty. Therefore, we have
decided at this time to proceed with finalizing the significant
hardship exceptions under the AUC program as proposed. We remind all
commenters that this proposal included a significant hardship exception
for those ordering professionals that can demonstrate inability to
control the availability of Certified EHR Technology.
We agree with the commenters that the agency need not create a
separate process for granting a significant hardship exception where
practitioner overlap is available but we understand that a separate
process will need to be established to handle significant hardship
requests from non-physician practitioners that order advanced imaging
tests as they are not currently included in the EHR Incentive Program.
However, we remind all commenters that we intend to revisit this option
for years after 2018 as the current EHR Incentive Program payment
adjustment is set to expire after the 2018 payment year as the Merit-
Based Incentive Payment System takes effect.
Comment: A few commenters urged CMS to consider additional
exceptions for ordering professionals that may encounter hardship in
attempting to consult of specified applicable AUC for an applicable
imaging service. The additional exceptions submitted by commenters
included (1) ordering professionals who lack control over the
availability of CEHRT for more than 50 percent of patient encounters,
such as in the case of some hospital-based physicians; (2) any
physician who does not have access to a low-cost integrated CDSM; (3)
ordering professionals within a small practice or with a low-volume of
advanced imaging services; (4) those who participate in either
alternative payment models or accountable care organizations; (5)
physicians who practice in a patient-centered medical home; (6) any
professional using a qualified CDSM that is either disqualified or not
re-qualified; (7) any group or institution in the process of
implementing a new electronic medical record and billing system; (8)
clinicians who receive a 0% weighting for the advancing care
information performance

[[Page 80424]]

category under the MIPS; and (9) claims for patients in clinical
trials.
Response: We appreciate the additional feedback received about
additional categories of hardship that could be excepted from the
consulting and reporting requirements. Although we did not propose
additional hardship categories outside of the EHR Incentive Program in
this year's rule, we will take these comments into account as we
consider hardship exceptions in the CY 2018 PFS proposed rule.
Comment: Other commenters were not concerned with the determination
of the hardship exceptions for ordering professionals, and instead
raised concerns that a furnishing professional may not be able to
accurately determine whether an ordering professional qualifies for a
hardship exception. Another commenter proposed a potential solution to
the other commenters' concerns and recommended to CMS that any ordering
professional with a hardship exception should have a special NPI
designation. Other commenters did not propose such mechanisms and
encouraged CMS to address this concern in future rulemaking.
Response: We will work internally to consider this concern and may
address it in future rulemaking.
Comment: Commenters generally supported exceptions to AUC
consultation and reporting requirements for applicable imaging services
ordered for an individual with an emergency medical condition; however,
there was disagreement on how best to implement this exception.
Commenters stated that ambiguity regarding whether an emergency medical
condition is present could cause a delay in the delivery of emergency
services to patients and requested clarification on the application of
the AUC program in emergency departments and exceptions for certain
emergency services. A few commenters offered an alternative exception
from AUC consultation for all emergency departments. One commenter
proposed a simple attestation process that does not further divert
physician time away from patients. Some commenters expected that to
operationalize this exception, any service with revenue codes in the
range of 045X or 0516 or place of service code 23 would be exempt.
Other commenters recognized and remarked to CMS that encounters that
may occur outside the emergency department may also be ordered for an
individual with an emergency medical condition. Another commenter
explained that one problem with creating an exception for individuals
with an emergency medical condition is that the ordering professional
may not be in a position to make such a determination. As an
alternative recommendation, one commenter suggested that a ``reasonable
person'' should make the determination as to whether an emergency
medical condition exists. The commenter states that the ``reasonable
person'' standard is used by private health insurance coverage in
emergency situations and would include scenarios when the patient
himself has a reasonable belief that he has an emergency medical
condition. A few commenters disagreed as to how many encounters in an
emergency department are outside the definition of an emergency medical
condition.
Response: We do agree that exceptions granted for an individual
with an emergency medical condition include instances where an
emergency medical condition is suspected, but not yet confirmed. This
may include, for example, instances of severe pain or severe allergic
reactions. In these instances, the exception is applicable even if it
is determined later that the patient did not in fact have an emergency
medical condition. We appreciate the offer from stakeholders to work
with us to determine how best to capture this exception on claims. We
do not have a reason at this time to believe that a categorical
exception granted to emergency departments would foster inappropriate
use of advanced imaging services. However, we believe such a
categorical exception would not be consistent with the statutory
requirement under section 1834(q)(4)(C)(i) of the Act, which is framed
in terms of individual services.
In response to the comments, we have made no changes to the
proposed exceptions and have finalized our proposals.
6. Summary
Section 1834(q) of the Act includes rapid timelines for
establishing a Medicare AUC program for advanced diagnostic imaging
services. The number of clinicians impacted by the scope of this
program is massive as it will apply to every physician or other
practitioner who orders or furnishes applicable imaging services. This
crosses almost every medical specialty and could have a particular
impact on primary care physicians since their scope of practice can be
quite broad.
We continue to believe the best implementation approach is one that
is diligent, maximizes the opportunity for public comment and
stakeholder engagement, and allows for adequate advance notice to
physicians and practitioners, beneficiaries, AUC developers, and CDSM
developers. It is for these reasons we proposed to continue a stepwise
approach, adopted through notice and comment rulemaking. We proposed
this second component to the program to specify qualified CDSMs,
identify the initial list of priority clinical areas, and establish
requirements related to CDSMs, as well as consulting and reporting
exceptions. However, we also recognize the importance of moving
expeditiously to accomplish a fully implemented program. Under this
proposal, the first list of qualified CDSMs will be posted no later
than June 30, 2017, allowing ordering professionals to begin aligning
themselves with a qualified CDSM. We expect that furnishing
professionals will be required to begin reporting AUC information
starting January 1, 2018, and will address this requirement through PFS
rulemaking for CY 2018, including how to report that information on
claims.
In summary, we proposed definitions of terms and processes
necessary to implement the second component of the AUC program. We
invited the public to submit comments on these proposals. We were
particularly seeking comment on the proposed priority clinical areas
and the requirements that must be met by CDSMs to become qualified. We
believe the proposed requirements for qualified CDSMs will allow for
flexibility so mechanisms can continue to reflect innovative concepts
in decision support and develop customer-driven products to ultimately
provide information to the ordering professional in such a manner that
will maximize appropriate ordering of advanced diagnostic imaging while
seamlessly integrating into workflow. As the stakeholders continue to
move to a place of consensus-based standards deemed ready for
deployment, we may become more prescriptive in future requirements for
CDSMs. We also solicited comment on the exceptions to the requirements
to consult applicable AUC using CDSMs.
The following is a summary of the other of the comments we received
specific to the Medicare AUC program but not directly related to our
proposals.
Comment: Overall, commenters expressed their general support for
the use of AUC in diagnostic imaging.
Response: We appreciate the support and stakeholder involvement
throughout the implementation process.
Comment: Most commenters supported our staged approach to
implementing this program and most commenters supported the longer time
period before requiring ordering

[[Page 80425]]

professionals to consult AUC in qualified CDSMs and furnishing
professionals to report consultation information on claims. Many
commenters requested additional time to comply with the consultation
and reporting requirements under this program. Some recommended an
additional 6-months until July 1, 2018, and others encouraged waiting
until 2019 noting that providers will not have time to choose a CDSM
once the qualified CDSM list is posted by June 30, 2017. Many
commenters urged us to allow for 18 months between the release of the
list of qualified CDSMs and the start of the reporting requirement.
Commenters also supported additional time for implementation by stating
that the program implementation date should be dictated by the
availability of CDSMs, their integration into EHR systems, physician
readiness, and sufficient testing. One commenter suggested, in the
absence of additional time, we could ask physicians to annually attest,
subject to audit, that they are consulting a CDSM prior to ordering
relevant advanced imaging services.
Response: We appreciate the challenges that the aggressive
timeline, established in section 218(b) of the PAMA, creates for all of
us, and have taken steps to alleviate these challenges by phasing in
components of this program as necessary for meaningful implementation.
We continue to expect that furnishing professionals will be required to
begin reporting January 1, 2018, and will address this requirement
through PFS rulemaking for CY 2018.
Comment: One commenter cautioned CMS to ensure ordering
professionals and furnishing professionals are not penalized due to
phase-in of the consulting and reporting requirements under the AUC
program or any other quality program.
Response: We do not foresee any situations where professionals
would be penalized as a result of our decision to phase in the
consulting and reporting requirements.
Comment: Several commenters noted that practitioners will have to
comply with the requirements of the Merit-Based Incentive Payment
System (MIPS) (under the Quality Payment Program) at the same time they
will have to comply with the AUC consultation and reporting
requirements which is overly burdensome. Some commenters recommended
alignment of the AUC program with the Quality Payment Program
requirements so as not to further increase burden on practitioners, and
one commenter recommended alignment of the AUC program with MIPS rather
than creating a standalone AUC program.
Response: We will continue to explore avenues for alignment of the
AUC program and the Quality Payment Program. CMS issued a final rule
with comment period to implement the QPP, including MIPS. The rule can
be accessed at https://qpp.cms.gov/education.
Comment: Some commenters requested that CMS confirm that consulting
and reporting will be required starting January 1, 2018, and stated
that due to the availability of CDSMs and AUC, this start date is
reasonable and feasible. One commenter expressed concern with the
January 1, 2018 implementation date for consultation and reporting due
to the cost and patient harm resulting from inappropriate imaging. The
commenter urged CMS to work diligently to implement these requirements
as quickly as is feasible. Another commenter suggested using a pilot
period or starting voluntary consulting and reporting on January 1,
2018, during which information on the Medicare claim would not be
considered for outlier determinations. Some commenters also suggested
that the program first start with health systems and larger group
practices and be rolled out to smaller settings over time.
Response: We continue to expect that furnishing professionals will
be required to begin reporting January 1, 2018, and will address this
requirement through PFS rulemaking for CY 2018.
Comment: Some commenters requested that CMS continue to implement
the AUC program through rulemaking separate from the PFS so as to
establish more programmatic components sooner, particularly related to
consulting and reporting requirements and how this information will be
documented on Medicare claims. Other commenters stated that the PFS is
the appropriate cycle for establishing the AUC program and is important
to ensure all stakeholders are aware of proposals and have the
opportunity to comment.
Response: We believe that the PFS is the most appropriate
rulemaking vehicle for implementing the AUC program and will continue
to use the PFS annual rulemaking process to establish future
components.
Comment: Many comments were submitted specific to qualified PLEs.
Commenters requested both clarification and modifications to the
definition of PLE finalized through rulemaking in the CY 2016 PFS final
rule with comment period. Specifically, some commenters requested that
we clarify that radiology benefit management (RBM) companies cannot be
involved in any way with qualified PLEs and in the development of
specified applicable AUC. Some commenters further stated that RBMs
should not be involved because they do not use the same rigorous AUC
development process as medical specialty societies, clinicians and
providers and are focused on limiting utilization rather than assisting
providers in making optimal medical decisions. Other commenters
requested that we better explain the third party interaction
permissible between qualified PLEs and RBMs.
Response: As finalized in the CY 2016 PFS final rule with comment
period, the definition of PLE refers to organizations comprised
primarily of providers or practitioners who, either within the
organization or outside of the organization, predominantly provide
direct patient care. This definition of PLE includes health care
collaboratives and other similar organizations such as the National
Comprehensive Cancer Network and the High Value Healthcare
Collaborative. We further clarify that qualified PLEs may collaborate
with third parties that they believe add value to their development of
AUC, provided such collaboration is transparent. It is our expectation
that PLEs will develop or modify AUC consistent with all regulations in
Sec. 414.94(c)(1). If commenters are interested in learning more about
the AUC development process of any individual qualified PLE, then we
remind the commenters that qualified PLEs disclose the parties external
to the organization when such parties have involvement in the AUC
development process.
Comment: Another commenter noted that the definition of qualified
PLE restricts independent, evidence-based content solutions from
inclusion. The commenter further requested that we remove language from
the preamble they believe adds criteria to the definition of PLE.
Specifically they requested removal of language discussing expectations
of qualified PLEs ``to have sufficient infrastructure, resources, and
the relevant experience to develop and maintain AUC. . .'' and
identified this language as an ``evolving definition'' that is ``highly
problematic'' and requested revision to more accurately reflect the
language in the CY 2016 PFS final rule with comment period.
Response: We are not changing the requirements of qualified PLEs
and disagree that the cited language adds criteria to the existing
definition of PLE. The language in the background section of the CY
2017 PFS proposed rule

[[Page 80426]]

referenced above is not intended to build upon or provide more criteria
to the definition of PLE in Sec. 414.94(b). In fact this language was
being used to describe the requirements of qualified PLEs under Sec.
414.94(c)(1) and not to further explain the definition of PLE.
Comment: Some commenters requested that we provide more information
about qualified PLEs and facilitate interactions between qualified PLEs
and other stakeholders perhaps in the form of a tool or resource
containing more detailed information or by coordinating a meeting for
qualified PLEs and other stakeholders to interact.
Response: We do not believe we are best equipped to facilitate
stakeholder interactions as suggested; however, we will continue to
build out the information on the AUC Web site to enable stakeholders to
research and reach out directly to qualified PLEs to learn more about
their AUC libraries and processes.
Comment: A commenter requested that we wait to implement the AUC
program until a broader list of qualified PLEs is available.
Response: On June 30, 2016, a list of 11 qualified PLEs was posted
to the AUC Web site (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/). Together these qualified PLEs include a large volume of
AUC and we do not agree that it is necessary to wait to implement the
program to further expand the list of qualified PLEs. Furthermore, we
expect more applications from organizations seeking specification as
qualified PLEs for 2017 so we expect the list to grow again in June of
2017.
Comment: Several commenters requested that all applications
submitted by organizations seeking qualification as a PLE be made
public.
Response: We appreciate the interest and contributions of all
stakeholders as we implement this program and understand the desire to
learn more about qualified PLEs, however we will not systematically
release this information. To encourage stakeholder interactions and to
assist those seeking more information about qualified PLEs, we posted
general information about each qualified PLE on the AUC Web site. We
intend to add more information about each qualified PLE to the AUC Web
site which should enable stakeholders to research and reach out
directly to qualified PLEs. We remind PLE applicants that they may mark
their applications as containing proprietary business information and
we will protect that information to the fullest extent permitted by
law.
Comment: In response to our request for feedback regarding how
appropriateness ratings provided by CDSMs could be interpreted and
recorded for the purposes of this program, we received numerous
comments. Commenters identified several ways appropriateness ratings
are presented in CDSMs including: binary yes, appropriate or no, not
appropriate; color coded using green for appropriate, yellow for may be
appropriate and red for not appropriate; numerical ranges from 1
through 9/10 where 1-3 are not appropriate, 4-6 may be appropriate and
7-9/10 are appropriate, and a combination of color coded and numerical
ratings. Commenters also used varying terminology including not
appropriate, rarely appropriate, may be appropriate, usually
appropriate, indicated and not indicated. Commenters recommended that
appropriateness ratings that are not in a binary form need to be
translated into binary values, only values equivalent to not
appropriate equal no and values equal to may be appropriate and
appropriate equal yes. Some commenters recommended that CDSMs be
required to present appropriateness ratings in binary formats as this
information will be required on the claim, while others stated that a
binary appropriateness rating should not be required. Some commenters
recommended CMS define standards for appropriateness ratings.
Response: We appreciate the extensive and thoughtful information
provided in response to our request. These comments will be
instrumental in operationalizing the AUC program.
Comment: We received numerous comments addressing the future
outlier determinations. Many commenters agreed with using priority
clinical areas to inform the outlier identifications. Other commenters
questioned how we will be able to identify outliers starting in 2020
when priority clinical areas include AUC that conflict with one
another. Some commenters suggested that outlier determinations be based
upon the percentage of orders for which AUC consultation resulted in a
recommendation of 1-3 (based on the 1-9 appropriateness level
determinations). More specifically, ordering professionals ``with an
ordering pattern in `Red Rate' percentage two standard deviations
higher than the median should be considered outliers.'' One commenter
suggested that the outlier calculation use AUC compliance for priority
clinical areas as the numerator and total AUC as the denominator. Some
commenters encouraged us to focus outlier identification where wide
variance in appropriate imaging patterns appears. Commenters also
recommended that ordering professionals should be made aware of
ordering patterns before being subject to prior authorization under the
AUC program.
Some commenters opposed a strict application of all priority
clinical areas for the purposes of outlier identification. Commenters
requested that only ordering professionals with ordering patterns
significantly misaligned with AUC be subject to prior authorization.
Commenters also requested criteria used to make outlier determination
be adjusted over time to allow for innovation in ordering. One
commenter requested that ordering professionals not be subject to AUC
consultation and prior authorization at the same time.
Response: We appreciate the extensive and thoughtful information
provided in response to our request. We will consider these comments
when determining how to operationalize the outlier determination
component of this program.
Comment: Some commenters recommended that we require data
submission to CMS directly or to a third party registry. Such reporting
would enable professionals to track ordering patterns, especially in
relation to priority clinical areas and subsequent outlier
determinations.
Response: We will consider this recommendation as we implement the
future components of this program.
Comment: Several comments focused on the communication for the
image order from ordering professionals to furnishing professionals.
Some commenters requested we include requirements in the final rule,
and some requested that we require electronic communications.
Commenters recommended that the furnishing professional be allowed to
consult specified applicable AUC through a qualified CDSM if the
ordering professional fails to provide consultation information to the
furnishing professional to avoid claims denials. Others suggested that
furnishing professionals be able to identify whether an ordering
professional is considered an outlier under the AUC program and others
recommended we develop a verification mechanism that would be required
of the ordering professional.
Response: We are not establishing requirements regarding the
communication of the imaging order from the ordering professional to
the

[[Page 80427]]

furnishing professional. These professionals currently send and receive
orders successfully via various vehicles (within EHR, fax, etc.), and
we do not believe it is appropriate at this time to place further
constraints or requirements on the systems for communications between
these professionals. We also note that section 1834(q)(4) of the Act
clearly specifies that AUC consultation is required for ordering
professionals and does not provide for instances where consultation by
furnishing professionals is an acceptable alternative, even if only for
the purpose of avoiding claims denials. We do not believe the statute
affords us the authority to allow furnishing professionals to consult
in lieu of or in the absence of consultation by ordering professionals.
For all other purposes, we remind commenters that furnishing
professionals are not specifically prohibited from consulting specified
applicable AUC through a CDSM.
Comment: Some commenters requested clarification regarding the role
of local coverage determinations (LCDs) and national coverage
determinations (NCDs) under the AUC program. Commenters requested that
CMS identify whether LCDs and NCDs take precedent over specified
applicable AUC, or if advanced diagnostic imaging orders that are
considered appropriate based on consultation with specified applicable
AUC would be covered under Medicare if such order was not covered by an
LCD or NCD. Some commenters requested that AUC be the only criteria for
medical necessity of advanced imaging services and other commenters
insisted that we instruct MACs to retire LCDs for advanced imaging
services once the AUC program is implemented. One commenter also
recommended that we instruct qualified PLEs to adhere to NCD
requirements when developing AUC.
Response: At this time we consider LCDs and NCDs to be active and
binding policies detailing the criteria upon which Medicare coverage or
non-coverage is based. For the purposes of this program, consulting
with AUC is not a replacement for a determination of medical necessity.
Consultation with AUC that conflict with an LCD or NCD does not modify
the applicability of the LCD or NCD. Specified applicable AUC do not
override LCDs or NCDs.
Comment: Some commenters stated that the disproportionate burden of
the AUC program is on primary care physicians. Many commenters noted in
general the additional burden, both administratively and financially,
the AUC program will create for providers. While other commenters
stated that the added burden is outweighed by the cost savings and
quality improvements resulting from a properly implemented AUC program
and is significantly less than traditional prior authorization
programs.
Response: We understand that primary care physicians will be
significantly impacted by the AUC program and have acknowledged this
throughout implementation of this program. We are making every effort
to implement a program that does not impart excess levels of burden but
still includes all statutorily required provisions and is designed to
achieve goals of the PAMA.
Comment: Some commenters noted that since AUC consultation
information will be required on the claim for the imaging service
ordered, only the furnishing professional, often including the hospital
where imaging services are provided, will be held accountable if AUC
are not consulted. Because the ordering professional is required to
consult and their action, or inaction, impacts payment for the
furnishing professional, commenters stated that we should find a way to
hold the ordering professional accountable as well.
Response: The fourth component of the AUC program in section
1834(q)(5) of the Act includes the identification of outlier ordering
professionals, which we believe will distinguish and provide
consequences for those ordering professionals that fail to comply with
AUC. Through facilitation of a prior authorization requirement for such
identified professionals, as specified under section 1834(q)(6) of the
Act, we believe we will fulfill the shared goal of assisting both
ordering and furnishing professionals in making the most appropriate
treatment decisions for Medicare beneficiaries. Although we did not
propose to implement these sections in the CY 2017 PFS proposed rule,
we continue to expect that consultations with physicians, practitioners
and other stakeholders will serve as part of the process to hold
accountable outlier ordering professionals, and believe that such
dialogues will yield meaningful results. We recognize that this
response does not address those ordering professionals that
consistently fail to consult AUC at all, and we will continue to
discuss internally the extent to which such professionals would be
impacted by this AUC program and other Medicare programs.
Comment: Some commenters requested that we ensure that AUC
consultation requirements do not create issues with patient access to
care due to the additional administrative burden this program will
place on providers. Commenters also requested that we ensure that AUC
consultations do not interfere with physicians' clinical judgment when
treating patients.
Response: We disagree with the idea that AUC consultation creates
new barriers for Medicare beneficiaries, and believe that while
technology itself cannot improve care coordination or patient outcomes,
the use of that technology can be a tool for practitioners to use in
working toward improving care for Medicare beneficiaries. To this end,
CDSMs can provide efficiencies in administrative processes which
support clinical effectiveness, leveraging automated patient safety
checks, supporting clinical decision making, enabling wider access to
health information for patients, and allowing for dynamic communication
between providers. We believe that as ordering professionals continue
to engage with qualified PLEs, qualified CDSMs and CMS, AUC
consultations will complement the practice of medicine.
Comment: Some commenters questioned the overall approach we are
taking in implementing this program. Commenters noted that the program
should not be set in place until it is determined that use of AUC
actually improves utilization of diagnostic imaging. Other commenters
reiterated their opposition to using the AUC consultation requirement
to withhold payment for rendered services.
Response: Section 1834(q) of the Act as amended by section 218(b)
of the PAMA identifies specific requirements for the implementation of
the Medicare AUC program. The program must be implemented and must
include all detailed components in the statute. We believe the approach
we are taking is consistent with the requirements in the PAMA.
Comment: Some comments focused on requests for practitioner and
patient education efforts. Commenters requested that we educate
practitioners and allow for adequate time to do so. Another commenter
recommended that we inform patients on the AUC program and explain both
the need for the program and supposed benefits. This commenter also
recommended that we encourage other payers to use the same criteria as
the Medicare AUC program to avoid additional administrative burden on
providers. This commenter recommended that we inform clinicians of the
expected cost associated with compliance with the AUC program
requirements.

[[Page 80428]]

Response: We plan to develop and provide educational materials
about the AUC program before implementation of this program. We also
expect many stakeholders will work to educate and inform providers and
the public and other interested parties about the program. We do not
have control over what other payers choose to implement and do not have
cost projections associated with implementation of this program at this
time as they relate to regulations yet to be proposed through notice
and comment rulemaking.
Comment: One commenter noted that different terminology is used in
the two proposed rules with the CY 2017 OPPS proposed rule using the
term ``imaging supplier'' and the CY 2017 PFS proposed rule using
``furnishing professional.'' The commenter noted that the PAMA uses the
term ``furnishing professional'' and asks that CMS use consistent
terminology for the parties furnishing the radiology service and more
clearly define the parties/entities that would fall into the standard
term.
Response: We understand commenters' confusion. All components of
the Medicare AUC program are being implemented through the PFS. The use
of ``imaging supplier'' in the OPPS is not relevant to the AUC program.
Under the AUC program and as specified in section 1834(q)(1) of the
Act, the term ``furnishing professional'' is defined as a physician (as
defined in section 1861(r) of the Act) or a practitioner described in
section 1842(b)(18)(C) of the Act who orders an applicable imaging
service which we codified in Sec. 414.94(b) as discussed in the CY
2016 PFS final rule.
Comment: Several commenters made various recommendations and
suggestions regarding the development of AUC, the type of AUC that
should be used under this program and their involvement in identifying
and/or developing AUC for use under this program.
Response: We remind readers that through the CY 2016 PFS final rule
with comment period, we established new Sec. 414.94 and included
requirements regarding the development of AUC and who can be qualified
to develop, modify and endorse AUC. We will not be developing specified
applicable AUC for consultation under this program. Rather specified
applicable AUC, that ordering professionals will be required to
consult, are those developed, modified or endorsed by qualified PLEs.
The first list of qualified PLEs was released in June of 2016 and can
be found on the CMS AUC program Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/.
Comment: Many commenters communicated their appreciation of efforts
by CMS to actively engage with stakeholders to implement this program
as mandated by the section 218(b) of the PAMA amending section 1834(q)
of the Act. Other commenters asked how they can become involved and
when CMS will reach out directly to them.
Response: We have found the extensive interactions we have had with
a wide range of stakeholders over the past several years to be highly
instrumental and essential to the development of this program. Many
stakeholders reached out to us from early on and we have reached out to
other organizations when issues particularly relevant to their areas of
focus arise. We have also expanded our stakeholder interactions through
numerous conferences and meetings held by various organizations.
Furthermore we receive regular email inquiries that create an open
dialogue with more stakeholders and are always happy to interact with
any individual or organization with an interest in the AUC program. The
best way to contact the CMS AUC Team is through the AUC program
resource box: ImagingAUC@cms.hhs.gov. We check the resource box
regularly and respond to all inquiries.
These additional comments will assist us in further building out
the AUC program as we move into the next component for implementation
in future rulemaking and have not resulted in any changes to our
proposals. We have discussed above, throughout the preamble, our
changes in response to public comment. We thank the public for their
comments and appreciate the detailed feedback and recommendations from
stakeholders. We believe the changes based on public comments have
improved the identified priority clinical areas and the qualified CDSM
requirements and process for qualification. We are finalizing without
change the proposals for the determination of non-adherence and the
exceptions under this program. We will continue to post information on
our Web site for this program accessible at www.cms.gov/Medicare/Quality-Initiatives/Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program.

D. Reports of Payments or Other Transfers of Value to Covered
Recipients: Summary of Public Comments

1. Background
In the February 8, 2013 Federal Register (78 FR 9458), we published
the ``Transparency Reports and Reporting of Physician Ownership or
Investment Interests'' final rule (Open Payments Final Rule) which
implemented section 1128G of the Act, as added by section 6002 of the
Affordable Care Act. Under section 1128G(a)(1) of the Act,
manufacturers of covered drugs, devices, biologicals, and medical
supplies (applicable manufacturers) are required to submit, on an
annual basis, information about certain payments or other transfers of
value made to physicians and teaching hospitals (collectively called
covered recipients) during the course of the preceding calendar year.
Section 1128G(a)(2) of the Act requires applicable manufacturers and
applicable group purchasing organizations (GPOs) to disclose any
ownership or investment interests in such entities held by physicians
or their immediate family members, as well as information on any
payments or other transfers of value provided to such physician owners
or investors. The Open Payments program creates transparency around the
nature and extent of relationships that exist between drug, device,
biologicals and medical supply manufacturers, and physicians and
teaching hospitals (covered recipients and physician owner or
investors). The implementing regulations are at 42 CFR part 402,
subpart A, and part 403, subpart I.
In addition to the Open Payments final rule, we issued final
regulations in the CY 2015 PFS final rule with comment period (79 FR
67758) that revised the Open Payments regulations. Specifically, we:
(1) Deleted the definition of ``covered device''; (2) removed the
continuous medical education (CME) exclusion; (3) expanded the marketed
name reporting requirements to biologicals and medical supplies; and
(4) required stock, stock options, and any other ownership interests to
be reported as distinct forms of payment.
Since the publication and implementation of the Open Payments Final
Rule and the CY 2015 PFS, various stakeholders have provided feedback
to us regarding a variety of aspects of the Open Payments program. As a
result, we have identified areas of the rule that might benefit from
revision or subregulatory clarification. To consider the views of all
stakeholders,

[[Page 80429]]

in the CY 2017 PFS proposed rule (81 FR 46395 through 46396), we
solicited public comments regarding policy and operational issues
related to the Open Payments program.
Examples of subject matter areas for which we solicited public
comments included: (1) Expansion of the nature of payment categories;
(2) length of continued reporting obligations; (3) length of time in
which Open Payments data remains relevant to users; (4) mandatory
registration for applicable manufacturers and GPOs; (5) pre-vetting of
payment information with physicians and teaching hospitals prior to
submission; (6) definition of a teaching hospital; (7) new teaching
hospital reporting elements; (8) option for early or continuous data
submission; (9) the impact of mergers, acquisitions, and other business
dealings on reporting; (10) clarification on the definitions of
ownership and investment interest terms; and (11) definition of, and
collection of data from, Physician Owned Distributors (PODs).
In response to our solicitation, we received 136 timely comments,
95 of which were deemed relevant to the solicitation in that they
suggested matters to consider in future rulemaking and system
enhancements. The majority of the comments focused on:
Expanding or clarifying the nature of payment categories
enumerated in Sec. 403.904(e)(2).
Changing the continued reporting obligation to a specific
period of time, such as 5 years after the payment or transfer of value
was made.
Publishing or refreshing the Open Payments data so that it
is accessible to stakeholders for an appropriate period of time, such
as 5 years or the number of years in which an applicable manufacturer
or GPO is required to report.
Streamlining the Open Payments registration process and
maintaining voluntary registration for those applicable manufacturers
or GPOs that do not report.
Requiring applicable manufacturers and GPOs to pre-vet
financial information with physicians and teaching hospitals before it
is reported to Open Payments.
Clarifying the regulatory definition of a teaching
hospital.
Adding non-public data elements that allow additional
detail about the specific recipient or department of a teaching
hospital that received a payment or transfer of value.
Expanding the timeframe in which the Open Payments program
can accept data submissions from applicable manufacturers and GPOs,
such as by implementing multiple submission windows.
Implementing flexible reporting requirements so that
applicable manufacturers and GPOs can properly and easily represent
changes resulting from mergers, acquisitions, and other business
dealings.
Clarifying the definition of PODs and how Open Payments
requirements apply to PODs.
These comments, submitted by a variety of parties, broadly
supported our effort to engage the program's stakeholders before
revising or creating new reporting requirements. We appreciate the
commenters' views and recommendations and we will consider the public
comments received in the future through possible rulemaking or
publication of subregulatory guidance. No Open Payments program changes
are being proposed or finalized within this final rule.

E. Release of Part C Medicare Advantage Bid Pricing Data and Part C and
Part D Medical Loss Ratio (MLR) Data

1. Overview of Proposed Rule
In the CY 2017 PFS proposed rule (81 FR 46162) we proposed to
release certain data related to the bids submitted annually by Medicare
Advantage Organizations (MAOs) and certain Medical Loss Ratio (MLR)
data submitted annually by MAOs and Part D plan sponsors. In general,
we proposed to release the data submitted by MAOs in the Medicare
Advantage (MA) Bid Pricing Tool (BPT), subject to a 5-year delay; and
to release data submitted by MAOs and Part D sponsors in accordance
with MLR requirements, subject to an 18-month delay. In both cases, the
proposed release is subject to specified exclusions.
2. Release of Bid Pricing Data
a. Summary of Proposed Rule
The proposed rule included a discussion of both the statutory and
regulatory authority for collecting bids, as well as an overview of how
the information is collected. Each year, MAOs submit bids to CMS for
participation in the Medicare Advantage program. Information from these
bids is primarily collected through the MA BPT, which was developed by
CMS. The data collected in the BPT demonstrates the actuarial bases of
the plan bid. Each MA plan bid is an estimate of the plan's revenue
requirement to cover plan benefits for a projected population,
including benefit costs net of cost-sharing, non-benefit expenses, and
gain/loss margin.
The following summary describes the types of data collected in the
BPT, which we described in greater detail in the proposed rule at 81 FR
46397-99:
Base period experience data.
Trend assumptions.
Manual rates and credibility assumptions.
Projected allowed costs.
Effective value of a plan's cost-sharing.
Projected administrative expenses and information related
to the plan's gain/loss margin.
Plan-specific bid and benchmark, based on projected
enrollment and risk scores.
Beneficiary rebate and beneficiary premium for the plan.
Rebate allocations to MA mandatory supplemental benefits
and buy down of the Part D basic premium, the Part D supplemental
premium, and/or the Part B premium.
Actuarial pricing elements for any optional supplemental
benefit packages.
In addition to these categories of data collected in the BPT, MAOs
must submit supporting documentation to substantiate the actuarial
basis of pricing and an actuarial certification of the bid.
We described the proposed regulatory changes to allow for the
release of MA bid pricing data, along with the manner in which we
proposed to make the release. We proposed to codify the requirements
for release of MA bid pricing data by adding new Sec. 422.272 to
subpart F of part 422. We proposed to release to the public each year,
after the first Monday in October, MA bid pricing data for MA plan bids
that we accepted or approved for a contract year at least 5 years prior
to the upcoming calendar year, subject to specific exclusions described
in proposed Sec. 422.272(c). We proposed to amend the regulation text
at Sec. 422.504 by adding a new paragraph (n)(2), which would require
that an MAO acknowledge the release of MA bid pricing data as provided
in Sec. 422.272 as a mandatory contract provision; we also proposed
certain technical changes to Sec. 422.504(n). The proposed rule did
not discuss these changes to Sec. 422.504(n) in detail as part of the
proposal to release MA bid data, but they were reflected in the
proposed regulation text at 81 FR 46471. Specifically, we proposed to
move the existing provisions regarding the release of summary CMS
payment data at existing paragraph (n) to paragraph (n)(1) and to
redesignate the existing paragraphs (n)(1)(i) through (iv) and (n)(2)
as (n)(1)(i)(A) through (D) and (n)(1)(ii), respectively.

[[Page 80430]]

We also described the data that would be subject to exclusion from
release. We proposed not to include any Part D bid pricing data, or any
information pertaining to the Part D prescription drug bid amount for
an MA plan offering Part D benefits. We also proposed to exclude any
narrative information included in the MA BPT, MSA BPT, and ESRD-SNP BPT
regarding base period factors, manual rates, cost-sharing methodology,
optional supplemental benefits, or other topics for which narratives
are required by us under Sec. 422.254. We proposed to exclude
supporting documentation that is provided outside of the BPT template.
We proposed to exclude any information identifying Medicare
beneficiaries or other individuals. Regarding other individuals, we
explained that our proposal would exclude the names and contact
information of certifying actuaries and MAO contacts from the releases.
Finally, we proposed to exclude any bid review correspondence between
us or our contractors and the MAO.
We detailed the rationale for the proposed releases. We discussed
how the release of this data is in support of the Administration's
commitment to transparency. We indicated that release of MA bid pricing
data could support public research into the MA program that could
support the agency's goals for the program, including the delivery of
better healthcare. We also suggested the data release would promote
public accountability of the program.
We also addressed past and ongoing attempts to achieve release of
this data under the Freedom of Information Act, 5 U.S.C. 552 (FOIA). We
have received several requests under the FOIA for the type of MA bid
pricing data we proposed to release. Under the FOIA, we are required to
make available any data released under the FOIA that the agency
determines are likely to become the subject of subsequent requests, or
that have been requested by three or more requesters. As a result of
one such FOIA request, we have already released publicly a limited set
of MA bid pricing data. This data, from 2011, is available at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/DataRequests.html. This data was posted in June 2013.
We solicited comments on the scope of the proposed release of MA
BPT worksheets and data elements. We were particularly interested in
comments on whether the MA bid pricing data we proposed to release
contains proprietary information, and if so, we requested detailed
explanations of good cause for its redaction from public availability
and suggestions for what safeguards might be implemented to
appropriately protect those portions of the data. We noted that
detailed explanations should contain specific examples which show how
this information disclosure could cause substantial competitive harm to
MAOs. Specific examples should have (1) cited the particular
information proposed to be released and explained how that information
differs from publicly available data; (2) pointed to the particular
entity or entity type that could gain an unfair competitive advantage
from the information release; and (3) fully explained the mechanism by
which the release of that particular information would create an unfair
competitive advantage for that particular entity. Similarly, we were
interested in comments that our proposed scope for release was too
narrow and unnecessarily protects data that is not confidential and
should not be protected.
We also solicited comments on the proposed 5-year delay and its
effect with respect to any competitive disadvantages to MAOs that could
result from the disclosure of MA bid pricing data. We solicited
comments on whether a shorter period would suffice to protect MAOs from
competitive harm associated with the disclosure of confidential
commercial information or if a longer period is necessary to adequately
protect the information.
b. Comments
We received 30 comments from the public, some in support and some
in opposition to our proposed release of MA bid pricing data. We
reviewed these comments closely, and we appreciate the concerns
identified in comments on our proposed release. These comments are
addressed below.
Comment: About half of the commenters expressed support for the
proposal to release MA bid pricing data.
Response: We appreciate the support.
Comment: A number of commenters stated that the release of MA bid
pricing data would result in substantial competitive harm to MAOs and
to the MA program. Commenters expressed concern that release of plan-
level financial data, even with the 5-year delay, would provide current
and future competitors with sensitive information such as gain/(loss)
margin and the profitability of serving beneficiary populations in
specific markets, which could expose business strategies, reduce
innovation, and undermine the functioning of a competitive marketplace.
These commenters stated that the detailed claims cost, cost sharing,
and utilization information collected in the MA BPT could be used by a
competitor to derive not only future bid amounts in the aggregate, but
also to derive components of future bids for specific benefits
contained in the bid. Some commenters remarked that this could incent
the gaming of bids, cause MAOs to exit markets, and create
disincentives for new market entrants.
Response: We share the commenters' interest in the continued
success of the MA program. In recent years, enrollment has grown while
plan quality has demonstrated continued improvement. Our goal is to
continue to make the MA program a strong and healthy one.
As discussed in the proposed rule, we believe this disclosure is
consistent with Presidential directives to make information available
to the public, and with our goals of allowing public evaluation of the
MA program, encouraging research into better ways to provide health
care, and reporting to the public regarding federal expenditures and
other statistics involving this program. Analysis of this data could
inform future bidding and payment policies. Further, releasing MA bid
pricing data, particularly in conjunction with information already
released under Sec. 422.504(n), will provide insight into the use of
public funds for the MA program, providing appropriate transparency
about the administration of the program.
We discussed the need to balance these goals with the need to
protect the proprietary information of the MAOs that submit this bid
pricing information to us. Our proposed time lag of 5 years prior to
the upcoming calendar year was an important element in our decision to
release the MA bid pricing data.
As part of our efforts to balance our mission to effectively
administer federal health care programs and increase data transparency
with MAOs' proprietary interests, we requested that commenters who
oppose release of MA bid pricing data provide a ``detailed explanation
of good cause'' for the redaction of some or all MA bid data from
public release. As noted in section III.E.2.a of this final rule
(``Summary of Proposed Rule''), we stated that detailed explanations
should contain specific examples which show how this information
disclosure could cause substantial competitive harm to MAOs. Specific
examples should have (1) cited the particular information proposed to
be released and explained how that information differs from publicly
available data; (2) pointed to the particular entity or entity type
that could gain an unfair competitive advantage from the information
release;

[[Page 80431]]

and (3) fully explained the mechanism by which the release of that
particular information would create an unfair competitive advantage for
that particular entity (81 FR 46402).
We believe that commenters did not provide data analysis that met
this requested standard of specificity to help us determine that
release of the data as proposed would cause unfair competitive harm or
negative consequences for the MA program. We did not receive specific
examples that illustrated how the structure of a particular healthcare
market (for example, a particular county or multi-county healthcare
market), combined with universal access to certain 5-year-old data
elements in the MA BPT, could create an unfair competitive advantage.
A number of commenters expressed concern about the use of MA bid
pricing data to reverse-engineer provider payment rates, stating that
this could cause competitive harm, especially in highly consolidated
markets in which there are a limited number of providers for a specific
service. A few commenters stated that a provider might determine
whether its payment rates were higher or lower than the average in such
a consolidated market (especially for MA bids for single-county MA
plans) by comparing its negotiated rate to the average unit price
reported in the BPT, in order to increase its leverage in future
negotiations with the MAO.
We understand this concern and appreciate the sensitivity of the
negotiations between private health plans and healthcare providers. We
discuss these comments a greater length below. However, as discussed in
more detail throughout this final rule, we believe that the 5-year
delay in the release of MA bid pricing data would make any information
about payment rates that could be obtained from an examination of plan
bids stale and no longer commercially sensitive.
Finally, in 2013, we released certain 2009 actual costs (worksheet
1) from the 2011 MA bid pricing data, as required by the U.S. District
Court for the District of Columbia in Biles v. Dep't of Health and
Human Services, 931 F. Supp. 2d 211 (D.D.C. 2013). (Discussion of this
case is at 81 FR 46403 of the proposed rule.) Given that this
information has been released to the public, and we have not been made
aware of any instances of competitive harm, we do not see any reason
why the release of 5-year-old data could cause competitive harm.
In the absence of any evidence or analysis demonstrating that
competitive harm would result from the proposed release of MA bid
pricing data, and in consideration of the important policy goals that
we believe will be served by publicly releasing MA bid pricing data,
discussed above, we are finalizing our proposal to release MA bid
pricing data after a 5-year delay, subject to certain specified
exclusions.
Comment: A few commenters expressed skepticism that the release of
MA bid pricing data will cause competitive harm to MAOs, and stated
that there is no real competition among MAOs for government approval of
bids because we approve multiple reasonable bids. Another commenter
stated that if MA bid pricing data is publicly released, there cannot
be competitive harm or unfair commercial gain because each MAO would
have the same information about its competitors and would be equally
capable of using that information. The commenter stated that such
symmetrical access to data obviates the potential for any unfair
commercial gain for one MAO over another, and that only asymmetric
disclosure can be a condition for substantial competitive harm.
Response: We do not agree entirely with the comments stating that
the public release of MA bid pricing data cannot cause competitive harm
or unfair commercial gain. We note that the public release of MA bid
pricing data could give new market entrants information on competitors'
MA plan bids while such information about their own bid(s) would not
have been released, allowing them to potentially benefit from
asymmetric disclosure. However, we believe that our proposed time lag
of 5 years prior to the upcoming calendar year is an important element
in mitigating competitive harm to MAOs or the potential for unfair
commercial gain for new market entrants when releasing MA bid pricing
data.
Comment: Many commenters stated that MA bid pricing data could be
used to calculate an MA plan's negotiated provider payment rates.
Several commenters cited a Federal Trade Commission (FTC) letter (at
https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-comment-regarding-amendments-minnesota-government-data-practices-act-regarding-health-care/150702minnhealthcare.pdf) stating that the
public disclosure of competitively sensitive pricing information may be
used in an anticompetitive manner that increases costs and adversely
impacts consumers. The commenters stated that when a provider knows
that another provider is receiving a higher payment rate for a service,
the provider will demand at least the same rate as the higher-paid
provider, thereby raising the ``price floor'' for the service. Some
commenters stated that with knowledge of MA bid pricing data, lower-
priced providers would negotiate for known higher rates, and that
providers may be less likely to agree to lower-cost arrangements if the
details will be shared with their competitors, which leads to higher
unit prices for healthcare services across the MA program and thus
higher total costs.
Several commenters also described, at a general level, various
methods for reverse engineering provider payment rates using certain
information that MAOs submit in their bids. A few commenters stated
that the release of an MA plan's average historical cost per unit could
be used to calculate negotiated rates by service category and market,
particularly where health care markets are highly concentrated.
Response: A negotiated rate between an MAO and a provider
(facility, physician, or other provider) refers to the payment rate
that an MAO has established by contract with a provider. Typically
negotiated rates are specified at a unit of payment such as per person
per month, per diem rate, per service rate, or a global capitation rate
(for example, a physician is paid a negotiated rate for managing all
services received by a beneficiary under a specific health plan).
We do not have access to these negotiated rates between an MAO and
its contracted network of providers, so we cannot determine how closely
an entry in the BPT may represent negotiated rates in provider
contracts. Since payment figures in the MA BPTs are grouped into
general service categories (such as ``Inpatient Facility'' and
``Skilled Nursing Facility'') and represent average costs across
multiple providers, beneficiaries, services, and sites of service, we
believe that the BPT information is unlikely to give more than high-
level insight into contractual negotiated rates.
Even if reverse engineering of provider rates were possible, the 5-
year delay renders that information even less competitively useful or
relevant. We do not believe that any commenters established that a
provider who uses MA bid data to estimate the negotiated rate that a
competitor was receiving 5 years earlier would be greatly advantaged by
this information.
Delivery of health care is constantly evolving and MAOs are
continually seeking ways to gain efficiency in providing care. For
example, the number of providers, the cost of services, and utilization
patterns associated with an MAO are very likely to change over a 5-year
period; we believe that these changes--particularly

[[Page 80432]]

as the health care industry moves toward alternative payment
methodologies--mitigate any risk associated with reverse engineering of
historical payment rates. As such, we remain unconvinced that releasing
this information has potential to cause harm to the marketplace as a
whole or to the competitive position of MAOs.
Comment: Some commenters stated that our proposal to release
multiple years of data initially, followed by the release of more
recent bid data on an annual basis, would make it possible for
providers and competitors to analyze cost trends, which could inform
negotiations and adversely impact competition by providing insight into
profit objectives and growth strategies. One commenter noted that the
Biles court indicated that its conclusion (that the MA bid pricing data
requested by the plaintiff could be released without impacting market
conditions) was specific to the request for a single year's data, and
that a request for second year's data that could be trended creates a
distinguishable factual situation that requires a new and separate
analysis. 931 F.Supp.2d at 227 n.22. The commenter stated that, if the
proposal to release bid data after a 5-year delay is finalized, we
should deny FOIA requests for more recent data, both because this data
is precluded under Exemption 4 as ``trade secrets and commercial or
financial information obtained from a person [that is] privileged or
confidential,'' and because this data could be analyzed in combination
with the bid data that we are proposing to release after a 5-year delay
to potentially reveal competitively sensitive trend information.
Finally, one commenter stated that we did not explain the rationale for
our assumption that the MA bid data is no longer commercially sensitive
after 5 years.
Response: We appreciate the commenters' concerns about how bid data
for multiple years can both reveal actual trends in the past and can be
trended into the future to predict an MAO's projected gains and losses,
which could give competitive insight into business strategies. However,
as we stated in the proposed rule at 81 FR 46400, we believe that our
proposed 5-year delay renders multi-year comparisons of pricing trends
less relevant to the current year of MA plan pricing.
We selected a 5-year delay, in part, due to the requirements
associated with projected margins in the bids submitted by MAOs,
particularly when the margin is projected to be negative. MAOs with
negative margins in their bids are expected to achieve profitability
within 5 years (that is, bids should not have negative margins for more
than 4 consecutive years). Absent the 5-year delay, we were concerned
that the public might be able to use this margin rule to deduce
competitively sensitive information from a plan's bids.
We also believe that 5 years is sufficient time for competitively
sensitive bid data to become no longer competitively sensitive. The
time lag represents a buffer between the development and implementation
of pricing strategies that can be distilled from multiple years of data
and the observed relationship and trend from 1 year to the next, and we
believe that this buffer mitigates any competitive disadvantage that
might otherwise result from the disclosure of multiple years of bid
data. As an example, we noted that an MAO looking to enter a new market
is significantly less likely to gain an unfair commercial advantage
from being able to examine and trend 5-year-old bid pricing data than
if the MAO were able to examine and trend more recent bid pricing data
(81 FR 46400).
We continue to believe that the proposed exclusion of MA BPT
narrative fields and supporting documentation is appropriate because
MAOs provide information in narrative fields and supporting
documentation that is commercially sensitive information in a way that
the cost and enrollment estimates in the BPT are not. MA BPT narrative
fields and supporting documentation can include sensitive information
such as multi-year regional or national-level information on an MAO's
approach to cost-sharing methodology or projection factors, which can
provide insight into longer-term strategies, or they may include
information on provider contracting, such as fee schedules or summaries
of provider contract terms. Provider contract terms and actual fee
schedules, for example, would be more competitively sensitive than the
estimated provider payment rates that could be generated from 5-year-
old bid figures at the broad service level categories in the MA BPT. In
addition, we believe that supporting documentation could cause
misinterpretation of the MA bid pricing data that we proposed to
release. We proposed to release only the MA bid pricing data for MA
plan bids that were accepted or approved by CMS. However, MAOs often
upload multiple versions of each plan bid in response to our requests
for further information or corrections. Given the volume of supporting
documentation submitted by MAOs, it may be difficult for a member of
the public to identify clearly which documents support the final
accepted version of the bid. We proposed, and finalize here, that these
documents will not be included in the data that we release under this
rule.
We agree that more recent MA bid data is more competitively
sensitive than bid data that is at least 5 years old, and we recognize
that, even if the release of bid pricing data for a single, more recent
year would not itself create a risk of substantial competitive harm,
there could be an increased likelihood of substantial competitive harm
resulting from the release of a more recent year's bid pricing data
when that data can be analyzed in combination with publicly-released
bid data for previous years and trended forward to predict current or
future bids.
If a FOIA request is received, we will follow our ordinary FOIA
procedures and not release data the agency determines are trade
secrets, or commercial or financial information protected by Exemption
4 to the FOIA (5 U.S.C. 552(b)(4)). We also note that we do not view
data releases made under the authority of the new Sec. 422.272 as FOIA
releases. These releases are discretionary disclosures of data to the
public, rather than in response to a request under the FOIA. Section
422.272 permits the release of data, but does not require it. As noted
in the proposed rule (81 FR 46396-97), we believe that these releases
are consistent with the principles of transparency in government that
underlie the FOIA and that regular release of this data might mitigate
the number of FOIA requests and the associated need for repeated
analyses of this data.
Comment: A number of commenters suggested that bid pricing data is
inherently proprietary, and therefore, should not be released. A few
commenters stated that pricing data is confidential, proprietary
information covered by Exemption 4 of the FOIA.
Response: We disagree with the commenters. Absent detailed
analytical evidence, which we solicited in the rulemaking process but
did not receive, as discussed above, we do not believe the release of
bid pricing data on a 5-year lag poses a threat of competitive harm.
Specifically, regarding the comment that MA bid pricing data is
proprietary and covered by Exemption 4 of the FOIA, we restate here
that we are finalizing our proposal to expand the basis and scope of
our regulations on MA bidding to incorporate section 1106(a) of the Act
(42 U.S.C. 1306(a)), which authorizes disclosure of information filed
with this agency in accordance with regulations adopted by

[[Page 80433]]

the agency. A substantive regulation issued following rulemaking
provides the legal authorization for government officials to disclose
commercial information that would otherwise be required to be kept
confidential in accordance with 18 U.S.C. 1905. See Chrysler Corp. v.
Brown, 441 U.S. 281, 306-08 (1979). We note as well that under 45 CFR
401.105(a), we have adopted a regulation that permits publication and
release of data that would not be exempt from disclosure under the FOIA
or prohibited from disclosure under other law, even if a request has
not been submitted.
Comment: Many commenters offered alternative ideas for what MA bid
pricing data to release. These commenters stated that the data should
be aggregated above the level of the MA plan bid, such as at the
contract level because it would be more difficult to reverse-engineer
provider payment rates and other proprietary information. Another
commenter suggested releasing only an aggregate financial measure that
reflects the sum of non-benefit expenses and gain/(loss) margin. Some
commenters recommended additional data exclusions, for example, that
all plan-level financial data should be excluded because it would
provide current and potential future competitors with proprietary,
competitively sensitive information such as profitability of specific
beneficiary populations. One commenter stated that information used to
project an MA plan's revenues and costs, such as enrollment and
population projections, should not be released at granular levels (for
example, county-level details). Commenters stated their concern that
the 5-year timeline we proposed for releasing the MA bid data is too
short, and one commenter stated that bid data should be released only
after 10 years and that any release after that time exclude all plan-
identifying information.
Response: We appreciate the concerns raised by the commenters.
However, based on our analysis of the comments we received, we did not
find that any commenter provided sufficiently detailed evidence of
competitive harm associated with the release of any of the fields
proposed for release after the proposed 5-year delay. As such, we do
not consider these exclusions or any further aggregation of bid data to
be necessary.
Comment: Several commenters recommended that the MA bid pricing
data not be released to the public on the CMS Web site, but be made
available through other mechanisms. One commenter suggested that, to
avoid any competitive use of the MA bid pricing data, the data should
be released only through the ResDAC portal for researchers as Research
Identifiable Files (RIFs). Another commenter urged us to aggregate the
MA bid pricing data and release it through our established methodology
of public data release, the Public Use File (PUF), which generally can
be understood by technical audiences after a review of supporting
documentation.
Response: We appreciate the recommendation that the bid pricing
data be released through ResDAC. CMS' Research Data Assistance Center
(ResDAC at www.resdac.org) is a critical part of the Administration's
commitment to transparency, and has been a valuable resource for
researchers (in releasing RIFs) and the public (in releasing PUFs).
However, we do not agree that this release should be through the ResDAC
resource or require the signing of a Data Use Agreement (DUA) that
restricts use and disclosure of the data (which is required for use of
RIFs). Because commenters did not identify a specific competitive harm
associated with the public release of the bid data, we will publish it
without restriction on the CMS Web site (www.cms.gov), subject to the
exclusions as finalized in this rule.
Comment: Several commenters stated that bid pricing data should not
be released because such data is not useful to beneficiaries, and it
has a high risk of being misinterpreted. One commenter stated that
beneficiaries will likely find bid data confusing and less informative
than our Star Ratings, which are considered a more accessible and
straightforward measure by which to compare plan value and quality. One
commenter stated that we should refrain from releasing bid data to the
public ``until there is a proven case that the release would lead to
improvements in the quality of care overall in the Medicare program.''
Response: We appreciate the concerns that were raised regarding the
possibility that the bid data we proposed to release could be
misinterpreted. We intend to release with each year's bid data the BPT
instructions and data dictionary for that year to minimize confusion
and the possibility of misinterpretation of the data. Further, as noted
in the proposed rule at 81 FR 49396, we anticipate that researchers, as
well as other members of the public will have use for this information
and that research based on the data may provide important insights for
future MA policy development and for developing health care policy.
Disclosing MA bid pricing data will allow the public to better
understand how public dollars are spent in the MA program.
Beneficiaries may or may not seek to use this data to make plan choices
and we did not identify that as a specific reason for the release of MA
bid pricing data.
Comment: Some commenters stated that the release of the MA bid
pricing data would likely result in an increase in the cost of MA plan
basic benefits and supplemental services (for example, dental benefits)
as MAOs respond to a new competitive situation. Commenters stated that
this would harm beneficiaries because it will cause MA plans to offer
fewer supplemental benefits, increase cost-sharing, or both.
Response: We expect that the MA program will continue providing
affordable and comprehensive health plan options to Medicare
beneficiaries. We did not receive any detailed analysis to demonstrate
that releasing 5-year-old MA bid pricing data is likely to have the
harmful impact on beneficiaries raised by the commenters.
Comment: Commenters expressed support for our proposal to not
release Part D bid pricing data. Two commenters argued against the
release of Part D bid pricing or manufacturer's rebate data, and one
commenter stated that the release of Part D bid pricing or rebate data
would violate the Takings Clause of the U.S. Constitution, as well as
the Part D noninterference clause (section 1860D-11(i) of the Act). One
commenter expressed concern that our broad interpretation of our
authority to release MA bid data through notice-and-comment rulemaking
could cause us to ignore legal barriers to the release of Part D
pricing data.
Response: We appreciate the support. Since we proposed to exclude
Part D bid data from our proposed release of MA bid pricing data and
are finalizing those exclusions in this final rule, we consider the
comments arguing against the release of Part D bid pricing and rebate
data to be beyond the scope of the proposed rule. To the extent that
these comments support the exclusion in our rule, we appreciate the
support.
Comment: Several commenters expressed support for the proposed
release of MA bid pricing data, but stated that the 5-year lag in
release was too long for timely analysis that would still be beneficial
to informing future policymaking and reforms. Some commenters stated
that MA organizations are paid with public funds to provide a public
benefit, and transparency should outweigh the concern of competitive
harm, in part because there is limited competition in the program in
that we approve multiple

[[Page 80434]]

reasonable bids, not merely the lowest bidders. Some commenters also
stated that significant changes in the health care landscape can occur
over the course of 5 years, and bid pricing data that is 5 years old
will constrain researchers' ability to do meaningful policy analysis.
Finally, one commenter suggested a 3-year lag instead of a 5-year lag
in release of MA bid pricing data.
Response: We appreciate the comments, and the interest in having
access to more recent data. Through notice and comment rulemaking, we
have sought to balance an interest in transparency with the need to
protect proprietary information. We received comments on both sides of
this issue, and have reviewed these comments critically. In this case,
we believe it is important to maintain the 5-year delay we originally
proposed. As discussed above, data more recent than 5 years old may
impose substantial competitive harm on market participants, such as by
providing an unfair competitive advantage to new market entrants, who
could use more recent data to determine current pricing arrangements
between existing plans and providers and undermine their negotiation
strategies. Such information would not be similarly available about new
market entrants to existing plans.
Comment: One commenter stated that, if we release MA bid data
without including MAO names or plan IDs, it is likely that some plan
sponsors with unique internal cost structures will be publicly
identifiable while other competitors may not be identifiable, giving
certain plan sponsors serious competitive advantage over others.
Response: All MA plan sponsors will be identifiable in the bid data
that we will release through the field labeled ``Organization Name.''
While there are some organization names in MA bids that differ from the
name of the parent organization, a link can be established through an
internet search if a member of the public is interested in making that
connection.
Comment: Several commenters expressed skepticism about the
necessity of using bid data for health policy research. One commenter
stated that the proposed bid data release is unnecessary for purposes
of ensuring program oversight or development of health policy; the
commenter noted that MA bids are already subject to our review and
approval and a bid audit process, and MedPAC analyzes bid data and
issues an annual report describing program-wide trends. Another
commenter expressed skepticism about the ability of researchers to use
the data we proposed to release in an effective, appropriate way; the
commenter supported our proposed exclusion of narrative information
from the proposed release of MA bid pricing data but argued that
researchers would find it extremely challenging if not impossible to
fully understand a plan's bid without this excluded information.
Finally, one commenter noted that we have made available on our Web
site MA bid data that was requested under the FOIA, and asked whether
this data had proven useful to researchers.
Response: As stated in the proposed rule, we believe that
facilitating public research using MA bid pricing data could lead to
better understanding of the costs and utilization trends in MA and
support future policymaking for the MA program. We do not believe that
it is possible for one researcher or one set of researchers to address
all policy questions regarding the MA program. We expect that a wide
range of research studies could complement the work published by
MedPAC. We believe that MA bid data could be useful to researchers even
without access to the narrative fields or supporting documentation, and
we have not received any comments that demonstrate convincingly or with
specific examples to change our position.
Finally, regarding the usefulness of currently available MA bid
pricing data to researchers, one commenter pointed to research
conducted by Dr. Brian Biles on behalf of the Commonwealth Fund, and
his work to examine costs in MA. We believe that the data may be
accessed again in the future for further research.
After consideration of the public comments received, we are
choosing to finalize the proposed MA bid pricing data release, codified
at Sec. 422.272, and the proposed contractual acknowledgment of the
release, codified at Sec. 422.504(n)(2), without modification. We also
finalize our proposal to amend Sec. 422.504 by moving the existing
provisions regarding the release of summary CMS payment data at
existing paragraph (n) to paragraph (n)(1) and redesignating existing
paragraphs (n)(1)(i) through (iv) and (n)(2) as (n)(1)(i)(A) through
(D) and (n)(1)(ii), respectively. We appreciate the concerns raised by
some commenters, and we believe that these concerns are addressed by
our decision to delay our release of MA bid data by 5 years and to
exclude certain information from release, as discussed above. We
continue to believe that the release of MA bid pricing data is
consistent with the Administration's directives regarding the
transparency of program data, and will support public research that can
potentially strengthen the program.
While we are not modifying any of the proposed exclusions, we note
that we will withhold certain fields within the BPT where necessary to
comply with our current cell size suppression policy. This policy
stipulates that no cell (for example, admissions, discharges, patients,
services, etc.) 10 or less may be displayed. For example, a plan with
more than 11 enrollees may have fewer than 11 beneficiaries who receive
benefits that fall under one of the BPT's service categories. The
policy is designed and implemented in order to protect against
disclosure of individually identifiable data as our analysis has
indicated the potential to identify individuals where the information
in the cell is based on 10 or fewer individuals. We interpret the
regulation text in this final rule (that protects against and excludes
from these disclosures ``information that could be used to identify
Medicare beneficiaries or other individuals'') to support this
suppression policy. Further, to the extent that the suppression policy
is revised in the future for these purposes to apply to cell sizes
based on more than 10 individuals, we will apply that updated policy
under this rule. In order for our release of MA bid pricing data to be
consistent with our cell size suppression policy, we may determine that
certain fields in the BPT should be withheld or redacted.
c. Summary of Proposed Technical Change and Response to Public Comments
We proposed to amend Sec. 422.250 on the basis and scope of the MA
program to add a reference to section 1106 of the Act. As discussed in
the proposed rule (81 FR 46396), section 1106(a) of the Act (42 U.S.C.
1306(a)) addresses requirements, including rulemaking, for the agency
to release information filed with it by outside parties.
We received a few comments on the proposed technical change,
summarized below with our response.
Comment: A few commenters expressed concern that we proposed
releasing MA bid pricing data in the CY 2017 PFS proposed rule, rather
than through a Part C and D rulemaking process. The commenters stated
that this approach increased the likelihood that many stakeholders
would have been unaware of our proposal in time to provide detailed
analysis of the impacts of the proposed data releases, and one
commenter suggested reissuing this proposal in a Parts C and D
rulemaking.

[[Page 80435]]

Response: The Administrative Procedure Act (APA) and section 1871
of the Act generally require that rules be published in the Federal
Register in proposed form, with a basis and purpose statement
explaining the proposal, and then published in the Federal Register in
final form, with revisions based on comments received, and responses to
such comments. There is no requirement governing how proposed or final
rules are packaged or organized, as long as the public is given proper
notice. The proposed rule (81 FR 46162) clearly listed all Parts of the
Medicare regulations that would be affected by the proposed regulations
(including part 422) and its title included a reference to release of
Medicare Advantage data (``. . . Medicare Advantage Pricing Data
Release; Medicare Advantage and Part D Medical Low [sic] Ratio Data
Release . . .''), so there was adequate notice to the public of the
content of the proposed rule. That fully satisfies the requirements of
the APA and section 1871 of the Act.
The presence of this rider was clearly discussed in the title of
the proposed rule, and was also discussed in the Fact Sheet we released
to the public at the time of the rule's display. We received many
comments from across the industry, including a number of comments from
MAOs and their trade associations. This further demonstrates that
adequate notice was provided.
After consideration of the public comments we received on the
proposed technical amendment, we are finalizing the amendment as
proposed.
3. Release of MLR Data
a. Summary of Proposed Rule
The proposed rule provided background on the Part C and Part D
Medical Loss Ratio requirements, including the statutory and regulatory
authority. An MLR is expressed as a percentage, generally representing
the percentage of revenue used for patient care rather than for such
other items as administrative expenses or profit. In the May 23, 2013
final rule (78 FR 31284), we codified the MLR requirements for MAOs and
Part D sponsors in the regulations at 42 CFR part 422, subpart X, and
part 423, subpart X, respectively.
For contracts beginning in 2014 or later, MAOs and Part D sponsors
are required to report their MLRs and are subject to financial and
other penalties for failure to meet the statutory requirement that they
have an MLR of at least 85 percent (see Sec. 422.2410 and Sec.
423.2410). Section 1857(e)(4) of the Act requires several levels of
sanctions for failure to meet the 85 percent minimum MLR requirement,
including remittance of funds to CMS, a prohibition on enrolling new
members, and ultimately contract termination.
Under the regulations at Sec. 422.2410 and Sec. 422.2460, with
respect to MAOs, and Sec. 423.2410 and Sec. 423.2460, with respect to
Part D sponsors, for each contract year, each MAO and Part D sponsor is
required to submit a report to us, in a timeframe and manner that we
specify, which includes the data needed to calculate and verify the MLR
and remittance amount, if any, for each contract. For each contract
year beginning in 2014 or later, MAOs and Part D sponsors are required
to enter their MLR data and upload their MLR Reports to our Health Plan
Management System (HPMS). The MLR Report is on our Web site at https://www.cms.gov/Medicare/Medicare-Advantage/Plan-Payment/medicallossratio.html, accompanied by instructions on how to populate
the Report.
In the proposed rule, we summarized the information collected in
conjunction with the MLR requirement. We described the categories of
information, including:
Revenue.
Claims.
Federal and State Taxes and Licensing or Regulatory Fees.
Health Care Quality Improvement Expenses.
Non-claims Costs.
Member Months.

We also described the process used to calculate the MLR with this
information, including the numerator and denominator.

We explained the proposed regulatory changes to provide for the
release of Part C and Part D MLR data, along with the manner in which
we proposed to make the release. We proposed to codify the new
requirements for the release of Part C and Part D MLR data by adding
new regulations at Sec. 422.504 (related to contract terms) and Sec.
422.2490 (related to the details of the MLR data release) of part 422,
with respect to Part C MLR data, and Sec. 423.505 (related to contract
terms) and Sec. 423.2490 (related to the details of the MLR data
release) of part 423, with respect to Part D MLR data. We proposed to
define Part C MLR data at Sec. 422.2490(a), and Part D MLR data at
Sec. 423.2490(a), as the data the MAOs and Part D sponsors submit to
us in their annual MLR Reports, as required under existing Sec.
422.2460 and Sec. 423.2460. At Sec. 422.2490(b) and Sec.
423.2490(b), we proposed certain exclusions to the definitions of Part
C MLR data and Part D MLR data, respectively. We proposed at Sec.
422.2490(c) and Sec. 423.2490(c) to release the Part C MLR data and
Part D MLR data, respectively, for each contract for each contract
year, no earlier than 18 months after the end of the applicable
contract year.
We proposed to amend the regulation text at Sec. 422.504 by adding
a new paragraph (n)(2), which would require that an MAO acknowledge the
release of Part C MLR data as provided in Sec. 422.2490 as a mandatory
contract provision. We also proposed to amend the regulation text at
Sec. 423.505(o) by adding a new paragraph (o)(2), which would require
that a Part D sponsor acknowledge the release of Part D MLR data as
provided in Sec. 423.2490 as a mandatory contract provision. We
proposed certain technical changes to Sec. 422.504(n) and to Sec.
423.505(o). The proposed rule did not discuss these changes to Sec.
422.504(n) and Sec. 423.505(o) in detail as part of the proposal to
release Part C and Part D MLR data, but they were reflected in the
proposed regulation text at 81 FR 46471-72. Our proposed technical
changes to Sec. 422.504(n) are described in section III.E.2.a of this
final rule (``Summary of Proposed Rule''). With respect to Sec.
423.505(o), we proposed to move the existing provisions regarding the
release of summary CMS payment data at existing paragraph (o) to
paragraph (o)(1) and to redesignate the existing paragraphs (o)(1)
through (5) as (o)(1)(i) through (v).
We also explained the rationale for the proposed data release. As
with our release of MA bid pricing data, discussed in section III.E.2.b
of this final rule (``Comments''), our release of Part C and Part D MLR
data is consistent with Administration initiatives to improve federal
management of information resources by increasing data transparency and
access to federal datasets. We also noted in the proposed rule that we
already publicly release MLR data that issuers of commercial health
plans submit each year as required by section 2718 of the Public Health
Service Act. This data is listed publicly at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html. In releasing Part C and Part D MLR
data, we are seeking to align with the disclosure of commercial MLR
data.
Finally, we discussed our belief that Part C and Part D MLR data
could be a valuable tool for consumers, researchers, and the public. We
believe that the release of this data will facilitate public evaluation
of the MA and Part D programs by providing insight into the efficiency
of health insurers' operations. In addition, we believe that the
release of certain MLR

[[Page 80436]]

data will provide beneficiaries with information that can be used to
assess the relative value of Medicare health and drug plans. We
acknowledged in the proposed rule that the commercial MLR varies from
the Part C and Part D MLR in certain ways. For example, commercial MLR
data is collected from issuers at the state level, aggregated by
market, while Part C and Part D MLR data is collected at the contract
level. Although the data is reported differently, we do not believe
these differences are significant enough to merit a different approach
to the public disclosure of data.
We also believe that the availability of Part C and Part D MLR data
will enhance the competitive nature of the MA and Part D programs. The
proposed access to data will support potential new plan sponsors in
evaluating their participation in the Part C and Part D programs and
will facilitate the entry into new markets of existing plan sponsors.
With knowledge of historical MLR data, new business partners might
emerge, and better business decisions might be made by existing
partners. As a result, we believe that releasing Part C and Part D MLR
data as proposed is both important and appropriate for the effective
operation of these programs.
Further, we believe that the release of Part C and Part D MLR data,
as described in this final rule, strikes the appropriate balance
between our goals for the release of Part C and Part D MLR data and
safeguarding information that could be commercially sensitive or
proprietary. Costs in the MLR numerator are aggregated across
providers, beneficiaries, and sites of service. Costs and revenues are
further aggregated across all plans under the contract. We do not
believe that there is a realistic possibility that the MLR data we
release could be disaggregated or reverse engineered to reveal
commercially sensitive or proprietary information.
We described the data we proposed to exclude from the public
release. We stated that we would exclude the following four categories
of data from release: narrative information, plan-level information
(Part C MLR data and Part D MLR data that we will release is aggregated
at the contract level), any information identifying beneficiaries or
other individuals, and any MLR review correspondence.
First, at proposed Sec. 422.2490(b)(1) and Sec. 423.2490(b)(1),
we proposed to exclude from release any narrative information that MAOs
and Part D sponsors submit to support the amounts that they include in
their MLR Reports, such as descriptions of the methods used to allocate
expenses. MAOs and Part D sponsors are required to describe the methods
they used to allocate expenses, including incurred claims, quality
improvement expenses, federal and state taxes and licensing or
regulatory fees, and other non-claims costs. A detailed description of
each expense element is provided, including how each specific expense
meets the criteria for the type of expense in which it is categorized.
MAOs and Part D sponsors may provide information that is pertinent to
more than the individual MA or Part D contract for which the MLR Report
is being submitted (see, for example, Sec. 422.2420(d)(1)(ii) and
Sec. 423.2420(d)(1)(ii), which requires that expenditures that benefit
multiple contracts, or contracts other than those being reported, be
reported on a pro rata share), such as an MAO's or Part D sponsor's
approach to setting payment rates in contracts with providers, or its
strategies for investing in activities that improve health quality. We
proposed to exclude this narrative information because we believe that
it is more competitively sensitive than the contract-level figures that
are used to populate the non-narrative fields in the MLR Report. We are
concerned that MAOs and Part D sponsors would be reluctant to submit
narrative descriptions that include information that they regard as
proprietary or confidential if they know that it will be disclosed to
the public, which could impair our ability to assess whether their
allocation methods are appropriate.
Second, at proposed Sec. 422.2490(b)(2) and Sec. 423.2490(b)(2),
we proposed to exclude from release any plan-level information that
MAOs and Part D sponsors submit in their MLR Reports. Some of the plan-
level data in MAO's and Part D sponsors' MLR Reports is also included
in their plan bids as base period experience data, such as plan IDs,
plan member months, and Medicaid per member per month gain/loss. As
discussed in our proposal to release certain MA bid pricing data, we
believe bid data would no longer be competitively sensitive after 5
years; however, we do not believe that bid data becomes no longer
competitively sensitive within the 18-month timeframe for our proposed
release of MLR data. Therefore, we proposed to exclude from release
plan-level data that is included as base period experience data in plan
bids. We also proposed to exclude the plan-level information submitted
in MLR Reports because we do not regard it as relevant to the purposes
of our proposed release of Part C and Part D MLR data, which include
giving the public access to data that can be used to evaluate the
efficiency of MAOs and Part D sponsors and providing enrollees with
information that can be used to compare the relative value of health
plans. For example, our proposed release excludes MAOs' and Part D
sponsors' responses to questions in the MLR Report that ask whether
each plan under a contract is a Special Needs Plan for beneficiaries
who are dually eligible for both Medicare and Medicaid (D-SNP), or
whether the plan's defined service area includes counties in one of the
territories.
Third, at proposed Sec. 422.2490(b)(3) and Sec. 423.2490(b)(3),
we proposed to exclude from release any information identifying
Medicare beneficiaries or other individuals. This exclusion was
proposed for the same reason we proposed to exclude similar information
from MA bid submission data that will be released: we believe that it
is important to protect the privacy of individuals identified in these
submissions, particularly Medicare beneficiaries. We explained that,
consistent with our longstanding data release policy for protecting
individually identifiable information, if a data field in the MLR
Report for an MA or Part D contract is calculated based on figures
associated with fewer than 11 enrollees (or 132 member months, assuming
each individual is counted for 12 months), we would suppress all the
data from such fields in the public release file for that contract.
Regarding other individuals, we require that MAOs and Part D
sponsors provide in their MLR Reports the names and contact information
of individuals who can answer questions about the data submitted in an
MLR Report. We proposed to exclude this information from release. We do
not believe that the release of this information serves the purposes of
our proposed release of certain MLR data, which are to provide the
public with data that can be used to evaluate MA and Part D contracts'
efficiency, and to provide beneficiaries with information that can be
used to compare the relative value of Medicare plans. Further, release
of this identifying and contact information appears to be an
unnecessary intrusion into information about private individuals.
Fourth, at proposed Sec. 422.2490(b)(4) and Sec. 423.2490(b)(4),
we proposed to exclude from release any MLR review correspondence. In
the course of the MLR review process, our reviewers may engage in
correspondence with MAOs and Part D sponsors in order to validate
amounts included in their MLR Reports. Such correspondence may include

[[Page 80437]]

requests for evidence of amounts reported to us. Responses to these
requests could include proprietary or confidential information, such as
MAOs' and Part D sponsors' negotiated rates of reimbursement. We
believe that such information is more competitively sensitive than the
contract-level figures that are used to populate the non-narrative
fields in the MLR Report. Further, we are concerned that, if we were to
publicly release this correspondence, it could cause MAOs and Part D
sponsors to be less forthcoming in the information provided to us or
our reviewers, which would impede our access to information that would
we could use to verify the information submitted by MAOs and Part D
sponsors.
We proposed to release the MLR data specified in this rule for each
MA and Part D contract on an annual basis no earlier than 18 months
after the end of the contract year to which the MLR data applies. We
proposed to follow the commercial MLR approach in making the data we
receive in MLR Reports available to the public. For Part C and Part D
MLR reporting, the data is due about 12 months after the end of the
contract year. After we receive MAOs' and Part D sponsors' MLR Reports,
we anticipate that it will take approximately 6 months for us to review
and finalize the data submitted by MAOs and Part D sponsors.
We recognize that the 18-month time lag time for the release of
Part C and Part D MLR data differs from the 5-year delay used for the
release of MA bid pricing data (discussed in section III.E.2.a of this
final rule (``Summary of Proposed Rule'')). This difference in the
length of the delay that applies to each of these data releases
reflects key differences between the MA bid pricing data that we
proposed to release in accordance with Sec. 422.272 and the Part C and
Part D MLR data that we proposed to in accordance with Sec. 422.2490
and Sec. 423.2490. Most importantly, the Part C and Part D MLR data
that we proposed to release is aggregated at the contract level, and we
are excluding any plan-level data. The MA bid pricing data that we
proposed to release includes plan-level information. We believe that
contract-level information is sufficiently aggregated such that it
would be difficult to obtain an unfair competitive advantage from its
review. For example, we do not believe it is possible to reverse-
engineer provider rates from contract-level information.
Finally, we proposed to amend Sec. 422.2400, which identifies the
basis and scope of the MLR regulations for MAOs, and Sec. 423.2400,
which identifies the basis and scope of the MLR regulations for Part D
sponsors, to add a reference to section 1106 of the Act, which governs
the release of information gathered in the course of administering our
programs under the Act.
We solicited comment on the release of MLR data as outlined above.
We also solicited comment on whether the Part C and Part D MLR data we
proposed to release contain proprietary information, and if so, what
safeguards might be appropriate to protect those data, such as
recommended fields to be redacted, the minimum length of time that such
data remains commercially sensitive, and any suggestions for publishing
aggregations of Part C and Part D MLR data in lieu of publishing the
MLR data as submitted by MAOs and Part D sponsors. We invited
commenters to provide analysis and explanations to support comments
that information should be protected for a longer--or shorter--period
of time so that we could properly evaluate our proposal in adopting a
final rule. Analysis and explanations were requested to (1) cite the
particular information proposed to be released and explain how that
information differs from publicly available data; (2) point to the
particular entity or entity type that could gain an unfair competitive
advantage from the information release; and (3) fully explain the
mechanism by which the release of that particular information would
create an unfair competitive advantage for that particular entity. We
requested this level of detail in order to substantiate the positions
taken by commenters and to better inform our rulemaking and decisions
(81 FR 46403).
b. Comments
The following is summary of the comments we received on our
proposed regulatory changes providing for the release of Part C and
Part D MLR data.
Comment: Several commenters expressed support for our proposal to
release Part C and Part D MLR data, noting the benefits of transparency
and advancing research, and improving healthcare delivery, as well as
the cost of healthcare. A number of commenters also stated that release
of Part C and Part D MLR data would help beneficiaries make informed
choices when choosing between health plans. Two commenters added that
releasing Part C and Part D MLR data would allow the public to see how
MAOs and Part D sponsors administer Medicare and supplemental benefits
in an effective and efficient manner.
Response: We appreciate the support.
Comment: Some commenters suggested that Part C and Part D MLR data
would be unhelpful to the public, including researchers and
beneficiaries, because it could be misconstrued. A few commenters
stated that release of Part C and Part D MLR data as proposed would
lead to misinterpretation and inappropriate comparisons across MA or
Part D contracts, causing erroneous conclusions and misinformed policy
decisions. Many commenters questioned whether the MLR data would be
valuable or useful to Medicare beneficiaries.
Response: We appreciate the concerns raised. However, we continue
to believe that releasing the MLR data is consistent with the
Administration's commitment to transparency. In addition, while
Medicare beneficiaries have multiple tools available to assist them in
evaluating MA and Part D plans, we continue to believe that
beneficiaries should have the opportunity to review Part C and Part D
MLR information as an additional tool. We continue to believe that
making the MLR data available to the research community will spur
research that could support the goals of federal policymakers.
Furthermore, we believe it is important to mirror the transparency
created by the commercial MLR to the extent possible. As commercial MLR
data is already being released, our proposal to release Part C and Part
D MLR data is the next step in maintaining consistency.
Comment: Some commenters indicated that the commercial MLR data
that we release each year is substantively different from the Part C
and Part D MLR data, making the decision to release Part C and Part D
MLR data one that should not be tied to the current disclosure of
commercial MLR data. Two commenters noted that because the MLR Reports
for MAOs and Part D sponsors are contract-based and MLR Reports for
issuers in the commercial market are state-based, the Part C and Part D
MLR Reports could be confusing to consumers and subject to
misinterpretation.
Response: We acknowledge that there are differences between Part C
and Part D MLR data and commercial MLR data. However, we do not believe
these differences are substantial enough to merit withholding the Part
C and Part D MLR data from public consumption when commercial MLR data
is released annually. Although there are some differences between how
the Part C and Part D MLR is reported in comparison with the commercial
MLR, in all cases, the data is used to produce a final MLR

[[Page 80438]]

ratio, and we continue to believe that this data can be a valuable tool
for beneficiaries and researchers, as discussed earlier in this rule.
Comment: Several commenters expressed support for our proposed
exclusions of certain data from our proposed release of Part C and Part
D MLR data, stating that aggregation and exclusions would help
safeguard against the release of proprietary information.
Response: We appreciate the support.
Comment: Several commenters stated that the proposed release of
Part C and Part D MLR data would cause significant competitive harm to
plans in the MA and Part D markets through the disclosure of
confidential and proprietary information. Some commenters suggested the
data in the proposed release could provide insight into a plan's
strategies related to provider agreements, pricing, or quality
improvement activities.
Response: We appreciate the concerns raised by the commenters with
respect to protecting proprietary information. We take very seriously
the need to safeguard proprietary and confidential business information
shared with the agency for purposes of participation in the MA and Part
D programs. However, we do not believe that the information included in
the proposed MLR release represents a threat to the competitive
position of MAOs and Part D sponsors particularly as comparable data is
already released for commercial plans. Through the comment period and
rulemaking process, we provided MAOs and Part D sponsors the
opportunity to offer specific, detailed examples of how the release of
MLR data could lead to competitive harm. We do not believe any of the
commenters provided such examples. Further, we believe that the
exclusions described in the final rule will help protect plans'
proprietary information.
However, to address concerns raised by commenters, we are expanding
the data that would be subject to exclusion. First, we are revising our
proposed exclusion of plan-level data at proposed Sec. 422.2490(b)(2)
and Sec. 423.2490(b)(2) to state that we will not be releasing any MLR
data submitted for contracts that consist of only one plan. Contract-
level data for single-plan contracts is equivalent to plan-level data,
which we regard as more competitively sensitive because it is at a
lower level of aggregation. In expanding the exclusion at proposed
Sec. 422.2490(b)(2) and Sec. 423.2490(b)(2) to include MLR data
submitted for single-plan contracts, we are confirming our commitment
not to release any plan-level MLR data. Second, we are excluding from
release any MLR data for a contract in a contract year that the
contract is determined to be non-credible, as defined in accordance
with Sec. 422.2440(d) for MA contracts and Sec. 423.2440(d) for Part
D contracts. Although, as we explain more fully below, we are adopting
this new exclusion of non-credible contracts' MLR data for reasons
other than the protection of proprietary information, we expect that
this exclusion will address concerns about competitive harm for MAOs or
Part D sponsors operating contracts with limited enrollment.
Comment: Several commenters asked us to aggregate the data further
or expand the list of exclusions before release, in order to protect
plans' proprietary and confidential information. One commenter
suggested that we limit the release of MLR data to the aggregate
categories that we listed in the preamble of the proposed rule at 81 FR
46404 (that is, ``Revenue,'' ``Claims,'' ``Federal and State Taxes and
Licensing or Regulatory Fees,'' ``Health Care Quality Improvement
Expenses,'' and ``Non-Claim Costs'') and the MLR calculation itself,
without releasing the data for the component fields that make up each
of these categories. Another commenter requested that we exclude any
part of the MLR substantiation, including but not limited to the
narrative included in the substantiation. In addition, we received two
comments requesting that we not release Part C and Part D MLR data at a
more granular level than the contract level. This would exclude the
``Plan-Specific Data'' section of the MLR Report. Another commenter
stated that if we believe it is important for the public to further
understand the breakdown of how revenue is spent, then we could
consider releasing only the percent of revenue associated with incurred
claims, quality improvement activities, and Part B premium rebates, in
order to limit potential competitive harm.
Response: We appreciate the concerns raised by commenters, along
with the proposed alternatives. We believe that the list of exclusions
provided in the final rule is sufficient to protect plans against
competitive harm. Where possible, we have sought to mirror the release
policies for the commercial MLR, and we are not aware of any evidence
demonstrating that the release of commercial MLR data has caused any
competitive harm. We have also broadened the data subject to exclusion,
as discussed above.
Comment: Several commenters urged us to not release Part C or Part
D MLR data for single-plan contracts. One commenter requested further
clarification regarding the plan-level information that we are
proposing to exclude. The commenter asked that we state whether plan-
level means at the plan benefit package (PBP) level or something else.
Response: We appreciate the comments submitted, and have expanded
the data exclusions to not release data for single-plan contracts,
since single-plan contract level data is functionally the same as plan-
level data. The exclusion of plan-level data would also apply to data
that is captured by the section of the MLR Report that is labeled
``Plan-Specific Data.'' We described the information collected in this
section of the MLR Report in the proposed rule at 81 FR 46404. We
explain above why the release of plan-level data that is as recent as
18 months old could cause substantial competitive harm.
Comment: One commenter expressed concern about the release of MLR
data for contracts with a limited number of beneficiaries. This
commenter suggested that we not release data for a contract in a year
that the contract does not meet the minimum credibility threshold of
2,400 member months for MA contracts or 4,800 member months for Part D
contracts.
Response: We agree with the commenter's concern about releasing
Part C and Part D MLR data for contracts that have non-credible
experience. We believe that publishing the MLR data for a contract in a
contract year in which it has non-credible experience may be misleading
and cause incorrect assumptions. As such, we have added an exclusion to
our proposed release of Part C and Part D MLR data to specify that we
will not release the MLR data for a contract in any contract year in
which the contract is determined to be non-credible. This exclusion is
added at Sec. 422.2490(b)(5), with respect to Part C MLR data, and at
Sec. 423.2490(b)(5), with respect to Part D MLR data.
Currently, MA contracts are considered to be non-credible if they
have fewer than 2,400 member months, and Part D contracts are
considered non-credible if they have fewer than 4,800 member months. In
the February 23, 2013 proposed rule (78 FR 12428, 12438-40), we
explained our rationale for taking into account the number of enrollees
under a contract when assessing Part C and Part D MLRs, stating, ``To
avoid requiring MA organizations and Part D sponsors to pay remittances
due to random claim variation, rather than due to their underlying
pricing and benefits structure, it is necessary to assess MLRs

[[Page 80439]]

on sufficient numbers of member months for statistical credibility.''
In excluding from release MLR data submitted for contracts with non-
credible experience, we recognize that these contracts' MLRs are more
vulnerable to the effects of random variations in claims experience and
may fail to reflect their efficiency or relative value. We wish to
release MLR data that accurately and meaningfully reflects the value of
MA and Part D plans; we do not believe that pro-active public release
of MLR Reports for contracts that have non-credible experience furthers
that goal. Therefore, we are finalizing the rule with an exclusion for
any MLR data submitted for a contract in a year that the contract is
determined to be non-credible.
Comment: A small number of commenters asked that we only release
the final MLR for MA and Part D contracts (that is, the ratio that is
calculated by dividing the MLR numerator by the MLR denominator),
instead of the additional data included with MLR submissions. They
stated that this would fulfill our goal of increased transparency,
while protecting beneficiaries and researchers from drawing incorrect
conclusions, and would safeguard confidential and proprietary
information that could hurt competition.
Response: We appreciate the suggestion. Given that we already
release annually the MLR data submitted by commercial plans, we believe
that it would be inconsistent to release only the final MLR for MA and
Part D contracts. As previously discussed, we do not believe that
differences between the Part C and Part D MLRs and the commercial MLR
are significant enough to merit a different approach to the public
disclosure of data.
We have proposed appropriate exclusions and safeguards to protect
proprietary business strategies. Completely excluding other information
would not be consistent with the Administration's commitment to
transparency.
Comment: Several commenters expressed support for our proposal to
release MLR data on an annual basis no earlier than 18 months after the
end of the contract year to which the MLR data applies. A few
commenters stated that the proposed 18-month delayed release of MLR
data would help balance the need for transparency and the potential for
competitive harm.
Response: We appreciate the support.
Comment: We received one comment encouraging us to consider
releasing MLR data that is more recent, and therefore, more useful to
beneficiaries and researchers.
Response: We appreciate the commenter's concern. The decision to
follow an 18-month delay was not intended only for the purpose of
protecting proprietary interests. Part C and Part D MLR data is
typically not collected until the end of the year following the
contract year (for example, contract year 2014 data was not collected
until December 2015). We must then review all submitted data for
completeness and accuracy before determining whether MLRs are final. We
continue to believe that the 18-month delay is appropriate, given these
operational constraints.
Comment: Several commenters expressed concern that 18 months was
not a sufficient period of time to ensure the release of data would not
cause competitive harm. One commenter pointed out that because our
revenue settlement is 8 months after the close of the year, and Part C
and Part D MLR Reports are submitted at the end of that calendar year,
MLR data would end up being released only 6 months after the data is
filed with CMS, not the 18 months envisioned by the policy. Another
commenter stated that data generally does not change significantly from
year-to-year or across plans within a contract, and therefore, neither
aggregation at the contract level nor an 18-month delay of release will
provide sufficient protection. Several commenters asked that we release
Part C and Part D MLR data using the same 5-year delay that was
proposed for the release of bid data. A few commenters added that
releasing such competitively sensitive information sooner than the 5-
year lag could potentially injure plans and the program by harming
competition among MA plans and driving up costs.
Response: We believe that the proposed 18-month delay of release of
Part C and Part D MLR data will balance the need to make sure the data
is complete with the desire to provide beneficiaries and researchers
with data that is meaningful and helpful in plan selection and
research. We selected a 5-year delay for bid pricing data because much
of that data is collected at the plan level. Part C and Part D MLR data
is aggregated to the contract level, and also includes a more limited
range of information. Further, as we have noted, we do not believe that
there will be competitive harm to MAOs or Part D plan sponsors as a
result of the release of MLR reports as provided under this rule.
Contract-level data is, as described above, sufficiently aggregated to
avoid creating an unfair competitive advantage for particular entities,
such as new market entrants, who would have access to such data without
having to release such data themselves. It is not likely that entities,
such as new market entrants, could use aggregated data to reverse-
engineer pricing strategies, payments rates, or other competitively
sensitive information.
Comment: One commenter urged us to utilize established public data
release methodologies for the release of Part C and Part D MLR data. A
few commenters also asked that we only release data through ResDAC to
researchers.
Response: Through the Administration's continued commitment to
transparency, we have significantly increased the amount of Medicare
data available to the public in recent years, in part through the
ResDAC portal. While we agree that ResDAC is a valuable resource, we
believe that it is more appropriate in this instance to post the data
directly to our Web site (cms.gov) for broader consumption. Because the
data is aggregated to the contract level, we do not believe there is a
significant risk associated with making the data more widely available.
Comment: A few commenters expressed concern that we proposed
releasing Part C and Part D MLR data in the CY 2017 PFS proposed rule,
rather than through a Part C and Part D rulemaking process. The
commenters stated that this approach increased the likelihood that many
stakeholders would have been unaware of our proposal in time to provide
detailed analysis of the impacts of the proposed data releases, and one
commenter suggested reissuing this proposal in a Parts C and D
rulemaking.
Response: The Administrative Procedure Act (APA) and section 1871
of the Act generally require that rules be published in the Federal
Register in proposed form, with a basis and purpose statement
explaining the proposal, and then published in the Federal Register in
final form, with revisions based on comments received, and responses to
such comments. There is no requirement governing how proposed or final
rules are packaged or organized, as long as the public is given proper
notice. The proposed rule here clearly listed all Parts of the Medicare
regulations that would be affected by the proposed regulations
(including parts 422 and 423) and its title included a reference to
release of Medicare Advantage and Part D data (``. . . Medicare
Advantage Pricing Data Release; Medicare Advantage and Part D Medical
Low [sic] Ratio Data Release

[[Page 80440]]

. . .''), so there was adequate notice to the public of the content of
the proposed rule (81 FR 46162). That fully satisfies the requirements
of the APA and section 1871 of the Act.
The presence of this rider was clearly discussed in the title of
the rule and in the Fact Sheet that we released publicly at the time of
the rule's display. We received 26 comments on our proposed release of
Part C and Part D MLR data from across the industry, including a number
of comments from MAOs, Part D sponsors, and their trade associations.
This further demonstrates that adequate notice was provided.
We also proposed to amend Sec. 422.2400, which identifies the
basis and scope of the MLR regulations for MAOs, and Sec. 423.2400,
which identifies the basis and scope of the MLR regulations for Part D
sponsors, to add a reference to section 1106 of the Act, which governs
the release of information gathered in the course of administering our
programs under the Act. After consideration of public comments received
on the technical changes, we are finalizing these technical changes to
Sec. 422.2400 and Sec. 423.2400 as proposed.
After reviewing the comments we received, we are choosing to
finalize the proposed MLR data release with two modifications. First,
we will revise the exclusion at Sec. 422.2490(b)(2), with respect to
Part C MLR data, and at Sec. 423.2490(b)(2), with respect to Part D
MLR data, to exclude from release any MLR data submitted for a single-
plan contract. Second, we add a new exclusion at Sec. 422.2490(b)(5),
with respect to Part C MLR data, and at Sec. 423.2490(b)(5), with
respect to Part D MLR data, to exclude from release any MLR data
submitted for a contract in a contract year for which the contract is
determined to be non-credible, as defined in accordance with Sec.
422.2440(d) for MA contracts and Sec. 423.2440(d) for Part D
contracts. We continue to believe that the release of MLR data is
consistent with the Administration's directives regarding the
transparency of program data, and we support public research that can
potentially strengthen the program.

F. Prohibition on Billing Qualified Medicare Beneficiary Individuals
for Medicare Cost-Sharing

As we stated in the CY 2017 proposed rule, we remind all Medicare
providers (including providers of services defined in section 1861 of
the Act and physicians) that federal law prohibits them from collecting
Medicare Part A and Medicare Part B deductibles, coinsurance, or
copayments, from beneficiaries enrolled in the Qualified Medicare
Beneficiaries (QMB) program (a Medicaid program which helps certain
low-income individuals with Medicare cost-sharing liability). In July
2015, we released a study finding that confusion and inappropriate
balance billing persist notwithstanding laws prohibiting Medicare cost-
sharing charges for QMB individuals, Access to Care Issues Among
Qualified Medicare Beneficiaries (QMB) (``Access to Care'') https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/Access_to_Care_Issues_Among_Qualified_Medicare_Beneficiaries.pdf.
These findings underscore the need to re-educate providers about
proper billing practices for QMB enrollees.
In 2013, approximately 7 million Medicare beneficiaries were
enrolled in the QMB program. State Medicaid programs are liable to pay
Medicare providers who serve QMB individuals for the Medicare cost-
sharing. However, as permitted by federal law, states can limit
provider payment for Medicare cost-sharing to the lesser of the
Medicare cost-sharing amount, or the difference between the Medicare
payment and the Medicaid rate for the service. Regardless, as stated in
the CY 2017 proposed rule, Medicare providers must accept the Medicare
payment and Medicaid payment (if any, and including any permissible
Medicaid cost sharing from the beneficiary) as payment in full for
services rendered to a QMB individual. Medicare providers who violate
these billing prohibitions are violating their Medicare Provider
Agreement and may be subject to sanctions. (See sections 1902(n)(3),
1905(p), 1866(a)(1)(A), and 1848(g)(3) of the Act.)
Additionally, as we stated in the CY 2017 proposed rule, Medicare
providers should take steps to educate themselves and their staff about
QMB billing prohibitions and to exempt QMB individuals from
impermissible Medicare cost-sharing billing and related collection
efforts. For more information about these requirements, steps to
identify QMB patients and ways to promote compliance, see https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/se1128.pdf.
Given that original Medicare providers may also serve Medicare
Advantage enrollees, we again note that the CY 2017 Medicare Advantage
Call Letter reiterates the billing prohibitions applicable to dual
eligible beneficiaries (including QMBs) enrolled in Medicare Advantage
plans and the responsibility of plans to adopt certain measures to
protect dual eligible beneficiaries from unauthorized charges under
Sec. 422.504(g). (See pages 181-183 at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2017.pdf).
Although we did not solicit comments on this statement of current
law and policy, we appreciate the comments received, which included
comments from national beneficiary advocacy organizations, and
professional, insurance, and medical billing associations.
Comment: Commenters concurred that confusion and improper QMB
billing problems remain pervasive and affirmed their negative toll on
beneficiaries. Commenters were supportive of CMS's expanded efforts to
educate providers regarding QMB billing rules to reduce the incidence
of improper QMB billing. Some commenters also noted that Medicare
providers encounter difficulties discerning which patients are QMBs and
advised CMS to adopt strategies to help providers ascertain this
information. Additionally, one commenter noted that the variation in
state policies to pay providers for Medicare cost-sharing fuels
confusion, frustration and compliance problems.
Response: We continue to pursue opportunities to educate providers
and welcome partnering with commenters and others in these efforts.
Currently, Medicare providers must determine a patient's QMB status
through information from State Medicaid agencies, including online
eligibility systems and beneficiary identification cards. We are
actively exploring additional mechanisms for Medicare providers to
readily identify the QMB status of patients.

G. Recoupment or Offset of Payments to Providers Sharing the Same
Taxpayer Identification Number

1. Overview and Background
Medicare payments to providers and suppliers may be offset or
recouped, in whole or in part, by a Medicare Administrator Contractor
(MAC) if the MAC or CMS has determined that a provider or supplier has
been overpaid. Historically, we have used the Medicare provider billing
number or National Provider Identifier (NPI) to recoup overpayments
from Medicare providers and suppliers until these debts were paid in
full or eligible for referral to the Department of Treasury (Treasury)
for further collection action under the Debt

[[Page 80441]]

Collection Improvement Act of 1996 and the Digital Accountability and
Transparency Act of 2014. Once an overpayment is referred to Treasury,
the Treasury's Debt Management Services uses various tools to collect
the debt, including offset of federal payments against entities that
share the same provider Taxpayer Identification Number (TIN). Hence,
Treasury has the ability to collect our overpayments using the provider
TIN and we pay a fee for every collection made.
On March 23, 2010, the Affordable Care Act (ACA) was enacted.
Section 6401(a)(6) of the Affordable Care Act established a new section
1866(j)(6) of the Act. Section 1866(j)(6) of the Act allows the
Secretary to make any necessary adjustments to the payments to an
applicable provider of services or supplier to satisfy any amount due
from an obligated provider of services or supplier. The statute defines
an applicable provider of services or supplier (applicable provider) as
a provider of services or supplier that has the same taxpayer
identification number as the one assigned to the obligated provider of
services or supplier. The statute defines the obligated provider of
services or supplier (obligated provider) as a provider of services or
supplier that owes a past-due overpayment to the Medicare program. For
purposes of this provision, the applicable and obligated providers must
share a TIN, but may possess a different billing number or National
Provider Identifier (NPI) number than one another.
For example, a health care system may own a number of hospital
providers and these providers may share the same TIN while having
different NPI or Medicare billing numbers. If one of the hospitals in
this system receives a demand letter for a Medicare overpayment, then
that hospital (Hospital A) will be considered the obligated provider
while its sister hospitals (Hospitals B and C) will be considered the
applicable providers. This authority allows us to recoup the
overpayment of the obligated provider, Hospital A, against any or all
of the applicable providers, Hospitals B and C, with which it, Hospital
A, shares a TIN.
2. Provisions of the Proposed Regulations
If CMS or a Medicare contractor has decided to put into effect an
offset or recoupment, then Sec. 405.373(a) requires the Medicare
contractor to notify the provider or supplier in writing of its
intention to fully or partially offset or recoup payment and the
reasons for the offset or recoupment. Currently, the written demand
letter sent by the Medicare contractor to a provider or supplier serves
as notification of the overpayment and intention to recoup or offset if
the obligated provider, Hospital A, fails to repay the overpayment in a
timely manner.
With the passage of section 1866(j)(6) of the Act, the requirements
in Sec. 405.373(a) could be interpreted to require the Medicare
contractor to provide notification to both the obligated provider,
Hospital A, and the applicable provider, Hospital B, of its intention
to recoup or offset payment. Because we don't think it is necessary to
provide separate notice to both the obligated provider and the
applicable provider, we proposed to amend the notice requirement in
Sec. 405.373. Specifically, we proposed to create a new paragraph (f)
in Sec. 405.373 to state that Sec. 405.373(a) does not apply in
instances where the Medicare Administrative Contractor intends to
offset or recoup payments to the applicable provider of services or
supplier to satisfy an amount due from an obligated provider of
services or supplier when the applicable and obligated provider of
services or supplier share the same Taxpayer Identification Number.
Before the effective date of this rule, we intend to notify all
potentially affected Medicare providers of the implementation of
section 1866(j)(6) of the Act through Medicare Learning Network (MLN)
or MLN Connects Provider eNews article(s). We also intend to update the
current Internet Only Manual instructions including, the Medicare
Financial Management Manual, and the addition of clarifying language in
the demand letters issued to obligated providers. We believe these
actions would provide adequate notice to providers and suppliers
sharing a TIN, if they choose, provide the opportunity to implement a
tracking system of Medicare overpayments on the corporate level for the
affected providers. We also believe these actions are sufficient
because of Treasury's analogous practice of offsetting using a TIN
without furnishing notice to all potentially affected providers and
suppliers. It has been a long standing practice for Treasury to offset
federal payments using the TIN and Treasury currently does not issue a
notice of intent to recoup or offset to applicable providers and
suppliers when Treasury recoups CMS overpayments.
Additionally, in our review of Sec. 405.373(a) and (b), we
proposed to replace the terms intermediary and carrier with the term
Medicare Administrative Contractor as intermediaries and carriers no
longer exist.
The following is a summary of the comments we received on
recoupment or offset of payments to providers sharing the same taxpayer
identification number.
Comment: One commenter disagreed with our assertion that there is
no need for its contractors to notify either party when such a
recoupment will be made. The commenter recommended that CMS should not
finalize its proposal to eliminate notice to the applicable provider
and the obligated provider in the event of a recoupment of an
overpayment.
Response: We continue to believe it is not necessary to provide
separate notice to both the obligated provider and the applicable
provider. We believe that updating the Medicare Financial Management
Manual, as well as including clarifying language in the demand letters
issued will provide sufficient notification to providers and suppliers
sharing a TIN. In addition, we believe the publication of this rule and
notification through a Medicare Learning Network article provides
sufficient notice to providers and suppliers sharing the same TIN and
allows these providers and suppliers sufficient time to implement a
tracking system of Medicare overpayments on a corporate level, should
they choose. Finally, offsetting using a TIN without furnishing notice
to all potentially affected providers and suppliers is a long standing
practice used by Treasury to collect Medicare overpayments.
Comment: One commenter recommended CMS recoup payments based upon
the combination of the TIN and individual NPI.
Response: We do not believe the intent of section 1866(j)(6) of the
Act is to use a combination of the TIN and individual NPI to offset
Medicare overpayments. We view section 1866(j)(6) of the Act as giving
the agency the authority to recoup payments from an applicable provider
or supplier that are due from an obligated provider or supplier that
shares the same TIN. Accordingly, we will finalize the rule as
proposed.

H. Accountable Care Organization (ACO) Participants Who Report
Physician Quality Reporting System (PQRS) Quality Measures Separately

The Affordable Care Act gives the Secretary authority to
incorporate reporting requirements and incentive payments from certain
Medicare programs into the Shared Savings Program, and to use
alternative criteria to determine if payments are warranted.

[[Page 80442]]

Specifically, section 1899(b)(3)(D) of the Act affords the Secretary
discretion to incorporate reporting requirements and incentive payments
related to the physician quality reporting initiative (PQRI), under
section 1848 of the Act, including such requirements and such payments
related to electronic prescribing, electronic health records, and other
similar initiatives under section 1848, and permits the Secretary to
use alternative criteria than would otherwise apply (under section 1848
of the Act) for determining whether to make such payments.
Current Shared Savings Program regulations at Sec. 425.504(c) do
not allow eligible professionals (EPs) billing through the Taxpayer
Identification Number (TIN) of an Accountable Care Organization (ACO)
participant to participate in PQRS outside of the Shared Savings
Program, and these EPs and the ACO participants through which they bill
may not independently report for purposes of the PQRS apart from the
ACO. This policy was designed to ease reporting burden for individual
EPs and group practices and promote integration of providers and
suppliers within the ACO in order to help achieve the Shared Savings
Program goals of improving quality and coordination of care. While over
98 percent of ACOs satisfactorily report their quality data annually,
if an ACO fails to satisfy the PQRS reporting requirements, the
individual EPs and group practices participating in that ACO will
receive the PQRS payment adjustment along with the automatic VM
downward payment adjustment.
We proposed to amend the regulation at Sec. 425.504 to permit EPs
that bill under the TIN of an ACO participant to report separately for
purposes of the 2018 PQRS payment adjustment when the ACO fails to
report on behalf of the EPs who bill under the TIN of an ACO
participant. Specifically, we proposed to remove the requirement at
Sec. 425.504(c)(2) so that, for purposes of the reporting period for
the 2018 PQRS payment adjustment (that is, January 1, 2016, through
December 31, 2016), EPs who bill under the TIN of an ACO participant
have the option of reporting separately as individual EPs or group
practices. If the ACO fails to satisfactorily report on behalf of such
EPs or group practices, we proposed to consider this separately
reported data for purposes of determining whether the EPs or group
practices are subject to the 2018 PQRS payment adjustment. We also
proposed to amend Sec. 425.504(c)(2) to apply only for purposes of the
2016 payment adjustment. We proposed revised requirements for the 2017
and 2018 PQRS payment adjustments under the Shared Savings Program at
Sec. 425.504(d). We refer readers to section III.K.1.e. of this final
rule for a more detailed discussion of the proposed revisions to the
requirements at Sec. 425.504 and the policies that are being finalized
in this final rule.
In the proposed rule, we noted that the registration deadline for
participating in the PQRS Group Practice Reporting Option (GPRO) is
June 30 of the applicable reporting period. Since affected EPs are not
able to register for the PQRS GPRO by the applicable deadline for the
2018 PQRS payment adjustment, we proposed that such EPs would not need
to register for the PQRS GPRO for the 2018 PQRS payment adjustment, but
rather could mark the data as group-level data in their submission.
Thus, we proposed to eliminate a registration process for groups
submitting data using third party entities. When groups submit data
utilizing third party entities, such as a qualified registry, qualified
clinical data registry (QCDR), direct Electronic Health Record (EHR)
product, or EHR data submission vendor, we are able to obtain group
information from the third party entity and discern whether the data
submitted represents a group-level submission or an individual-level
submission once the data is submitted. In addition, we proposed that an
affected EP may utilize the secondary reporting period either as an
individual EP using one of the registry, QCDR, direct EHR product, or
EHR data submission vendor reporting options or as a group practice
using one of the registry, QCDR, direct EHR product, or EHR data
submission vendor reporting options. We noted that this would exclude,
for individual EPs, the claims reporting option and, for group
practices, the Web Interface and certified survey vendor reporting
options.
Furthermore, we recognized that certain EPs are similarly situated
with regard to the 2017 PQRS payment adjustment, which will be applied
beginning on January 1, 2017. We stated that we believe it is
appropriate and consistent with our stated policy goals to afford these
EPs the benefit of this proposed policy change. Accordingly, as noted
above, we proposed to permit EPs that bill through the TIN of an ACO
participant to report separately for purposes of the 2017 PQRS payment
adjustment if the ACO failed to report on behalf of the EPs who bill
under the TIN of an ACO participant. Specifically, we proposed to
remove the requirements at Sec. 425.504(c)(2) so that, for purposes of
the reporting period for the 2017 PQRS payment adjustment, EPs who bill
under the TIN of an ACO participant have the option of reporting
separately as individual EPs or group practices. As noted in this final
rule, we proposed to amend Sec. 425.504(c)(2) to apply only for
purposes of the 2016 payment adjustment. We proposed to include the
revised requirements for the 2017 and 2018 PQRS payment adjustments
under the Shared Savings Program at Sec. 425.504(d). We refer readers
to the discussion of this proposal and the final policies that we are
adopting in section III.K.1.e. of this final rule.
The previously established reporting period for the 2017 PQRS
payment adjustment is January 1, 2015, through December 31, 2015. To
allow affected EPs that participate in an ACO to report separately for
purposes of the 2017 PQRS payment adjustment, we proposed at Sec.
414.90(j)(1)(ii) to establish a secondary PQRS reporting period for the
2017 PQRS payment adjustment for individual EPs or group practices who
bill under the TIN of an ACO participant if the ACO failed to report on
behalf of such individual EPs or group practices during the previously
established reporting period for the 2017 PQRS payment adjustment. We
proposed that this option would be limited to EPs that bill through the
TIN of an ACO participant in an ACO that failed to satisfactorily
report on behalf of its EPs and would not be available to EPs that
failed to report for purposes of PQRS outside the Shared Savings
Program.
In addition, we proposed that these affected EPs may utilize the
secondary reporting period either as an individual EP using the
registry, QCDR, direct EHR product, or EHR data submission vendor
reporting options or as a group practice using one of the registry,
QCDR, direct EHR product, or EHR data submission vendor reporting
options. We noted that this would exclude, for individual EPs, the
claims reporting option and, for group practices, the Web Interface and
certified survey vendor reporting options.
We note that the registration deadline for the participating in the
PQRS GPRO is June 30 of the applicable reporting period. Since the
applicable deadline for the 2017 PQRS payment adjustment has passed, we
proposed that such EPs would not need to register for the PQRS GPRO for
the 2017 PQRS payment adjustment, but rather would be able to report as
a group practice via the registry, QCDR, direct EHR product, or EHR
data submission vendor reporting options. Therefore, we proposed at
Sec. 414.90(j)(4)(v) that sections

[[Page 80443]]

Sec. 414.90(j)(8)(ii), (iii), and (iv) would apply to affected EPs
reporting as individuals using this secondary reporting period for the
2017 PQRS payment adjustment. In addition, we proposed at Sec.
414.90(j)(7)(viii) that sections Sec. 414.90(j)(9)(ii), (iii), and
(iv) would apply to affected EPs reporting as group practices using
this secondary reporting period for the 2017 PQRS payment adjustment.
Further, we proposed at Sec. 414.90(k)(4)(ii) that Sec. 414.90(k)(5)
would apply to affected EPs reporting as individuals or group practices
using this secondary reporting period for the 2017 PQRS payment
adjustment.
We also proposed that the secondary reporting period for the 2017
PQRS payment adjustment would coincide with the reporting period for
the 2018 PQRS payment adjustment (that is, January 1, 2016 through
December 31, 2016). In addition, for operational reasons and to
minimize any additional burden on affected EPs (who are already
required to report for CY 2016 for purposes of the 2018 PQRS payment
adjustment), we proposed to assess the individual EP or group
practice's 2016 data using the applicable satisfactory reporting
requirements for the 2018 PQRS payment adjustment (including, but not
limited to, the applicable PQRS measure set). We invited comment on any
2018 requirements that might need to be modified when applied for
purposes of the 2017 PQRS payment adjustment.
As a result, individual EP or group practice 2016 data could be
used with respect to the secondary reporting period for the 2017 PQRS
payment adjustment or for the 2018 PQRS payment adjustment or for both
payment adjustments if the ACO in which the affected EPs participate
failed to report for purposes of the applicable payment adjustment. We
explained that we believe this change to our program rules is necessary
for affected individual EPs and group practices to be able to take
advantage of the additional flexibility proposed for the Shared Savings
Program (81 FR 46426 through 45427). If an affected individual EP or
group practice decides to use the secondary reporting period for the
2017 PQRS payment adjustment, we explained that this EP or group
practice should expect to receive a PQRS payment adjustment for
services furnished in 2017 until CMS is able to determine that the EP
or group practice satisfactorily reported for purposes of the 2017 PQRS
payment adjustment. First, we would need to process the data submitted
for 2016. Second, we would need to determine whether or not the
individual EP or group practice met the applicable satisfactory
reporting requirements for the 2018 PQRS payment adjustment. Third, we
would need to update the individual EP or group practice's status so
that the EP or group practice stops receiving a negative payment
adjustment on claims for services furnished in 2017 and reprocess all
claims that were previously paid. In addition, as discussed in the
proposed rule, the EP or group practice would also avoid the automatic
downward VM adjustment, but would not qualify for an upward adjustment
since the ACO failed to report (81 FR 46446).
Since EPs and group practices taking advantage of this secondary
reporting period for the 2017 PQRS payment adjustment will have missed
the deadline for submitting an informal review request for the 2017
PQRS payment adjustment, we proposed that the informal review
submission periods for these EPs or group practices would occur during
the 60 days following the release of the PQRS feedback reports for the
2018 PQRS payment adjustment.
We requested comments on these proposals.
The following is summary of the comments we received on ACO
participants who report PQRS quality measures separately.
Comment: The majority of commenters supported CMS's proposal to
allow affected EPs or group practices to use CY 2016 as a secondary
reporting period for purposes of the 2017 PQRS payment adjustment, in
which case such EPs or group practices should expect to receive a PQRS
payment adjustment for services furnished in 2017 until CMS is able to
determine that the EP or group practice satisfactorily reported for
purposes of the 2017 PQRS payment adjustment. In addition, the
commenters supported CMS's proposal to allow EPs or group practices
that bill under the TIN of an ACO participant to report separately for
purposes of the PQRS payment adjustment if the ACO fails to report on
their behalf; the commenters believed this proposal provides
flexibility for EPs and group practices to avoid penalties under PQRS
and VM when ACOs fail to report the data. Another commenter supported
the proposal to retain the requirement that an ACO satisfactorily
report on behalf of the EPs who bill under the TIN of an ACO
participant for purposes of the PQRS payment adjustment. One commenter
stated that they appreciated the elimination of the registration
process for groups using third party entities.
Response: We would like to clarify that the elimination of the GPRO
registration process would only apply to EPs and groups that
participate in ACOs that fail to report on their behalf.
Comment: One commenter stated that affected EPs or group practices
would not be aware that the ACO did not satisfactorily report for
purposes of the 2018 PQRS payment adjustment and, absent such
information, would not choose to report outside the ACO during the CY
2016 reporting period. Another commenter noted that many EPs in an ACO
will not report data separately during the reporting period if they are
operating under the assumption that their ACO is reporting on their
behalf. In addition, other commenters urged CMS to invest in strategies
to prevent these situations from occurring in the first place, such as
providing ACOs with more frequent feedback on their reporting
compliance throughout the year.
Response: We expect that any ACO that is unable to meet
satisfactory reporting requirements for any reason would inform the EPs
participating in the ACO in a timely and transparent manner to allow
the EPs to report separately using the registry, QCDR, direct EHR or
EHR data submission vendor reporting options. Therefore, if an EP or
group practice has reason to believe their ACO may not report on their
behalf in 2016, they have the ability to report separately for purposes
of the 2018 PQRS payment adjustment. In regards to providing ACOs with
more frequent feedback on their reporting compliance, we provide many
opportunities for ACOs to monitor their progress toward the
satisfactory reporting requirement while the Web Interface is open for
data collection. Throughout the data collection period, and when the
ACO has finished its abstraction, ACOs may use reports available in the
Web Interface to confirm whether or not the Web Interface reporting
requirements have been met. Leading up to the data collection period
and during the data collection period, we provide frequent reminders to
ACOs on the importance of reporting and how to satisfactorily report.
We also provide targeted outreach to ACOs who have not entered data
into the Web Interface in the final weeks of the data collection
period, in an effort to ensure that all ACOs completely report.
Comment: One commenter acknowledged the difficulty in adding a
second reporting period for affected EPs and group practices, and
therefore, urged flexibility on the part of CMS to determine a way to
provide an

[[Page 80444]]

additional reporting period in 2017 for purposes of the 2018 PQRS
payment adjustment for EPs and group practices that participate in ACOs
that fail to report for purposes of the 2018 PQRS payment adjustment.
Another commenter encouraged CMS to allow affected EPs and group
practices to report PQRS data separately during the year following the
CY 2016 reporting period in order for them to avoid penalties during
the 2018 payment year.
Response: As discussed in section III.K.1.e. of this final rule, we
are finalizing our proposal to remove the requirement at Sec.
425.504(c)(2) so that, for purposes of the reporting periods for the
2017 and 2018 PQRS payment adjustments, EPs who bill under the TIN of a
Shared Savings Program ACO participant have the option of reporting
separately as individual EPs or group practices. We disagree with the
commenter's suggestions to establish a secondary reporting period for
the 2018 PQRS payment adjustment, in addition to the 2017 PQRS payment
adjustment. We believe there is adequate time for EPs or group
practices to report separately for the 2018 payment adjustment given
that this final rule will be issued more than a month prior to the end
of the reporting period for the 2018 payment adjustment (that is,
January 1, 2016 through December 31, 2016).
Comment: Several commenters stated their support for CMS's
recognition of the individual commitment to quality improvement of EPs
in ACOs and CMS's proposals that would enable them to avoid penalties
in situations where their ACO fails to meet satisfactory reporting
requirements. The commenters stated that individual EPs and group
practices are not in direct control of decisions or actions taken by
the larger ACO, and therefore, should not be penalized. In fact, the
commenters stated that many EPs do not even know they are part of an
ACO and prefer instead to report more directly relevant measures, such
as those available through a QCDR. As an alternative to giving these
EPs another opportunity to report data, a few commenters believed that
EPs should instead be held harmless or provided a waiver from a
negative payment adjustment if the ACO fails to report.
Response: We appreciate the commenters' support. However, we do not
believe that EPs should be held harmless or provided a waiver if the
ACO fails to report on their behalf. As discussed above, we believe it
is reasonable and appropriate to expect that any ACO that is unable to
meet satisfactory reporting requirements for any reason would inform
the EPs participating in the ACO in a timely and transparent manner to
allow the EPs to report separately using the registry, QCDR, direct EHR
or EHR data submission vendor reporting options. However, if an EP or
group practice has reason to believe their ACO may not report on their
behalf in 2016, they have the ability to report separately for purposes
of the 2018 PQRS payment adjustment. In addition, by permitting EPs and
group practices to report separately from the ACO in such cases, we are
giving them flexibility to report more directly relevant measures if
they so choose.
Comment: One commenter supported CMS's proposal to allow affected
EPs to report separately via a registry, QCDR, direct EHR or EHR data
submission vendor.
Response: We appreciate the commenter's support for our proposal.
Comment: One commenter recommended that for the CY 2016 reporting
period: (1) In cases where measures data are submitted by both the EP
and the ACO, the best performance should be counted and the EP should
be eligible for a positive payment adjustment; or (2) in cases where
the EP does not opt to report outside the ACO, and the ACO fails to
report, the EP should receive a neutral payment adjustment (that is,
the EP should be held harmless from a negative payment adjustment and
be ineligible for a positive payment adjustment).
Response: PQRS only assesses whether or not an EP or group practice
satisfactorily reported quality data or satisfactorily participated in
a QCDR. PQRS does not apply positive payment adjustments or adjust
payments based on an EP or group practice's performance on the quality
measures. However, the VM does apply positive payment adjustments and
adjust payments based on the EP or group practice's performance. We
refer readers to section III.L.3.b. of this final rule for a discussion
of the VM policies in this scenario.
Comment: One commenter stated that reporting the previous year's
data is burdensome, particularly for registry measures. The commenter
believed that requiring EPs to report separately from the ACO
effectively penalizes the EP for the ACO's error. Instead, the
commenter suggested that CMS impose a negative payment adjustment on
the ACOs when they fail to report. For the 2017 PQRS payment
adjustment, the commenter recommended that affected EPs be held
harmless by receiving no payment adjustment. The commenter stated that
retroactive reporting would be burdensome to the EPs and would require
information reported using QCDRs and EHRs to simultaneously meet the
reporting requirements and measures of multiple years.
Response: We would like to clarify that we are not requiring
affected EPs or group practices to report the previous year's data. EPs
or group practices that are taking advantage of the secondary reporting
period for the 2017 PQRS payment adjustment would be reporting data
from CY 2016 and would be assessed using the applicable reporting
requirements for the 2018 PQRS payment adjustment (including, but not
limited to, the applicable PQRS measure set). In addition, we note that
the PQRS payment adjustment does not apply to ACOs, and therefore, we
cannot impose a negative payment adjustment on the ACOs when they fail
to satisfactorily report.
Out of Scope Comments
We received a few comments for this section that are out of scope
for this final rule. We received comments pertaining to the following:
(1) Support for CMS' proposal that EPs participating in an ACO under
the Shared Savings Program that satisfy the CQM reporting component of
meaningful use for the Medicare EHR Incentive Program when the EP
extracts data necessary for the ACO to satisfy the quality reporting
requirements under the Shared Savings Program from CEHRT and when the
ACO reports the ACO GPRO measures through the CMS Web Interface; (2)
recommendation that under MIPS, CMS use the PQRS data (either submitted
by the ACO or separately by the ACO participant) which would generate
the highest score for the quality performance category; and (3)
requested guidance in the final rule for EPs, such as rehabilitation
therapists, who are currently subject to PQRS, but will not be subject
to MIPS until 2021 at the earliest.
After consideration of the comments received regarding our proposed
policies for EPs and group practices participating in ACOs that report
PQRS quality measures separately from the ACO, we are finalizing the
policies as proposed. At Sec. 414.90(j)(1)(ii), we are finalizing our
proposal to establish a secondary PQRS reporting period for the 2017
PQRS payment adjustment for individual EPs or group practices who bill
under the TIN of an ACO participant if the ACO failed to report on
behalf of such individual EPs or group practices during the previously
established reporting period for the 2017 PQRS payment adjustment. This
option is limited to EPs and group practices that bill through the TIN
of an

[[Page 80445]]

ACO participant in an ACO that failed to satisfactorily report on
behalf of its EPs and would not be available to EPs and group practices
that failed to report for purposes of PQRS outside the Shared Savings
Program. We are finalizing our proposal that these affected EPs may
utilize the secondary reporting period either as an individual EP or as
a group practice using one of the registry, QCDR, direct EHR product,
or EHR data submission vendor reporting options. We are also finalizing
our proposal that such EPs do not need to register for the PQRS GPRO
for the 2017 PQRS payment adjustment. In addition, we are finalizing at
Sec. 414.90(j)(4)(v) our proposal that sections Sec.
414.90(j)(8)(ii), (iii), and (iv) would apply to affected EPs reporting
as individuals using this secondary reporting period for the 2017 PQRS
payment adjustment. Further, we are finalizing at Sec.
414.90(j)(7)(viii) our proposal that sections Sec. 414.90(j)(9)(ii),
(iii), and (iv) would apply to affected EPs reporting as group
practices using this secondary reporting period for the 2017 PQRS
payment adjustment. We are finalizing at Sec. 414.90(k)(4)(ii) our
proposal that Sec. 414.90(k)(5) would apply to affected EPs reporting
as individuals or group practices using this secondary reporting period
for the 2017 PQRS payment adjustment. We are finalizing our proposal
that the secondary reporting period for the 2017 PQRS payment
adjustment would coincide with the reporting period for the 2018 PQRS
payment adjustment (that is, January 1, 2016 through December 31,
2016). In addition, we are finalizing a policy under which we will
assess the individual EP or group practice's 2016 data using the
applicable satisfactory reporting requirements for the 2018 PQRS
payment adjustment (including, but not limited to, the applicable PQRS
measure set). If an affected individual EP or group practice decides to
use the secondary reporting period for the 2017 PQRS payment
adjustment, the EP or group practice should expect to receive a PQRS
payment adjustment for services furnished in 2017 until we are able to
determine that the EP or group practice satisfactorily reported for
purposes of the 2017 PQRS payment adjustment. Further, we are
finalizing our proposal that the informal review submission periods for
these EPs or group practices would occur during the 60 days following
the release of the PQRS feedback reports for the 2018 PQRS payment
adjustment.

I. Medicare Advantage Provider Enrollment

1. Background
a. General Overview
The Medicare program is the primary payer of health care for
approximately 54 million beneficiaries and enrollees. Section 1802(a)
of the Act permits beneficiaries to obtain health services from any
individual or organization qualified to participate in the Medicare
program. Providers and suppliers furnishing items or services must
comply with all applicable Medicare requirements stipulated in the Act
and codified in the regulations. These requirements are meant to
promote quality care while protecting the integrity of the program. As
a major component of our fraud prevention activities, we have increased
our efforts to prevent unqualified individuals or organizations from
enrolling in Medicare.
The term ``provider of services'' is defined in section 1861(u) of
the Act as a hospital, a critical access hospital (CAH), a skilled
nursing facility (SNF), a comprehensive outpatient rehabilitation
facility (CORF), a home health agency (HHA), or a hospice. The term
``supplier'' is defined in section 1861(d) of the Act as, unless
context otherwise requires, a physician or other practitioner, facility
or other entity (other than a provider of services) that furnishes
items or services under title XVIII of the Act. Other supplier
categories may include, for example, physicians, nurse practitioners,
and physical therapists.
Providers and suppliers that fit into these statutorily defined
categories may enroll in Medicare if they meet the proper screening and
enrollment requirements. This final rule will require providers and
suppliers in MA organization networks and other designated plans
(hereafter including MA-PD plans, FDRs, PACE, Cost HMOs or CMPs,
demonstration programs, pilot programs, locum tenens suppliers, and
incident-to suppliers) to be enrolled in Medicare in an approved
status. We generally refer to an ``approved status'' as a status
whereby a provider or supplier is enrolled in, and is not revoked from,
the Medicare program. For example, a provider or supplier that has
submitted an application, but has not completed the enrollment process
with their respective Medicare Administrative Contractor (MAC), is not
enrolled in an approved status. The submission of an enrollment
application does not deem a provider or supplier enrolled in an
approved status. A provider or supplier that is currently revoked from
Medicare is not in an approved status. Out-of network or non-contract
providers and suppliers are not required to enroll in Medicare to meet
the requirements of this final rule with respect to furnishing items
and services to MA enrollees.
b. Background
To receive payment for a furnished Medicare Part A or Part B
service or item, or to order, certify, or prescribe certain Medicare
services, items, and drugs, a provider or supplier must enroll in
Medicare. The enrollment process requires the provider or supplier to
complete, sign, and submit to its assigned Medicare contractor the
appropriate Form CMS-855 enrollment application. The CMS-855
application form captures information about the provider or supplier
that is needed for CMS or its contractors to screen the provider or
supplier, verify the information provided, and determine whether the
provider or supplier meets all Medicare requirements. This screening
prior to enrollment helps to ensure that unqualified individuals and
entities do not bill Medicare and that the Medicare Trust Funds are
accordingly protected. Data collected and verified during the
enrollment process generally includes, but is not limited to: (1) Basic
identifying information (for example, legal business name, tax
identification number); (2) state licensure information; (3) practice
locations; and (4) information regarding ownership and management
control.
We strive to further strengthen the provider and supplier
enrollment process to prevent problematic providers and suppliers from
entering the Medicare program. This includes, but is not limited to,
enhancing our program integrity monitoring systems and revising our
provider and supplier enrollment regulations in 42 CFR 424, subpart P,
and elsewhere, as needed. With authority granted by the Act, including
provisions in the Affordable Care Act, we have revised our provider and
supplier enrollment regulations by issuing the following:
In the February 2, 2011 Federal Register (76 FR 5861), we
published a final rule with comment period titled, ``Medicare,
Medicaid, and Children's Health Insurance Programs; Additional
Screening Requirements, Application Fees, Temporary Enrollment
Moratoria, Payment Suspensions and Compliance Plans for Providers and
Suppliers.'' This final rule with comment period implemented major
Affordable Care Act provisions, including the following:

[[Page 80446]]

++ A requirement that institutional providers and suppliers must
submit application fees as part of the Medicare, Medicaid, and CHIP
provider and supplier enrollment processes.
++ Establishment of Medicare, Medicaid, and CHIP provider and
supplier risk-based enrollment screening categories and corresponding
screening requirements.
++ Authority that enabled imposition of temporary moratoria on the
enrollment of new Medicare, Medicaid, and CHIP providers and suppliers
of a particular type (or the establishment of new practice locations of
a particular type) in a geographic area.
In the April 27, 2012 Federal Register (77 FR 25284), we
published a final rule titled, ``Medicare and Medicaid Programs;
Changes in Provider and Supplier Enrollment, Ordering and Referring,
and Documentation Requirements and Changes in Provider Agreements.''
The rule implemented another major Affordable Care Act provision and
required, among other things, that providers and suppliers that order
or certify certain items or services be enrolled in or validly opted-
out of the Medicare program.
++ This requirement was expanded to include prescribers of Medicare
Part D drugs in the final rule published in the May 23, 2014 Federal
Register (79 FR 29844) titled, ``Medicare Program; Contract Year 2015
Policy and Technical Changes to the Medicare Advantage and the Medicare
Prescription Drug Benefit Programs.''
Through improved processes and systems, since March 2011 we have:
Saved over $927 million by revoking Medicare Part A and B
providers and suppliers that did not comply with Medicare requirements;
Avoided over $2.4 billion in costs by preventing further
billing from revoked and deactivated Medicare Part A and B providers
and suppliers;
Deactivated more than 543,163 Medicare Part A and B
providers and suppliers that did not meet Medicare enrollment
standards;
Revoked enrollment and billing privileges under Sec.
424.535 for more than 34,888 Medicare Parts A and B providers and
suppliers that did not meet Medicare enrollment standards, and
Denied 4,949 applications for providers and suppliers in
Medicare Parts A and B that did not meet Medicare enrollment standards
within a recent 12-month period.\14\
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\14\ Taken from Shantanu Agrawal, M.D. testimony to Congress on
July 22, 2015 https://www.aging.senate.gov/imo/media/doc/CMS%20_Agrawal_7_22_15.pdf.
---------------------------------------------------------------------------

The public may review the Annual Report to Congress on the Medicare
and Medicaid Integrity Programs each year for more information on
program integrity efforts, including how we calculate savings to the
Medicare and Medicaid programs. The Department of Health and Human
Services (HHS), Office of Inspector General (OIG), Government
Accountability Office (GAO), and other federal agencies routinely
review Medicare's provider and supplier enrollment processes and
systems, including a recent study stating that ``as part of an overall
effort to enhance program integrity and reduce fraud risk, effective
enrollment-screening procedures are essential to ensure that ineligible
or potentially fraudulent providers or suppliers do not enroll in the
Medicare program.'' (GAO-15-448) The enrollment screening authorities
granted in the Affordable Care Act and used to prevent and detect
ineligible or potentially fraudulent providers and suppliers from
enrolling in the Medicare program are working to protect beneficiaries
and the Medicare Trust Funds.
Under applicable provisions of the Tax Equity and Fiscal
Responsibility Act (TEFRA) of 1982, Medicare began to pay health plans
on a prospective risk basis for the first time. The Balanced Budget Act
of 1997 (BBA) modified these provisions and established a new Part C of
the Medicare program, known as Medicare+Choice (M+C), effective January
1999. As part of the M+C program, the BBA authorized us to contract
with public or private organizations to offer a variety of health plan
options for enrollees, including both traditional managed care plans
(such as those offered by HMOs, as defined in section 1876 of the Act)
and new options not previously authorized.
The M+C program was renamed the Medicare Advantage (MA) program
under Title II of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub. L. 108-173), which was enacted on
December 8, 2003. The MMA updated the choice of plans for enrollees
under MA and changed how benefits are established and payments are
made. In addition, Title I of the MMA established the Medicare
prescription drug benefit (Part D) program and amended the MA program
to allow most types of MA plans to offer prescription drug coverage.
All Medicare health plans, with the exception of PACE
organizations, operating in geographic areas that we determine to have
enough qualified providers and suppliers with which to contract in
order for enrollees to have access to all Medicare Part A and Part B
services, must develop a network of qualified providers and suppliers
that meet our network adequacy standards. As a condition of contracting
with us, the health plans' contracted network of providers and
suppliers must be approved by us as part of application approval (Sec.
417.406). PACE organizations must furnish comprehensive medical,
health, and social services that integrate acute and long-term care in
at least the PACE center, the participant's home, or inpatient
facilities, and must ensure accessible and adequate services to meet
the needs of its participants.
Individuals receiving care through MA organizations are typically
referred to as enrollees, while in other parts of the Medicare program,
benefit recipients are referred to as beneficiaries. This rule does not
change the proper meaning of either term; however, for ease of reading,
the terms ``beneficiary'' and ``enrollee'' are used synonymously
throughout the preamble of this final rule.
2. Provisions of the Proposed Regulation
a. Need for Regulatory Action
This final rule will require providers or suppliers that furnish
health care items or services to a Medicare enrollee who receives his
or her Medicare benefit through an MA organization to be enrolled in
Medicare and be in an approved status. The term ``MA organization''
refers to both MA plans and also MA plans that provide drug coverage,
otherwise known as MA-PD plans. This final rule creates consistency
with the provider and supplier enrollment requirements for all other
Medicare (Part A, Part B, and Part D) programs. We believe that this
final rule is necessary to help ensure that Medicare enrollees receive
items or services from providers and suppliers that are fully compliant
with the requirements for Medicare enrollment and that are in an
approved enrollment status in Medicare. This final rule will assist our
efforts to prevent fraud, waste, and abuse and to protect Medicare
enrollees by carefully screening all providers and suppliers,
especially those that potentially pose an elevated risk to Medicare, to
ensure that they are qualified to furnish Medicare items and services.
Out-of-network or non-contract providers and suppliers are not required
to enroll in Medicare to meet the requirements of this final rule.

[[Page 80447]]

We consider provider and supplier enrollment to be the gateway to
the Medicare program and to beneficiaries. Requiring enrollment of
those that wish to furnish items or services to MA beneficiaries gives
us improved oversight of the providers and suppliers treating
beneficiaries and the Medicare Trust Funds dollars spent on their care.
However, Medicare has not historically had direct oversight over all
providers and suppliers in MA organizations. We note that Sec. 422.204
requires MA organizations to conduct screening of their providers. We
believe that we, through our enrollment processes, can further ensure
that only qualified providers and suppliers treat Medicare
beneficiaries by conducting rigorous screening and rescreening of
providers and suppliers that includes, for example, risk-based site
visits and, in some cases, fingerprint-based background checks. We also
have access to information and data not available to MA organizations,
making oversight to ensure compliance with all federal and state
requirements more robust. We also continually review provider and
supplier enrollment information from multiple sources, such as judicial
and law enforcement databases, state licensure databases, professional
credentialing sources, and other systems of record. In short, we
collect and carefully review and verify information prior to the
provider's or supplier's enrollment and, of great importance, continue
this monitoring throughout the period of enrollment. Section 422.204,
on the other hand, neither requires MA organizations to, for instance,
review a provider or supplier's final adverse action history (as
defined in Sec. 424.502), nor to verify a provider or supplier's
practice location, ownership, or general identifying information.
We believe that MA organization enrollees should have the same
protections against potentially unqualified or fraudulent providers and
suppliers as those afforded to beneficiaries under the fee-for-service
(FFS) and Part D programs. Indeed, Medicare beneficiaries and
enrollees, the Medicare Trust Funds, and the program at large, are at
risk when providers and suppliers that have not been adequately
screened, furnish, order, certify, or prescribe Medicare services and
items and receive Medicare payments. For instance, a network provider
with a history of performing medically unnecessary tests, treatments,
or procedures could threaten enrollees' welfare, as could a physician
who routinely overprescribes dangerous drugs. Lack of sufficient
oversight could also result in improper Medicare payments, harming the
Medicare Trust Funds and taxpayers. Requiring enrollment allows us to
have proper oversight of providers and suppliers, making it more
difficult for these types of providers and suppliers to enroll in
Medicare and remain enrolled in Medicare. Furthermore, it allows us to
remove a enrolled provider or supplier that does not comply with our
rules across Medicare (Part A, Part B, MA, and Part D).
Information regarding a provider or supplier's enrollment status is
housed in our enrollment repository called the Provider Enrollment,
Chain and Ownership System (PECOS). A link to that information is
located on the CMS Web site. Initial data show a large percent of MA
providers and suppliers are already enrolled in Medicare. We do not
believe that this final rule will have a significant impact on MA
organizations' ability to establish networks of contracted providers
and suppliers that meet CMS' MA network requirements. However, we
solicited industry comment on the potential impact of this final rule
on MA organizations ability to establish or maintain an adequate
networks of providers and suppliers. To clarify, this rule only
requires the enrollment of providers and suppliers that are of a
provider or supplier type eligible to enroll in Medicare.
Categorically- eligible providers and suppliers unable to meet the
specific enrollment requirements are not exempt from this rule. For
example, if a clinical social worker cannot meet an education
requirement as required by Sec. 410.73, the clinical social worker
cannot enroll because he or she fails to meet program requirements.
Therefore, this clinical social worker may not provide items and
services to beneficiaries that receive items and services through FFS,
MA, MA-PD, PACE, and Cost plans, as well as demonstration and pilot
programs, regardless of whether the provider or supplier is listed on a
specific claim for payment.
We believe that preventing questionable providers or suppliers from
participating in the MA program and removing existing unqualified
providers and suppliers will help ensure that fewer enrollees are
exposed to risks and potential harm, and that taxpayer monies are spent
appropriately. Such a policy will also help comply with the GAO's
recommendation that we improve our provider and supplier enrollment
processes and systems to increase the protection of all beneficiaries
and the Medicare Trust Funds. (GAO-15-448). The additional resources
and oversight that we provide in our processes for enrolling providers
and suppliers will enhance and complement the screening processes that
MA organizations already are required to perform.
b. Statutory Authority
The following are the principal legal authorities for these
provisions:
Section 1856(b) of the Act provides that the Secretary
shall establish by regulation other standards for Medicare+Choice
organizations and plans consistent with, and to carry out, this part.
In addition, section 1856(b) states that these standards supersede any
state law or regulation (other than those related to licensing or plan
solvency) for all MA organizations.
Sections 1102 and 1871 of the Act, which provide general
authority for the Secretary to prescribe regulations for the efficient
administration of the Medicare program.
Section 1866(j) of the Act, which provides specific
authority with respect to the enrollment process for providers and
suppliers in the Medicare program.
3. Major Provisions
Given the foregoing and the need to safeguard the Medicare program
and its enrollees, we are finalizing most provisions included in the
proposed rule, with limited exceptions and explained herein.
Although existing regulations at Sec. 422.204 address basic
requirements for MA provider credentialing, we are finalizing the
requirement in Sec. 422.204(b)(5) to require plans to verify that they
are compliant with the provider and supplier enrollment requirements.
We believe this addition would help facilitate MA organizations'
compliance.
In Sec. Sec. 422.222, 417.478, 460.50, 460.70, and 460.71 we are
finalizing the provisions requiring providers and suppliers to enroll
in Medicare and be in an approved status in order to provide health
care items or services to a Medicare enrollee who receives his or her
Medicare benefit through an MA organization. This requirement would
apply to network providers and suppliers; first-tier, downstream, and
related entities (FDR); providers and suppliers participating in the
Program of All-inclusive Care for the Elderly (PACE); suppliers in Cost
HMOs or CMPs; providers and suppliers participating in demonstration
programs; providers and suppliers in pilot programs; locum tenens
suppliers; and incident-to suppliers. Based on a comment we received,
we made a change from the proposed rule when

[[Page 80448]]

finalizing a specific provision relating to the PACE program.
Commenters were concerned that the requirement to update PACE program
agreements with the name and NPIs of all enrolled providers and
suppliers was extremely burdensome based on the nature of the
agreements and it imposed more of a burden than was established for
other plans and programs required to comply with this rule. Instead of
requiring PACE organizations to update the program agreement with the
name and NPI of all providers and suppliers (Sec. 460.32), we added
language to Sec. 460.70 and Sec. 460.71 that better reflect the
enrollment requirements imposed on MA organizations. We agree that we
can achieve the same program integrity goals, without the added burden
of having PACE organizations reflect this information in the program
agreement. Based on a comment we received, we also moved the
requirement for PACE that was included in 422.222 and relocated it to
better align with the PACE program. The requirements remain the same;
however, the enrollment requirements are now contained in part 460.
We are finalizing the provisions in Sec. 422.510, Sec. 422.752,
Sec. 460.40, and Sec. 460.50 stating that organizations and programs
that do not ensure that providers and suppliers comply with the
provider and supplier enrollment requirements may be subject to
sanctions and termination. Considering the serious risks to the
Medicare program and enrollees from fraudulent or unqualified providers
and suppliers, we believe that these are actions may be appropriate.
Current rules allow MA organizations to contract with different
entities to provide services to beneficiaries. These contracted
entities are referred to as first-tier, downstream, and related
entities or FDRs, as defined in Sec. 422.500. FDRs must enroll to
comply with this rule.
PACE is a Medicare and Medicaid program that helps people meet
their health care needs in the community instead of going to a nursing
home or other care facility, wherein a team of health care
professionals works with participants and their families to make sure
participants get the coordinated care they need. A participant enrolled
in PACE must receive Medicare and Medicaid benefits solely through the
PACE organization. To ensure consistency within our programs, we
believe that our provider and supplier enrollment requirements should
extend to this program.
Medicare Cost HMOs or CMPs are a type of Medicare health plan
available in certain areas of the country. Some Cost HMOs or CMPs only
provide coverage for Part B services. Cost HMOs or CMPs do not include
Part D. These plans are either sponsored by employer or union group
health plans or offered by companies that do not provide Part A
services.
Demonstrations and pilot programs, also called research studies,
are special projects that test improvements in Medicare coverage,
payment, and quality of care. They usually operate only for a limited
time for a specific group of people and may only be offered only in
specific areas. Providers and suppliers in these programs would not be
exempt from the requirements of this final rule.
In Sec. Sec. 422.224 and 460.86, we are finalizing the prohibition
on MA, PACE, the other designated programs and organizations from
paying individuals or entities that are excluded by the OIG or revoked
from the Medicare program. These provisions also require MA, PACE, the
other designated programs and organizations to notify the enrollee and
the excluded or revoked provider or supplier that payment shall not be
made. We are not, however, finalizing a first time allowance for
payment. Based on further analysis, we believe a first time payment
allowance would violate existing statute. However, we believe that
beneficiaries are adequately protected in these situations based upon
regulatory protections afforded at 42 CFR 1001.1901(b) and Sec.
424.555(b) that preclude OIG excluded individuals and entities, as well
as revoked, deactivated, or Medicare enrollment denied providers or
suppliers from recouping payment from beneficiaries. We continue to
believe such excluded or revoked individuals and entities pose a
significant risk to enrollees and the Medicare program and should not
receive federal dollars, even if payment is made through an
intermediary such as an MA organization. Based upon the inclusion of
PACE in Sec. 422.222 in the proposed rule, and our relocating the PACE
requirement to part 460, the application of the prohibition to pay
excluded and revoked providers and suppliers also needs to be
separately designated. Therefore, in this final rule, the sections
applicable to not paying excluded or revoked providers and suppliers is
now designated in Sec. 460.86.
In Sec. 422.501(c)(2), we are finalizing language requiring MA
organization applications to include documentation demonstrating that
all applicable providers and suppliers are enrolled in Medicare in an
approved status. We believe that this will assist CMS in the MA
organization application process by requiring MA organizations to
provide assurance that the designated providers and suppliers are
properly screened and enrolled in Medicare.
In Sec. 422.504(a)(6), we are finalizing language with respect to
contract conditions. MA organizations must agree to comply with all
applicable provider requirements in subpart E of this part, including
provider certification requirements, anti-discrimination requirements,
provider participation and consultation requirements, the prohibition
on interference with provider advice, limits on provider
indemnification, rules governing payments to providers, and limits on
physician incentive plans. In Sec. 422.504(a)(6), we are finalizing
the extension of this requirement to suppliers. In this same section,
we also are finalizing the requirement for MA organizations to comply
with the provider and supplier enrollment requirements referenced in
Sec. 422.222. We believe these revisions would help facilitate the MA
organizations' compliance with Sec. 422.222. In Sec. Sec.
422.504(i)(2)(v), 417.484, 460.70, and 460.71, we are finalizing
provisions that require MA organizations, Cost plans, and PACE
organizations to require all FDRs and contracted entities to agree to
comply with the provider and supplier enrollment provision.
Finally, the provisions are effective the first day of the next
plan year that begins 2 years from the date of publication of the CY
2017 PFS final rule. For PACE organizations, these requirements will be
effective the first day of the calendar year that is 2 years after the
publication of this final rule.
We believe this would give all stakeholders sufficient time to
prepare for these requirements. We are unable to impose new
requirements on MA organizations mid-year, and therefore, must wait to
make these rules effective.
The following is a summary of the comments we received on MA
provider enrollment.
Enrollment File
Comment: A commenter expressed concern that CMS' requirements for
plan validation are overly burdensome. The commenter noted that, as a
condition of contracting with CMS, an MA organization would have to
agree to provide documentation that all providers and suppliers in the
MA or MA-PD plan who could enroll in Medicare were indeed enrolled.
Believing that the providers themselves should be involved in this
process, the commenter stated that providers should submit the required
documentation to CMS (as in the FFS program) and that

[[Page 80449]]

CMS should in turn maintain a ``source of truth'' document for audit
and compliance purposes. The commenter stated that provider information
can change frequently and become outdated; without a ``source of
truth'' to confirm a provider's enrollment in Medicare, the commenter
said, unintended consequences could arise.
Response: We do not agree that this requirement is overly
burdensome. We have made compliance simple by providing a file of
enrolled providers and suppliers. We maintain all provider enrollment
information in PECOS, our enrollment repository. In an effort to
provide MA organization with the necessary information, an online,
public file listing enrolled providers and suppliers has already been
made available to MA organizations and will continue to be updated at a
frequency to be determined and announced through established processes
such as a Medicare Learning Network (MLN) article. We believe this
approach will provide MA organizations with sufficient access to the
necessary provider enrollment information for the relevant requirements
under this final rule. In addition, providers and suppliers will be
required to submit documentation to a CMS contractor, consistent with
current Medicare enrollment processes.
Comment: Several commenters asked how CMS will communicate provider
and supplier information to individual MA organizations so that they
can remain compliant with our proposed requirement. Another commenter
asked how CMS will verify the inclusion or exclusion of enrolled
providers and suppliers. Several commenters stated that if CMS
finalizes its proposed requirement, it must grant the MA organizations
full access to PECOS so they can confirm a provider's or supplier's
enrollment status. A commenter recommended that CMS make publicly
available a list of all Medicare revocations, including the date and
reason for the revocation. Several commenters suggested that MA
organizations be given access to PECOS or some other means of verifying
an MA provider's or supplier's enrollment in Medicare. This would, they
contended, reduce the burden on the plans and help ensure the plans'
compliance with the requirements of Sec. 422.222.
Response: We have created a public file that will be regularly
updated with provider and supplier enrollment information at a
frequency to be determined and announced through established processes
such as a MLN article. As mentioned previously, we believe this is an
efficient and sufficient approach to providing information to plans,
and we do not believe that MA organizations need full access to PECOS
to obtain the information necessary to comply with this final rule.
Regarding revoked providers, providers or suppliers that are revoked
from the program will not be included in the enrollment file because
they are not validly enrolled.
Comment: A commenter asked how CMS will communicate with MA
organizations if it revokes a provider's or supplier's enrollment and
what steps the MA organization would be required to take in response to
the revocation.
Response: We will periodically update our enrollment file made
available to MA organizations. Providers or suppliers that are revoked
from the program will not be included in the enrollment file because
they are not validly enrolled. MA organizations will be expected to
check the enrollment file to ensure all providers and suppliers are
validly enrolled and may not have an unenrolled provider and supplier
in their network. As we move toward implementation, we will provide
subregulatory guidance with respect to revoked providers and suppliers.
Comment: A commenter asked whether our proposed enrollment
requirement represents a mere clarification of Sec. 422.204(b)(2)(i),
which outlines the provider credentialing process, or constitutes a new
and expanded process that MA organizations must address in their
policies and contracting processes. If it is the latter, the commenter
requested specific information on the ``source of truth'' and the
method for MA organizations to verify this information (for example,
whether MA organizations will have to confirm the enrollment statuses
of providers and suppliers via a CMS Web site or whether CMS will
furnish a list of enrolled providers and suppliers to the MA
organizations).
Response: This requirement is not a mere clarification of Sec.
422.204(b)(2)(i) but imposes additional requirements on plans to ensure
that their providers and suppliers are screened and enrolled in
Medicare. These requirements are an expansion of Sec.
422.204(b)(2)(i). Verification of enrollment can be found by accessing
the online enrollment file we have provided to the public, which will
be updated to reflect changing enrollment data.
Authority and Burden
Comment: A commenter suggested that CMS estimate the number of
providers and suppliers that furnish care to Medicare beneficiaries
through an MA organization only and not through the Medicare FFS
program and that CMS include this figure and the associated cost in its
regulatory burden and Paperwork Reduction Act estimates.
Response: We appreciate the opportunity to clarify that these are
the exact figures reflected in the proposed rule and in this final rule
in the regulatory burden and Paperwork Reduction Act sections.
Comment: A commenter asked that CMS: (1) Monitor the impact of
these requirements on MA organization networks and physician enrollment
and, if negative effects are found, to either roll-back the requirement
or implement appropriate changes; (2) create realistic implementation
timeframes and comprehensive outreach plans; and (3) establish
beneficiary financial protections during the transition. Another
commenter recommended that CMS improve its enrollment processes so that
those affected can enroll in a timely manner.
Response: We appreciate the commenters' suggestions and will take
these suggestions into consideration as we move forward with
operational plans.
Comment: A commenter asked whether CMS has conducted a preliminary
assessment of the potential nationwide impact this requirement.
Response: We have made that assessment, and it is reflected in our
Regulatory Impact Analysis.
Comment: A commenter sought clarification on how the provisions of
Sec. 422.222 would improve program integrity and quality of care.
Response: This final rule would assist our efforts to prevent
fraud, waste, and abuse and to protect Medicare enrollees by carefully
screening all providers and suppliers, especially those that
potentially pose an elevated risk to Medicare, to ensure that they are
qualified to furnish Medicare items and services. These requirements
are not a clarification of Sec. 422.204(b)(2)(i), but impose
additional requirements on plans to ensure that their providers and
suppliers are screened and enrolled in Medicare. Requiring enrollment
of those that wish to furnish items or services to MA beneficiaries
gives us improved oversight of the providers and suppliers treating
beneficiaries and the Medicare Trust Fund dollars spent on their care.
Prior to this rule, Medicare did not have direct oversight over all
providers and suppliers furnishing items and services to enrollees of
MA organizations. Section 422.204 requires MA organizations to conduct
screening of their providers. We believe that we can, through our
enrollment processes, conduct more robust verification of the

[[Page 80450]]

information provided during enrollment so that only qualified providers
and suppliers treat Medicare beneficiaries by conducting rigorous
screening and rescreening of providers and suppliers, risk-based site
visits and fingerprint-based background checks. We also have access to
information and data not available to MA organizations, making
oversight to ensure compliance with all federal and state requirements
more robust. These checks prevent certain providers and suppliers from
furnishing items and services to beneficiaries, such as a doctor
convicted of a felony for abusing patients. While we are hopeful that
licensing boards would take action to prevent providers and suppliers
such as this from lawfully providing services to patients in the
future, we cannot always rely on the boards to take the action we
believe is appropriate when serving beneficiaries. We believe that MA
organization enrollees should have the same protections against
potentially unqualified or fraudulent providers and suppliers as those
afforded to beneficiaries under the FFS and Part D programs. Our
program integrity concerns are furthered by having the ability to
easily consolidate data across all lines of Medicare to see billing
patterns and schemes for a particular provider or supplier. For
example, a network provider with a history of performing medically
unnecessary tests, treatments, or procedures could threaten enrollees'
welfare, as could a physician who routinely overprescribes dangerous
drugs. This could also result in improper Medicare payments, harming
the Medicare Trust Funds and taxpayers. A benefit of enrolling all
providers and suppliers in Medicare is the ability to remove a provider
or supplier for failure to meet our requirements or violates federal
rules and regulations. Not only is the provider or supplier unable to
bill a particular MA organization, but they also may not bill any other
plan, bill Medicare, order and certify Medicare items and services, or
prescribe Part D drugs.
Comment: A commenter opposed our proposed enrollment requirement,
stating that it would be redundant in that all payers have rigorous
screening and rescreening processes, as well as programs to ensure
quality and cost effectiveness. The commenter also stated that: (1)
physician quality data is transparent and made available through payer
Web sites and portals to provide members with the opportunity to choose
highly rated qualified physicians; and (2) MA plans should be
responsible for ensuring that they are enrolling the most qualified
physicians into their networks. In addition, the commenter encouraged
CMS to ensure that health plans are consulting the OIG exclusion list
to guarantee that physicians who have been convicted of crimes are not
in the MA networks.
Response: We appreciate the commenter's concerns; however, we
respectfully disagree and believe that our enrollment screening
processes (for example, risk-based site visits and fingerprint-based
background checks) help to ensure that qualified providers and
suppliers treat Medicare beneficiaries. We conduct rigorous screening
and rescreening of providers and suppliers. We also have access to
information and data that is not available to MA organizations, which
enhances enrollment screening and helps ensure that providers and
suppliers are in compliance with all federal and state requirements.
Moreover, we also continually review provider and supplier enrollment
information from multiple sources, such as judicial, law enforcement,
state licensure, professional credentialing, and other databases for
which MA organizations do not have access. In short, we collect and
verify information prior to the provider's or supplier's enrollment
and, of great importance, continue this monitoring throughout the
period of enrollment. Section 422.204, on the other hand, neither
requires MA organizations to, for instance, review a provider or
supplier's final adverse action history (as defined in Sec. 424.502),
nor to verify a provider or supplier's practice location, ownership, or
general identifying information.
Comment: A commenter questioned the need for our proposal by
stating that CMS did not provide empirical evidence of problems in MA
for which our enrollment requirement would be appropriate or fully
address the proposal's impact on network adequacy and potential
downstream beneficiary access issues. The commenter stated that the
requirement is a FFS solution developed for FFS program integrity
issues and is improper for the MA program. The commenter urged CMS to
withdraw the proposal and work with plans to develop solutions that are
better applicable to the MA program. Another commenter suggested that
CMS cite the specific OIG or GAO reports that recommend that MA
providers and suppliers be enrolled in Medicare FFS and furnish
evidence that our proposed requirement would improve care for MA
beneficiaries.
Response: We believe that the vulnerabilities identified by the GAO
(GAO-15-448) provide sufficient justification to impose this
requirement. Based upon our analysis of unenrolled providers and
suppliers that only provide services for MA organizations and do not
bill Medicare FFS, we do not believe there will be network adequacy
issues or beneficiary access issues. Regarding the commenter's concern
that Medicare enrollment and screening is a FFS solution and is
improper for the MA program, we note that MA organizations'
requirements for screening providers and suppliers are similar to
Medicare screening and enrollment in that MA organizations have
requirements to, for example, perform site visits, check licensure, and
to complete background checks. However, MA organizations have
discretion in administering their screening and verification
procedures. The Medicare enrollment process is much more robust and
provides heightened consistency to the MA organizations' screening
processes and also allows for screening using databases that are not
available to MA organizations.
As discussed in the preamble, a recent GAO study stated that ``as
part of an overall effort to enhance program integrity and reduce fraud
risk, effective enrollment-screening procedures are essential to ensure
that ineligible or potentially fraudulent providers or suppliers do not
enroll in the Medicare program.'' (GAO-15-448) This study's
recommendations did not specifically recommend MA provider and supplier
enrollment; however, these new provisions are part of an overall plan
to ensure standard screening for those providers and suppliers treating
MA beneficiaries. Evidentiary support for improved care for
beneficiaries can be seen by reviewing the Annual Report to Congress on
the Medicare and Medicaid Integrity Programs, which gives more
information on program integrity efforts and administrative actions.
This report demonstrates statistical evidence of the judicial and
administrative actions taken against providers and suppliers, such as,
licensure suspensions, felony convictions, and Medicare revocations.
Comment: A commenter recommended that CMS identify the types of
oversight it currently uses to ensure that MA organizations do not have
unlicensed or fraudulent providers and suppliers participating in their
network.
Response: These regulatory requirements are specified at Sec.
422.204 and impose obligations on plans.
Comment: A commenter recommended that CMS streamline and improve
the enrollment process before implementing its proposed MA enrollment
requirements. Another

[[Page 80451]]

commenter urged CMS to administer the enrollment requirements in a
manner that limits the burden on physician practices as much as
possible.
Response: We appreciate the commenters' concerns and have taken
steps to make the enrollment process as streamlined as possible, but we
do not believe that implementation should be delayed. The application
process, especially for physicians and physician practices, requires
the provision of basic information that should be easily obtained, such
as name, NPI, practice locations, licensure number, criminal history,
and education. We do not believe that furnishing this information will
be overly burdensome for providers and suppliers. Moreover, this
information provides great value in assessing the risk to beneficiaries
and the program. Consequently, we decline to delay the requirements in
this rule.
Comment: A commenter urged CMS to work with plans so that an
informed assessment of the potential impact of our proposed
requirements can be developed before the rule is finalized.
Response: We remain committed to working with plans to help them
understand and be compliant with these requirements; however, we
decline to delay implementation. We have reviewed all public comments
and considered the potential impacts provided by commenters and
internal stakeholders prior to finalizing this rule.
Comment: Several commenters opposed CMS' proposal. One commenter
stated that it represents a regulatory overreach and asked CMS to cite
the legal authority for the proposal, explain our justification for the
proposal, and identify the specific problem the proposal is intended to
resolve. The commenter stated that CMS did not furnish evidence that MA
providers are unqualified or fraudulent and suggested that CMS provide
examples of where (1) an MA provider or supplier was not licensed to
practice medicine and where the MA organization did not take the
appropriate action to terminate the provider or supplier; (2) CMS has
taken a compliance action against an MA organization for failing to
exclude unlicensed or fraudulent providers or suppliers from their
network; and (3) CMS imposed civil money penalties or sanctions on an
MA organization for its failure to protect its members from unlicensed
or fraudulent providers or suppliers. Other commenters stated that the
proposed requirement would be overly burdensome on plans and providers.
Response: Our legal authority is based upon section 1856(b) of the
Act, which provides that the Secretary shall establish by regulation
other standards for Medicare+Choice organizations and plans
``consistent with, and to carry out, this part.'' In addition, section
1856(b) of the Act states that these standards supersede any state law
or regulation (other than those related to licensing or plan solvency)
for all MA organizations. We have also relied on sections 1102 and 1871
of the Act, which provide general authority for the Secretary to
prescribe regulations for the efficient administration of the Medicare
program. Section 1866(j) of the Act gives us specific authority with
respect to the enrollment process for providers and suppliers in the
Medicare program.
Our justification for broadening our enrollment requirements is
based upon a desire for MA organization enrollees to have the same
protections against potentially unqualified or fraudulent providers and
suppliers as those afforded to beneficiaries under the FFS and Part D
programs. We believe that robust screening is fundamentally important
to promote quality of care. Medicare beneficiaries and enrollees, the
Medicare Trust Funds, and the program at large, are at risk when
providers and suppliers that have not been adequately screened furnish,
order, certify, or prescribe Medicare services and items and receive
Medicare payments. Requiring enrollment allows us to have proper
oversight of providers and suppliers, making it more difficult for
these types of providers and suppliers to enroll in Medicare and remain
enrolled in Medicare. Furthermore, it allows us to remove a provider or
supplier that does not comply with our rules across Medicare (Part A,
Part B, MA, and Part D).
We believe the GAO report cited herein provides specific examples
and evidence of our need to standardize the enrollment process and take
advantage of the information available to Medicare that the MA
organizations cannot access. We believe the enrollment file provides an
efficient way for the plans to ensure that providers and suppliers are
enrolled, which will minimize burden on plans.
Comment: A commenter expressed concern that some of the operational
challenges encountered in CMS' implementation of the Part D prescriber
enrollment requirement could also occur during implementation of a
similar requirement in MA. The commenter urged CMS to implement its MA
enrollment requirement in a manner that avoids such issues.
Specifically, the commenter urged CMS to improve application processing
timeframes, test file protocols, and file layouts while developing a
mechanism to require providers to update their taxonomy codes.
Response: We appreciate this comment and will continue our ongoing
work to minimize burden on MA organizations, as well as providers and
suppliers, while ensuring that an effective and efficient enrollment
process, as well as outreach and education efforts, exist to
operationalize the requirements under this final rule.
Comment: A commenter expressed concern that certain contractual
arrangements that are currently required for SNFs under Medicare Parts
A and B might be disallowed under the proposed rule. The commenter
stated that SNFs are statutorily required under consolidated billing to
submit charges for certain ancillary services, such as rehabilitation
therapy and portable x-ray services as a part of the nursing facility's
institutional claim; that is, Medicare Part B requires that the nursing
facility bill Medicare for these services. The commenter sought
clarification on the question of contractual disallowance, given the
proposed rule's objectives of achieving consistency between MA and
Medicare Parts A and B and whether such ancillary service providers
must enroll as Medicare providers.
Response: This rule does not address the payment arrangements
described by the commenter. We note that Part A and B providers and
suppliers are already required to enroll in Medicare. These provisions
only provide for requirements for the Medicare enrollment of MA
organization providers and suppliers and prohibition of payment in
certain circumstances such as an OIG exclusion or Medicare revocation.
Plan Noncompliance
Comment: A commenter contended that sanctioning or terminating
plans for non-compliance with our enrollment requirements is too
aggressive. The commenter stated that plans will need to ensure that
systems are updated with current provider information and that new
information can be received and reviewed in a timely manner. The
commenter stated that legitimate errors could arise throughout the
process, and that rather than immediately sanction or terminate a plan
(which would have negative consequences on its members), CMS should
instead put into place a process for remediation. Plans that are
consistently found to be in non-compliance with the rules, the
commenter said, should face enforcement action, but first time
``offenders'' should be given the

[[Page 80452]]

opportunity to work through challenges with both CMS and providers.
Response: We will work with MA organizations and all other
stakeholders as we move forward with implementation. We have discretion
in determining the appropriate action to take for noncompliant plans,
such that any remedial actions or penalties imposed on plans that do
not comply with the requirements of this rule will be the result of
thorough analysis of all relevant factors. Furthermore, we have
provided the stakeholders with more than 2 years to make the changes
necessary to accommodate this requirement.
Comment: A commenter asked whether beneficiary complaints about the
MA organization due to the impact of the enrollment requirement (for
example, the beneficiary can no longer receive covered services from a
non-enrolled provider) will affect a plan's Star Rating. The commenter
believed it would be unfair to penalize plans that are merely
attempting to comply with CMS' enrollment requirement.
Response: We do not expect the requirements of this final rule to
have a significant impact on Star Ratings, given the relatively few
number of providers and suppliers that need to enroll to meet the
requirements of this rule. Issues regarding the potential impact that
beneficiary complaints have on plans' Star Ratings will be addressed by
CMS in future guidance. Furthermore, any remedial actions or penalties
imposed on MA organizations that do not comply with the requirements of
this rule will be the result of thorough analysis of all relevant
factors.
Comment: A commenter sought clarification as to the extent an MA
organization may be subject to contract termination, intermediate
sanctions, or civil monetary penalties.
Response: It is difficult to predict, prior to our enforcement of
these provisions, how and when we will use these sanctions. We cannot
yet assess plans' compliance with this requirement and the steps they
will take to become compliant. We will consider issuing guidance in the
future related to this rule.
Comment: Several commenters expressed concern about the potential
penalties for plans that do not adhere to our enrollment requirements.
One commenter stated that data or other system issues might prevent
plans from having complete and accurate information about a provider's
or supplier's status at a certain point in time. The commenter added
that it may be critical for beneficiaries to retain access to a
provider for continuity of care, that plans should not be sanctioned
for ensuring that beneficiaries are protected in these cases, and that
appropriate exceptions would need to be developed.
Response: We will work with MA organizations and all other
stakeholders as we move forward with implementation. We have discretion
in determining the appropriate action to take for noncompliant plans,
such that any remedial actions or penalties imposed on plans that do
not comply with the requirements of this rule will be the result of a
thorough analysis of all relevant factors. Furthermore, we have
provided the stakeholders with more than 2 years to make the changes
necessary to accommodate this requirement.
Clarification and Exemptions
Comment: A commenter recommended that CMS explain whether a DMEPOS
supplier that services Medicare beneficiaries through an MA
organization, a cost contract plan under section 1876 of the Act, or a
health care pre-payment plan under section 1833 of the Act will be
subject to surety bonding, accreditation, and other DMEPOS provisions
contained in the Medicare FFS program. The commenter also asked how CMS
will address access-to-care issues when such DMEPOS suppliers are
unable to comply with Sec. 424.57 and Sec. Sec. 424.500-424.570.
Another commenter recommended that CMS clarify whether Part A providers
serving Medicare beneficiaries through an MA organization, a section
1876 cost contract plan, or a section 1833 health care pre-payment plan
must obtain a CMS survey or accreditation to enroll in Medicare FFS.
Response: All providers and suppliers that enroll in Medicare are
subject to the Medicare enrollment requirements, as assigned by their
provider or supplier type. For example, provider and supplier types
subject to surety bonding are required to obtain a surety bond to
complete the enrollment process. There are no exceptions to the
enrollment requirements based on this rule. If a CMS survey or
accreditation is required for a particular provider or supplier type,
it must comply in order to enroll. We do not anticipate any issues with
regard to access to care based on the relatively small number of
providers and suppliers that need to enroll to meet the requirements of
this rule. If there are access to care issues, the plans will follow
established protocols to ensure all beneficiaries have access to needed
items and services.
Comment: A commenter requested more explicit definitions of the
terms ``provider'' and ``supplier,'' particularly in the context of
Medicare-Medicaid plans (MMPs), which the commenter stated would not
otherwise qualify for Medicare enrollment but furnish needed services
to MMP members; the commenter believed that such providers should be
excluded from our proposal.
Response: As stated in the preamble of the rule, those terms are
defined in sections 1861(u) and 1861(d) of the Act. We are only
requiring enrollment for providers and suppliers that are
categorically-eligible to enroll in Medicare. This rule is not
requiring MMP plans to enroll.
Comment: A commenter recommended that CMS clarify whether our
proposal applies to providers and suppliers furnishing services to a
Medicare beneficiary through the Railroad Retirement Board or the
Indirect Payment Procedure (IPP) under Sec. 424.66 and, if so, that
CMS adjust the regulatory impact analysis accordingly.
Response: This particular rule is not applicable to the Railroad
Retirement Board or the IPP.
Comment: A commenter requested clarification as to whether the
proposed requirements add MA provider enrollment burdens that extend
beyond the current FFS enrollment process requirements.
Response: No, the enrollment requirements do not extend beyond our
current requirements. Providers and suppliers that are already enrolled
in Medicare for purposes of billing the Medicare program, rather than
enrolled to order, refer, certify, or prescribe, have met the
enrollment requirements for this rule and are compliant. Part A
providers and suppliers that are validly enrolled in the Medicare
program do not need to separately enroll to meet the requirements of
this rule. In-network providers and suppliers that are not already
enrolled in Medicare and that are currently providing services to MA
enrollees will need to enroll in Medicare to continue to provide those
services to MA enrollees.
Comment: A commenter asked how our proposed requirement applies to
providers and suppliers for MMPs. The commenter stated that these plans
might have atypical providers and suppliers that would be unable to
enroll in Medicare but provide needed care to MMP members. The
commenter recommended that such providers be excluded from this
requirement.
Response: This rule specifies requirements for providers and
suppliers that provide services to beneficiaries enrolled in MA, MA-PD,

[[Page 80453]]

PACE, and Cost plans, as well as demonstration and pilot programs. The
requirements also apply to FDRs, locum tenens, and incident-to
suppliers. To the extent that MMPs are MA or MA-PD plans they would be
subject to these requirements. We are not providing any exemptions and
are only requiring enrollment in Medicare for providers and suppliers
that are categorically-eligible to enroll in Medicare.
Comment: A commenter asked whether providers associated with FDRs
would need to be enrolled in Medicare, even if they are not directly
engaged in providing services to plan members. The commenter cited the
example of dentists and expressed concern that a requirement for
dentists to enroll in Medicare to participate in an MA network would
threaten beneficiary access to a supplemental dental benefit that many
members have as part of their MA benefit package. In general, the
commenter urged CMS to clarify which providers are affected by the
provision, and how providers associated with FDRs are to be treated in
this respect.
Response: FDRs, such as dentists, will need to enroll to meet the
requirements of this rule. All providers and suppliers that are
categorically-eligible to enroll in Medicare must enroll in Medicare in
an approved status in order to meet the requirements of this final
rule. A determination as to whether a provider or supplier is eligible
to enroll will be based on the type of provider or supplier. For
example, if an audiologist works for a PACE organization or an FDR, he
or she would need to enroll in Medicare because an audiologist is a
type of provider or supplier eligible to enroll. Furthermore, section
1861(ll)(4)(B) of the Act states that a qualified audiologist must have
a masters or doctoral degree in audiology, among other requirements. If
the audiologist cannot enroll because he or she fails to meet program
requirements, such as this educational requirement, he or she may not
enroll in the program or provide services to beneficiaries enrolled in
programs under this final rule. It does not mean that providers and
suppliers, that are of the type of providers or suppliers eligible to
enroll in Medicare, are exempt from enrolling because they cannot or do
not meet the necessary requirements for their specific provider or
supplier type to enroll in Medicare. Providers and suppliers that
cannot or do not meet the enrollment requirements may not provide items
and services to beneficiaries that receive items and services through
FFS, MA, MA-PD, PACE, and Cost plans, as well as demonstration and
pilot programs.
Comment: A commenter asked whether there would be a grandfathering
provision or grace period for un-enrolled MA providers and suppliers.
Response: We believe that the effective date of the provisions of
this rule and length of time we have allowed for plans to comply with
these provisions provides enough time for providers and suppliers to
enroll. We do not believe that providing a grace period or a
grandfathering provision would serve the goals of ensuring consistent
screening.
Comment: A commenter recommended that CMS clarify proposed Sec.
422.222 to state that enrollment in Medicare in an ``approved status''
includes providers and suppliers that are deactivated for lack of
claims submission.
Response: Providers and suppliers that are deactivated are not
considered in an approved status. Deactivated providers and suppliers
may reactivate their enrollment by contacting their Medicare
Administrative Contractor and following the applicable reactivation
procedures which are set forth in our enrollment regulations at Sec.
424.540(b).
Comment: A commenter recommended that the proposed MA enrollment
requirement for in-network providers and suppliers extended to out-of-
network providers; the commenter believed this would help ensure that
all MA beneficiaries have access to fully screened and qualified
providers and suppliers.
Response: We appreciate the commenter's support and suggestion.
Because we did not propose an expansion to out-of-network providers and
suppliers, we are not able to finalize that in this rule. We proposed
including only in-network providers and suppliers in this rule to
ensure only a minimal impact to beneficiaries. We may consider future
rulemaking to address the commenter's concerns.
Comment: A commenter requested clarification as to whether the
proposed enrollment requirement extends to employees and contracted
services furnished through properly enrolled and approved Medicare
providers of services, including SNFs; that is, whether such employees
or contractual professionals or agencies of providers meet the
definition of FDRs. The commenter stated that, under FFS Medicare,
there is no requirement that professional employees or contracted
professionals or agencies of a properly enrolled provider of services,
such as a SNF, must be independently enrolled in FFS. Another commenter
asked whether MA organizations will be responsible for ensuring that
the entire staff or all the employees of such organizations (including
nurses, medical students, interns and residents of a facility or other
ancillary personnel, others in a provider's office, or in an inpatient
setting that the MA organization does not directly contract with for
the provision of services) are enrolled. Another commenter recommended
that these requirements be limited to MA first tier contracted
providers and facilities that provide basic Medicare A, B, and D
benefits and that the scope of those needed to enroll be scaled back
significantly.
Response: We are using the definitions for first-tier, downstream,
and related entities in Sec. 422.500. The MA organizations will be
responsible for ensuring that the providers and suppliers that are
required to enroll, are indeed enrolled.
Comment: A commenter sought clarification as to whether the rule
would extend existing requirements for Part A and B providers to MA
organization networks, rather than requiring expanded screening for
subcontracted providers.
Response: The rule extends Parts A and B enrollment requirements to
MA organization networks including other providers and suppliers, such
as FDRs.
Comment: A commenter stated that because Medicare FFS does not
offer a dental benefit, CMS should not require MA organizations to
adhere to the standard of mandating that dentists enroll as MA
suppliers in order to provide dental care to MA beneficiaries. Another
commenter sought clarification concerning the impact of the enrollment
requirement on supplemental providers that are not covered by Medicare
Part A or Part B. The commenter cited the example of dental services,
which are often included as part of a supplemental services package;
the commenter asked whether dentists who are in-network with MA
organizations would be required to enroll in Medicare. The commenter
urged CMS to consider (1) whether extending its enrollment requirement
to dentists and other affected supplemental service providers is in the
best interest of beneficiaries and (2) delaying such a requirement for
providers of supplemental services until CMS gains experience and
understands the effects of the requirement on Part A and Part B
providers, and can make any modifications needed to ensure access.
Response: We appreciate the commenter's recommendations; however,
we are committed to ensuring that beneficiaries receive items and
services from providers and suppliers that are the categorical types of

[[Page 80454]]

providers and suppliers eligible to enroll, that are subject to uniform
screening processes, including when receiving dental services or other
services not covered by Medicare in Part A or Part B.
Comment: A commenter stated that our proposed requirement is too
broad, citing as examples its application to locum tenens suppliers and
incident-to suppliers. In particular, the commenter stated that MA
beneficiaries may receive covered Medicare services from non-
contracting and/or out-of-network providers in the case of a local or
regional preferred provider organization (PPO), or from hospitals and
physicians not under contract with the MA organization for urgent or
emergency services; MA organizations, the commenter stated, generally
have no relationships to physician staffing organizations for
correctional facilities or government and military facilities, yet they
are listed as having the MA requirements apply to them. The commenter
contended that this is a requirement that appears to be placed on MA
organizations, rather than on the traditional Medicare program, but
that MA organizations cannot be, and should not be, required to carry
out functions that may belong to the Medicare program overall. If
Medicare wants to widen its scope of providers enrolled in Medicare for
the purpose of expanding its program integrity program, the commenter
stated, Medicare's enrollment efforts should be housed in a single
source or database, not merely in MA organizations.
Response: The rule specifically applies to network providers and
suppliers, including locum tenens and incident-to suppliers. We are
unsure of what the commenter means by stating that the MA organizations
are required to carry out functions that belong to the Medicare
program. Consistent with existing enrollment practices, enrollment will
be completed by our MACs, and all enrollment data will be housed in our
enrollment repository, PECOS. Information on a provider or supplier's
enrollment status will be available on a public file for ease of access
to the plans. We do not agree that the application of this rule is too
broad. We have limited the provisions to in-network providers and
suppliers. Furthermore, we believe it is important that all
beneficiaries have the benefits of being treated by providers and
suppliers that have been adequately screened by the Medicare program.
Comment: A commenter stated that the proposed rule could be
misconstrued as treating all FDRs as Medicare providers and suppliers,
thus requiring them to enroll in Medicare; the commenter cited as an
example PBMs, which do not provide covered health care services but
instead arrange for their provision. The commenter encouraged CMS to
make clear that only those entities that meet the definition of a
Medicare ``provider'' or ``supplier'' would be required to enroll in
Medicare in order to provide services to MA beneficiaries.
Response: This provision does not change enrollment parameters
concerning the types of providers and suppliers eligible to enroll in
Medicare. The commenter is correct that only providers and suppliers
meeting those statutory definitions will be required and allowed to
enroll in Medicare.
Comment: Concerning the term ``Medicare-covered services'' as
referenced in the rule, a commenter sought clarification as to whether
the enrollment requirement only applies to providers and suppliers of
Medicare Part A, B, MA, and D covered benefits and not to other
services potentially offered by an MA organizations, such as routine
eye care services, dental services, wellness programs, and other non-
Medicare covered services.
Response: To clarify, we did not use the term ``Medicare-covered
services'' in either the preamble or the regulation text with respect
to these specific provisions of the rule. However, we expect all
providers and suppliers that are categorically-eligible to enroll in
Medicare and that fall under the requirements of this rule, to enroll
in Medicare if they wish to participate in the MA program. This
includes providers and suppliers of dental, eye care, and other
supplemental services.
Comment: Several commenters recommended that CMS exclude pharmacies
from the MA enrollment requirement, stating that pharmacies are
excluded from the Part D prescriber enrollment requirement. Other
commenters stated that Part D sponsors and their FDRs are equipped to
perform the necessary vetting and credentialing with respect to
pharmacy providers, which, one commenter contended, was the rationale
for excluding pharmacies from the Part D enrollment requirement. The
commenter stated that the same considerations apply in the MA program
and added that applying the proposed requirement to pharmacies would
create costly, burdensome, and potentially disruptive redundancies
without commensurate benefits.
Response: We decline to exempt pharmacies or other individuals or
entities that fall within the framework of this rule. We believe that
requiring enrollment in Medicare serves a valuable purpose in
protecting beneficiaries and safeguarding the Trust Funds and will help
reduce the burden on MA organizations as we move forward with
operationalizing this policy. However, we note that we currently do not
have a process in place to enroll pharmacies for the purpose of
dispensing drugs, except in very limited circumstances, such as for
Part B drugs. We are working on operationalizing such a process for
network pharmacies in MA-PD plans that do not provide only those
limited Part B benefits to enroll in Medicare to be able to comply with
this rule. We recognize that plans can be compliant only to the extent
that our enrollment requirements and processes in place allow at any
given time.
Comment: A commenter asked whether our proposed requirement will
impact coverage determinations. The comment stated that, with respect
to the Part D enrollment requirement, there is uncertainty regarding
the actions that Part D sponsors must take upon receiving a coverage
determination request from a non-enrolled prescriber or beneficiary
regarding a claim that is denied solely because of that enrollment
requirement.
Response: This rule establishes requirements that services provided
to Medicare beneficiaries by MA organizations must be provided by
providers and suppliers that are enrolled in Medicare. This rule does
not address any other criteria affecting coverage determinations.
Comment: A commenter requested that CMS exempt emergency medicine
physicians from the enrollment requirements. The commenter added that
if this were not feasible, CMS at a minimum should: (1) establish a
provision similar to Sec. 423.120(c)(6) that would allow CMS to
provide reimbursement for covered items, services or drugs ordered,
certified, referred or prescribed by emergency medicine physicians on a
provisional basis (for example, for a period of 90-days from the date
of service); and (2) exclude from the enrollment requirements those
providers whose enrollment applications are pending with the Medicare
Administrative Contractor (MAC).
Response: We have not provided for any exemptions; however, we have
a provision in Sec. 422.224 that provides for allowances for some
payments for emergency or urgently needed services, as defined in Sec.
422.113. We also appreciate the suggestion that we exclude providers
and suppliers with pending applications from our requirements. We
believe that the rule

[[Page 80455]]

furnishes sufficient time for providers and suppliers to enroll to meet
the requirements of this rule and decline to provide an exemption in
these circumstances.
Comment: A commenter asked for more information regarding the
providers and suppliers that are covered under this proposal; the
commenter specifically sought clarification regarding providers and
suppliers that are not currently subject to credentialing (such as
hospital-based providers) and only provide supplemental benefits that
are not part of the basic benefits under Medicare Parts A and B.
Response: Regarding the commenter's inquiry, neither category of
provider would be exempt from the requirements of this provision simply
based on those factors. If a provider or supplier falls into the
categories articulated in the rule, there will be no exemptions
provided.
Concerns for Beneficiaries
Comment: A commenter stated that if CMS terminates a contract with
an MA organization for failing to meet provider enrollment requirements
or payment prohibitions, CMS should allow impacted patients to continue
with their physicians on an in-network basis until the next enrollment
period, with the physician's consent. The commenter said that
effectively requiring a beneficiary to find a new provider in the
middle of an enrollment period with little advanced notice could be
extremely disruptive and harmful to the enrollee's health.
Response: We will follow existing protocols and rules regarding
beneficiary care if CMS terminates a contract with an MA organization.
Beneficiary care and access are always of the highest concern when
determining contract action. Furthermore, we have access to tools other
than contract termination to ensure MA organizations are compliant with
this rule.
Comment: A commenter expressed concern about the potential
financial impact on beneficiaries if a provider or supplier requests
payment (1) for multiple beneficiaries at once, or (2) for Medicare
beneficiaries after notification that the provider or supplier is
revoked from Medicare. The commenter recommended that CMS clarify that
beneficiaries would not be financially responsible in these cases.
Overall, the commenter urged CMS to ensure that beneficiaries are
financially protected and do not lose access to care during the
transition phase as providers enroll in Medicare.
Response: As we work towards the implementation date, we will
continue to monitor beneficiary impact. The public should be aware of
the provisions in Sec. 422.224 regarding prohibition of payment for
excluded or revoked individuals or entities. This rule also does not
change beneficiaries' ability to ask for a coverage determination prior
to receiving an item or service if they are unsure of a provider or
supplier's enrollment status. The issue of beneficiary liability
resulting from an OIG exclusion is addressed in 42 CFR 1001.1901(b).
The issue of beneficiary liability resulting from revoked providers and
suppliers, deactivated providers and suppliers, or enrollment denials
is addressed in Sec. 424.555(b). Any needed additional clarification
of this provision will be provided in subregulatory guidance.
Comment: A commenter noted the provision to prohibit MA
organizations from paying individuals or entities that are excluded by
the OIG or revoked from Medicare. Citing the requirement that the MA
organization in such cases must notify the physician and the
beneficiary that no future payment will made beyond the first one, the
commenter stated that the notification may only reach the beneficiary
after numerous services have been provided and billed. The commenter
expressed concern that either the beneficiary or the physician would be
without reimbursement or payment for the subsequent services provided
before notification was received.
Response: We understand the concerns of the commenter and do
believe it is important for MA organizations and the other programs and
plans that fall within the context of this rule to notify beneficiaries
and providers and suppliers that payments will not be made. However,
after further analysis, we are not able to finalize the first time
payment provision that was proposed because all payments to excluded
individuals or entities is prohibited. Beneficiaries have the ability
to ask for a coverage determination prior to receiving an item or
service if they are unsure of a provider or supplier's enrollment
status. The issue of beneficiary liability resulting from an OIG
exclusion is addressed in Sec. 1001.1901(b). The issue of beneficiary
liability resulting from revoked providers and suppliers, deactivated
providers and suppliers, or enrollment denials is addressed in Sec.
424.555(b). All individuals and entities that are excluded or revoked
are notified of their exclusion or revocation status, and therefore,
should not request or receive payment for items or services that
violate federal law.
Comment: A commenter stated that CMS must assess the impact of our
proposed requirement on beneficiaries. The commenter specifically asked
how the requirement will be explained to beneficiaries and whether
beneficiaries themselves will have to pay for services obtained from a
non-enrolled provider (for example, an out-of-network PPO provider) if
they were unaware of the enrollment requirement.
Response: As we work towards the implementation date, we will
continue to assess beneficiary impact, though we believe that based on
the low number of providers and suppliers that need to enroll, this
impact will be small. This rule applies to in-network providers and
suppliers and other providers and suppliers listed herein. This rule
does not modify existing rules on out-of-network providers and
suppliers; however, the public should be aware of the provisions in
Sec. 422.224 regarding prohibition of payment for excluded or revoked
individuals or entities. This rule also does not change beneficiaries'
ability to ask for a coverage determination prior to receiving an item
or service if they are unsure of a provider or supplier's enrollment
status.
Operations
Comment: A commenter stated that CMS should engage in robust
provider and practice education to ensure that enrollment updates are
implemented efficiently and without complication.
Response: We appreciate the suggestion and will incorporate this
into our operational plan.
Comment: A commenter asked CMS to address the claims and coding
technical components that CMS will implement for our proposed
requirement.
Response: We will issue subregulatory guidance that addresses this
issue.
Comment: A commenter asked CMS to clarify the components of its
provider education campaign.
Response: We will issue subregulatory guidance detailing
educational efforts in the future as we move forward in
operationalizing this program.
Comment: A commenter suggested that CMS explain how it will
communicate provider and supplier information to individual MA
organizations so that the latter can remain compliant with our
requirements and identify the types of enforcement actions it will take
against an MA organization that permits an unenrolled provider or
supplier to furnish care in an MA setting. The commenter asked us to
list all of the

[[Page 80456]]

enforcement actions imposed against MA providers and suppliers based on
the provider being unqualified or fraudulent.
Response: We will continue to provide outreach and education to the
provider and supplier community about these enrollment requirements and
will work with our stakeholders, including MA organizations, to assist
them in ensuring compliance. Specific operational plans and guidance
are forthcoming as we move towards operationalizing this policy.
Regarding enforcement actions, we have provided a number of options and
have discretion when determining the appropriate action to take for
noncompliant plans. Those specific sanctions and contract actions are
in existing policy.
Comment: A commenter supported our proposed requirement to notify
the enrollee when the provider's or supplier's enrollment is revoked
from Medicare but encouraged CMS to ensure that such notices are
consumer-friendly. Another commenter urged CMS to furnish additional
details on how plans are to operationalize these new requirements in a
format that allows plans to provide feedback on the proposed processes.
Response: We appreciate the commenter's support and will use the
suggestion to help operationalize this policy.
Comment: Regarding proposed Sec. 422.224, a commenter asked
whether ``first time allowance'' for payment is a requirement or is at
the discretion of the MA organization.
Response: After further legal analysis, we have determined that we
lack the authority to allow a first time payment granted in the
proposed Sec. 422.224. Therefore, MA organizations have no discretion
and may not pay an individual or entity that is excluded by the OIG or
revoked from the Medicare program.
Comment: Regarding proposed Sec. 422.501, a commenter sought
clarification regarding the method of submission and the frequency of
checks, and how this process differs from the current standard
attestation process.
Response: Further information and direction on this provision will
be issued in subregulatory guidance.
Comment: Stating that the proposed requirement contains no
specifications for how often plans would be required to confirm the
status of a network provider, a commenter sought clarification on the
following issues: (1) Whether a plan has met its obligations under the
proposed requirements if, for example, the plan confirms the provider's
enrollment status before signing the provider to a 5-year contract for
network participation; (2) if the provider fails to notify the MA
organization of changes to its Medicare enrollment status, whether the
plan is responsible for all payments made to the provider beginning as
of the date of disenrollment; (3) if a provider's Medicare enrollment
status changes and the plan removes the provider from its network,
whether and what consequences would ensue if this results in the plan
failing network adequacy requirements; and (4) whether there are
requirements concerning continuity of care with respect to providers
that lose Medicare status.
Response: The requirements of this rule require that after the
effective date, MA and MA PD plans must ensure that only enrolled
providers and suppliers are providing services to Medicare
beneficiaries who are enrolled in their plans. We have developed
informational tools--the list of enrolled providers and suppliers
referenced in several places throughout this rule--that further support
plans' ability to meet these requirements and not rely on notification
by providers in ensuring compliance. Based on the small number of
providers and suppliers that need to enroll to comply with the
provisions of this rule, we do not believe this requirement will cause
network adequacy issues. As to the frequency with which the plans will
be expected to update their records, further guidance will be provided
as we operationalize this requirement; however, it is anticipated that
the plans will be expected to update their records with the same
frequency that the applicable online files are updated. This rule does
not require providers and suppliers to notify the plans, as the
enrollment status on the file will change. This rule also does not
change any rules regarding continuity of care.
Comment: A commenter sought clarification regarding whether CMS'
use of the term ``enrollment'' indicated enrollment in the Medicare
program through PECOS or an MA organization's enrollment of health
professionals for the purpose of identifying them as legitimate health
professionals on claims. The commenter expressed concern that if
Medicare enrollment is required without a concomitant requirement that
the MA organization enroll the provider or supplier, CMS risks
perpetuating the concealment of certain types of health professionals.
Citing the example of physician assistants, the commenter stated that
when an MA organization requires that a physician's assistant bill
under a physician's name, the physician's assistant becomes a
``hidden'' provider, which the commenter stated is contrary to CMS'
goal of proper attribution to the health professional who furnished the
service. The commenter stated that MA organization should be required
to enroll relevant health professionals, including physician's
assistants, and mandate the inclusion of the appropriate professional's
NPI on a claim.
Response: The term ``enrollment'' is specific to enrollment in
Medicare. The enrollment data repository is PECOS. We believe the
commenter is referring to incident-to services. Incident-to suppliers
and locum tenens suppliers are also required to enroll in Medicare,
meaning that the supplier actually furnishing the service, not only the
billing supplier, must be enrolled. We believe that this is an
important step in addressing the concerns of the commenter and may
consider future rulemaking to further prevent the scenario offered by
the commenter.
Network Adequacy
Comment: A commenter expressed concern that the enrollment
requirement would unduly burden physical therapists, which could harm
access to physical therapy services as MA organizations struggle to
find physical therapy providers for their networks.
Response: This rule seeks to ensure that beneficiaries receive care
from providers and suppliers that have been uniformly screened. We have
found relatively few physical therapists that are not already enrolled
in Medicare. Therefore, we do not believe this will have an impact on
network adequacy.
Comment: A commenter recommended that CMS proceed with its
enrollment requirement for only a limited number of providers and
suppliers at first, specifically, for those provider types for which MA
organizations are required to maintain adequate networks, as specified
in the Health Services Delivery Guidance that CMS issues each contract
year.
Response: We believe the requirements should be implemented
simultaneously and have structured our efforts to accomplish that task.
As we have stated throughout this rule, we think the timeframe afforded
plans for compliance coupled with the relatively small number of
providers and suppliers that are not already enrolled in Medicare will
allow plans to ensure that all necessary providers and suppliers can be
enrolled and there are no access issues.
Comment: A commenter requested clarification regarding what MA
organizations must do if the termination

[[Page 80457]]

of providers or suppliers from the plan's network results in network
adequacy deficiencies.
Response: Based on the small number of providers and suppliers that
need to enroll to comply with the provisions of this rule, we do not
believe this requirement will cause network adequacy issues. However,
MA organizations should use existing resources and processes to address
any network adequacy concerns.
Comment: A commenter stated that the administrative steps involved
in enrolling in Medicare will deter some physicians from entering into
MA arrangements, thereby potentially impacting the plan's network
adequacy and beneficiary access to care.
Response: The vast majority of providers and suppliers providing
services in the MA program are already enrolled in Medicare. Based on
the number of providers and suppliers needing to enroll to become
compliant with this requirement, we do not anticipate this impacting
network adequacy and access to care.
PACE
Comment: A commenter asked whether the requirements that are
applicable to FDR entities of MA organizations will also apply in the
context of PACE organizations.
Response: The requirements for FDR entities also apply to PACE
organizations.
Comment: A commenter stated that our proposals should not be
applied to the PACE program for several reasons. First, the proposed
requirements are duplicative of exclusion screening requirements
established by the OIG, which are often reinforced by state screening
requirements. Second, PACE organizations are already Medicare-certified
provider entities responsible for the comprehensive medical, health and
social well-being of their PACE participants; existing regulations
under part 460 have requirements in place concerning these policies.
The commenter stated that PACE is a different model of care from MA
organizations. The latter are insurers while PACE programs are
Medicare-certified provider entities that are directly responsible for
the care of Medicare and Medicaid beneficiaries. At a minimum, the
commenter stated, PACE organization personnel (for example, employees
and contractors) should be exempt from the enrollment requirement; the
burden of requiring the enrollment of staff members, the commenter
contended would be enormous. Another commenter suggested that CMS
clarify in the final rule how its MA enrollment policies do not
inadvertently exclude long-term services and supports (LTSS) caregivers
who cannot presently bill Medicare directly. Another commenter also
expressed concern about the rule's effect on LTSS caregivers.
Response: This rule only requires the enrollment of providers and
suppliers that are of a type this are eligible to enroll. Staff members
that are not of a provider or supplier type that is eligible to enroll,
are not subject to this rule. A determination on if a provider or
supplier is eligible to enroll will be based on the type of provider or
supplier. For example, if a clinical social worker works for a PACE
organization, he or she would need to enroll in Medicare because a
clinical social worker is a type of provider or supplier eligible to
enroll. Furthermore, Sec. 410.73(a) defines clinical social worker and
states they must have a masters or doctoral degree in social work,
among other requirements. If the clinical social worker cannot enroll
because he or she fails to meet program requirements, such as this
educational requirement, he or she may not enroll in the program or
provide services to beneficiaries enrolled in programs under this final
rule, such as the PACE program. It does not mean that providers and
suppliers, that are of the type of providers or suppliers eligible to
enroll in Medicare, are exempt from enrolling because they cannot or do
not meet the necessary requirements for their specific provider or
supplier type to enroll in Medicare. Providers and supplier that cannot
or do not meet the enrollment requirements may not provide items and
services to beneficiaries that receive items and services through FFS,
MA, MA-PD, PACE, and Cost plans, as well as demonstration and pilot
programs. We have decided to finalize the proposal to include PACE
organizations in this rule because we believe it is in the best
interest of the beneficiaries to receive items and services from
Medicare providers and suppliers that are subject to the same screening
requirements. The screening efforts mentioned by the commenter are not
duplicative to any other process, specifically OIG and state screening.
We have access to information and authority for keeping certain
providers and suppliers out of the program that are not available to
these entities. Additionally, while it may be true that PACE
organizations are Medicare-certified provider entities, the individual
providers and suppliers have not been required to enroll. We do not
anticipate that this rule will have a significant impact on LTSS
caregivers because of the relatively small number of providers and
suppliers that need to enroll. Furthermore, some of the LTSS caregivers
are not of a provider or supplier type that is eligible to enroll in
Medicare.
Comment: A commenter expressed concern about our proposal to amend
Sec. 460.32 to require that the PACE program agreement include the
name and NPI of providers and suppliers reflecting enrollment in
Medicare. The commenter stated that the program agreement is a three-
way agreement between CMS, the state, and the PACE organization, and
that any change to the agreement would require the three parties to
reenter and resign the document. The commenter contended that this
would prove burdensome because new agreements would have to be signed
each time a provider or supplier enters or departs a contractual
relationship with a PACE organization. The commenter recommended that
CMS (1) devise an alternative approach, or (2) require PACE
organizations to furnish this information only on an annual basis;
concerning the latter, the commenter said that this would not absolve
PACE organizations from ensuring that all contracted providers and
suppliers, but would reduce the reporting burden. Another commenter
shared these concerns and added that uninterrupted access to PACE
services should be ensured.
Response: We understand the operational concerns and thank the
commenters. Based on this concern, we have reduced the burden this
requirement would have imposed on PACE organizations by aligning the
requirements to the provisions applicable to MA organizations. We have
removed the requirement in 42 CFR 460.32 and simply added Sec. Sec.
460.70 and 460.71. We believe this change will ensure that PACE
organizations employ and contract with enrolled providers and suppliers
without the additional burden of having the parties update the program
agreement.
Comment: A commenter recommended that any enrollment regulatory
requirements imposed on PACE organizations be made in part 460 and that
such requirements have the same specificity and precision as the
regulation changes proposed for part 422.
Response: We believe the appropriate requirements have been
reflected in part 460.
Other Comments
Comment: A number of commenters supported our proposal to require

[[Page 80458]]

providers or suppliers who furnish health care items or services to an
MA beneficiary be enrolled in Medicare in an approved status. A
commenter stated that many MA organizations already have this
requirement in place, and supported our efforts to standardize this
practice across all organizations.
Response: We appreciate the commenters' support.
Comment: A commenter disagreed with the use of the term
``intermediary'' being applied to MA organizations. The commenter
stated that MA organizations are state licensed, risk-bearing entities
that contract with CMS to provide Medicare Part A, B, and D benefits
and services. An intermediary, the commenter stated, is a Medicare
Administrative Contractor that bears no risk but is under contract with
CMS to pay Medicare covered claims and perform other functions for CMS.
The commenter sought greater clarification on this issue.
Response: We used intermediary as a general term to describe an
entity that holds a position between CMS and the provider and supplier
communities; we did not mean ``intermediary'' as the former contractor
entity that paid Medicare claims in the past before there were MACs. As
the public is likely aware, we do not pay providers and suppliers
directly in the MA program. We appreciate the opportunity to clarify.
Comment: Several commenters requested that CMS delay the
implementation of the MA enrollment requirement. They generally stated
that a delay would give all stakeholders (for example, MA
organizations, providers, suppliers, beneficiaries, and CMS) adequate
time to prepare for the requirement. They added that the delay would
enable CMS to resolve certain issues encountered in the Part D
enrollment process so they are avoided in the MA enrollment process.
Some commenters stated that CMS must establish an implementation plan,
provide operational and technical guidance (including clarity around
FDRs), and develop a comprehensive education and outreach strategy for
relevant stakeholders, and that a delay would give CMS time to perform
these activities. Several commenters recommended that the requirement
be implemented at the same time as the Part D enrollment requirement,
with one commenter specifically suggesting an effective date in CY 2020
for both requirements. Other commenters recommended an effective date
for the MA enrollment requirement of least 3 years from the date of
this final rule; several commenters suggested 4 years from the date of
this rule.
Response: We believe that the 2019 implementation date is
appropriate and takes into account the concerns raised by the
commenters. We thank the comments for the suggestions regarding
operational planning and will take them into consideration as we issue
future guidance.
Comment: A commenter contended that an increasing number of
physician practices may provide most or all of their Medicare services
to MA patients. The commenter encouraged CMS to develop means by which
such physicians can remain enrolled, for purposes of furnishing MA
services, without having to submit Part B claims.
Response: If the commenter is concerned about possible
deactivations due to 12 consecutive months of non-billing, we can say
that although Sec. 424.540(a)(1) is part of our regulatory authority,
its use is limited due to the expansion of our enrollment requirements
in Medicare that extend beyond billing Parts A and B. We have thousands
of providers and suppliers enrolled in Medicare that do not submit
claims for payment, such as providers and suppliers ordering and
certifying certain items and services and prescribers of Part D drugs.
Thus, systematic deactivations for 12 consecutive months of non-billing
would not be appropriate for providers and suppliers that enrolled
exclusively for purposes unrelated to billing the Medicare program. We
are mindful of the scenario described as we operationalize this rule.
Scope
Comment: A commenter asked CMS to clarify the MA enrollment
requirement's relationship to the Part D prescriber enrollment rule and
the latter's implementation date.
Response: The Part D prescriber enrollment requirement states that
nearly all prescribers of Part D drugs must be enrolled in Medicare or
validly opted-out. The requirement in this rule is that providers and
suppliers that provide services to Medicare beneficiaries in MA
organizations or MA-PD plans, including FDRs, must be enrolled in
Medicare. These are separate requirements; therefore, the
implementation date for the Part D prescriber rule is outside the scope
of this rule.
Comment: A commenter asked CMS to clarify the benefits of increased
opportunities for private practice physical therapists to become in-
network providers under MA organizations.
Response: We believe this request is outside the scope of the rule.
Comment: A commenter asked whether CMS is collaborating with state
Medicaid agencies to discuss implementation issues related to a similar
enrollment requirement on the Medicaid side; the commenter indicated
that such discussions could assist CMS in effectively implementing the
MA enrollment requirement.
Response: On May 6, 2016, we published the ``Medicaid and
Children's Health Insurance Program (CHIP) Programs; Medicaid Managed
Care, CHIP Delivered in Managed Care, and Revisions Related to Third
Party Liability'' final rule (81 FR 27498) that includes requirements
for providers and suppliers that provide services to Medicaid
beneficiaries in a managed care setting to be screened and enrolled in
Medicaid. We collaborate regularly with state Medicaid agencies when
operationalizing rules and appreciate the commenter's suggestion.
Comment: A commenter asked whether the enrollment requirements
apply to providers that are participating in special CMS initiatives,
such as Accountable Care Organizations initiatives and, if not, why
not, and which entity in these initiatives would be held accountable as
to their participating providers and suppliers are enrolled in
Medicare. The commenter stated that it would be reasonable to have this
requirement extend beyond the MA and Part D programs.
Response: We believe this comment is outside the scope of this
rule.
Comment: One commenter expressed support for requiring MA network
providers to publicly report quality data in a manner consistent with
Part A and B providers, specifically, requiring these providers to
submit administrative data sets to CMS such as claims and encounter
data in a manner consistent with Medicare Part A and B programs. The
commenter stated that there currently is little insight as to the
quality, volume, and utilization patterns of beneficiaries who elected
MA coverage.
Response: We appreciate this comment but believe it is outside the
scope of this rule.
Comment: One commenter, while supporting our proposed requirement,
made two recommendations. The first was that CMS should use the MA
enrollment requirement as an opportunity to begin deeming providers for
general compliance training as well. The second was that CMS should
obtain the demographic data for providers at the point of enrollment
into Medicare

[[Page 80459]]

and require providers to supply CMS with updates; plans would be
expected to use the most up-to-date information CMS has on file for
providers when updating the directories. This would create a provider
demographic repository, which the commenter believed would help ensure
consistency between CMS and MA records.
Response: We believe these comments are outside the scope of this
rule.
Comment: A commenter recommended that CMS explain whether providers
and suppliers participating in a section 1876 cost contract plan, a
section 1833 health care prepayment plan, the Railroad Retirement
Board, or an Indirect Payment Procedure (IPP) entity that does not
treat Medicare FFS beneficiaries, are subject to the $500 application
fee.
Response: We believe this comment is outside the scope of this
final rule.

J. Expansion of the Diabetes Prevention Program (DPP) Model

1. Summary
This final rule finalizes our proposal to expand the duration and
scope of the Diabetes Prevention Program (DPP) model test, which we
refer to as the Medicare Diabetes Prevention Program (MDPP) expanded
model.\15\ The MDPP expanded model aims to prevent the onset of type 2
diabetes among Medicare beneficiaries diagnosed with pre-diabetes.
Services available through the MDPP expanded model are MDPP services,
which will be furnished in community and health care settings by
coaches, such as trained community health workers or health
professionals. The MDPP expanded model is a Center for Medicare and
Medicaid Innovation (Innovation Center) model that is being expanded in
duration and scope under section 1115A(c) of the Act and will be
covered as an additional preventive service under Medicare.
---------------------------------------------------------------------------

\15\ Centers for Medicare & Medicaid Services, Proposed Rules,
``Proposed Expansion of the Diabetes Prevention Program (DPP)
Model,'' Federal Register 81, no. 136 (July 15, 2016): 46413-46418,
https://www.federalregister.gov/documents/2016/07/15/2016-16097/medicare-program-revisions-to-payment-policies-under-the-physician-fee-schedule-and-other-revisions.
---------------------------------------------------------------------------

We received approximately 700 timely pieces of correspondence
containing multiple comments on the MDPP expanded model. We note that
some of these public comments were outside of the scope of the proposed
rule. Summaries of the public comments that are within the scope of the
proposed rule and our responses to those public comments are set forth
in the various sections of this final rule under the corresponding
heading.
Commenters ranged from professional organizations, health plans,
advocacy groups, individual physicians, and numerous individuals who
have direct experience with the National Diabetes Prevention Program
(National DPP), and expressed overwhelming support for this model
expansion. Commenters raised key considerations as well.
Because the MDPP expanded model will be implemented through at
least two rounds of rulemaking, we have chosen in this final rule to
finalize aspects of this model expansion that will enable organizations
to prepare for enrollment. This includes finalizing the framework for
expansion and finalizing details of the MDPP benefit, beneficiary
eligibility criteria, and MDPP supplier eligibility criteria and
enrollment policies.
We are finalizing our proposal to expand the duration and scope of
the DPP model test as proposed. We are also finalizing our proposal to
designate MDPP services as ``additional preventive services'' as
defined by section 1861(ddd) of the Act. We are finalizing our proposal
to use the Secretary's waiver authority under section 1115A(d)(1) of
the Act to waive two requirements of the benefit category of additional
preventive services: the requirement in section 1861(ddd)(1)(B) of the
Act that the services be recommended by a grade of A or B from the
United States Preventive Services Task Force (USPSTF) and the
requirement of section 1861(ddd)(2) of the Act that the Secretary make
the determinations required under section 1861(ddd)(1) of the Act using
the National Coverage Determination (NCD) process.
We are finalizing our proposal that the MDPP core benefit is 12
consecutive months and consists of at least 16 weekly core sessions
over months 1-6 and at least six monthly core maintenance sessions over
months 6-12, furnished regardless of weight loss. Eligible
beneficiaries will have access to ongoing maintenance sessions after
the MDPP core benefit if they achieve and maintain the required minimum
weight loss of five percent. We are adding definitions of ``maintenance
session bundle'' and ``maintenance of weight loss'' to help provide
clarity. We are revising the definition of ``CDC-approved core
curriculum'' to remove specific curriculum topic names. We are also
revising the session duration requirement to specify that any session
must have a duration of approximately one hour.
We are finalizing the beneficiary eligibility criteria and our
referral policy as proposed.
We are finalizing the proposed high screening level for MDPP
supplier enrollment, the requirement for coaches to obtain National
Provider Identifiers (NPIs), and for DPP organizations to submit a
roster of coach NPIs and other coach information upon applying for
enrollment. We are modifying our proposal regarding the enrollment of
existing Medicare providers or suppliers, and are requiring all DPP
organizations, regardless of any existing enrollment in Medicare, to
enroll in Medicare as MDPP suppliers in order to furnish and bill for
MDPP services.
We are not finalizing our proposal that organizations that deliver
DPP virtually or through remote technologies will be eligible to
furnish MDPP services to future rulemaking. We intend to address
policies related to the delivery of virtual MDPP services in future
rulemaking. We are also not finalizing the definition of preliminary
recognition. We intend to seek comment on recognition standards in
future rulemaking.
We are also deferring certain policies, specifically related to
payment, use of coach information during enrollment and monitoring, and
other program integrity safeguards to future rulemaking. In particular,
specific policies regarding monitoring and enforcement actions for
supplier enrollment require future rulemaking. Because we are not
implementing such requirements in this rule, we cannot begin any
enrollment for organizations seeking to enroll as MDPP suppliers until
after the next round of rulemaking is complete in 2017. We intend to
begin supplier enrollment before the model expansion becomes effective
on January 1, 2018. We intend for organizations to be able to apply to
enroll as MDPP suppliers at the conclusion of the next round of
rulemaking. We may issue subregulatory guidance to assist in this
preparation before subsequent rulemaking is finalized. We will address
public comments on sections of the proposed rule we sought comment on,
including payment, quality reporting, and program integrity, in future
rulemaking.
The MDPP expanded model will become effective nationwide beginning
on January 1, 2018. We will continue to evaluate this expanded model
test.
2. Background
In January 2015, the Administration announced the vision of
``Better Care, Smarter Spending, Healthier People'' with emphases on
improving the way

[[Page 80460]]

providers are paid, improving and innovating in care delivery, and
sharing information to support better decisions, and that set goals for
payments made through alternative payment models and tied to quality or
value. In March 2016, the United States Department of Health and Human
Services (HHS) announced that an estimated 30 percent of Medicare
payments are tied to alternative payment models that reward the quality
of care over quantity of services provided to beneficiaries, nearly a
year ahead of schedule.
Diabetes affects more than 25 percent of Americans aged 65 or older
\16\ and its prevalence is projected to increase approximately 2 fold
for all U.S. adults (ages 18-79) by 2050 if current trends
continue.\17\ Additionally, the risk of progression to type 2 diabetes
in an individual with pre-diabetes is 5-10 percent per year, or 5-20
times higher than in individuals with normal blood glucose.\18\ Care
for Americans aged 65 and older with diabetes accounts for roughly $104
billion annually, and these costs are growing.\19\ In total, we
estimate that Medicare will spend $42 billion more in the single year
of 2016 on fee-for-service, non-dual eligible, over age 65
beneficiaries with diabetes than it would spend if those beneficiaries
did not have diabetes--$20 billion more for Part A, $17 billion more
for Part B, and $5 billion more for Part D. On a per-beneficiary basis,
this disparity is just as clear. In 2016 alone, Medicare will spend an
estimated $1,500 more on Part D prescription drugs, $3,100 more for
hospital and facility services, and $2,700 more in physician and other
clinical services for those with diabetes than those without
diabetes.\20\
---------------------------------------------------------------------------

\16\ Centers for Medicare & Medicaid Services, ``Chronic
Conditions Among Medicare Beneficiaries, Chartbook: 2012 Edition,''
Centers for Medicare & Medicaid Services, 2012, https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/chronic-conditions/downloads/2012chartbook.pdf.
\17\ James Boyle, et al., ``Projection of the Year 2050 Burden
of Diabetes in the US Adult Population: Dynamic Modeling of
Incidence, Mortality, and Pre-Diabetes Prevalence,'' Population
Health Metrics 8, no. 29 (2010): 1-12.
\18\ X Zhang et al., ``A1C Level and Future Risk of Diabetes: A
Systematic Review,'' Diabetes Care 33, no. 7 (2010): 1665-1673.
\19\ James Boyle, et al., ``Projection of the Year 2050 Burden
of Diabetes in the US Adult Population: Dynamic Modeling of
Incidence, Mortality, and Pre-Diabetes Prevalence,'' Population
Health Metrics 8, no. 29 (2010): 1-12.
\20\ Erkan Erdem and Holly Korda, ``Medicare Fee-For-Service
Spending for Diabetes: Examining Aging and Comorbidities,'' Diabetes
& Metabolism 5, no. 3 (2014); The Boards of Trustees: Federal
Hospital Insurance and Federal Supplementary Medical Insurance Trust
Funds, ``2016 Annual Report of the Boards of Trustees of the Federal
Hospital Insurance and Federal Supplementary Medical Insurance Trust
Funds,'' Centers for Medicare & Medicaid Services, 2016, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/downloads/tr2016.pdf.; and CMS
estimates.
---------------------------------------------------------------------------

Fortunately, type 2 diabetes is typically preventable with
appropriate lifestyle changes. The National DPP, administered by the
Centers for Disease Control and Prevention (CDC), is an evidence-based
intervention targeted to individuals with pre-diabetes, meaning those
with blood sugar that is higher than normal but not yet in the diabetes
range. The National DPP is a structured health behavior change program
delivered in community and health care settings by trained community
health workers or health professionals. The National DPP consists of 16
intensive core sessions of a CDC-approved curriculum in a group-based
setting that provides practical training in long-term dietary change,
increased physical activity, and problem-solving strategies for
overcoming challenges to sustaining weight loss and a healthy
lifestyle. After the 16 core sessions, monthly maintenance sessions
help to ensure that the participants maintain healthy behaviors. The
primary goal of the intervention is to reduce incidence of type 2
diabetes by achieving at least 5 percent average weight loss among
participants. To learn more about the National DPP, please visit https://www.cdc.gov/diabetes/prevention/lifestyle-program/.
In 2012, the Innovation Center awarded a Health Care Innovation
Award (HCIA) to The Young Men's Christian Association (YMCA) of the USA
(Y-USA) to test whether DPP services could be successfully furnished by
non-physician, community-based organizations to Medicare beneficiaries
diagnosed with pre-diabetes and therefore at high risk for development
of type 2 diabetes (referred to hereafter as the DPP model test). The
DPP model test has been conducted under the authority of section 1115A
of the Act, which authorizes the Innovation Center to test innovative
health care payment and service delivery models that have the potential
to reduce Medicare, Medicaid, and Children's Health Insurance Program
(CHIP) expenditures while preserving or enhancing the quality of
patient care.
Between February 2013 and June 2015, the Y-USA, in partnership with
17 local YMCAs, the Diabetes Prevention and Control Alliance, and seven
other non-profit organizations, enrolled a total of 7,804 Medicare
beneficiaries into the model. Enrolled beneficiaries represented a
diverse demographic across the eight states of Arizona, Delaware,
Florida, Indiana, Minnesota, New York, Ohio, and Texas. According to
the second year independent evaluation report of the DPP model test,
Medicare beneficiaries demonstrated high rates of participation and
sustained engagement in the Diabetes Prevention Program. Approximately
83 percent of recruited Medicare beneficiaries attended at least four
core sessions and approximately 63 percent completed nine or more core
sessions. The first and second independent evaluation reports are
available on the Innovation Center's Web site at https://innovation.cms.gov/initiatives/Health-Care-Innovation-Awards/.
3. Requirements for Expansion
Section 1115A(c) of the Act provides the Secretary of the U.S.
Department of Health and Human Services (the Secretary) with the
authority to expand (including implementation on a nationwide basis)
through rulemaking the duration and scope of a model that is being
tested under section 1115A(b) of the Act if the following findings are
made, taking into account the evaluation of the model under section
1115A(b)(4) of the Act: (1) The Secretary determines that the model
expansion is expected to either reduce spending without reducing
quality of care or improve the quality of patient care without
increasing spending; (2) the CMS Chief Actuary certifies that the
expansion would reduce (or would not result in any increase in) net
program spending; and (3) The Secretary determines that the expansion
would not deny or limit the coverage or provision of benefits.
Improved Quality of Care without Increased Spending: The
DPP model test was designed to improve care through diabetes-related
preventive services in community- and primary-care based settings.
Weight loss is a key indicator of success among persons enrolled in a
DPP due to the strong association between weight loss and reduction in
the risk of diabetes.\21\ According to the second year independent
evaluation of the DPP model test, those beneficiaries who attended at
least one core session lost an average of 7.6 pounds while
beneficiaries who attended at least four core sessions lost an average
of 9 pounds. Body Mass Index (BMI) was reduced from 32.9 to 31.5 among
Medicare beneficiaries that attended at least four core sessions. The
evaluation

[[Page 80461]]

also demonstrated a statistically significant reduction in inpatient
admissions following the intervention. Based on these findings and
results from other DPP evaluations demonstrating the effectiveness of
DPP programs in preventing diabetes onset in non-Medicare
beneficiaries, some of which were over 65, the Secretary determined
that expansion of the DPP model test is expected to improve the quality
of patient care for Medicare beneficiaries without increasing spending.
---------------------------------------------------------------------------

\21\ RF Hamman et al., ``Effects of Weight Loss with Lifestyle
Intervention on Risk of Diabetes,'' Diabetes Care 29, no. 9 (2006):
2102-2107.
---------------------------------------------------------------------------

Impact on Medicare Spending: The CMS Chief Actuary
(referred to hereafter as the Chief Actuary) has certified that
expansion of the DPP model test would not result in an increase in
Medicare spending. The Chief Actuary has determined that DPP is likely
to reduce Medicare expenditures if made available to eligible Medicare
beneficiaries based on historical evidence from evaluations of the DPP
model test and other DPPs. In addition, to evaluate the longer-term
impact of the expanded model, the Chief Actuary developed a model to
estimate lifetime per participant savings of a Medicare beneficiary
receiving DPP services.
The full Chief Actuary Certification is available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/Diabetes-Prevention-Certification-2016-03-14.pdf.
No Alteration in Coverage or Provision of Benefits: The
MDPP model expansion would make MDPP services available to
beneficiaries in addition to existing Medicare services, and
beneficiaries receiving MDPP services would retain all benefits covered
in traditional Medicare. Therefore, the Secretary has determined that
expansion of the DPP model test would not deny or limit the coverage or
provision of Medicare benefits for Medicare beneficiaries.
The following is a summary of the comments received and our
responses.
Comment: Commenters were overwhelmingly in favor of the proposed
expansion and Medicare covering the MDPP services as an additional
preventive service. Many commenters offered personal stories of their
battles with type 2 diabetes, or caring for those with type 2 diabetes,
and expressed gratitude toward the agency for proposing to cover the
benefit to prevent future beneficiaries from the challenges posed by
type 2 diabetes. Commenters encouraged us to consider ways to increase
beneficiary awareness and lower barriers to access. Several commenters
expressed their desire to assist us in further development of the model
expansion. Commenters also encouraged us to continue to align with the
CDC Diabetes Prevention Recognition Program Standards and Operating
Procedures (CDC DPRP Standards) on various policies such as supplier
requirements, recognition status, and required minimum weight loss
percentage. Another commenter recommended that we reimburse for
technology such as the continuous glucose monitor. Some commenters
encouraged us to continue to take steps toward more preventive models.
One commenter disagreed altogether with the proposed MDPP model
expansion, stating it allows another high risk supplier type into the
Medicare program.
Response: We appreciate the commenters' suggestions to increase
beneficiary awareness of the benefit, and look forward to exploring
ways we can achieve our shared aims through stakeholder engagement and
communications efforts, such as updates to the Medicare & You Handbook.
We also hope to engage the public and MDPP stakeholders in further
developments and any adjustments we make through future rulemaking,
subregulatory guidance, or other guidance, as appropriate. We
appreciate the comments to test more preventive models and to pay for
technology that could be used in connection with the MDPP expanded
model, but those are outside the scope of what we proposed to expand,
and we decline to include them in the MDPP model expansion. We disagree
with the commenter who believed we should not expand the DPP model
test. We describe later in this rule some of the enrollment policies
that are intended to protect against the risks introduced by the new
supplier class. Additionally, we intend to propose specific program
integrity policies in future rulemaking.
Comment: A few commenters expressed concerns that the MDPP model
expansion will set a flawed precedent for future model expansions. For
example, two commenters expressed concerns that the Secretary's
determination that the MDPP model expansion would improve the quality
of care is not substantiated by the evidence, and asked for more
discussion of how the MDPP expansion will improve other elements within
quality of care, such as patient experience.
Response: We are undertaking the MDPP model expansion in a manner
consistent with the statutory requirements of section 1115A(c) of the
Act. Therefore we do not agree that expansion of the DPP model test
sets a flawed precedent. We also note that the specific data, analyses,
and other factors informing the MDPP expansion are unique to this
particular model. For example, different approaches to actuarial
modeling may be required for a preventive service payment and service
delivery model as compared to a payment model focused on treatment. We
expect to take into account the specific aspects of each model when
evaluating it for expansion. We found that the DPP model test has been
shown to reduce risk of type 2 diabetes through weight loss and
behavior change. The second year independent evaluation of the DPP
model test also found statistically significant reductions in inpatient
and emergency room visits and robust engagement by beneficiaries.
Expansion of the DPP model test will give eligible beneficiaries access
to MDPP services, which are evidence-based, to improve their health.
The Secretary has determined that by improving health outcomes, as
measured by participation in the DPP and weight loss, the MDPP expanded
model will improve beneficiaries' quality of care. Weight loss is a key
indicator of success among persons enrolled in the DPP as it predicts
the reduced incidence of type 2 diabetes.\22\ According to the second
year independent evaluation of the DPP model test, which included 6,874
Medicare beneficiaries, those beneficiaries who attended at least one
core session lost an average of 7.6 pounds while beneficiaries who
attended at least four core sessions lost an average of nine pounds.
BMI was reduced from 32.9 to 31.5 among Medicare beneficiaries that
attended at least four core sessions.
---------------------------------------------------------------------------

\22\ RF Hamman et al., ``Effects of Weight Loss with Lifestyle
Intervention on Risk of Diabetes,'' Diabetes Care 29, no. 9 (2006):
2102-2107.
---------------------------------------------------------------------------

Comment: Regarding the Chief Actuary's certification, some
commenters expressed appreciation that the determination was made
available to the public several months before the proposed rule. One
commenter also asked us to clarify if, and how, stakeholders can engage
with the certification process in the event that there are outstanding
questions of methodology and model assumptions. Two commenters
criticized the Chief Actuary's consideration of findings in addition to
the DPP model test, such as other DPPs in the National DPP, in making
the certification. A commenter stated that the Chief Actuary certified
the expansion of a model that is different than the tested model, which
the commenter viewed as contrary to the statute. MedPAC expressed
concern that the MDPP expanded model would

[[Page 80462]]

expand far beyond the structure of the initial model test. One
commenter expressed concern that this determination was made based on a
preliminary, 2-year evaluation.
Response: We appreciate commenters' interest in the certification
process. The CMS Office of the Actuary, led by the Chief Actuary,
functions in accordance with professional standards of actuarial
independence. The statute does not require that in certifying an
expansion the Chief Actuary may consider data only from the model
evaluation; rather, the statute requires only that the evaluation be
taken into consideration.
The Chief Actuary also reviewed data from other sources besides the
model evaluations in certifying the Pioneer Accountable Care
Organization (ACO) Model, the first Innovation Center model determined
eligible for expansion. In April 2015, the Chief Actuary certified that
expansion of the Pioneer ACO Model, as it was tested in the model's
first 2 years, would reduce net program spending. The Chief Actuary
used historical evidence from the formal evaluation of the Pioneer ACO
Model as well as the Chief Actuary's independent internal analysis of
financial impacts. The Chief Actuary's certification of the Pioneer ACO
Model is available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/Pioneer-Certification-2015-04-10.pdf. The Secretary also determined that expansion would not limit
coverage or benefits, and that expansion would maintain or improve
patient care without increasing spending. While the Pioneer ACO Model
has not been expanded through section 1115A(c) of the Act, CMS has
incorporated successful design elements of the Pioneer ACO Model into
the Medicare Shared Savings Program.
The statute does not require that an expanded model test be
identical to the initial model test. Indeed, section 1115A(c) of the
Act authorizes the Secretary to expand (including implementation on a
nationwide basis) the duration and the scope of a model being tested
under subsection (b) or a demonstration project under section 1866C of
the Act through rulemaking. The rulemaking requirement indicates that
the expansion is to be subject to public comment, which, in turn,
indicates that the expansion can and should be modified as appropriate
to reflect the outcome of the rulemaking process. In addition, we
expect that we will need to modify some design features in nearly all
cases of expanded model tests, by virtue of the shift in duration or
scope. For example, a nationwide expansion may require different
policies and operations to manage large-scale provider enrollment or
payment than does the initial model test. The Chief Actuary certified
expansion of the DPP model test understanding that the expansion would
include specific changes driven by policies and operations necessary in
bringing the model to a national scale. As the expansion's full design
is implemented in future rulemaking, the Chief Actuary will assess
whether such expansion will reduce or not increase net program
spending, and will update the certification as appropriate.
Comment: Some commenters supported the determination that the DPP
model expansion would not deny or limit the coverage or provision of
Medicare benefits for Medicare beneficiaries as the MDPP expanded model
makes additional services available to eligible beneficiaries. Two
commenters asked that in future model expansions we assess the impact
of a model on patient access to covered items and services based on a
broad evaluation of the direct and indirect barriers to care that may
result from a model's expansion.
Response: We appreciate the commenters' support regarding the
determination that the expansion of the DPP model test would not deny
or limit the coverage or provision of Medicare benefits. We will apply
the statutory criteria for expanding a model on an individual basis and
will take the particular features of each model into account when
making any determinations.
Comment: Several commenters encouraged us to continue to collect
data and evaluate the impact of the expanded model test.
Response: We will continue to evaluate this expanded model test as
indicated in the proposed rule. Using an evaluation design that could
include a before and after assessment and or matched comparison groups,
we will examine the impact of the model on utilization of services and
cost of care, particularly whether the model has had an impact on the
development of diabetes, and other health consequences of diabetes. We
will also examine the expanded model's impact on changes in health
metrics, such as weight loss.
In general, evaluations of Innovation Center models address the
impact of the models on use of services and the quality of care
provided, relative to a comparison group, using CMS administrative data
and relevant beneficiary experience data when available. Utilization
measures can be used to monitor whether beneficiaries are receiving the
services that would be expected given beneficiaries' health status. The
comparison group generally consists of beneficiaries who are similar to
the beneficiaries receiving services under the model, and are often
matched on underlying health status and other important
characteristics, including whether the beneficiary is part of another
model test. We intend to apply additional information on the evaluation
in the future. We will continue to assess whether the MDPP expanded
model is expected to improve the quality of care without increasing
spending, reduce spending without reducing the quality of care, or
improve the quality of care and reduce spending, and we will terminate
or modify the MDPP expanded model if the expanded model is not expected
to meet these criteria.
4. Expansion of the Diabetes Prevention Program Model
We proposed to expand the duration and scope of the DPP model test
under section 1115A(c) of the Act, and we proposed to refer to this
expanded model as the MDPP. In this section of this final rule, we are
finalizing a framework for the MDPP expanded model. We intend to engage
in additional rulemaking in 2017, to establish additional requirements
of the MDPP expanded model. We solicited comment on all of the
proposals below and on other policy or operational issues that need to
be considered in implementing this expansion.
a. Designation of MDPP Services as Additional Preventive Services Under
Section 1861(ddd) of the Act
We proposed to designate MDPP services as ``additional preventive
services'' available under Medicare Part B. Section 1861(ddd) of the
Act defines ``additional preventive services'' as services (other than
screening or other preventive services or personalized prevention plan
services described in other sections of the Act) that identify medical
conditions or risk factors, and that the Secretary determines, using
the National Coverage Determination (NCD) process, are (A) reasonable
and necessary for the prevention or early detection of an illness or
disability; (B) recommended with a grade of A or B by the United States
Preventive Services Task Force (USPSTF); and (C) appropriate for
individuals entitled to benefits under Part A or enrolled in Part B.
We believe that MDPP services are consistent with the types of
additional preventive services that are appropriate

[[Page 80463]]

for Medicare beneficiaries. In particular, we believe that MDPP
services meet the requirements of section 1861(ddd)(1)(A) of the Act
(that is, that they are reasonable and necessary for the prevention or
early detection of an illness or disability) because they are
specifically designed to prevent pre-diabetes from advancing into type
2 diabetes and their effectiveness is supported by the evaluations of
the DPP model test.
We proposed to use the Secretary's waiver authority under section
1115A(d)(1) of the Act to waive two requirements of the benefit
category of additional preventive services. MDPP services do not meet
the requirement in section 1861(ddd)(1)(B) of the Act in that MDPP
services have not been recommended with a grade of A or B by the
USPSTF, and thus a waiver of that requirement is necessary. We proposed
to use the Secretary's waiver authority to waive this requirement with
respect to MDPP services.
We proposed to waive the requirement of section 1861(ddd)(2) of the
Act that the Secretary make the determinations required under section
1861(ddd)(1) of the Act using the NCD process. We proposed to waive
this requirement because applying the NCD process to the MDPP model
expansion is inappropriate, and thus the waiver is necessary. The
creation of a new supplier class is necessary for coaches to furnish
MDPP services, which the NCD process was not designed to address.
Since Medicare cost-sharing does not apply to additional preventive
services, MDPP services would not be subject to Medicare cost-sharing.
We solicited comment on these proposals.
The following is a summary of the comments we received on
designating MDPP services as additional preventive services and our
responses.
Comment: While some commenters supported the Secretary's use of the
waiver authority provided by section 1115A(d)(1) of the Act in
expansion of the DPP model test, a few commenters stated that the
statute does not permit the Secretary to waive statutory or regulatory
requirements when a model is expanded under section 1115A(c) of the
Act. These commenters stated that any use of waiver authority in an
expanded model is not made ``with respect to testing models described
in subsection (b).'' As a consequence, these commenters stated, the
Secretary lacks the authority to waive the provisions of section
1861(ddd) of the Act proposed in the proposed rule.
Response: We disagree with the commenters. Section 1115A(d)(1) of
the Act authorizes the Secretary to waive certain requirements as may
be necessary solely for purposes of carrying out this section with
respect to testing models described in subsection (b). We believe that
the phrase ``described in subsection (b)'' is simply a reference that
describes the models that are authorized under subsection (b), and that
the waiver authority extends to expanded models because they continue
to be models described in subsection (b). The language of section
1115A(c) of the Act itself supports this view because it gives the
Secretary authority to expand the duration and scope of a model that is
being tested under subsection (b).
Therefore, in our view, the Secretary is authorized to waive
requirements of Title XI, Title XVIII, and sections 1902(a)(1),
1902(a)(13), 1902(m)(2)(A)(iii), and 1934 of the Act (other than
subsections (b)(1)(A) and (c)(5) of such section) in connection with
expanded model tests. As the MDPP model expansion is an expansion of
the duration and scope of a model described in and tested under
subsection (b), the Secretary may waive Medicare requirements as
necessary for the purposes of the expanded model.
Comment: Many commenters believed that the Secretary's waiver of
section 1861(ddd)(1)(B) of the Act, which requires that a benefit must
be recommended with a grade of A or B by the USPSTF, is unnecessary.
These commenters stated that the USPSTF issued guidance in October 2015
entitled Abnormal Blood Glucose and Type 2 Diabetes Mellitus:
Screening, which provided a B rating for intensive behavioral
counseling interventions for patients with abnormal blood glucose based
on National DPP clinical trial evidence. This recommendation is
available at https://www.uspreventiveservicestaskforce.org/Page/Document/RecommendationStatementFinal/screening-for-abnormal-blood-glucose-and-type-2-diabetes. Because of this recommendation, these
commenters suggested, the Secretary does not need to waive the
requirement in section 1861(ddd)(1)(B) of the Act.
Response: While the interventions mentioned in the USPSTF's
recommendation bears some similarity to the expanded DPP model test,
and provides evidence to support DPPs generally, there are differences
between the USPSTF's recommendation and the design of the MDPP expanded
model, both as initially tested and as we have proposed to expand it.
We believe these differences make USPSTF's recommendation inapplicable
to MDPP, and therefore the waiver is necessary.
In particular, the specific USPSTF recommendation cited by
commenters is for ``adults aged 40 to 70 years who are overweight or
obese who are seen in primary care settings,'' which does not include
Medicare beneficiaries over 70 who would be eligible for MDPP services
or the furnishing of MDPP services by a community service organization.
While the USPSTF recommendation discussed by the commenters does
not match with the elements of the MDPP model expansion, we do note
that the recommendation supports the principle of the MDPP expanded
model. In addition, we have spoken to the USPSTF about its
recommendation and shared the findings of the evaluation of the model
in case the USPSTF would like to reconsider its recommendation.
Similarly, we note that in 2014, the Community Preventive Services
Task Force (CPSTF), a ``sister entity'' to the USPSTF that is focused
on population-based interventions, issued a recommendation for
Diabetes: Combined Diet and Physical Activity Promotion Programs to
Prevent Type 2 Diabetes Among People at Increased Risk, specifically
recommending ``combined diet and physical activity promotion programs
for people at increased risk of type 2 diabetes based on strong
evidence of effectiveness in reducing new-onset diabetes.'' The CPSTF
recommendation is available at https://www.thecommunityguide.org/findings/diabetes-combined-diet-and-physical-activity-promotion-programs-prevent-type-2-diabetes. We believe that the MDPP expanded
model is consistent with the CPSTF recommendation.
Comment: One commenter suggested that the Secretary should not
waive the National Coverage Determination (NCD) process required by
section 1861(ddd)(2) of the Act. One commenter suggested that it is
irrelevant that the NCD process does not address the creation of a new
supplier class. This commenter also suggested that the statute does not
require CMS to implement an additional preventive service via the NCD
process; all it requires is that CMS make the three determinations that
are prerequisites for additional preventive service status using the
NCD process. This commenter also stated that the timing of the NCD
process will not hinder this expansion, suggesting that we have the
discretion to expedite the NCD process. Another commenter suggested
that waiving the NCD process is unnecessary because the

[[Page 80464]]

creation of a supplier class is not hindered by the NCD process.
Response: We disagree that waiving requirements of section
1861(ddd)(2) of the Act is unnecessary. In particular, we disagree with
the commenters who believe that using the NCD process would not create
timing challenges for the MDPP expanded model. To the contrary, we
believe that the use of the NCD process is inappropriate for the MDPP
expanded model.
The MDPP expanded model necessitates the creation of a new supplier
class that must be able to enroll in Medicare so that it may furnish
MDPP services as of the effective date of the expanded model. We are
establishing the new supplier class through rulemaking, in conjunction
with the model expansion. Contrary to commenters' assertions, using the
NCD process to designate MDPP services as additional preventive
services would create significant timing challenges, given that we need
to expand the model and establish the MDPP supplier class through
rulemaking. If we were to use the NCD process to determine that MDPP
services are additional preventive services, we would not be able to
begin covering MDPP services on the date the NCD was issued, even if it
were issued simultaneously with the effective date of a final rule
establishing the supplier class. This is because in order to align the
effective dates, we would have had to issue a final rule establishing
the MDPP supplier class 60 days before we determined that MDPP services
were covered by Medicare. Were we to instead issue an NCD
simultaneously with the release of a final rule establishing a new
supplier class, the benefit would be unavailable for a period of time
after the NCD's effective date because of the 60-day delay in
effectiveness of the final rule plus time needed thereafter to process
MDPP supplier enrollment applications. Because we cannot allow MDPP
suppliers to enroll specifically to provide a service that is not yet a
Medicare service, we find that it is necessary for purposes of
expanding the MDPP model to waive the requirements of section
1861(ddd)(2) of the Act. This rulemaking establishes MDPP services as
additional preventive services that will become available after there
is sufficient time to enroll MDPP suppliers to furnish those services,
which allows us to avoid timing and logistics problems while also
providing the public with the opportunity to comment in a manner
similar to the NCD process.
Comment: Commenters overwhelmingly supported the proposal to not
hold beneficiaries responsible for cost sharing for MDPP services. A
few commenters asked us to clarify that beneficiaries would not have to
pay cost-sharing, particularly because they were concerned that cost
sharing would restrict beneficiary access.
Response: MDPP services are additional preventive services under
section 1861(ddd) of the Act and therefore, consistent with section
1833(a)(1)(W) of the Act, are not subject to the Medicare Part B
coinsurance or deductible.
Final Decision: We finalize our proposal to expand the duration and
scope of the DPP model test as proposed. We finalize our proposal to
designate this benefit as an additional preventive service according to
section 1861(ddd) of the Act as proposed, and we also finalize our
proposals to waive the requirements of sections 1861(ddd)(1)(B) and
(ddd)(2) of the Act as proposed.
b. Timing of the Expansion of the Medicare Diabetes Prevention Program
Model
We proposed that the expansion of the duration and scope of the DPP
model test would become effective on a nationwide basis beginning on
January 1, 2018. Expanding the DPP model test is a complex undertaking,
which could be approached in different ways, such as expanding the
scope of the DPP model test nationally in its first year of
implementation or expanding the duration and scope using a phase-in
approach. The phase-in approach could expand MDPP initially for a
period of time in certain geographic markets or regions or among a
subpopulation of MDPP suppliers, with the goal of addressing technical
issues prior to broader expansion. We solicited comment on whether to
expand the scope of the DPP model test nationally or use a phase-in
approach, and if phased-in, what factors we should consider in the
possible selection of initial phased-in MDPP suppliers.
Comment: We received many comments related to the timing of the
MDPP expansion. Commenters overwhelmingly supported nationwide
expansion of the DPP model test on January 1, 2018, over a phase-in
approach. Several commenters, including MedPAC, supported a phase-in
approach, to allow CMS to address program integrity issues before
nationwide expansion. Some commenters made suggestions for where and
with which providers to phase the benefit in if CMS were to adopt the
phase-in approach. Others asked for clarification on what criteria
would be used to determine the details of a phased-in approach.
Response: We believe that nationwide expansion of the scope of the
model would allow the greatest access to the MDPP services for
beneficiaries. We also acknowledge the concerns that the MDPP expanded
model introduces a new service and a new supplier type to the Medicare
program, and we will prioritize beneficiary safety and the need to
consider program integrity concerns in our implementation of this
expansion.
MDPP services will be available to eligible beneficiaries beginning
on January 1, 2018, subject to additional rulemaking on issues such as
payment for the service. However, as a factual matter, eligible
beneficiaries' access to MDPP services will increase over time as more
organizations seek and receive CDC DPRP recognition, enroll in Medicare
as MDPP suppliers, and therefore furnish MDPP services. As of October
2016, more than 1,000 organizations have pending or full recognition
from the CDC DPRP to provide DPP services. As described in section
III.J.7.a. of this final rule, these organizations will have to meet
certain standards before becoming eligible to enroll as a Medicare
supplier. This will provide a de facto phase in that will allow us to
gain experience with the MDPP expanded model with fewer organizations
initially who meet the supplier eligibility criteria, and more over
time as supplier enrollment increases.
c. Other Comments on the Expansion of the Medicare Diabetes Prevention
Program Model
Comment: A few commenters expressed concern that MDPP suppliers
should be coordinating with primary care providers or other physicians,
and a few commenters did not support the MDPP expanded model because
they believed it would further fragment the health care system.
Response: We appreciate and respect the concern regarding
coordination with the clinical care system, and we encourage MDPP
suppliers to promptly communicate with the beneficiary's health care
providers as appropriate with the beneficiary's consent to promote care
coordination. We also expect that some clinicians will furnish MDPP
services on behalf of organizations that have or will obtain CDC DPRP
recognition and enroll in Medicare as MDPP suppliers. However, we did
not propose specific rules or requirements around coordination with
primary care providers or other health care entities for the purposes
of this

[[Page 80465]]

MDPP expanded model because the DPP model test did not require this
level of coordination. We also want to provide organizations with the
flexibility they need to effectively coordinate care with physicians
while decreasing the administrative burden of offering the services. We
will take these comments into consideration as we finalize various
aspects of MDPP in future rulemaking.
Comment: One commenter suggested the use of mobile application-
based technology with built in incentives for beneficiaries.
Response: We appreciate the suggestion and we will consider it as
we engage in future rulemaking.
Comment: A few commenters recommended they be allowed to apply
Diabetes Self-Management Training (DSMT) to beneficiaries with pre-
diabetes. One commenter suggested that CMS merge DSMT and MDPP because
core training elements are identical.
Response: While we acknowledge that there may be similarities
between the two benefits, DSMT and MDPP have different eligibility
criteria and goals. Beneficiaries with a type 2 diabetes diagnosis have
different needs than those with pre-diabetes. We therefore do not
believe we should merge these benefits.
Comment: Several commenters recommended that we add MDPP services
to the personalized prevention plan offered as part of the Medicare
Annual Wellness Visit (AWV). A few commenters expressed disagreement
with the focus on weight loss, citing fitness and physical activity,
metabolic and behavioral markers, and other alternatives that CMS
should consider as outcomes for value-based payments.
Response: We did not test the other indicators that commenters
recommended such as fitness, metabolic activity and behavioral markers.
We will make adjustments through rulemaking, as necessary, if through
our continuing evaluation we find that such adjustments are warranted.
One of the elements of the AWV is for the health professional to
furnish personalized health advice to the beneficiary, and a referral,
as appropriate, to health education or preventive counseling services
or programs. An eligible beneficiary can be referred for MDPP services
as part of a personalized prevention plan. We reiterate, however, that
we did not propose to require that beneficiaries obtain a referral for
MDPP services, though as discussed in section III.J.7.c. of this final
rule, referrals are permitted.
Comment: Some commenters suggested using the term ``delay'' rather
than ``prevent'' diabetes, and others suggested using the name National
Diabetes Prevention Program (National DPP), rather than MDPP, citing
confusion in the market of payers that currently cover DPP for their
members.
Response: We believe prevention of type 2 diabetes is the goal of
the MDPP expanded model even though some beneficiaries may still be
diagnosed with type 2 diabetes, so we decline to change the name to
reference a ``delay'' in diabetes onset. We also believe MDPP is the
appropriate name for this expanded model because there are differences
between MDPP and the National DPP, such as the age of the beneficiaries
served, beneficiary eligibility criteria, and the DPP organization or
MDPP supplier eligibility criteria.
5. MDPP Benefit Description
We proposed the MDPP core benefit to be 12-months of sessions using
a CDC-approved DPP curriculum, consisting of at least 16 core sessions
furnished over a range of 16 to 26 weeks (that is, the first 6 months)
and at least 6 monthly core maintenance sessions over weeks 27-52
(second 6 months). We proposed that beneficiaries who complete the 12-
month core benefit, and achieve and maintain a required minimum weight
loss of 5 percent from the first core session, in accordance with the
CDC Diabetes Prevention Recognition Program Standards and Operating
Procedures (CDC DPRP Standards), would be eligible for monthly ongoing
maintenance sessions for as long as the weight loss is maintained. The
CDC DPRP Standards are available at https://www.cdc.gov/diabetes/prevention/pdf/dprp-standards.pdf. We proposed to require each MDPP
core and maintenance session (both core and ongoing) be at least one
hour in duration. We proposed that the MDPP expanded model will use the
CDC-approved curriculum. Details pertaining to the content of both the
core sessions and maintenance sessions, as set by the CDC, are
available at https://www.cdc.gov/diabetes/prevention/pdf/curriculum_toc.pdf.
We proposed that during the first 6 months (weeks 1-26) of the MDPP
core benefit, each of the 16 core sessions must address a different
curriculum topic included on the list of 16 curriculum topics, ensuring
all topics are addressed by the end of the 16 sessions. We proposed
that the second 6 months (weeks 27-52) of the MDPP core benefit must
include at least one core maintenance session furnished in each of the
6 months (for a minimum of six sessions), and all core maintenance
sessions must address different topics. We proposed that ongoing
maintenance sessions adhere to the same curriculum requirements as the
core maintenance sessions.
We solicited comment on these proposals.
The following is a summary of the comments received and our
responses.
Comment: Several commenters suggested that we clarify whether MDPP
suppliers must furnish MDPP services in the second 6 months of the core
benefit (the core maintenance sessions) or Medicare payment for
services furnished in the second 6 months of the core benefit without
achievement of the required 5 percent weight loss. The commenters
recommended that we allow MDPP suppliers to document and bill for
achievement of beneficiary weight loss at any time during the first
year, rather than during only the first 6 months. One commenter
suggested that CMS clarify if there is a minimum or maximum number of
beneficiaries that an MDPP supplier must/may serve.
Response: We clarify that core maintenance sessions in the second 6
months are furnished as part of the 12-month core benefit, regardless
of weight loss. We refer readers to section III.J.7.b. of this final
rule for discussion of the requirement that organizations maintain CDC
DPRP recognition to enroll in Medicare to bill for furnishing MDPP
services. The CDC DPRP Standards require that DPP-eligible individuals
be able to access the core maintenance sessions, regardless of weight
loss, in order for an organization to maintain CDC DPRP recognition.
Therefore, we are finalizing our proposal that the MDPP core benefit is
a 12-month program that consists of at least 16 weekly core sessions,
over months 1-6, and at least 6 monthly core maintenance sessions over
months 6-12, furnished regardless of weight loss. We are making
corresponding changes to the regulations text to address when the MDPP
core benefit will be available. We intend to address payment for MDPP
services in future rulemaking. We will not require a minimum or maximum
number of beneficiaries at this time, recognizing that MDPP suppliers
will vary in capacity and mode of delivery. However, we will monitor
for signs of adverse selection of beneficiaries and propose specific
program integrity requirements in future rulemaking, as appropriate.
Comment: Numerous commenters expressed general support for ongoing
maintenance sessions after the 12-month core benefit and recommended
that CMS allow beneficiaries access to ongoing maintenance sessions if
they achieve the required 5 percent weight

[[Page 80466]]

loss any time during the 12-month core benefit. A few commenters
recommended that CMS clarify the definition of maintenance of weight
loss, noting that it is common for individuals to lose, regain, and
lose weight again. One commenter recommended that beneficiaries whose
weight increases during the maintenance period should have up to 3
months to bring their weight back to the maintenance level. Another
commenter requested clarification on when and how MDPP suppliers should
track weight on an ongoing basis to ensure a beneficiary qualifies for
maintenance sessions, and whether beneficiaries should be weighed every
month to qualify.
Several commenters recommended allowing beneficiaries who did not
achieve and maintain the required 5 percent weight loss to still be
able to access the ongoing maintenance sessions. The commenters stated
various reasons, including that weight loss of less than 5 percent is
clinically relevant and also reduces type 2 diabetes risk; the evidence
base suggests greater impact on onset of diabetes through re-enrolling
beneficiaries who are regaining weight than through continuing the
service for those who can maintain weight loss; weight regain is common
due to metabolic adaptation or receding behavior changes; discontinuing
the service for beneficiaries who do not lose weight will discourage
them and increase their risk for diabetes; the opportunity to provide a
safe environment of recovery for individuals who have a binge-eating
disorder; and that the intervention will still reduce diabetes among
beneficiaries who are unable to achieve or maintain weight loss.
Additionally, commenters stated that exclusion from maintenance
sessions for beneficiaries who do not achieve the required weight loss
would be punitive, particularly for beneficiaries who need the
additional support to achieve the desired weight loss goal. Some
commenters suggested that MDPP expanded model risks perpetuating health
inequities because low-income beneficiaries who need MDPP services the
most struggle disproportionately to achieve the required weight loss
and will not be able to access ongoing maintenance sessions.
One commenter suggested that CMS use an aggregate, not individual,
5 percent weight loss across a supplier's beneficiaries to align with
the CDC DPRP Standards and promote ongoing maintenance session
eligibility for populations that experience difficulty achieving the 5
percent weight loss due to socioeconomic or demographic factors.
Another recommendation was to allow participants within 2 percentage
points of the minimum weight loss to have their maintenance sessions
covered to account for weight gain during extenuating circumstances
(for example, falling ill or other circumstances that interfere with
weight loss).
Several commenters recommended that access to ongoing maintenance
sessions, and payments for maintenance session attendance, depend not
on the 5 percent weight loss, but instead on attendance of monthly
maintenance sessions. Other commenters suggested that payment should be
linked to alternative measures rather than weight loss, such as A1C,
waist measurement, and knowledge tests.
Response: As noted previously, MDPP eligible beneficiaries are
eligible to access core maintenance sessions in the second 6 months of
the 12-month core benefit regardless of weight loss. MDPP eligible
beneficiaries are eligible to access ongoing maintenance sessions after
the 12 month core benefit if the beneficiary achieves and maintains the
required minimum weight loss percentage. We understand that
beneficiaries' weight may fluctuate after meeting the 5 percent
required weight loss. We are defining maintenance of weight loss, which
allows a beneficiary to access ongoing maintenance sessions, as
achieving the required minimum weight loss from baseline weight at any
point during each 3 months of core maintenance or ongoing maintenance
sessions. In other words, a beneficiary can access the next three
months of ongoing maintenance sessions if the beneficiary achieved
maintenance of weight loss at any point during the previous three
months of maintenance sessions. As mentioned in comments, 3 months is
the appropriate interval because it aligns with the proposed payment
structure that pays for each three maintenance sessions attended with
maintenance of weight loss. A beneficiary's weight must be measured and
recorded during every core session and maintenance session the
beneficiary attends. In response to comments, we are also adding a
definition for maintenance session bundle to refer to each 3-month
interval of core maintenance or ongoing maintenance sessions. Each
bundle must include at least one maintenance session per month, for a
minimum of three sessions in each bundle.
We acknowledge some commenters' desire for CMS to cover ongoing
maintenance sessions for beneficiaries who do not achieve and maintain
the required 5 percent weight loss. The requirement that eligible
beneficiaries must maintain 5 percent weight loss is consistent with
the weight loss goal tested in the DPP model test, and was factored
into the Secretary's determination to expand the model and the Chief
Actuary's certification that MDPP expansion would not result in an
increase of Medicare spending. We are not changing the requirement that
beneficiaries must maintain the 5 percent minimum weight loss in order
to receive ongoing maintenance sessions. We acknowledge commenters'
concerns regarding potential unintended consequences if the MDPP
expanded model results in low-income or other disadvantaged populations
having less access to ongoing maintenance sessions. We may consider
making adjustments as appropriate if, through our monitoring and
evaluation and through tribal consultation, we find that such
adjustments are warranted to address disparities in access.
We disagree with a commenter's suggestion that we use an aggregate,
not individual, 5 percent weight loss for ongoing maintenance session
eligibility. We do not believe aggregate weight loss is an appropriate
application for individuals' eligibility for ongoing maintenance
sessions. We believe it is unfair to deny a beneficiary access to
ongoing maintenance sessions if the beneficiary achieves 5 percent or
more weight loss but happens to attend MDPP sessions with other
beneficiaries who gain or do not lose the minimum weight. Aggregate
weight loss can be arbitrary because there is no minimum or maximum
number of beneficiaries per MDPP supplier, and there is no way to
ensure equal access to the benefit. It decreases a beneficiary's
incentive to meet the weight loss goal in order to access ongoing
maintenance sessions and a suppliers' incentive to actively help each
beneficiary to meet that weight loss goal, particularly if a few people
lost a large percent of their weight. The goal of the DPP model test is
at least 5 percent weight loss for each individual, which is expected
to lead to a reduction in the incidence of diabetes. We do not have
data to support an expanded model that does not require the achievement
and maintenance of the minimum weight loss. We clarify that
beneficiaries have access to the MDPP core benefit regardless of weight
loss. This provides all eligible beneficiaries with access to 12 months
of MDPP services, without cost-sharing, to achieve the target weight
loss. We believe the incentive to achieve the target weight loss would
be diluted for

[[Page 80467]]

beneficiaries if they could access the ongoing maintenance sessions
regardless of weight loss.
Comment: Commenters recommended limiting the number of years of
payment for ongoing maintenance sessions due to the limited
administrative and operational capability of many MDPP suppliers to
provide ongoing maintenance sessions in perpetuity. A few commenters
opposed payment for ongoing maintenance sessions at all, stating that
indefinite monthly maintenance sessions extend beyond what is supported
by scientific research. The commenters recommended additional review of
clinical effectiveness and cost implications of payment for ongoing
maintenance sessions, suggesting that we study the optimal number of
maintenance sessions for beneficiaries who achieve and maintain the
required weight loss. One commenter recommended that we eliminate
ongoing maintenance sessions or make them voluntary for MDPP suppliers
to furnish. The commenter noted the potential difficulty of assembling
enough ongoing maintenance session attendees to cover a supplier's
costs due to factors such as beneficiary attrition or schedule
variation and administrative burdens associated with documenting
beneficiary eligibility. The commenter also suggested that we clarify
whether MDPP suppliers can offer and charge beneficiaries directly for
additional services, such as health coaching beyond MDPP services or
counseling to beneficiaries who regain weight and are no longer
receiving MDPP services.
One commenter recommended that we clarify whether beneficiaries
must participate with the same coach or group of beneficiaries upon the
transition from the core benefit to ongoing maintenance sessions.
Another commenter recommended that CMS use different terminology for
the ongoing maintenance sessions after the 12-month core benefit
because it is confusing that the core maintenance sessions in the
second 6 months are also called maintenance sessions.
Response: We believe it is important for CMS to cover ongoing
maintenance sessions after the 12-month core benefit to better equip
beneficiaries to maintain healthy lifestyle changes and prevent type 2
diabetes. As part of the expanded model, MDPP suppliers are required to
provide eligible beneficiaries access to ongoing maintenance sessions.
We acknowledge commenters' concern regarding the sustainability of
ongoing maintenance sessions in perpetuity, and we intend to propose a
limit to the duration of ongoing maintenance sessions in future
rulemaking. As acknowledged by several commenters, continued
participation by an individual in a DPP after year 3 has been generally
untested, and we intend to take this into consideration when we address
a limit in future rulemaking.
In response to comments on the provision of services outside of
MDPP, the MDPP model expansion only includes MDPP services. We note the
distinction between core maintenance sessions and ongoing maintenance
sessions is important in that core maintenance sessions are a part of
the core benefit and are accessible to all eligible beneficiaries,
while ongoing maintenance sessions require beneficiaries to maintain
weight loss after the 12 month core benefit. As mentioned in section
III.J.6. of this final rule, we defer questions of beneficiary
attribution, such as how to address beneficiaries who switch suppliers
upon the transition from the core benefit to ongoing maintenance
sessions, to future rulemaking.
Comment: Numerous commenters supported the use of CDC's DPRP
Standards for the MDPP curriculum. Several commenters suggested that we
permit MDPP suppliers to furnish any CDC-approved curriculum, rather
than requiring the use of a particular curriculum. Commenters stated
that CDC regularly updates its suggested curriculum, as well as reviews
and approves alternative curricula that are submitted with an
organization's application for CDC DPRP recognition. Commenters
requested clarification on whether suppliers may use the 2016 CDC
Prevent T2 Curriculum or the 2012 CDC-developed curriculum, both of
which are permitted by the CDC DPRP Standards. Commenters recommended
that CMS clarify whether CMS would need to undergo a rule change if CDC
makes changes to the curriculum.
Commenters also suggested clarification on the curriculum topics
that MDPP suppliers should follow for ongoing maintenance sessions, as
the National DPP curriculum only specifies content for what is
analogous to the MDPP core benefit. Other commenters recommended
allowing MDPP suppliers to use the CDC-approved DPP curriculum in
another language or making the curriculum more culturally sensitive.
Commenters suggested changes to the curriculum, such as shifting the
focus away from calorie counting, emphasizing physical activity and
exercise goals, training coaches to handle emotional issues and
offering oral hygiene sessions.
One commenter suggested we consider ways to embed the curriculum
into the Diabetes Self-Management Training (DSMT) benefit.
Response: We agree with commenters that MDPP suppliers should be
permitted to, consistent with their CDC DPRP recognition, use any
curriculum approved by the CDC. The CDC-preferred curriculum is
available at https://www.cdc.gov/diabetes/prevention/lifestyle-program/curriculum.html. We note that if a DPP organization chooses to use a
different curriculum, it must send the curriculum to the CDC DPRP so it
can be evaluated to ensure that it covers similar content and is
consistent with the current evidence base. To mitigate confusion
surrounding the use of specific topic names, we will remove specific
curriculum topics from the regulations text and instead specify that
the sessions must be furnished consistent with any CDC-approved
curriculum. We believe this change also will make it unnecessary for us
to undertake rulemaking to address regular CDC curriculum updates. This
will reduce the risk that MDPP suppliers would need to have two
separate curricula, one for their Medicare beneficiaries and one for
the rest of their enrollees, which could be unnecessarily burdensome.
For the ongoing maintenance session curriculum, we are requiring
that MDPP suppliers use a CDC-approved curriculum. The purpose of
ongoing maintenance sessions is to reinforce and revisit what was
learned and practiced in the core benefit, so beneficiaries can
maintain healthy behavioral changes and weight loss. Coaches can offer
any of the curriculum topics except for the introductory sessions. We
support the use of culturally sensitive curricula based on the MDPP
supplier's population and furnishing MDPP services in languages other
than English. If the CDC approves a curriculum that has adjustments to
address language barriers or cultural differences, the MDPP supplier
can use the curriculum. We remind organizations that the policies and
procedures of approved curricula must ensure accessibility to persons
with disabilities, persons with limited English proficiency, and other
populations in compliance with HHS civil rights non-discrimination
regulations, including those implementing section 504 of the
Rehabilitation Act of 1973, Title VI of the Civil Rights Act, section
1557 of the Patient Protection and Affordable Care Act, and Title IX of
the Education Amendments of 1972, as amended. More information is
available at https://www.hhs.gov/civil-rights. With respect to embedding
the DPP curriculum into DSMT, we decline to adopt this

[[Page 80468]]

recommendation. As noted previously, DSMT and MDPP services, though
similar, serve different purposes and are for individuals with
different needs.
Comment: Some commenters recommended that CMS modify the session
duration requirement from ``at least one hour'' to align with the CDC
DPRP Standards of ``each session must be of sufficient duration to
convey the session content--or approximately one hour in length.''
Commenters stated that the time it takes to complete a curriculum topic
depends on the number of attendees, how the services are furnished,
beneficiaries' assessed need, the curriculum topic, and the approach to
the curriculum, and the one-hour requirement would be too rigid and too
long for many CDC-recognized organizations. Other commenters
recommended we focus on completion of modules in the required
curriculum, not session-based time standards, since module completion
requires active participation and the ability to turn learning into
action, while a time-based standard does not correlate with impact on
outcomes. Some commenters stated that value-based care de-emphasizes
the amount of time involved with furnishing a given service and focuses
on the results achieved.
Response: We agree with commenters that the one-hour requirement
may be too rigid when compared against CDC-approved DPP curricula that
vary in approach and mode of delivery. We agree that ``approximately
one-hour in duration'' is an appropriate requirement for in-person
sessions because completion of a curriculum topic may vary depending on
factors such as number of attendees, how the program is delivered,
beneficiaries' assessed need, the curriculum topic, and the approach to
the curriculum. We do not believe the CDC DPRP Standard that ``each
session must be of sufficient duration to convey the session content''
is an auditable requirement, and therefore, we decline to adopt it for
MDPP because, as noted in the proposed rule, having auditable
requirements is a critical component of our program integrity efforts.
For these reasons, we are amending our regulations to specify that
sessions must be ``approximately one-hour in duration.''
Final Decision: After consideration of the public comments
received, we are finalizing the proposal that the MDPP core benefit is
a 12 consecutive month program that consists of at least 16 weekly core
sessions over months 1-6 and at least six monthly core maintenance
sessions over months 6-12, furnished regardless of weight loss. We are
also finalizing the proposal that beneficiaries have access to ongoing
maintenance sessions after the 12-month core benefit if they achieve
and maintain the required minimum weight loss of 5 percent. We are
modifying the regulations in Sec. 410.79 to add the definition of
``maintenance session bundle'' to refer to each 3-month interval of
core maintenance or ongoing maintenance sessions, with at least one
maintenance session delivered in each of the 3 months. We are also
adding the definition of ``maintenance of weight loss'' to clarify that
maintenance of weight loss is achieving the required minimum weight
loss from baseline weight at any point during each 3-month core
maintenance or ongoing maintenance session bundle. We are revising the
definitions of the CDC-approved core curriculum to remove specific
curriculum topic names and to indicate MDPP suppliers must use any CDC-
approved curriculum. We are revising the session duration to specify
that sessions must have a duration of approximately one hour. We are
also making minor technical changes to the proposed definitions to
improve clarity.
6. Beneficiary Eligibility
a. MDPP Eligible Beneficiaries
We proposed that coverage of MDPP services would be available for
beneficiaries who meet all of the following criteria: (1) Are enrolled
in Medicare Part B; (2) have, as of the date of attendance at the first
core session, a body mass index (BMI) of at least 25 if not self-
identified as Asian or a BMI of at least 23 if self-identified as
Asian. The CDC DPRP Standards have defined a lower BMI for self-
identified Asian individuals based on data that show Asians develop
abnormal glucose levels at a lower BMI; (3) have, within the 12 months
prior to attending the first core session, a hemoglobin A1c (HgA1c)
test with a value between 5.7 and 6.4 percent, or a fasting plasma
glucose of 110-125 mg/dL, or a 2-hour post-glucose challenge of 140-199
mg/dL (oral glucose tolerance test); (4) have no previous diagnosis of
type 1 or type 2 diabetes with the exception of a previous diagnosis of
gestational diabetes; and (5) does not have end-stage renal disease
(ESRD).
Comment: MedPAC commented that the proposed eligibility
requirements may be too broad and could result in the inclusion of
beneficiaries who meet the stated eligibility criteria but have other
conditions such as dementia or frailty that could render a weight loss
program inappropriate.
Response: We appreciate the views of commenters, including MedPAC.
We are considering ways to monitor for MDPP suppliers who consistently
bill for session attendance and not weight loss, and intend to address
this in our program integrity and payment proposals in future
rulemaking. We recognize that performing mental capacity assessment
prior to enrollment would be difficult and create an additional burden
for MDPP suppliers. We will consider how to address the issue of
beneficiaries who are eligible to receive MDPP services, but for whom
MDPP may not be clinically appropriate, in future rulemaking, as
necessary.
Comment: Many commenters stated that differences between the MDPP
expanded model's proposed eligibility criteria and the National DPP
eligibility criteria will cause confusion for providers and
beneficiaries. Commenters specifically noted that the BMI cut off for
National DPP eligibility is 24 kg/m\2\ and 22 kg/m\2\ for those self-
identified as Asian, whereas the proposed BMI cut offs for the MDPP
expanded model are 25 kg/m\2\ and 23 kgm\2\ for those self-identified
as Asian. Commenters also noted the differences in the blood test
criteria for the fasting plasma glucose test between the National DPP
(range is 100-125 mg/dL) and MDPP expanded model (range is 110-125 mg/
dL). Commenters who pointed out these differences recommended that CMS
align its eligibility criteria with CDC's eligibility criteria.
Several commenters also supported the lower BMI threshold for self-
identified Asians.
Response: We agree with commenters that there are differences
between the MDPP beneficiary eligibility criteria and National DPP
eligibility criteria, which may be a source of confusion for suppliers,
providers and beneficiaries. However, we proposed a BMI cut off for
non-Asians of 25 kg/m\2\ because this was the cut off used in the DPP
model test. In addition, the generally accepted clinical definition of
overweight is a BMI of 25.0--29.9 in adults over age 20.\23\ We
proposed a lower BMI cut off for self-identified Asians of 23 kg/m\2\
which is endorsed by the American Diabetes Association and aligns with
the CDC DPRP Standards which allow for a lower BMI in self-identified
Asians

[[Page 80469]]

consistent with the latest research.\24\ In summary, the evidence used
to make the certification determination indicated that individuals who
fall into the 100-110mg/dL range for fasting plasma glucose and those
with BMIs of 24 kg/m\2\ (22 kg/m\2\ for Asians) or less have lower risk
for developing type 2 diabetes. We have chosen to focus on the highest
risk population, and therefore the Chief Actuary's analysis for
certification focused on this population.^{25 26}
---------------------------------------------------------------------------

\23\ Centers for Disease Control and Prevention, ``Healthy
Weight,'' Centers for Disease Control and Prevention, 2015, https://www.cdc.gov/healthyweight/assessing/bmi/adult_bmi/.
\24\ William Hsu et al., ``BMI Cut Points to Identify At-Risk
Asian Americans for Type 2 Diabetes Screening,'' Diabetes Care 38,
no. 1 (2015): 150-158.
\25\ Gregory Nichols et al., ``Trends in Diabetes Incidence
Among 7 Million Insured Adults, 2006-2011: the SUPREME-DM Project,''
American Journal of Epidemiology 181, no. 1 (2015): 32-39.
\26\ DH Morris et al., ``Progression Rates from HbA1c 6.0-6.4%
and Other Prediabetes Definitions to Type 2 Diabetes: a Meta-
Analysis,'' Diabetologia 56, no. 7 (2013): 1489-1493.
---------------------------------------------------------------------------

Comment: Several commenters stated that Medicare currently does not
cover the HgA1c test for people without diabetes. These commenters
recommended that the HgA1c test be covered with no cost-sharing under
Medicare for those seeking to receive MDPP services. Commenters
suggested the precedent of Diabetes Self-Management Training (DSMT)
requiring HgA1c as a diagnostic test for DSMT eligibility, and that the
test is covered for this purpose. Commenters recommended a parallel
coverage determination should be made for the MDPP expanded model. One
commenter stated that the oral glucose tolerance test should be covered
if it is being considered as one of the eligibility tests.
Response: CDC standards for eligibility, which align with the
American Diabetes Association definition for pre-diabetes, include an
option for demonstrating eligibility using an HgA1c test and we
proposed to adopt these eligibility standards for the MDPP expanded
model. However, the blood tests that are permitted to be used to
demonstrate MDPP eligibility are not covered as part of the MDPP
services and occur before the start of the beneficiary's participation
in MDPP. We did not propose to cover HgA1C tests for purposes of
screening for pre-diabetes, but we note that the other blood tests that
can be used to demonstrate eligibility for MDPP services, the oral
glucose tolerance test and fasting plasma glucose test, are covered for
pre-diabetes screening under Medicare. To cover HgA1C tests for
purposes of screening for pre-diabetes, we would first need to make a
separate coverage determination.
Comment: Commenters requested clarity on how suppliers would verify
that beneficiaries meet certain eligibility criteria. Specifically,
commenters asked how suppliers would determine whether a Medicare
beneficiary has had a prior diagnosis of type 1 or type 2 diabetes, or
whether they have already used the benefit. Commenters requested
clarity that beneficiaries would be able to self-report their history
of gestational diabetes to become eligible for MDPP. Commenters also
encouraged us to explain what documentation MDPP suppliers will be
required to collect from participants who are presenting MDPP-
qualifying blood test results to confirm eligibility. Commenters also
suggested allowing beneficiaries to complete an eligible risk
questionnaire in lieu of the qualifying lab tests for up to 50 percent
of their participants as this would align with the current CDC DPRP
Standards for eligibility. Commenters suggested using other types of
criteria such as family history, hypertension, high cholesterol, and
high triglycerides, to determine eligibility among patients for whom
abnormal blood glucose values are not available. One commenter
requested that we clarify the timeframe in which the BMI and blood
tests must occur to qualify for participation, such as whether the
beneficiary has to have a qualifying BMI either when the blood tests
were completed or upon enrollment. Other commenters requested guidance
on whether the blood tests have to come from a lab or primary care
physician or if the supplier can provide HgA1c finger pricks to
determine eligibility. Commenters also asked if proof of lab work is
required or if documentation of the values is sufficient. MedPAC
commented that beneficiaries should receive blood tests by a provider
other than the MDPP supplier as a safeguard to prevent fraud.
Response: The following eligibility criteria can be self-reported:
Asian ethnicity; no history of type 1 or type 2 diabetes; and no
previous receipt of MDPP services. We cannot verify self-reported
eligibility criteria when beneficiaries begin receiving MDPP services.
We will know which beneficiaries are participating in MDPP when the
MDPP supplier submits claims with beneficiary identifiers. In our next
round of rulemaking we intend to propose specific policies and
requirements to protect MDPP suppliers from furnishing services that
may not be covered by Medicare in cases where the beneficiary's
eligibility for MDPP services is assessed based on self-reported
eligibility criteria that cannot be verified prospectively. We clarify
that beneficiaries can participate in MDPP regardless of a history of
gestational diabetes (so long as they do not have a history of type 1
or type 2 diabetes), but must also meet the other criteria such as
qualifying BMI and blood test results.
We believe the requirement to obtain blood test results is
important for maintaining program integrity, and use of risk
questionnaires presents opportunities for invalid and unreliable data
reporting. The DPP model test required blood test results as part of
its eligibility criteria to show a beneficiary has pre-diabetes, and
therefore we are requiring blood tests for MDPP eligibility. In
considering how to expand the DPP model test, we relied on eligibility
criteria that was either tested in the initial DPP model test and/or
set forth by the American Diabetes Association or World Health
Organization, and we do not intend to include additional eligibility
criteria at this time.
Regarding comments about the timeframe of eligibility tests and
required documentation: We did not propose specific requirements for
how or where blood test results may be obtained as we do not want to
create unnecessary obstacles for beneficiaries and MDPP suppliers. An
MDPP supplier may administer an HgA1c finger prick to determine
eligibility. We note that Medicare only covers the fasting plasma
glucose test and the oral glucose tolerance test when the beneficiary
has a referral from his or her primary care physician or qualifying
provider. Similarly, we did not propose specific documentation methods
beyond our proposal that MDPP suppliers maintain records that document
each beneficiary's eligibility status. We will consider whether it is
necessary or appropriate to establish specific documentation standards
in future rulemaking.
Comment: Commenters requested guidance on how to handle
beneficiaries who are diagnosed with diabetes during the screening
process or while receiving MDPP services. Commenters recommended we
work with CDC to develop a protocol of how to address beneficiaries who
receive a diagnosis of diabetes while being screened for or while
receiving MDPP services. Several commenters stated that this protocol
should ensure participants receive proper care and a referral into a
DSMT program.
Response: We reiterate that beneficiaries who are diagnosed with
diabetes before they begin receiving MDPP services, such as during the
enrollment process, based on their lab

[[Page 80470]]

results or history of type 1 or type 2 diabetes are not eligible
beneficiaries. These beneficiaries may be eligible for other types of
diabetes-related care under Medicare, such as DSMT.
We did not propose an eligibility policy for beneficiaries who
receive a diagnosis of diabetes while receiving MDPP services. However,
we agree with commenters that a protocol needs to be developed to
ensure beneficiaries who are diagnosed with diabetes while receiving
MDPP services are receiving the proper care for their condition. We
intend to address this issue in future rulemaking.
Comment: A number of commenters requested that we include
populations beyond those that meet the eligibility criteria, such as
all Medicare beneficiaries, Medicaid beneficiaries, those with ESRD and
those who have been diagnosed with type 1 or type 2 diabetes.
Additionally, one commenter suggested that beneficiaries who do not
meet the BMI criteria, but have a family history of diabetes and
motivation to receive MDPP services, should be able to do so.
Response: We believe that beneficiaries who meet the eligibility
criteria that we proposed are the most appropriate population to access
MDPP services because these beneficiaries are among the highest risk
within the pre-diabetic population for developing diabetes. Targeting
lower risk beneficiaries is not consistent with the model that we are
expanding. Beneficiaries with type 1 or type 2 diabetes do not meet the
eligibility criteria for MDPP but may be eligible for services such as
Medicare's obesity counseling benefit and DSMT. We do not believe MDPP
is appropriate for those with ESRD because beneficiaries with ESRD have
more complex dietary requirements that are better addressed by
dieticians and other health care professionals.
We appreciate the commenters' interest in Medicaid coverage.
However, this model expansion pertains only to Medicare beneficiaries,
though we note that Medicaid beneficiaries who are also Medicare
beneficiaries are eligible if they meet the MDPP beneficiary
eligibility requirements. We encourage states to work with the Center
for Medicaid & CHIP Services (CMCS) to discuss options to cover
diabetes preventive services within the Medicaid program.
Final Decisions: We are finalizing the beneficiary eligibility
criteria as proposed. These criteria are set forth in Sec. 410.79.
b. Limitations on Coverage
We proposed that beneficiaries who meet the beneficiary eligibility
criteria would be able to receive MDPP services only once in their
lifetime.
Comment: Many commenters asked CMS to allow exceptions to the once
per lifetime restriction based on significant life events. Commenters
recommended that CMS allow beneficiaries to access the benefit again
after a certain period of time (for example, 6 months or 1 year) and to
allow beneficiaries to access MDPP services at least two times in their
lifetime. Several commenters suggested the lifetime benefit policy may
be unfair due to extenuating circumstances that may arise throughout
the core benefit, such as hospitalization or death of a loved one.
Commenters also requested clarity on how we may handle attribution
if beneficiaries switch suppliers. One commenter believed there may be
operational implications of managing this benefit across hundreds of
suppliers should participants change suppliers or elect to withdraw
from MDPP while it is underway and re-enroll at a later date. The
commenter recommended that we issue guidelines on how MDPP suppliers
should address changes, particularly with respect to beneficiary
eligibility and billing and reimbursement.
Response: We understand concerns regarding the potential for life
events to disrupt the beneficiary's receipt of MDPP services. However,
the MDPP expansion is designed to generate savings for the Medicare
program by preventing individuals with pre-diabetes from developing
type 2 diabetes. We believe the once per lifetime restriction is
necessary in order to generate enough savings to offset the cost of
delivering MDPP services.
We are finalizing the policy that eligible beneficiaries can
participate in MDPP only once in their lifetimes. However, we
acknowledge the commenters' concerns, and plan to address any
exceptions to the once per lifetime restriction in future rulemaking as
appropriate. As we did not propose to restrict eligible beneficiaries'
choice of MDPP suppliers, we are confirming that they will be able to
change suppliers at any time; however, because beneficiary attribution
directly relates to payment, we will consider the comments on how to
address attribution and its attendant effect on payment in developing
proposals for future rulemaking.
Final Decision: We will finalize limitations on coverage of MDPP as
proposed. The MDPP core benefit is available only once per lifetime per
MDPP eligible beneficiary, and ongoing maintenance sessions are
available only if the MDPP eligible beneficiary has achieved
maintenance of weight loss. These limitations are specified in Sec.
410.79.
c. Referrals
The DPP currently allows community-referral such as by Y-USA and
self-referral of patients, in addition to referral by physicians and
other health care practitioners, if the patient presents DPP-qualifying
blood test results that the DPP organization keeps on record. We
proposed to similarly permit beneficiaries who meet our eligibility
criteria to obtain MDPP services by self-referral, community-referral,
or health care practitioner-referral.
The following is a summary of the comments received and our
responses.
Comment: Commenters generally supported our proposal allowing for
self-referral, community-referral, or health care practitioner referral
to obtain MDPP services, although MedPAC expressed concern that MDPP
services could be inappropriately used and suppliers could initiate
services without a referral. Commenters suggested that we broaden the
types of providers eligible to make referrals to MDPP suppliers. For
example, a commenter recommended clarification of what types of
provider referrals would be permitted for MDPP and recommended that
such providers include nurse practitioners to broaden program access;
another commenter suggested that we will be able to increase access to
and streamline beneficiary access to MDPP services by allowing
community-based organizations to refer beneficiaries. Many commenters
recommended that we promote referrals from MDPP suppliers to
psychologists to help address psychosocial components of their care.
Other commenters opposed a physician referral requirement. One
commenter opposed the requirement of blood tests as part of referral
pathway. Some commenters recommended that we explicitly state that MDPP
services will be paid for when ordered/referred by non-physician
practitioners. A commenter recommended that we require non-clinician
health care MDPP suppliers to ask beneficiaries about their usual
source of care and mandate that MDPP suppliers share results with the
beneficiary's self-identified primary care physician.
Response: We agree with commenters that there should be broad
program access, which is why we are not requiring any specific type of
referral for this expanded model test. With respect

[[Page 80471]]

to the comments on program integrity, we will take these comments into
consideration in future rulemaking, as discussed in section III.J.8.b.
of this final rule. We agree with commenters and clarify that non-
physician practitioners can order or refer eligible beneficiaries for
MDPP services. We understand the value of coordinating results from the
MDPP with a beneficiary's primary care provider, however, we will not
require this type of coordination because we believe it creates an
additional burden for this new supplier type that will discourage DPP
organizations from enrolling in Medicare as MDPP suppliers.
Additionally, the MDPP suppliers have no reimbursement mechanism for
coordinating services with primary care physicians, specialists or
other providers. The value-based payment proposed for the MDPP expanded
model affords no compensation for coordination among providers. We are
concerned that holding MDPP suppliers to a higher service coordination
standard than other Medicare suppliers and providers may negatively
impact MDPP supplier capacity. We do not believe it is appropriate to
address referrals from MDPP suppliers to other providers in this
expansion because suppliers may or may not employ providers with the
credentials to make referrals to other providers, and we believe this
is beyond the parameters of the MDPP expanded model.
Final Decision: We are finalizing the procedure for referrals to
MDPP as proposed.
7. Enrollment of MDPP Suppliers
a. MDPP Supplier Enrollment Requirements
We proposed that any organization with preliminary or full CDC DPRP
recognition would be eligible to apply for enrollment in Medicare as an
MDPP supplier beginning on or after January 1, 2017. This proposal
would promote timely enrollment of CDC-recognized organizations before
the MDPP expanded model becomes effective on January 1, 2018. We
proposed that MDPP suppliers would be subject to the enrollment
regulations set forth in 42 CFR part 424, subpart P.
Organizations seeking to enroll in Medicare to become MDPP
suppliers would be subject to screening under Sec. 424.518. We
proposed that potential MDPP suppliers be screened according to the
high categorical risk category defined in Sec. 424.518(c) because the
MDPP expanded model allows organization types that are new to Medicare
to enroll. We also believe that MDPP suppliers have some similarities
to home health agencies, a provider screened according to the high
categorical risk category, because non-licensed personnel may furnish
MDPP services in a non-clinical setting, such as at Y-USA.
We proposed that existing Medicare providers and suppliers that
wish to bill for MDPP services would have to inform us of that
intention and satisfy all other requirements, such as preliminary or
full CDC DPRP recognition, but would not need to enroll a second time.
These existing Medicare providers and suppliers would be eligible to
bill for MDPP services furnished on or after January 1, 2018. We also
considered an alternative approach where existing Medicare providers
and suppliers would have to submit a separate enrollment application
(including any applicable enrollment application fee) and be separately
screened to be eligible to bill for MDPP services. This alternative
would enable all organizations furnishing MDPP services to have the
same classification as MDPP suppliers and undergo the same application
requirements. Under this option, should an entity have an issue related
to their MDPP enrollment, for example, falsely attesting to beneficiary
weight loss, CMS would have discretion to apply revocation to its MDPP
enrollment, rather than affecting their broader enrollment in Medicare.
We proposed to require that all MDPP suppliers comply with
applicable Medicare supplier enrollment, program integrity, and payment
rules. These regulations include, but are not limited to, time limits
for filing claims (Sec. 424.44), requirements to report and return
overpayments (Sec. 401.305), and procedures for suspending, offsetting
or recouping Medicare payments in certain situations (Sec. 405.371).
The following is a summary of the comments we received regarding
supplier enrollment.
Comment: Several commenters supported the proposal to allow
organizations that previously would not be eligible to enroll in
Medicare to enroll as MDPP suppliers. One commenter stated that
enabling organizations with either preliminary or full CDC DPRP
recognition to furnish MDPP services as officially enrolled suppliers
is an important step in validating community health workers' place in
the health care system. Other commenters stated that these
organizations should be able to enroll and furnish MDPP services, but
that they should do so with a clinical affiliate to serve as a resource
to provide medical insight or oversight as necessary.
Many commenters who supported allowing these organizations to
enroll in Medicare as MDPP suppliers recommended that the enrollment
policies should be aligned as closely to CDC DPRP Standards as possible
to avoid additional burden to organizations that are less familiar with
Medicare rules and regulations.
Response: We appreciate the commenters' support for allowing
organizations that meet the MDPP supplier eligibility criteria to
enroll in Medicare, even for those that in other circumstances would be
ineligible to enroll in Medicare. As described in detail in section
III.J.7.c. of this final rule, the literature does not support the need
for coaches to have clinical credentials to successfully achieve the
behavior change MDPP seeks to encourage. Therefore, we disagree with
commenters who suggested requiring that these new suppliers enroll with
a clinical affiliate, that is, a provider or supplier that is currently
enrolled in Medicare and currently furnishes services.
For those who requested that we closely align MDPP supplier
eligibility requirements to the DPP organization recognition
requirements in the CDC DPRP Standards, an organization that obtains
CDC DPRP recognition can become an MDPP supplier if they meet a few
additional Medicare requirements.
Comment: Some commenters disagreed with requiring community-based
organizations to enroll as an MDPP supplier in order to furnish MDPP
services, stating that the enrollment process would be too burdensome.
Others recommended that due to the burden that enrolling as a Medicare
supplier could place on smaller, community-based organizations that
wish to furnish MDPP services, we should offer them an easier,
expedited enrollment process that is less complex and burdensome. Other
commenters noted that given the burden that enrolling, recordkeeping,
and billing could impose on these organizations, particularly smaller
community-based organizations, many such organizations utilize third
party administrators to assume these roles on their behalf. Commenters
recommended that we consider the role that third party administrators,
which are not CDC-recognized to deliver DPP, could play in MDPP,
particularly providing administrative services to new Medicare
suppliers to lighten their burden.
Response: We acknowledge that smaller, community-based
organizations without experience in the traditional

[[Page 80472]]

health care system may not be familiar with Medicare's enrollment
requirements, and may find Medicare enrollment burdensome. Medicare
enrollment is the process through which suppliers acquire eligibility
to submit claims to Medicare to bill for services furnished. (In other
contexts enrollment can also be the process used to establish
eligibility to order or certify Medicare covered items and services.)
Furthermore, enrolling into Medicare also enables us to maintain
program integrity through screening, monitoring and revocation. Thus,
we believe the benefits of enrollment, even for smaller community-based
organizations, outweigh the costs of the associated administrative
burden. We note that organizations that face financial difficulty
related to the enrollment application fee may apply for a hardship
exception. For more information on the hardship exemption, please
visit: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM7350.pdf.
We recognize the role that third party administrators may play in
facilitating the enrollment process for DPP organizations. We intend to
allow MDPP suppliers to utilize third-party administrators for the
purposes of enrollment but will further consider how these entities may
fit into the MDPP enrollment and policy framework in future rulemaking,
as appropriate.
Comment: A few commenters questioned whether new suppliers could
obtain a National Provider Identifier (NPI) to become eligible to
enroll in Medicare. Some commenters believed that many DPP
organizations with CDC DPRP recognition do not meet the requirements to
obtain an NPI given the definition of health care provider under 45 CFR
160.103, and requested that we explain how unlicensed organizations and
individuals with no health care experience qualify for an NPI.
Commenters requested clarity regarding what supplier type an MDPP
supplier would indicate on the Medicare enrollment application. Other
commenters requested clarity on what taxonomy code suppliers would use
when applying for their NPI.
Response: We disagree with commenters who stated that some
organizations that meet the MDPP supplier requirements would be unable
to obtain an NPI. Under 45 CFR part 162, subpart D, health care
providers, as defined in 45 CFR 160.103, may obtain NPIs. The
definition of health care provider at 45 CFR 160.103 specifies, in
part, that any person or organization who furnishes health care in the
normal course of business is a health care provider. Section 45 CFR
160.103 defines ``health care'' to include, among other things,
preventive services. Because MDPP services are considered additional
preventive services, we believe MDPP suppliers and coaches who furnish
MDPP in the normal course of business are furnishing health care and
therefore qualify as health care providers that are eligible for NPIs
under 45 CFR part 162, subpart D.
We acknowledge commenters' questions regarding which provider
taxonomy to include when applying for an NPI, as well as which supplier
type MDPP organizations would denote when enrolling. We plan to issue
additional details through guidance or future rulemaking as appropriate
to help guide organizations in applying for an NPI. For the purposes of
providing guidance in this final rule, we would like to note for DPP
organizations that we believe the taxonomy code of Health Educator
(174H00000X) could be appropriate for MDPP suppliers when applying for
an NPI. As for supplier type to denote upon applying to enroll in
Medicare, we intend to create a new supplier type, specific to MDPP
suppliers, and may release an appropriate application form accordingly.
Comment: Many commenters sought clarity regarding enrolling
suppliers new to Medicare. One commenter asked whether these suppliers
could furnish MDPP services at community locations such as faith-based
organizations and community centers, as was permitted in the DPP model
test. One commenter stated that DSMT and MDPP should be subject to
consistent rules, but noted that current rules for DSMT do not permit
hospital-based programs to be offered at community locations. Another
commenter noted that while we do not define ``qualified physical
practice location,'' the Medicare Program Integrity Manual suggests
that in order to enroll in Medicare, organizations must have a physical
location where a Medicare beneficiary could visit in person. This
commenter recommended that CMS clarify how suppliers furnishing virtual
DPP services would meet this physical location requirement, whether it
would be waived, or whether their company headquarters would serve as
the ``qualified physical practice location.''
Response: Consistent with the DPP model test, MDPP suppliers will
be able to provide the service at community-locations such as faith-
based organizations and community centers. Given that MDPP services can
be furnished in community-based settings, the physical location
associated with the MDPP supplier's base of operations in each state,
as indicated on their enrollment application, would meet the
requirements for the qualified physical practice location, provided
that the location was open and operational as described in Chapter 15
of Medicare's Program Integrity Manual, Section 19.2.2. As described in
III.J.7.e. of this final rule, we will address policies related to
virtual DPP organizations in future rulemaking.
Comment: Several commenters agreed with our proposal that we would
screen MDPP suppliers as high categorical risk. Many other commenters
disagreed and stated that MDPP, like Diabetes Self-Management Training
(DSMT), is educational by teaching beneficiaries about eating healthy
and being active, which makes MDPP suppliers more analogous to DSMT
organizations than Home Health Agencies (HHAs). Both the MDPP expanded
model and DSMT are educational in nature, and both MDPP and DSMT
organizations require recognition or accreditation by a third party
organization or agency to be eligible to furnish services. Given these
similarities, commenters noted that organizations that enroll as DSMT
providers are screened according to the limited categorical risk, and
therefore MDPP suppliers should similarly be screened at the limited
categorical risk. Some commenters stated that MDPP suppliers should
face less scrutiny and screening than that of medical professionals
because of the fundamental difference between the educational MDPP and
the medical services furnished by traditional Medicare providers.
Other commenters disagreed with CMS' parallel between HHAs and
MDPP, noting that the requirement to obtain CDC DPRP recognition
establishes a higher level of program integrity than that faced by
HHAs. One commenter noted that Durable Medical Equipment, Prosthetics/
Orthotics, and Supplies (DMEPOS) suppliers and HHAs became classified
as high categorical risk in response to reports issued by the HHS
Office of Inspector General (HHS-OIG) and the Government Accountability
Office (GAO).
Response: We understand that MDPP bears similarities to an
educational service like DSMT, but do not agree with commenters who
stated MDPP suppliers should face less scrutiny or screening than that
of medical professionals. CMS assigns risk level based not on the
nature of the benefit that the supplier furnishes, but on the

[[Page 80473]]

level of risk that the supplier type may pose to the Medicare program.
Therefore, we disagree with commenters who sought a limited screening
level for MDPP suppliers on the basis that DSMT suppliers face limited
screening. Fewer organizations are eligible to furnish DSMT than MDPP
because DSMT organizations must already be enrolled in Medicare to
furnish services other than DSMT. Due to their existing enrollments,
all DSMT providers are affiliated with medical professionals enrolled
in Medicare. Medical professionals face many additional regulations
outside of those set by Medicare, including state licensure
requirements that help to protect against fraud or abuse by these
individuals. This is not comparable to MDPP suppliers that are not
required to have an existing enrollment in Medicare. Given the
requirements that credentialing and licensure place on these providers,
the DSMT supplier type poses less risk to Medicare than suppliers like
HHAs and DMEPOS suppliers that do not have the same credentialing and
licensure requirements to serve as an additional check on fraud or
abuse in addition to Medicare efforts. Similar to home health aides,
individuals who furnish MDPP services are not required to have medical
credentials or state licensure. Given the similarities between MDPP
suppliers and HHAs, we believe the concerns HHS-OIG and GAO have
regarding HHAs' vulnerability for fraud and abuse could also apply to
MDPP. We believe our policy to require high-risk screening during
enrollment will safeguard against potential fraud and abuse associated
with this new supplier type.
Comment: Some commenters stated that the high categorical risk
screening requirement would carry a substantial financial burden that
may discourage MDPP supplier enrollment. One commenter noted that the
on-site visits required in moderate and high categorical risk
screenings would be redundant to the CDC DPRP Standards that already
subject recognized organizations to random audits and site visits.
These commenters noted that financial burdens may disproportionally
affect community-based organizations that are well-suited to furnish a
behavioral change program like the DPP. Commenters highlighted that the
burden of collecting fingerprints would disproportionately affect
independently run community-based organizations more so than corporate
entities that typically only have one central board.
Commenters also requested additional information on the
requirements for high categorical risk screening. One commenter stated
that for entities that are corporately owned or traded, requirements
for regional, privately owned suppliers may not be appropriate given
the different ownership structures that are not well captured by CMS's
enrollment applications. A few commenters also noted that suppliers
newly enrolled into Medicare for MDPP, and providers or suppliers with
existing enrollment in Medicare who wish to furnish MDPP, should be
screened at the same level.
Response: While we agree that CDC ensures the quality of DPP
programs using performance data, which will help ensure the quality of
MDPP suppliers, CDC is not a regulatory body responsible for the
integrity of Medicare payments. We therefore disagree that program
integrity policies in Medicare would duplicate CDC's random site visits
and audits of DPP organizations because the agencies play different
roles. CMS's program integrity and audits focus on payments, whereas
CDC focuses on monitoring whether organizations are meeting the CDC
DPRP standards.
We agree with commenters who noted that suppliers newly enrolling
into Medicare for MDPP should be screened at the same level as those
with existing enrollment in Medicare who wish to furnish MDPP services.
We acknowledge the financial burden that enrolling may place on some
community-based DPP organizations. It is not our intent to hinder
smaller organizations' ability to enroll in Medicare. We do not,
however, believe that a high screening level as opposed to limited or
moderate would greatly affect participation given the minimal
additional requirements the higher screening levels entail. The
difference between limited and high categorical risk screening includes
a site visit for each base of operations and fingerprinting of certain
individuals within the organization. This site visit poses no cost to
the supplier, and should not delay the enrollment process beyond the 45
to 60 day window. Fingerprints are required of all individuals with 5
percent or more ownership interest in the entity. Organizations would
not be required to submit fingerprints from managing members, coaches,
or other employees. The enrollment application fee a supplier pays to
Medicare is the same regardless of screening level, therefore the only
difference in cost to the supplier amounts to the cost of obtaining
fingerprints of those with 5 percent or more direct or indirect
ownership interest in the entity. We do not believe this additional
cost of high screening is cost prohibitive for enrollment, even for
smaller community-based organizations. We understand the commenter's
concern that for entities that are corporately owned or traded,
screening requirements and CMS's enrollment applications may be
difficult or may not be applicable given the different ownership
structures. We will not change our requirement to collect fingerprints
from all individuals with a direct or indirect ownership interest,
though we recognize that not all suppliers under this requirement will
have individual owners who meet this criterion. However, when an
individual has 5 percent or more direct or indirect ownership in a
prospective MDPP supplier, whether private or publically traded,
submitting a set of fingerprints would be required for enrollment into
Medicare.
We refer those interested in learning more about the requirements
associated with a high screening level to Sec. 424.518. Given the
nominal financial difference of obtaining fingerprints from 5 percent
or more owners, we do not believe that application of the high
screening level will be a barrier to organizations to enroll in
Medicare as an MDPP supplier. Additionally, we expect that MDPP
suppliers will revalidate at a moderate risk level, consistent with the
revalidation policy of other high risk suppliers. We will address the
screening level of MDPP suppliers seeking to revalidate in future
rulemaking.
Comment: Various commenters recommended that we clarify whether the
MDPP supplier eligibility criteria would apply to existing providers
and suppliers in Medicare. Specifically, commenters asked whether
certified diabetes educators, pharmacies, pharmacists, physical
therapists, registered dietitians, licensed clinical social workers,
and licensed naturopathic physicians who graduated from accredited
medical schools would have the ability to bill Medicare for MDPP
services. Other commenters highlighted that certain types of medical
professionals that are not currently eligible to enroll in Medicare,
like RNs, have the capabilities to furnish MDPP services as a coach,
and requested the ability to enroll in Medicare to furnish and bill for
MDPP services.
Some commenters noted that many existing health care providers are
well suited to furnish MDPP services, but may lack familiarity with the
CDC National DPP and the process to obtain CDC DPRP recognition. These
commenters recommended that CMS provide education and outreach to these

[[Page 80474]]

providers to ensure that they have the opportunity to obtain CDC DPRP
recognition in a timely manner and eligible to furnish MDPP services.
Response: We appreciate interest from existing Medicare providers
and suppliers in furnishing MDPP services. Any organization that
obtains CDC DPRP recognition would be eligible to enroll in Medicare as
an MDPP supplier. The CDC recognizes organizations, not individuals. As
such, only organizations, not individuals, would be able to enroll as
an MDPP supplier. Any claims submitted for MDPP services would
therefore be billed by the MDPP supplier, and not by an individual or
any other enrollment type a supplier may have.
Although many individual clinicians could serve as MDPP coaches, we
note that entities, not individuals, receive CDC DPRP recognition.
Furthermore, we would like to reiterate that entities enrolled in
Medicare for the sole purpose of furnishing MDPP services would be
eligible to submit claims only for MDPP services.
We agree that many health care entities may be well suited to
furnish MDPP services but may lack familiarity with the CDC DPRP
recognition process. We will further consider the recommendations to
undertake targeted education and outreach efforts to build supplier
capacity.
Comment: Some commenters noted that rural health clinics (RHCs) and
federally qualified health centers (FQHCs) serve beneficiaries who
could benefit from MDPP services, and sought clarification and/or
recommended that RHCs and FQHCs be eligible to furnish MDPP services.
One of these commenters also recommended that we allow RHCs to bill for
MDPP services using the UB-04 form so that RHCs would not have to
remove the cost of furnishing MDPP services from their cost report,
which they said would make the benefit too administratively difficult
to implement.
Response: RHC and FQHC services are defined in section 1861(aa) of
the Act as services furnished by a physician, nurse practitioner,
physician assistant, certified nurse midwife, clinical psychologist, or
clinical social worker. Under certain conditions, an FQHC visit may be
furnished by a qualified practitioner of outpatient DSMT and medical
nutrition therapy (MNT) when the FQHC meets the relevant program
requirements for provision of these services. RHC and FQHC visits are
medically-necessary primary health services, and qualified preventive
health services, that are furnished face-to-face to a patient by a RHC
or FQHC practitioner.
RHCs and FQHCs can enroll as MDPP suppliers if they otherwise meet
the enrollment eligibility criteria, but we clarify that MDPP is not a
RHC/FQHC service. However, a clinic that chooses to furnish MDPP
services could exclude all costs related to furnishing MDPP services
from its cost report and instead submit claims for MDPP services under
its separate MDPP supplier enrollment. RHCs and FQHCs must ensure that
there is no commingling of RHC or FQHC resources in the cost report
used to furnish MDPP services. We understand that some clinics believe
this will be burdensome, but only RHC or FQHC services can be billed on
a UB-04 form.
Comment: Commenters generally supported the proposal that providers
and suppliers with existing enrollment in Medicare only be required to
inform us of their intent to furnish MDPP services. A few commenters
explicitly stated that providers and suppliers with existing enrollment
should not have to create a separate enrollment as an MDPP supplier to
bill for MDPP services because the burden of doing so would
unnecessarily discourage enrollment. In support of this assertion,
commenters stated that providers and suppliers with existing enrollment
face stringent regulations both from and outside of Medicare
requirements, and therefore requiring an additional enrollment process
for MDPP would only add redundancy, rather than support program
integrity concerns. One commenter highlighted that under current CMS
requirements, retail pharmacies must already undergo two enrollment
processes and pay two application fees to serve dual roles as durable
medical equipment suppliers and mass immunizers. The commenter stated
that an additional enrollment process and fee would not further protect
against fraud and abuse, but would simply add redundancy and
inefficiency that could deter supplier uptake and limit beneficiary
access.
For providers and suppliers with existing enrollment in Medicare,
some commenters noted that they should not have to be held to the CDC
DPRP Standards, but instead meet other requirements, as noted above.
Other commenters expressed support for specific health care provider
types that are well suited to furnish MDPP services.
A few commenters supported our alternative proposal that existing
Medicare providers and suppliers separately enroll as MDPP suppliers
and be separately screened to be eligible to bill for MDPP services.
One commenter noted that consistency of procedures and guidelines among
organizations furnishing MDPP services, regardless of whether they were
new entrants to Medicare, would benefit the program to ensure the same
requirements applied across all entities furnishing MDPP services.
Response: We agree with commenters who support the alternative
approach we proposed that suppliers and providers with existing
Medicare enrollment enroll separately as an MDPP supplier. We believe
existing providers and suppliers will benefit from a standardized
procedure that all MDPP suppliers follow.
Though requiring existing Medicare providers and suppliers to
separately enroll as MDPP suppliers initially imposes an additional
requirement, this is a standard procedure for current suppliers. Other
types of Medicare providers, such as hospitals or clinics who wish to
provide home health services, would similarly need to enroll as HHA
suppliers and undergo screening requirements associated with HHAs. We
also believe this requirement would ultimately protect existing
Medicare providers from revocation action against their enrollment and
ability to furnish services outside of MDPP. For example, should an
existing provider furnishing MDPP services lose CDC DPRP recognition,
the provider would be subject to revocation. If the provider were not
enrolled separately as a MDPP supplier, the provider's Medicare
enrollment would be subject to revocation action, not just the billing
privileges associated with MDPP services. As discussed in section
III.J.7.d. of this final rule, many commenters agreed with the proposal
that loss of CDC DPRP recognition should result in revocation only of
MDPP billing authorities, and not necessarily affect the existing
provider or supplier's eligibility to furnish and bill for non-MDPP
services. By requiring all prospective MDPP suppliers--regardless of
whether they have existing enrollment in Medicare--to enroll as an MDPP
supplier, CMS has the discretion to target any revocation action
against the MDPP supplier enrollment alone, rather than affect the
existing provider or supplier's other enrollment. It is important to
note that revocation removes a provider or supplier's enrollment in
Medicare, not just its billing privileges for a particular Medicare
service. For example, if a hospital had an additional enrollment as an
MDPP supplier and one of their coaches was fraudulently reporting
weight loss that beneficiaries did not achieve, CMS would have the
discretion

[[Page 80475]]

to revoke the hospital's MDPP supplier enrollment, but could withhold
revocation of the hospital's Part A Medicare enrollment. Alternatively,
if CMS pursued the original proposal and the hospital did not reenroll
as an MDPP supplier, under the same scenario, the hospital's entire
enrollment could be revoked for up to three years, which could have
deleterious effects on the provision of care well beyond MDPP. For this
reason, we are adopting our alternative proposal.
We acknowledge the concerns that requiring enrolled providers and
suppliers to separately enroll as an MDPP suppler imposes a burden.
However, we disagree that enrollment screening for the purposes of one
supplier type would satisfy program integrity concerns for a different
supplier type. Many program integrity checks specifically target the
licensure and credentials of a particular supplier type that would not
necessarily transfer to other suppliers. Similarly, we disagree with
commenters who stated that the program integrity efforts and
regulations on providers or suppliers with an existing, non-MDPP
enrollment in Medicare would sufficiently address any program integrity
related concerns with regards to MDPP services. MDPP services and the
manner in which those services will be provided differ from other
Medicare benefits and therefore require separate monitoring and
regulation to ensure the program integrity.
Final Decision: After consideration of the public comments we
received, we are finalizing our proposal to permit organizations that
meet the supplier enrollment eligibility criteria to enroll in Medicare
as MDPP suppliers. We are modifying our proposal with respect to
existing Medicare providers or suppliers and requiring them to adhere
to the same enrollment requirements as MDPP suppliers if they wish to
furnish and bill for MDPP services and otherwise meet the MDPP supplier
enrollment eligibility criteria.
We are finalizing the high screening level as proposed. We will
continue to monitor enrollment efforts and program integrity, and
should our policy merit adjustment, we may amend this decision in
future rulemaking as necessary.
We are finalizing that MDPP suppliers are obligated to comply with
all statutes and regulations that establish generally applicable
requirements for Medicare suppliers. These regulations include, but are
not limited to, time limits for filing claims (Sec. 424.44),
requirements to report and return overpayments (Sec. 401.305), and
procedures for suspending, offsetting or recouping Medicare payments in
certain situations (Sec. 405.371). As explained in more detail in
section III.J.7.c. of this final rule, we will not be able to begin
supplier enrollment until enforcement activities are finalized during
subsequent rulemaking in 2017, but we encourage DPP organizations to
use this final rule to prepare for enrollment. This may include working
towards CDC recognition, as detailed in III.J.7.b. of this final rule,
obtaining NPIs, or obtaining claims processing software.
The final policies for MDPP supplier enrollment are set forth in
Sec. 424.59.
b. CDC DPRP Recognition
CDC grants pending recognition to an organization upon its approval
of the organization's application and the organization's agreement to
comply with requirements for use of a CDC-approved curriculum and for
duration and frequency of sessions. CDC also establishes an effective
date for each approved organization which is the first day of the month
following their approval date. Organization must submit data every 12
months from their effective date. CDC grants full recognition after an
organization with pending recognition has consistently furnished
sessions with a CDC-approved curriculum, met CDC performance standards,
and met CDC reporting requirements. CDC makes the first determination
for full recognition 24 months after their effective date.
Organizations not meeting full recognition at that time are reassessed
at 36 months. Organizations that do not achieve full recognition within
36 months after their effective date will lose any recognition and must
wait 12 months before reapplying.
In our proposal regarding eligibility of DPP organizations to
enroll in Medicare, we proposed the use of an additional CDC
recognition status: preliminary recognition.
We proposed that DPP organizations must have either preliminary or
full CDC DPRP recognition in order to be eligible to enroll in Medicare
as MDPP suppliers. We proposed that DPP organizations can attain
preliminary CDC DPRP recognition upon meeting CDC DPRP performance
standards and reporting requirements for 12 months after applying for
recognition, and full recognition upon demonstrating program
effectiveness for 24-36 months after applying for CDC DPRP recognition.
We proposed that if an organization loses its CDC DPRP recognition
status at any point, for example for not meeting CDC standards or
failing to move from preliminary to full recognition within 36 months
of their effective date, or withdraws from the CDC DPRP at any point,
the organization would be subject to revocation of its Medicare billing
privileges for MDPP services as provided by 42 CFR part 424, subpart P.
Under the CDC DPRP Standards, an organization that loses its CDC DPRP
recognition (and thus, under our proposal, would no longer be able to
bill Medicare for MDPP services) must wait 12 months before reapplying
for recognition. We proposed that DPP organizations would be eligible
to re-enroll in Medicare as an MDPP supplier if, after reapplying for
CDC DPRP recognition, the organization again achieves preliminary
recognition.
The following is a summary of the comments we received and our
responses.
Comment: The majority of commenters supported requiring DPP
organizations to obtain CDC DPRP recognition in order to be eligible
for enrollment in Medicare as an MDPP supplier. Some commenters
recommended we take into account the socioeconomic status of
participants when considering CDC's recognition, and work with CDC to
account for the risk of inadvertently precluding suppliers serving
vulnerable populations who have fewer resources to achieve healthy
eating and fitness goals. Some commenters requested that CMS allow MDPP
supplier eligibility to be based on alternative accreditations and
standards focused on diabetes education.
A few commenters noted that CDC DPRP recognition is difficult to
attain because it relies on average weight loss of 5 percent across the
population of participants an organization serves, and if organizations
fall a few decimal points short of that threshold, they can lose their
recognition. Some commenters expressed the concern that beneficiary
access may be disrupted if a supplier falls short of CDC DPRP
Standards, therefore losing recognition and Medicare eligibility.
Furthermore, commenters were concerned with the timelines the CDC DPRP
Standards require for reapplication. Tribal organizations collectively
requested CDC DPRP recognition be automatically granted to providers of
the Special Diabetes Program for Indians.
Response: In response to comments regarding CDC recognition
(socioeconomic status of participants, average weight loss requirement,
timelines with reapplication) we note that CDC is responsible for
developing standards related to CDC recognition,

[[Page 80476]]

and we are not. We are coordinating with CDC to promote alignment
between the CDC DPRP and MDPP expanded model requirements, to the
extent possible. We are not considering other accrediting bodies or at
this time. We expect that the updated CDC DPRP Standards will be
published for public comment in 2017 and go into effect in 2018.
We welcome consultation with tribes and tribal organizations as
required by the CMS Tribal Consultation Policy,\27\ and will address
this and other concerns that have tribal implications, as appropriate,
in future rulemaking.
---------------------------------------------------------------------------

\27\ Centers for Medicare & Medicaid Services, ``CMS Tribal
Consultation Policy,'' Centers for Medicare & Medicaid Services,
2015, https://www.cms.gov/Outreach-and-Education/American-Indian-Alaska-Native/AIAN/Downloads/CMSTribalConsultationPolicy2015.pdf.
---------------------------------------------------------------------------

Comment: Several commenters expressed support for the proposal that
organizations must obtain preliminary or full CDC DPRP recognition in
order to become eligible to enroll in Medicare as an MDPP supplier.
Other commenters recommended that we clarify the requirements for
preliminary recognition and how preliminary recognition differs from
the CDC DPRP Standards' definition of pending recognition. The
commenters noted that the CDC DPRP Standards currently do not have a
preliminary recognition definition. A commenter recommended that CDC be
the entity responsible for recognizing organizations with preliminary
recognition, just as CDC is responsible for recognizing organizations
with pending recognition and full recognition.
Several commenters recommended that CMS clarify which performance
standards and reporting requirements need to be met for 12 consecutive
months to qualify for preliminary recognition. The commenters noted
that they assume that an MDPP supplier would comply with the first year
of CDC DPRP Standards for pending recognition status, starting at the
effective date of the DPP organization's pending recognition. The
commenters also noted that this means submitting data at 12 months from
the effective date, but not achieving any particular outcomes at 12
months because current CDC DPRP Standards do not consider outcomes for
achieving recognition until 24 months from the effective date. Several
commenters recommended that we clarify whether an organization must
submit 6 months or one year of data to obtain preliminary recognition.
The commenters expressed their support that an organization offer DPP
services for at least a year before qualifying for recognition as an
MDPP supplier. A separate commenter suggested that CMS clarify that to
obtain preliminary recognition, an organization must offer the CDC-
approved curriculum within 6 months of the effective date of the
organization's CDC DPRP application and submit at least 6 months of
participant data at 12 months post-effective date of the application.
Several commenters recommended removing the requirement to submit one
year's worth of data before obtaining preliminary recognition.
One commenter noted that given the work and time required for DPP
organizations to start providing DPP services, it may be difficult to
obtain 12 months of reporting data immediately after the effective date
of the DPP organization's pending recognition status. The commenter
expressed concern that an organization that has met the standards and
reporting requirements for 11 of the 12 months immediately following
its application to participate in the DPRP should not have to reapply
for preliminary recognition and start the 12-month process over again.
Another commenter recommended that preliminary recognition performance
standards focus on percent of weight loss achieved, as opposed to
average weight loss, and maintenance of weight loss among participants.
Some commenters recommended that we allow organizations that have
either pending recognition or full recognition from CDC to enroll as
MDPP suppliers. The commenters noted that organizations obtain pending
recognition from CDC after they agree to curriculum, duration, and
intensity requirements. One commenter noted that the additional status
of preliminary recognition adds a complicated layer of bureaucracy to
the existing CDC DPRP, adds little value, and will likely delay
enrollment of organizations in Medicare as MDPP suppliers due to lack
of defined requirements for preliminary recognition. Several commenters
suggested that we allow participation of DPP organizations with pending
recognition until CDC standards for preliminary recognition status are
established. One commenter requested that we explain why we proposed an
additional recognition status, whether we can create new CDC DPRP
recognition standards, and if so, how the new recognition standards
will be incorporated into the CDC DPRP Standards.
One commenter recommended that only organizations with full CDC
DPRP recognition may serve as MDPP suppliers in order to eliminate
potential confusion caused by the preliminary recognition standard and
preserve program integrity. The commenter suggested that we should only
pay suppliers that have demonstrated their effectiveness as MDPP
suppliers or their ability to establish and maintain the necessary
infrastructure. Another commenter suggested that organizations with
full recognition be paid at a higher rate than organizations with
preliminary recognition.
Several commenters recommended that CMS adopt a grandfathering
policy where organizations with 12 months of data may obtain
preliminary recognition. A few commenters noted that the creation of
the preliminary recognition definition risks having few or no MDPP
suppliers with preliminary recognition by MDPP's scheduled effective
date of January 1, 2018, thus delaying the implementation of MDPP. One
commenter noted that the preliminary recognition status does not exist
in CDC DPRP Standards, and that the preliminary recognition definition
would be published in CDC DPRP Standards too late for MDPP suppliers to
begin enrolling into Medicare in time to begin furnishing MDPP services
on January 1, 2018. The commenter recommended that we require CDC to
identify organizations with pending recognition that qualify for
preliminary recognition no later than December 31, 2016 and require
that CDC release interim guidance on standards or requirements for
preliminary recognition no later than March or April 2017. The
commenter notes that additional, minor clarifications may also be
needed when the CDC issues updated CDC DPRP Standards in January 2018
to reflect early experience with the new preliminary recognition
definition. One commenter believed it should be permitted to enroll as
an MDPP supplier because it has one year of data, even though it lacks
CDC DPRP recognition. Another commenter urged that we review its
organization's data before 2018, and if it meets the standards for MDPP
suppliers in 2017, that CMS reimburse the organization in 2017.
Response: We appreciate the support for our proposal to allow DPP
organizations with full CDC recognition, as well as certain DPP
organizations that do not yet have full CDC recognition, to enroll as
MDPP suppliers. We received many comments that raised questions and
concerns about preliminary CDC recognition status or offer suggestions
about how preliminary CDC recognition status should be determined.
Because the CDC has not adopted standards for preliminary recognition,
however, we are not finalizing any of our proposals

[[Page 80477]]

with respect to preliminary recognition status at this time. Although
we anticipate that CDC will address standards for preliminary
recognition when it publishes updated DPRP Standards for public comment
next year, because any such standards for CDC preliminary recognition
would not take effect until 2018, it will not be possible to permit DPP
organizations to enroll in Medicare based on achievement of CDC
preliminary recognition before then.
For this reason, we intend to use future rulemaking to propose
interim standards for preliminary recognition, under CMS authority,
that would bridge the gap until CDC preliminary recognition standards
are established. We anticipate that our proposed interim preliminary
recognition standards would be consistent with the principles described
in the proposed rule. We intend to align our MDPP supplier enrollment
policies with CDC recognition standards, as appropriate, as they are
established. We will take the commenters' comments on preliminary
recognition into account as we develop our proposal for interim CMS
recognition standards. We do not intend to delay implementation of the
MDPP expansion.
We proposed that certain DPP organizations that had not yet
achieved full recognition could enroll in Medicare in acknowledgement
that full recognition might take 36 months and require achievement of
certain performance standards. We proposed this eligibility requirement
for Medicare enrollment to allow an increased number of organizations
that have demonstrated a capacity to provide DPP services to enroll in
Medicare, thereby allowing access to MDPP services in a timely manner
as of January 1, 2018. We continue to believe that it is appropriate to
permit enrollment in Medicare prior to achievement of full CDC
recognition in cases where there is demonstrated capacity to furnish
DPP services, and as noted above, we intend to address this issue in
future rulemaking. Therefore, we decline to permit DPP organizations
that have only pending recognition to enroll in Medicare because such
organizations may not have any demonstrated capacity to furnish DPP
services. We are aware that most DPP organizations are currently in
pending recognition status, and that CDC's definition for pending
recognition currently includes a 6-month grace period before
organizations are required to start offering DPP sessions. We are also
aware that the current definition of full recognition requires
organizations to meet certain standards for average weight loss and
participation, and relative to those in pending status, few
organizations have obtained full recognition. However, we believe it is
important to ensure that prospective MDPP suppliers have demonstrated
experience in actually furnishing DPP services, and therefore we do not
believe it is appropriate to permit organizations to enroll in Medicare
before they have submitted any performance data to CDC that allows CDC
to assess their capacity to deliver DPP services.
We recognize the timing and nature of our proposal has caused some
confusion, particularly because we intend to use CDC recognition status
as a Medicare enrollment standard. We also agree with commenters that
in general CDC should be responsible for recognizing DPP organizations,
consistent with its recognition standards. However, as noted above, we
intend to propose in future rulemaking interim CMS recognition
standards that would permit DPP organizations that are seeking full CDC
recognition and have demonstrated capacity to furnish DPP services to
enroll in Medicare prior to January 1, 2018. We are considering
performance criteria that we could propose as part of any interim CMS
standards that we would use to permit DPP organizations that have not
yet achieved full CDC recognition to enroll as MDPP suppliers before
the CDC standards are updated. For example, we are considering
proposing that DPP organizations with pending CDC recognition would be
required to meet a performance standard threshold of 60 percent
participant attendance in at least 9 core sessions in months 1-6 and 60
percent participant attendance in at least 3 core maintenance sessions
in months 7-12. In addition, we intend to consider options to ensure
program integrity and mitigate fraud and abuse during the preliminary
recognition stage. We encourage interested parties to submit comments
on any updates to CDC's DPRP Standards when CDC publishes them for
public comment.
Finally, in response to commenters, we do not intend to propose
differential payments based on whether the supplier has full
recognition. We also do not intend to make payments for MDPP services
prior to January 1, 2018. We will also propose details on the payment
structure in future rulemaking.
Final Decision: We finalize our proposal that an entity must have
full CDC DPRP recognition as a requirement to enroll in Medicare as an
MDPP supplier. Due to timing issues with CDC standards updates, we are
not finalizing any proposals for preliminary recognition at this time.
We intend to address this issue in future rulemaking.
c. Coach Requirements
We proposed to require personnel who would furnish MDPP services,
referred to hereafter as ``coaches,'' to obtain a National Provider
Identifier (NPI) to help ensure the coaches meet CMS program integrity
standards. We also considered requiring that coaches enroll in the
Medicare program in addition to obtaining an NPI, and we solicited
comment on this approach. Another alternative policy we considered was
to require DPP organizations to collect and submit information on the
coaches who would furnish MDPP services, which could include
identifying information such as first and last name and social security
number (SSN). We proposed to require MDPP suppliers to submit the
active and valid NPIs of all coaches who would furnish MDPP services on
behalf of the MDPP supplier through a roster of coach identifying
information. We proposed that if MDPP suppliers fail to provide active
and valid NPIs of their coaches, or if the coaches fail to obtain or
lose their active and valid NPIs, the MDPP supplier may be subject to
compliance action or revocation of MDPP supplier status.
The following is a summary of the comments we received and our
responses.
Comment: We received comments regarding coach enrollment into
Medicare. Commenters overwhelmingly stated objections to coach
enrollment, citing reasons including high turnover and the reality that
many coaches work part time or as volunteers. Commenters also
highlighted that since claims and payment are handled directly by the
supplier, coaches have limited reasons to enroll. Other commenters
noted that coaches lack medical licensure, indicating that only medical
providers should enroll. And several commenters cited the burden that
enrollment would impose on coaches, and that requiring this approach
could limit coach participation and ultimately reduce beneficiary
access to services.
The majority of commenters indicated that organizations alone
should enroll in Medicare as MDPP suppliers, though one commenter
proposed that diabetes prevention coordinators, who oversee the coaches
as outlined in the CDC DPRP Standards, should enroll. A few commenters
recommended that coaches enroll, stating that this would ensure our
ability to protect the integrity of the Medicare program and have
direct oversight over coaches furnishing the benefit. Other commenters
cited

[[Page 80478]]

consistent use of CMS processes such as enrollment for program
integrity efforts rather than creating new processes. Several
commenters highlighted the opportunity for coaches to be directly paid
for the services furnished.
Response: We agree with the commenters who stated that coaches
should not enroll in Medicare and should not be submitting MDPP claims.
Though we understand there may be program integrity advantages if
coaches were to enroll, we do not believe the existing enrollment
process is appropriate for coaches. Most notably, enrollment is for the
purpose of permitting Medicare billing, and we have proposed that only
MDPP suppliers, not coaches, would submit claims for MDPP services. We
do not believe coaches should have the ability to submit claims for
MDPP or be directly paid for the services furnished because CDC DPRP
recognition is obtained at the organization level, not for the
individual coach furnishing MDPP services. Additionally, we believe
that the burden of enrolling and submitting claims, as well as the
medical record retention requirements associated with claim
submissions, would be too burdensome to place on individual coaches,
and that suppliers are more appropriate and suitable to assume this
responsibility. We did not propose enrolling diabetes prevention
coordinators, but we believe the same rationale against requiring
coaches to enroll would apply to these individuals as we did not
propose that diabetes prevention coordinators would be able to bill for
MDPP services.
Comment: We received many comments regarding whether coaches should
obtain NPIs, with commenters split on whether CMS should require only
suppliers, or both suppliers and coaches, to obtain NPIs. A few
commenters alternatively suggested that diabetes prevention
coordinators, not coaches, would be more appropriately suited to obtain
NPIs. Most commenters did not provide a reason for supporting the
proposal that coaches obtain an NPI, but those that did stated that
having coaches obtain an NPI would serve to validate community health
workers' role in health care. Many commenters expressed their support
for coaches obtaining an NPI as an alternative to enrolling in
Medicare. One commenter indicated that given that MDPP services will be
additional preventive services, the processes that would apply to other
additional preventive services should also apply, and coaches who
furnish these services should therefore obtain NPIs.
Commenters who opposed the requirement for coaches to obtain NPIs
largely expressed that only health care providers should obtain NPIs.
Some commenters believed that MDPP coaches do not meet the definition
of health care provider under 45 CFR 160.103, and therefore coaches
should not be allowed to obtain an NPI. Other commenters questioned how
coaches could obtain NPIs, particularly when registered nurses (RNs)
and other credentialed professionals can neither obtain NPIs nor enroll
as Medicare suppliers. Several commenters recommended that CMS extend
those same proposals for coaches to RNs and other medical professionals
who currently lack the ability to obtain an NPI. As an alternative to
obtaining NPIs, a number of commenters proposed that coaches should
have specialized training.
Response: We did not propose any requirements for diabetes
prevention coordinators, but we may consider this possibility for
future rulemaking as appropriate. Given that coaches directly furnish
MDPP services, we believe that for any process aiming to track and
screen professionals working with an MDPP supplier, the coach will
likely stand as the most appropriate individual to track and screen, as
opposed to the coordinators who do not directly furnish MDPP services.
To commenters who did not believe that coaches would be eligible
for an NPI, we note that 45 CFR part 162, subpart D specifies that
health care providers, as defined in 45 CFR 160.103, may obtain NPIs.
Among other things, a health care provider under 45 CFR 160.103 is a
person or organization who furnishes health care in the normal course
of business. Because 45 CFR 160.103 specifies that health care includes
preventive services, we believe MDPP coaches provide health care and
are therefore health care providers under 45 CFR 160.103 and eligible
to obtain NPIs. We disagree that requiring coaches to obtain NPIs would
impose an undue burden on coaches, even those who work as coaches part-
time or as volunteers. Obtaining an NPI takes approximately 20 minutes
and can be done easily online. We will further consider the impact of
coach requirements for rural and tribal areas that lack reliable access
to the internet and will consider adjusting policies in future
rulemaking as appropriate.
Requests for CMS to address NPI issues and enrollment for other
health care providers such as RNs are outside of the scope of this
rulemaking for MDPP. Should RNs or other providers who currently lack
an NPI decide to work as a coach, these individuals would be able to
obtain an NPI on that basis for purposes of furnishing MDPP services.
Given the relatively low burden that obtaining NPIs places on
coaches and important considerations for monitoring, evaluation, and
program integrity, we will require every coach furnishing MDPP services
on behalf of an MDPP supplier to obtain an active and valid NPI that
will be submitted to Medicare on the supplier's updated roster of
coaches. This roster of coach identifying information would be
submitted alongside the MDPP supplier's enrollment application to be
used for vetting and program integrity purposes. However, we did not
propose specific standards for how we would use roster information in
connection with MDPP supplier enrollment. We intend to propose such
standards in future rulemaking, and will begin enrollment of MDPP
suppliers once appropriate standards are in place.
Comment: We received general support from commenters for the
proposal to track coaches using some form of identifiable information
to help ensure the coaches meet CMS program integrity standards. Few
commenters detailed in their response the type of information that
should be collected. While some commenters preferred using coach names
and NPIs for tracking purposes, slightly more commenters preferred
using identifiable information such as social security numbers (SSNs).
Response: We appreciate the support from commenters. Use of NPIs
and SSNs would serve different purposes in vetting coaches against
program integrity risks upon the supplier's enrollment in Medicare, as
well as evaluation and monitoring purposes for performance and
continuing program integrity efforts. In existing areas of Medicare's
enrollment process where both NPIs and SSNs are used for individual
providers who enroll into Medicare, SSNs serve the purposes of
completing background checks, while NPIs serve an identifying and
tracking purposes with regards to Medicare claims and actions. These
two identifiers play distinct and important roles in ensuring the
integrity of Medicare's programs and the safety of the beneficiaries
served. Given commenters' openness to using both pieces of identifying
information, we will finalize a requirement that MDPP suppliers submit
the names, NPIs and SSNs of their coaches.
Upon enrollment, MDPP suppliers must submit, and update within 30
days of any changes, a roster of coaches, including individuals' first
and last

[[Page 80479]]

name, SSN and NPI to CMS along with its enrollment application to help
ensure the coaches meet CMS program integrity standards. Changes that
must be reported to us include adding identifying information for any
coach beginning to furnish MDPP services on behalf of the supplier or
removing a coach who ceases furnishing MDPP services on behalf of the
supplier. We intend to address how this coach information might affect
MDPP supplier enrollment and be used in enforcement actions in future
rulemaking as appropriate. As noted previously, enrollment of MDPP
suppliers will not begin until such standards are in place.
Comment: We received a number of comments on coach requirements
under the MDPP expanded model. The majority of commenters stated that
training should be required, some stipulating that specific trainers
should be utilized. Within the discussion of training, some commenters
stipulated that medical professionals should be exempt from any
additional training imposed on coaches, while others stipulated that
everyone--including medical professionals--should undergo training to
become a coach. One commenter recommended that CMS create an audit
process to ensure that training occurred. Several commenters urged us
to consider creating a certification program for coaches. Commenters
also referred to the CDC DPRP Standards for coach requirements and
requested that CMS clarify whether formal lifestyle coaching is a
requirement and specifically what constitutes the definition of trained
coach to furnish the required curriculum. Other commenters asked
whether we will require additional training sources or continuing
education requirements above the CDC DPRP Standards in order to qualify
as a coach.
Many commenters supported specific practitioners to serve as
coaches, such as Certified Diabetes Educators (CDEs). Other commenters
recommended that coaches should have clinician oversight. Similarly,
other commenters suggested that we require for coaches to have
clinicians as affiliates who can serve as a medical resource. A few
commenters stated that coaches should have some form of credentials,
particularly given that participants may have medical questions about
weight loss that extend beyond a CDC-approved curriculum, which
credentialed professionals are better equipped to handle. A number of
commenters specifically requested that we recognize the value that CDEs
can have in the MDPP expanded model and specify the role that they play
in the management of lifestyle changes.
While we received many comments suggesting additional requirements
for coaches, a number of commenters also urged against adding
additional requirements on coaches beyond CDC DPRP Standards.
Response: We do not, at this time, see any need to require
additional training, certification, or clinician oversight or
affiliation beyond the CDC DPRP Standards, particularly given that the
initial DPP model test met the criteria for expansion without these
requirements.
Though we agree that CDEs, RNs, and other credentialed professions
can be effective MDPP coaches, the DPP model test showed that trained,
non-credentialed coaches can effectively deliver the program.
Additionally, we do not believe that the literature supports this claim
that coaches with credentials would result in better participant
performance than non-credentialed individuals trained to be
coaches.^{28 29 30 31} Therefore, we do not believe credentials
are necessary at this time, but may evaluate and revisit this proposal
as necessary. Therefore, any individuals--with or without credentials--
can become a coach provided that they meet CDC DPRP Standards and work
for a MDPP supplier.
---------------------------------------------------------------------------

\28\ D Vojta et al., ``A Coordinated National Model for Diabetes
Prevention: Linking Health Systems to an Evidence-Based Community
Program,'' American Journal of Preventive Medicine 44, no. 4 Suppl 4
(2013): S301-S306.
\29\ Mohammed K. Ali et al., ``How Effective were Lifestyle
Interventions in Real-World Settings that were Modeled on the
Diabetes Prevention Program?,'' Health Affairs 31, no.1 (2012): 67-
75.
\30\ L Ruggiero et al., ``Community-Based Translation of the
Diabetes Prevention Program's Lifestyle Intervention in an
Underserved Latino Population,'' The Diabetes EDUCATOR 37, no. 4
(2011); 564-572.
\31\ JA Katula et al., ``The Healthy Living Partnerships to
Prevent Diabetes Study 2-Year Outcomes of a Randomized Controlled
Trial,'' American Journal of Preventive Medicine 44, no. 4S4 (2013):
S324 -S332.
---------------------------------------------------------------------------

We will further consider commenters' suggestions regarding
mechanisms to ensure that coaches have received high quality training,
whether we will require coach certification, the impact credentials may
have on coaches, and the possibility of clinician affiliation or
oversight as we monitor and evaluate the expanded model.
Final Decision: We are finalizing the proposal that DPP
organizations must enroll in Medicare to become MDPP suppliers, and
that coaches will not enroll in Medicare for purposes of furnishing
MDPP services. We are finalizing the proposal that coaches must obtain
NPIs. We are requiring MDPP suppliers to submit the active and valid
NPIs of all affiliated coaches and to update CMS within 30 days of a
coach beginning to or ceasing to furnish MDPP services. We finalize
that this roster of coaches submitted will include the first and last
name, SSN, and NPI. We intend to propose policies specific to
enrollment standards and enforcement actions, as they relate to the
roster, in future rulemaking.
The final policies for coach requirements are set forth in Sec.
424.59.
d. Revocation of MDPP Supplier Enrollment
We proposed that all MDPP suppliers would be required to comply
with the requirements of 42 CFR part 424. If an MDPP supplier has its
Medicare enrollment revoked or deactivated for reasons unrelated to its
loss of CDC DPRP recognition, that MDPP supplier would lose its ability
to bill Medicare for MDPP services but would not automatically lose its
CDC DPRP recognition. We proposed that existing Medicare providers and
suppliers who lose CDC DPRP recognition would lose their Medicare
billing privileges with respect to MDPP services, but may continue to
bill for other non-MDPP Medicare services for which they are eligible
to bill. We proposed that MDPP suppliers that have their Medicare
billing privileges revoked or that lose billing privileges for MDPP may
appeal these decisions in accordance with the procedures specified in
42 CFR part 405, subpart H, 42 CFR part 424, and 42 CFR part 498. We
proposed to add a new Sec. 424.59 to our regulations to specify the
suppliers who would be eligible for Medicare enrollment and billing for
MDPP services. We solicited comment on these proposals.
The following is a summary of the comments we received regarding
these proposals and our responses.
Comment: A few commenters agreed with the proposal that loss of CDC
DPRP recognition should lead to loss of MDPP billing privileges. Some
commenters specifically agreed that revocation should be limited to
MDPP privileges. Commenters also stated that the ability to appeal a
revocation decision was important. One commenter expressed concerns
that losing Medicare billing privileges would affect MDPP suppliers
less than medical professionals, presenting a potential vulnerability
to fraud. For medical professionals, Medicare provides a key source of
income and livelihood, whereas non-traditional Medicare providers who
primarily deliver non-health care related services like those in a
community center would not necessarily be as affected by a

[[Page 80480]]

revocation than a health clinic. The commenter did not suggest an
alternative approach that could make losing Medicare billing more
impactful for these organizations.
Response: We appreciate the support from commenters on our proposed
revocation policies, including the right to appeal a revocation. Should
we deny a prospective MDPP supplier's enrollment, we expect that appeal
rights set forth in 42 CFR part 424 would apply, however we will
address any provisions related to Medicare enrollment denial appeal
rights in future rulemaking. We agree with commenters that should a
supplier lose CDC DPRP recognition, the supplier's revocation would be
only of the supplier's MDPP enrollment. We disagree that revocation of
MDPP enrollment would affect existing providers and suppliers less than
new MDPP suppliers. In both cases, the supplier would lose its ability
to bill for MDPP services. We reiterate that all MDPP suppliers--
whether a new Medicare supplier or a currently enrolled provider and
supplier--must comply with the requirements of 42 CFR part 424, subpart
P, including, but not limited to, enrollment bars. CMS notes that we
did not propose a policy regarding the effective date of the
revocation, and will do so in future rulemaking. We retain the
authority to revoke any Medicare enrollment--MDPP supplier or
otherwise--if a supplier does not comply with Medicare requirements.
Final Decision: We are finalizing our proposals that all MDPP
suppliers must comply with the requirements of 42 CFR part 424, will
have their MDPP supplier enrollment revoked upon loss of CDC DPRP
recognition or noncompliance with Medicare requirements, and may appeal
these decisions in accordance with the procedures specified in 42 CFR
part 405, subpart H, 42 CFR part 424, and 42 CFR part 498.
The final revocation and appeal policies are set forth in Sec.
424.59.
e. Virtual MDPP Services
Currently, CDC-recognized DPP organizations deliver DPP services
in-person or virtually via a telecommunications system or other remote
technology. The majority of current DPP organizations furnish DPP
services in-person, but an emerging body of literature
^{32 33 34 35} supports the effectiveness of virtual sessions
furnished remotely. We proposed to allow MDPP suppliers to furnish MDPP
services through remote technologies. As part of our evaluation of the
MDPP expansion, to the extent feasible, we planned to evaluate the
effectiveness of MDPP services, particularly in relation to virtual
versus in-person services, and, using the evaluation data, modify or
terminate this component of the expansion as appropriate. To permit
such evaluation, we are considering specifying the nature of the
virtual service and the site of the service in codes included on claims
submitted for payment, as well as collecting information on the nature
of the virtual service and the site of service at the beneficiary level
from MDPP suppliers.
---------------------------------------------------------------------------

\32\ W Su et al., ``Return on Investment for Digital Behavioral
Counseling in Patients With Prediabetes and Cardiovascular
Disease,'' Preventive Chronic Disease 13, no. E13 (2016).
\33\ J Ma et al., ``Translating the Diabetes Prevention Program
Lifestyle Intervention for Weight Loss into Primary Care: a
Randomized Trial,'' JAMA Internal Medicine 173, no. 2 (2013): 113-
121.
\34\ CS Sepah et al., ``Translating the Diabetes Prevention
Program into an Online Social Network: Validation Against CDC
Standards,'' The Diabetes Educator 40, no. 4 (2014): 435-443.
\35\ Y Fukuoka et al., ``A Novel Diabetes Prevention
Intervention Using a Mobile App: A Randomized Controlled Trial with
Overweight Adults at Risk,'' American Journal of Preventive Medicine
[serial online] 49, no. 2 (2015): 223-237.
---------------------------------------------------------------------------

We planned to monitor administrative claims for virtual services to
identify any unusual and/or adverse utilization of the MDPP services.
We solicited comment on specific monitoring activities or program
integrity safeguards with respect to virtual services, in addition to
the time period in which such enhanced monitoring activities should
occur.
We noted that MDPP services provided via a telecommunications
system or other remote technology will not be part of current Medicare
telehealth benefits and have no impact on how telehealth services are
defined by Medicare. We recognize that the provision of MDPP services
by such virtual methods may introduce additional risks for fraud and
abuse, and we plan to address specific policies in future rulemaking to
mitigate these risks. We thus solicited comment on whether there are
quality or program integrity concerns regarding the use of virtual
sessions, or whether they offer comparable or higher quality MDPP
services when compared to in-person services. We solicited comment on
strategies to strengthen program integrity and minimize the potential
for fraud and abuse in virtual sessions.
The following is a summary of the comments we received regarding
these proposals and our responses.
Comment: In response to our proposals for virtual MDPP services, we
received many insightful and informative public comments suggesting
matters related to furnishing virtual services, various modes of
furnishing virtual services, how effective these services are, and that
the standards that apply to in-person sessions may not be applicable to
virtual sessions. Commenters were overwhelmingly supportive of the
proposal to allow virtual providers to participate, particularly to
ensure adequate access to the benefit in underserved areas. Only one
commenter noted that in-person services should be prioritized over
virtual services. Commenters provided specific suggestions on how to
mitigate fraud and abuse and evaluate these services by using site of
service codes on claims, and requiring technology based methods for
weight loss reporting (for example, digital scales) versus self-
reported methods.
Response: We appreciate the comments on the virtual furnishing of
MDPP services. We noticed many differences between the way a virtual
MDPP supplier and in-person supplier may operate, in addition to hybrid
virtual and in-person programs. We do not have enough information to
finalize this proposal at this time, but expect to continue gathering
more information on the virtual delivery of DPP services. We appreciate
the many insights and comments we received, particularly suggestions of
strategies to maintain program integrity. We remain committed to
including virtual providers and services in MDPP as soon as possible,
but we intend to use future rulemaking to address detailed policies on
virtual providers' eligibility to enroll, furnish and bill for MDPP
services.
f. Information Technology (IT) Infrastructure and Capabilities
We proposed that in order to receive payment, MDPP suppliers would
be required to submit claims to Medicare using standard claims forms
and procedures. Claims would be submitted in batches that contain
beneficiary Protected Health Information (PHI) and Personally
Identifiable Information (PII), including the Health Insurance Claim
Number (HICN). Most Medicare claims are submitted electronically except
in limited situations. We provide a free software package called PC-ACE
Pro32 that creates a patient database and allows organizations to
electronically submit claims to Medicare Part A and B. We understand
there are several other electronic claims submissions software packages
available in the market for purchase. We encouraged current and
prospective DPP organizations to investigate adopting these systems to
enhance the efficiency of claims

[[Page 80481]]

submission, and we sought comment on the capacity of DPP organizations
to integrate these systems into their workflows. We indicated that we
would provide guidance to MDPP suppliers regarding the Medicare claims
submission standards.
We proposed to require MDPP suppliers to maintain a crosswalk
between the beneficiary identifiers they submit to CMS for billing
purposes and the beneficiary identifiers they provide CDC for
beneficiary level-clinical data. We proposed that MDPP suppliers
provide this crosswalk to the CMS evaluator on a regular basis.
We proposed that MDPP suppliers maintain records that contain
detailed documentation of the services furnished to beneficiaries,
including but not limited to the beneficiary's eligibility status,
sessions attended, the coach furnishing the session attended, the date
and place of service of sessions attended, and weight. We proposed that
MDPP suppliers maintain these records within a larger medical record,
or within a medical record that an MDPP supplier establishes for the
purposes of administering MDPP. Consistent with the requirement in
Sec. 424.516(f) we proposed that these records be retained for 7 years
from the date of service and that MDPP suppliers would provide CMS or a
Medicare contractor access to these records upon request. We proposed
to require MDPP suppliers to accurately track payments and resolve any
discrepancies between claims and the beneficiary record within their
medical record. We also proposed that MDPP suppliers would be required
to maintain and handle any beneficiary PII and PHI in compliance with
the Health Insurance Portability and Accountability Act of 1996
(HIPAA), other applicable privacy laws, and CMS standards. We indicated
that we would provide education and guidance to MDPP suppliers to
mitigate the risk of data discrepancies and audits. We stated that we
would address specific recordkeeping requirements and standards in
future rulemaking as appropriate.
The following is a summary of the comments we received and our
responses.
Comment: Several commenters recommended CMS clarify what the
medical record should include, whether the medical record should be
paper or electronic, and whether suppliers should retain records of any
referrals and diagnostic tests demonstrating beneficiary eligibility or
simply document that one was presented at the time of enrollment.
Commenters requested guidance on whether the medical record would
require proof of lab work or if documentation of the values would
suffice. One commenter noted that while beneficiaries' data should be
held in an EHR, suppliers should be able to transfer this information
in electronic, paper, or fax format to beneficiaries' other providers.
Though commenters generally agreed with the recordkeeping requirements,
including the duration of recordkeeping, many of these same commenters
and others noted the burden that recordkeeping requirements might
impose on community-based organizations. These commenters urged us to
consider the implications that a high cost, HIPAA-compliant
recordkeeping system might impose on such organizations, as well as the
subsequent strain it would place on beneficiary access should the
requirement be cost prohibitive. Additionally, a number of commenters
urged that when making IT-related policy decisions, that we consider
the lack of internet and issues with electricity in rural and tribal
areas.
These commenters suggested clarifying the medical record
requirement in such a way that would be economically feasible for
community-based programs. Due to these concerns, a number of commenters
suggested that we work with CDC or other entities to identify a low
cost data and billing system. Other commenters went further to suggest
that CMS work with CDC to streamline the two data reporting systems
such that when coaches or suppliers input performance data on
beneficiary sessions to CDC, the Medicare claim would automatically be
generated. Others appreciated the reliance on existing claim forms and
software and applauded CMS for not creating a new data submission
system. A few commenters noted that given the cost burdens of adequate
IT, data, and recordkeeping systems, many community-based programs are
likely to use third party integrators. These commenters did not
advocate for a specific role for these integrators. One commenter,
however, requested that MDPP suppliers be permitted to partner with and
use the IT system of a healthcare entity to maintain records and submit
claims for Medicare payment. Lastly, one commenter suggested that MDPP
suppliers be required to take HIPAA-compliant training due to concerns
about non-medical professionals housing HIPAA-compliant information.
Response: We wish to clarify that for purposes of MDPP, the medical
record would need to contain information related to the MDPP services
furnished to the beneficiary, in compliance with HIPAA and other
applicable privacy laws, and CMS standards, such as documentation of
the beneficiary's eligibility, including blood test results, sessions
attended, the coach furnishing the session(s) attended, the date and
location of service(s), and weight. We understand various forms of
documentation exist depending on the type of blood test administered,
and we will provide additional details on what specific records are
required to demonstrate eligibility in future guidance and/or future
rulemaking as appropriate. In response to commenters' questions on the
format of these records, we encourage the use of electronic records,
but do not require it for purposes of this expanded model. Further
details on specific information that would qualify as auditable
documentation of the supplier's record will be provided in guidance
and/or future rulemaking as appropriate. Although we require entities
to maintain these records for the purposes of auditing, medical
reviews, or other CMS requests, we do not intend to require that
suppliers submit additional data, outside what is on the claim, to CMS
for the purpose of payment.
Although we understand it might be easier for suppliers to submit
claims and performance data to one joint CMS-CDC data system, we
believe that maintaining MDPP claims independent from CDC performance
data would allow us to compare information submitted to CMS with those
submitted to CDC to identify inconsistencies, as supported by certain
commenters. Additionally, it is important to note that while all MDPP
suppliers will be organizations that have CDC recognition, it is likely
that not all organizations with CDC recognition will enroll in
Medicare. Similarly, not all participants in the National DPP are
Medicare beneficiaries. Thus, Medicare claims information will not be
relevant to CDC's assessment of performance data. For the
aforementioned reasons, we do not agree with commenters that a joint
CDC-CMS data system would be appropriate. We appreciate that these
recordkeeping requirements can impose burdens on MDPP suppliers,
particularly those who have not previously had to comply with these
types of recordkeeping requirements. While MDPP suppliers are
responsible for complying with these requirements, MDPP suppliers can
decide which resources to utilize in order to do so, including the use
of a third party administrator or other entity.

[[Page 80482]]

Comment: Several commenters noted the current proposed requirements
for recordkeeping do not apply to the nature of sessions furnished
virtually. One commenter proposed alternative record keeping
requirements that were consistent with the proposal, but would allow
flexibility for suppliers who furnish MDPP services through virtual
technologies.
Response: We are deferring all decisions regarding virtual
providers to future rulemaking as discussed in section III.J.7.e. of
this final rule.
Comment: Numerous commenters agreed with the proposal that MDPP
suppliers maintain a crosswalk between beneficiary identifiers
submitted to CMS for billing and beneficiary identifiers submitted to
CDC for beneficiary-level clinical data. A few commenters disagreed,
stating CMS and CDC should not impose this requirement on suppliers and
should instead coordinate directly to alleviate further reporting
requirements for MDPP suppliers. Regarding monitoring and program
integrity comments, we received general support for this approach to
compare CMS claims with CDC performance data. Several commenters
requested further clarity on the crosswalk, its format, whether or not
CMS would provide a template, the frequency with which suppliers would
be required to submit the same data to CMS, and the need for the
crosswalk to CDC data given that CMS is requiring all suppliers to
retain records for auditing purposes, medical reviews, or other
requests.
Response: We understand the desire to avoid undue burdens on MDPP
suppliers. We intend for the crosswalk to alleviate the redundancy for
suppliers submitting performance data to CMS that is already being sent
to CDC. Since MDPP is an expanded model test, we are required to
evaluate the effectiveness of the MDPP expansion, and this crosswalk
will facilitate this evaluation. While we understand the recommendation
to create the crosswalk directly with CDC, the CDC does not receive any
personal identifying information (PII) on beneficiaries who participate
in the National DPP that would enable CMS and CDC to directly create
the beneficiary crosswalk. While we are requiring organizations to
retain records for CMS-directed audits, a crosswalk between CMS and CDC
data will enable CMS to conduct an evaluation on the effectiveness of
MDPP, as well as provide any necessary documents during an audit,
medical review, or other CMS request. The crosswalk therefore has a
role both with program integrity purposes as well as for evaluating the
expanded model's effectiveness, as required of any Innovation Center
model. We intend to provide guidance to suppliers on how to set up the
crosswalk, and make any further adjustments or clarifications (for
example, frequency of submissions) in future rulemaking, as
appropriate.
Final Decision: We are finalizing as proposed the documentation
retention requirements and requirements for suppliers to provide
documents in the case of an audit, medical review, or other CMS
request. The final policies are set forth in Sec. 424.59.
8. Policies for Future Rulemaking
a. MDPP Reimbursement Structure
We proposed to reimburse for MDPP services at the times and in the
amounts set forth in the Table 41, with payment tied to the number of
sessions attended and achievement of a minimum weight loss of 5 percent
of baseline weight (body weight recorded during the beneficiary's first
core session).

Table 41--MDPP Expansion Payment Model
------------------------------------------------------------------------
Payment per beneficiary (non-
cumulative)
------------------------------------------------------------------------
Core Sessions
------------------------------------------------------------------------
1 Session attended...................... $25
4 Sessions attended..................... $50
9 Sessions attended..................... $100
Achievement of minimum weight loss of 5% $160
from baseline weight.
-------------------------------
Achievement of advanced weight loss of $25 (in addition to $160
9% from baseline weight. above)
-------------------------------
Maximum Total for Core Sessions..... $360
------------------------------------------------------------------------
Core Maintenance Sessions (Maximum of 6 monthly sessions over 6 months
in Year 1)
------------------------------------------------------------------------
3 Core Maintenance Sessions attended $45
(with maintenance of minimum required
weight loss from baseline).
6 Core Maintenance Sessions attended $45
(with maintenance of minimum required
weight loss from baseline).
-------------------------------
Maximum Total for Maintenance $90
Sessions.
-------------------------------
Maximum Total for First Year.... $450
------------------------------------------------------------------------
Ongoing Maintenance Sessions After Year 1 (Minimum of 3 sessions
attended per quarter/no maximum)
------------------------------------------------------------------------
3 Ongoing Maintenance Sessions attended $45
plus maintenance of minimum required
weight loss from baseline.
6 Ongoing Maintenance Sessions attended $45
plus maintenance of minimum required
weight loss from baseline.
9 Ongoing Maintenance Sessions attended $45
plus maintenance of minimum required
weight loss from baseline.
12 Ongoing Maintenance Sessions attended $45
plus maintenance of minimum required
weight loss from baseline.
-------------------------------
Maximum Total After First Year...... $180
------------------------------------------------------------------------

As proposed, Table 41 illustrates that payments would be heavily
weighted toward achievement of weight loss over the 12-month core
benefit, and no payments would be available after the first 6 months
without achievement of

[[Page 80483]]

the minimum weight loss. In the payment structure we proposed, claims
for payment would be submitted following the achievement of core
session attendance, minimum weight loss, maintenance (both core and
ongoing) session attendance, and maintenance of minimum weight loss.
For example, MDPP suppliers would not be able to submit another claim
after core session one until the beneficiary has completed four
sessions, and maintenance sessions (both core and ongoing) would not
qualify for payment unless minimum weight loss was achieved and
maintained. Similar value-based payments are being offered by
commercial insurers and accepted by DPP organizations. We sought
comment on this payment structure. Additionally, we sought comment on
whether to update payment rates annually through an existing fee
schedule, such as the PFS, or establish a new fee schedule for MDPP
suppliers.
We are deferring finalizing the proposed reimbursement structure to
future rulemaking. In response to our solicitation, we received many
comments. We intend to address these comments in future rulemaking.
b. Program Integrity
We recognize the potential for fraud and abuse by suppliers filing
inaccurate claims and/or duplicative claims on the number of sessions
attended or amount of weight loss achieved. We also recognize
beneficiaries may move between MDPP suppliers, and we intend to address
in future rulemaking as appropriate any requirements necessary to
prevent duplication claims for MDPP services furnished by more than one
MDPP supplier to the same beneficiary. We are also concerned about the
potential for beneficiary inducement or coercion and the potential
program risks posed by permitting a new type of organization to receive
payment from Medicare for furnishing MDPP services. We also realize
that there may be other risks to program integrity. We intend to
develop policies to mitigate these risks and monitor the MDPP
expansion, to ensure MDPP suppliers meet all applicable CMS program
integrity and supplier enrollment standards, and will address them in
future rulemaking, as necessary. We intend to develop system checks to
identify when CMS may need to audit an MDPP supplier's records. We are
considering ways to cross reference the data DPP organizations are
currently required to report to the CDC to identify potential
discrepancies with data submitted to CMS. We sought comment on such
approaches. Finally, MDPP suppliers would be subject to audits and
reviews performed by CMS program integrity and/or review or audit
contractors in addition to program-specific audits. We sought comment
on these approaches and others to mitigate these risks and strategies
to ensure program integrity.
In response to our solicitation, we received many comments. We
intend to address these comments in future rulemaking.
c. Learning Activities
The CDC provides technical assistance to DPP organizations with CDC
DPRP recognition to improve performance. We solicited comment on what
additional technical assistance would be needed for providers and other
organizations in order to expand the MDPP model.
In response to our solicitation, we received many insightful and
informative public comments and will consider the input when developing
our strategy for ensuring that organizations seeking to enroll in
Medicare and furnish and bill for MDPP services have the information
and guidance they need to do so.
d. Quality Monitoring and Reporting
We solicited comment on the quality metrics that should be reported
by MDPP suppliers in addition to the reporting elements required on
Medicare claims submissions outlined above (attendance and weight loss)
or by the CDC DPRP. We solicited comment specifically on what quality
metrics should be considered for public reporting (not for payment) to
guide beneficiary choice of MDPP suppliers.
In response to our solicitation, we received many comments. We
intend to address these comments in future rulemaking.

K. Medicare Shared Savings Program

Under section 1899 of the Act, we established the Medicare Shared
Savings Program (Shared Savings Program) to facilitate coordination and
cooperation among providers to improve the quality of care for Medicare
Fee-For-Service (FFS) beneficiaries and reduce the rate of growth in
health care costs. Eligible groups of providers and suppliers,
including physicians, hospitals, and other health care providers, may
participate in the Shared Savings Program by forming or participating
in an Accountable Care Organization (ACO). The final rule establishing
the Shared Savings Program appeared in the November 2, 2011 Federal
Register (Medicare Shared Savings Program: Accountable Care
Organizations Final Rule (76 FR 67802) (November 2011 final rule)). A
subsequent major update to the program rules appeared in the June 9,
2015 Federal Register (Medicare Shared Savings Program; Accountable
Care Organizations Final Rule (80 FR 32692) (June 2015 final rule)). A
final rule addressing changes related to the program's financial
benchmark methodology appeared in the June 10, 2016 Federal Register
(Medicare Program; Medicare Shared Savings Program; Accountable Care
Organizations--Revised Benchmark Rebasing Methodology, Facilitating
Transition to Performance-Based Risk, and Administrative Finality of
Financial Calculations (81 FR 37950) (June 2016 final rule)). As noted
below, we have also made use of the annual PFS rules to address quality
reporting and certain other issues.
Additionally, on April 27, 2016, the Department of Health and Human
Services (HHS) issued a proposed rule to implement key provisions of
the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and
establish a new Quality Payment Program (QPP) (Medicare Program; Merit-
Based Incentive Payment System (MIPS) and Alternative Payment Model
(APM) Incentive under the Physician Fee Schedule, and Criteria for
Physician-Focused Payment Models (81 FR 28162) (QPP proposed rule)). On
October 14, 2016, HHS issued a final rule to implement key provisions
of the MACRA and establish a new QPP (QPP final rule with comment
period). (The rule will appear in the November 4, 2016 Federal
Register, and can be accessed at https://qpp.cms.gov/education.) The
QPP final rule with comment period establishes a new program under
which Medicare will reward physicians for providing high-quality care,
instead of paying them only for the number of tests or procedures
provided. The QPP final rule with comment period addresses issues
related to APMs, such as Tracks 1, 2, and 3 of the Medicare Shared
Savings Program, and issues related to reporting for purposes of MIPS
by eligible clinicians (ECs) that are participating in APMs.
Our intent in the CY 2017 PFS proposed rule was to propose further
refinements to the Shared Savings Program rules, and we identified
several policies that we proposed to update or revise. First, we
discussed and proposed policies related to ACO quality reporting
including proposed changes to the quality measures used to assess ACO
quality performance, changes in the methodology used in our quality

[[Page 80484]]

validation audits and the way in which the results of these audits may
affect an ACO's sharing rate, various issues related to alignment with
policies proposed in the QPP proposed rule, and revisions related to
the terminology used in quality assessment such as ``quality
performance standard'' and ``minimum attainment level.'' We also
proposed conforming changes to our regulatory text. Next, we addressed
several issues unrelated to quality reporting and assessment.
Specifically, we proposed to implement a process by which beneficiaries
may voluntarily align with an ACO by designating an ACO professional as
responsible for their overall care. We also proposed to introduce
beneficiary protections related to use of the SNF 3-day rule waiver.
Finally, we proposed to make technical changes and updates to certain
rules related to merged and acquired TINs and the minimum savings rate
(MSR) and minimum loss rate (MLR) that would be used during financial
reconciliation for ACOs that fall below 5,000 assigned beneficiaries.
1. ACO Quality Reporting
Section 1899(b)(3)(A) of the Act requires the Secretary to
determine appropriate measures to assess the quality of care furnished
by ACOs, such as measures of clinical processes and outcomes; patient,
and, wherever practicable, caregiver experience of care; and
utilization such as rates of hospital admission for ambulatory
sensitive conditions. Section 1899(b)(3)(B) of the Act requires ACOs to
submit data in a form and manner specified by the Secretary on measures
that the Secretary determines necessary for ACOs to report to evaluate
the quality of care furnished by ACOs. Section 1899(b)(3)(C) of the Act
requires the Secretary to establish quality performance standards to
assess the quality of care furnished by ACOs, and to seek to improve
the quality of care furnished by ACOs over time by specifying higher
standards, new measures, or both for the purposes of assessing the
quality of care. Additionally, section 1899(b)(3)(D) of the Act gives
the Secretary authority to incorporate reporting requirements and
incentive payments related to the PQRS, EHR Incentive Program and other
similar initiatives under section 1848 of the Act. Finally, section
1899(d)(1)(A) of the Act states that an ACO is eligible to receive
payment for shared savings, if they are generated, only after meeting
the quality performance standards established by the Secretary.
In the November 2011 final rule and recent CY PFS final rules with
comment period (77 FR 69301 through 69304; 78 FR 74757 through 74764;
79 FR 67907 through 67931; and 80 FR 71263 through 712710), we have
established the quality performance standard that ACOs must meet to be
eligible to share in savings that are generated. Through these previous
rulemakings, we have worked to improve the alignment of quality
performance measures, submission methods, and incentives under the
Shared Savings Program and PQRS.
In the CY 2017 PFS proposed rule, we proposed several changes and
other revisions to our policies related to the quality measures and the
quality performance standard, including the following:
Changes to the measure set used in establishing the
quality performance standard;
Changes to the methodology used to validate quality data
submitted by the ACO along with penalties that may apply if the audit
match rate is less than 90 percent;
Revisions to the use of the terms ``quality performance
standard'' and ``minimum attainment level'' in the regulation text;
Revisions related to use of flat percentages to establish
quality benchmarks; and
Alignment with policies proposed in the QPP proposed rule.
a. Changes to the Quality Measure Set Used in Establishing the Quality
Performance Standard
(1) Background
Section 1899(b)(3)(C) of the Act states that the Secretary shall
establish quality performance standards to assess the quality of care
furnished by ACOs and seek to improve the quality of care furnished by
ACOs over time by specifying higher standards, new measures, or both.
In the November 2011 final rule, we established a quality performance
standard consisting of 33 measures across four domains, including
patient experience of care, care coordination/patient safety,
preventive health, and at-risk population. In subsequent PFS final
rules with comment period, we have made a number of updates to the set
of measures that make up the quality performance standard. The quality
measure set currently includes 34 quality measures.
Quality measures are submitted by the ACO through the CMS web
interface, calculated by CMS from administrative and claims data, and
collected via a patient experience of care survey based on the
Clinician and Group Consumer Assessment of Healthcare Providers and
Systems (CG-CAHPS) survey. The measures collected through the CMS web
interface are also used to determine whether eligible professionals
participating in an ACO avoid the PQRS and automatic Physician Value
Modifier (VM) payment adjustments for 2015 and subsequent years.
Currently, eligible professionals billing through the TIN of an ACO
participant may avoid the downward PQRS payment adjustment when the ACO
satisfactorily reports all of the ACO GPRO measures on their behalf
using the CMS web interface. Beginning with the 2017 VM, ACO
performance on the CMS web interface measures and all cause readmission
measure will be used in calculating the quality component of the VM for
groups and solo practitioners participating within an ACO (79 FR 67941
through 67947).
In the CY 2017 PFS proposed rule, we explained that our principal
goal and rationale for selecting quality measures for ACOs has been to
identify measures of success in the delivery of high-quality health
care at the individual and population levels with a focus on outcomes
and a preference for NQF-endorsed measures. We noted, however, that the
statute does not limit us to using endorsed measures in the Shared
Savings Program. As a result, we have also exercised our discretion to
include certain measures that we believe to be high impact but that are
not currently endorsed, including for example, ACO#11, which is
currently titled Percent of PCPs Who Successfully Meet Meaningful Use
Requirements.
Further, we described our continuing work with the measures
community to ensure that the specifications for the measures used under
the Shared Savings Program are up-to-date and reduce reporting burden.
Importantly, we noted that the Core Quality Measures Collaborative was
formed in 2014, as a collaboration between CMS, providers, and other
stakeholders, with the goal of aligning quality measures for reporting
across public and private stakeholders in order to reduce provider
reporting burden. On February 16, 2016, the Core Quality Measures
Collaborative recommended a core quality measure set that aligns and
simplifies quality reporting across multiple payers (https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-02-16.html) and made specific recommendations for
ACOs (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityMeasures/Downloads/ACO-and-PCMH-Primary-Care-Measures.pdf). We proposed to

[[Page 80485]]

integrate several recommendations made by the Core Quality Measures
Collaborative into the CMS web interface as part of the QPP proposed
rule (81 FR 28399). These recommendations were subsequently adopted in
full in the QPP final rule with comment period. Groups that are
eligible to report using the CMS web interface for purposes of
reporting quality measures to CMS for various quality reporting
initiatives such as PQRS and the Shared Savings Program are required to
report on all measures included in the CMS web interface. In addition,
for purposes of the QPP, we proposed and finalized a policy requiring
that groups using the CMS web interface must report on all measures in
the CMS web interface.
(2) Proposals
In efforts to continue to align with other CMS initiatives and
reduce provider confusion and the burden of reporting, we proposed
modifications to the quality measure set that an ACO is required to
report. Specifically, to align the Shared Savings Program quality
measure set with the measures recommended by the Core Quality Measures
Collaborative and proposed for reporting through the CMS web interface
under the QPP proposed rule, we proposed to add, and in some cases to
replace, existing quality measures with the following:
ACO-12 Medication Reconciliation Post-Discharge
(NQF #0097). This measure addresses adverse drug events (ADEs) through
medication reconciliation, which is an important aspect of care
coordination. According to HHS' Agency for Healthcare Research and
Quality (AHRQ), ADEs account for nearly 700,000 emergency department
visits and 100,000 hospitalizations each year.\36\ The ACO-12
Medication Reconciliation measure was previously in the Shared Savings
Program measure set, however, it was replaced with ACO-39,
Documentation of Current Medications in the Medical Record (79 FR 67912
through 67914). The Core Quality Measures Collaborative, in
coordination with providers and stakeholders, determined the original
Medication Reconciliation measure would be more appropriate for
alignment across quality reporting initiatives. Based on this
recommendation, we proposed to require reporting of the measure through
the CMS web interface in the QPP proposed rule (81 FR 28403). In an
effort to align with the QPP proposals, we therefore proposed to
replace the Documentation of Current Medications in the Medical Record
measure (ACO-39) by reintroducing Medication Reconciliation (ACO-12) in
the Care Coordination/Patient Safety domain. We noted that in
accordance with our policy for newly introduced measures, this measure
would be pay for reporting for 2 years and proposed that it would phase
into pay for performance in accordance with the schedule indicated in
Table 36 of the proposed rule (81 FR 46421-46422).
---------------------------------------------------------------------------

\36\ ``Medication Errors.'' AHRQ. https://psnet.ahrq.gov/primers/primer/23/medication-errors.
---------------------------------------------------------------------------

ACO-44 Use of Imaging Studies for Low Back Pain
(NQF #0052). Imaging utilization is an important area for quality
measurement, because of the wide use of imaging services. This measure
reports the percentage of patients with a primary diagnosis of low back
pain that did not have an imaging study (for example, MRI, CT scan)
within 28 days of the diagnosis. (A higher score indicates higher
performance). The Use of Imaging Studies for Low Back Pain quality
measure is specified for patients 18-50 years of age. We proposed
adding this measure in the Care Coordination/Patient Safety domain to
address a gap in measures related to resource utilization and align
with the ACO measures recommended by the Core Quality Measures
Collaborative core measure set (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityMeasures/Downloads/ACO-and-PCMH-Primary-Care-Measures.pdf). We noted that the measure was
also proposed in the QPP proposed rule for measuring the quality of
care furnished by individual and specialty ECs (81 FR 28399 and 28460
Tables A and E). In the QPP final rule with comment period, we adopted
the low back pain measure for EHR reporting. Under the Shared Savings
Program, we proposed that this measure would be calculated using
Medicare claims data without any additional provider reporting
requirement. We noted that in accordance with our policy for newly
introduced measures, this measure would be designated as pay for
reporting in 2017 and 2018. We proposed to phase it into pay for
performance in accordance with the schedule indicated in Table 36 of
the proposed rule (81 FR 46421-46422). However, given the possible
small case sizes due to the measure specifications, we specifically
solicited comment on whether this measure should be phased in to pay
for performance or whether it should remain pay for reporting for all 3
performance years.
As we stated in the CY 2017 PFS proposed rule, by aligning the
Shared Savings Program measures with the Core Quality Measures
Collaborative recommendations and proposals under the QPP proposed
rule, we hope to reduce the burden of provider data collection and
reporting of measures that do not align across public and private
quality reporting initiatives. Therefore, we proposed to retire or
replace the following measures in order to reduce provider reporting
burden by reducing the number of measures that must be reported and
because these measures do not align with the core measure set
recommendations from the Core Quality Measures Collaborative and the
measures that we proposed for reporting through the CMS web interface
in the QPP proposed rule:
ACO-39 Documentation of Current Medications in the Medical
Record.
ACO-21 Preventive Care and Screening: Screening for High
Blood Pressure and Follow-up Documented.
ACO-31 Heart Failure (HF): Beta-Blocker Therapy for Left
Ventricular Systolic Dysfunction (LVSD).
ACO-33 Angiotensin-Converting Enzyme (ACE) Inhibitor or
Angiotensin Receptor Blocker (ARB) Therapy--for patients with CAD and
Diabetes or Left Ventricular Systolic Dysfunction (LVEF<40%).
In addition to our proposals above to modify the quality measure
set to align with the Core Quality Measures Collaborative and the
proposed modifications to the measures reported through the CMS web
interface under the QPP proposed rule, we proposed a few additional
modifications as follows:
First, we proposed to retire the two AHRQ Ambulatory Sensitive
Conditions Admission measures (ACO-9 and ACO-10). Although ACO-9 and
ACO-10 address admissions for patients with heart failure, chronic
obstructive pulmonary disease (COPD), and asthma, we introduced two
all-cause, unplanned admission measures for heart failure and multiple
chronic conditions (ACO-37 and ACO-38, respectively) in the 2015 PFS
final rule (79 FR 67911-67912). We believe ACO-37 and ACO-38 report on
a similar population with similar conditions as ACO-9 and ACO-10.
Therefore, in order to continue our efforts to reduce redundancies
within the Shared Savings Program measure set, we proposed to remove
ACO-9 and ACO-10 from the measure set.
Second, although we proposed to remove ACO-9 and ACO-10, we stated
that we continue to believe AHRQ's Prevention Quality Indicator (PQI)

[[Page 80486]]

measures are important because they report on inpatient hospital
admissions of patients with clinical conditions (such as dehydration,
bacterial pneumonia, and urinary tract infections) that could
potentially be prevented with high-quality outpatient care. We
therefore proposed adding ACO-43 Ambulatory Sensitive Condition Acute
Composite (AHRQ PQI #91) to the Care Coordination/Patient Safety
domain. We noted that this measure is a composite measure, currently
used in the Physician Value-Based Payment Modifier, which includes PQIs
reporting on admissions related to dehydration, bacterial pneumonia,
and urinary tract infections (PQIs #10, 11, and 12). We noted the
measure would be risk-adjusted for demographic variables and
comorbidities. In accordance with our policy for newly introduced
measures, we proposed that this measure would be pay for reporting for
2 years, and then phase into pay for performance in accordance with the
schedule indicated in Table 36 of the proposed rule (81 FR 46421-
46422).
Comment: Commenters were generally supportive of the proposed
changes to the Shared Savings Program quality measure set. Most
commenters supported alignment of quality measures with Core Quality
Measures Collaborative recommendations.
Response: We appreciate the support for proposed changes to the
Shared Savings Program quality measure set and for aligning with the
recommendations of the Core Quality Measures Collaborative.
The following is a summary of the comments we received on specific
proposed changes to the quality measure set:
Comment: Regarding our proposal to reinstate use of ACO-12
Medication Reconciliation and remove ACO-39 Documentation of Current
Medications in the Medical Record, one commenter suggested that using
ACO-12 Medication Reconciliation would be a better means to improve
population health. One commenter expressed concern over reintroducing
ACO-12 since it counts a readmission within 30 days as a new index
discharge for the measure and suggested using NQF #0554 Medication
Reconciliation Post-Discharge instead.
Response: We appreciate the comments submitted on our proposal to
reinstate ACO-12 Medication Reconciliation, including the comment
suggesting the measure would be a better means to improve population
health. While one commenter suggested using NQF #0554 Medication
Reconciliation Post-Discharge, as NQF notes on its Web site, NQF #0554
measure is no longer endorsed, because the measure developer, NCQA,
determined the measure is outdated and withdrew the measure from
endorsement. Although readmissions could be counted as a new index
discharge based on the measure specifications, it is important that
providers coordinate care and engage in medication reconciliation
following each hospital discharge, whether it be an initial admission
or subsequent readmission. ACO-12 also maintains alignment with quality
reporting under the QPP. Given that ACO-12 aligns with the QPP and is
an NQF endorsed measure that is recommended by the Core Quality
Measures Collaborative, we are finalizing our proposal to replace ACO-
39 with ACO-12. In accordance with our policy for newly introduced
measures, we are also finalizing our proposal that this measure will be
pay for reporting for 2 years, and then phase into pay for performance
in accordance with the schedule as proposed in Table 36 of the proposed
rule (81 FR 46421-46422).
Comment: Several commenters specifically supported the removal of
ACO-21 Screening for High Blood Pressure and Follow-up Documented, ACO-
31 Beta-Blocker Therapy for LVSD, and ACO-33 ACE Inhibitor or ARB
Therapy--for patients with CAD and Diabetes or Left Ventricular
Systolic Dysfunction (LVEF<40%) in the interest of harmonization, even
though the measures do include an important follow-up component. One
commenter raised concerns about removing ACO-21 because it has a
follow-up component they believe is particularly important for women
with heart disease.
Response: We appreciate the commenter support we received for
removing these measures. To the extent that commenters noted the
importance of certain aspects of these measures, we acknowledge that
these measures address important health issues. Many quality measures
that are not part of the ACO quality measure set address various
important health issues for patients. However, it is not feasible for
us to include all measures that address important health issues in the
quality measure set for the Shared Savings Program. Rather, we must
choose measures based upon a consideration of the importance of the
measures for the patient population served by ACOs, the reporting
burden placed on ACOs and their participants, and the extent to which
measures align with other quality reporting initiatives. Accordingly,
we are finalizing our proposal to retire ACO-21, ACO-31, and ACO-33 in
order to reduce provider reporting burden and align with the Core
Quality Measures Collaborative recommended core set and the measures
that will be reported for purposes of the QPP.
Comment: Most commenters agreed that ACO-44 Use of Imaging Studies
for Low Back Pain is an important quality measure and supported
addition of this measure. However, concerns were raised regarding the
measure specifications. Some commenters were concerned about the narrow
age range of this measure and potentially small case sizes that could
result from the age range being limited to adults aged 18-50. These
commenters made various suggestions for modification of our proposal
such as using a broader age range or making the measure pay for
reporting for all years. While some commenters appreciated that the use
of claims data to calculate this measure would avoid unnecessary
administrative burden on providers, one commenter was concerned about
relying solely on claims data without incorporating clinical data from
the medical record and suggested that the measure be pay for reporting
until CMS has the capacity to incorporate robust clinical data. A few
commenters opposed the addition of ACO-44, stating they believe it is
inappropriate for a Medicare ACO's patient population, given the
measure specification's limited age range. One commenter on ACO-44
asked whether plain film radiographs would be included as an imaging
modality for the measure.
Response: We agree with commenters that support the proposal to
include ACO-44 Use of Imaging Studies for Low Back Pain because it
addresses a clinically important gap in quality measurement and aligns
with the recommendations made by the Core Quality Measures
Collaborative. We also agree with commenters' concerns regarding the
narrow age range (18-50 years of age) under the measure specifications,
which could result in small case sizes if limited to Medicare
beneficiaries assigned to the ACO. With respect to the comment that
raised a concern about relying solely on claims data to calculate the
measure, we agree that additional clinical data could possibly enhance
the measure. However, using additional clinical data would require
additional reporting by the ACO. At this time, we do not believe it is
appropriate to impose this additional reporting burden, and therefore,
we will not be adopting the commenter's suggestion. In response to the
commenter that asked whether plain film radiographs would be included
in the measure specifications, we note that

[[Page 80487]]

the current NQF endorsed measure specifies the use of plain x-ray, MRI,
and CT scan. Although we are finalizing our proposal to add this
measure to the quality measure set, in light of the concerns raised
regarding the age range and potential for small case sizes, we are
modifying the proposed timeline for transitioning the measure to pay
for performance. In accordance with our policy for newly introduced
measures, this measure will be pay for reporting for 2 years. However,
rather than phasing in the measure as pay for performance, we are
finalizing a policy under which the measure will remain as pay for
reporting for all the 3 performance years of an ACO's agreement period.
Comment: Some commenters supported the proposal to retire ACO-9
because patients with COPD are already assessed under ACO-38 All-Cause
Unplanned Admissions for Patients with Multiple Chronic Conditions
(MCC). In addition, commenters supported CMS' proposal to retire ACO-
10, because the quality measure set already includes an all-cause
admission measure for patients with Heart Failure (ACO-37). Some
commenters urged CMS to retain ACO-9 or consider other COPD-related
measures for future reporting due to the prevalence of mortality-
related COPD. A commenter suggested that the Core Quality Measures
Collaborative consider COPD-related measures to include in their core
measure set recommendations.
Response: We appreciate the comments supporting our proposal to
retire ACO-9 and ACO-10. We agree that COPD and heart failure affect a
large volume of beneficiaries and are clinically important areas for
quality measurement. However, we note that COPD and heart failure are
among the chronic conditions addressed by the specifications for ACO-38
and ACO-37, respectively. Therefore the patient populations for the
measures are similar, and we agree with commenters who noted that the
measures are redundant. As a result, we are finalizing our proposal to
remove ACO-9 and ACO-10 from the ACO quality measure set. We also
appreciate the additional COPD measure recommendations and will
consider them for future reporting.
Comment: Most commenters supported the proposal to add ACO-43
Ambulatory Sensitive Condition Acute Composite to the measure set.
Commenters also appreciated our proposal that the measure would be
initially introduced as pay for reporting because it was not included
in the Core Quality Measure Collaborative measure set recommendations.
One commenter suggested quarterly feedback support for this measure and
other commenters suggested this measure be pay for reporting for all
performance years in an ACO's agreement period so ACOs can become more
familiar with the measure for their own operations. Some commenters
raised concerns with the use of the measure at the ACO-level when AHRQ
developed the measure at the population level.
Response: We appreciate commenters' support for our proposal to add
ACO-43 to the ACO quality measure set. We are finalizing its addition
to the ACO quality measure set because it addresses important clinical
conditions that could potentially be prevented with coordinated, high-
quality outpatient care. Although some commenters suggested maintaining
the measure as pay for reporting all 3 years of an ACO's agreement
period, we believe ACOs will have sufficient opportunity to become
familiar with the measure because, in accordance with the timeline for
introducing new measures under Sec. 425.502(a)(4), it will be pay for
reporting for 2 years before transitioning to pay for performance under
the phase-in schedule indicated in Table 36 of the proposed rule (81 FR
46421-46422). At this time, we do not anticipate providing quarterly
quality measure updates, because we only calculate the measure
annually; however, we will continue to consider whether it would be
feasible to do so. Further, we believe it is appropriate to use this
measure at the ACO-level to assess ACO performance. ACOs are required
to improve the quality and cost of the care of the fee-for-service
patient population assigned to them. In order to be eligible for
participation in the Shared Savings Program, the ACO must have at least
5,000 assigned beneficiaries. We therefore believe an ACO's patient
population is sufficiently large enough that it is appropriate to apply
this measure at the ACO-level. Additionally, ACO-43 is used in and
aligns with other CMS quality initiatives; it is currently reported for
purposes of the Physician Value-Modifier and has been used for
assessing physician performance and was finalized as an informational
measure under the QPP final rule with comment period. We have an
overarching belief in the importance of collecting information
regarding the prevalence of preventable conditions and readmissions and
providing this information to clinicians to assist them in developing
targeted care improvement processes. To support this goal and to align
with other CMS quality initiatives, we believe it is appropriate to
include ACO #43 in the ACO quality measure set.
Comment: We received several additional comments regarding the
quality measure set that were not directly related to our proposals. A
few commenters suggested CMS risk adjust the claims-based quality
measures to account for socioeconomic factors. Several commenters
stated their support for retaining the Influenza and Pneumonia
vaccination measures (ACO-14 and ACO-15). We also received quality
measure suggestions for future consideration, such as additional
immunization and transitions of care measures.
Response: We appreciate the support for measures that are currently
included in the quality measure set. We also thank commenters for their
other recommendations regarding quality reporting under the Shared
Savings Program. We will keep these suggestions and comments in mind
for future consideration.
Final Action: We appreciate the thoughtful comments submitted in
response to our proposed changes to the quality measure set. We are
finalizing the measure set changes (deletions, additions, and
replacement) as proposed for the reasons noted in our responses above
and to align with the Core Quality Measures Collaborative and the
measures that were finalized in the QPP final rule with comment period.
We note that in light of comments received on ACO-44 Use of Imaging
Studies for Low Back Pain and its potential for low case sizes, we will
add this measure as proposed but will retain it as pay for reporting in
all 3 years of the ACO's agreement period. All other measures will be
phased in as proposed.
Table 42 lists the Shared Savings Program quality measure set that
will be used to assess quality performance starting with the 2017
performance year including the new measures adopted in this final rule.
Each measure that is indicated as a new measure will be assessed as a
pay for reporting measure for the 2017 and 2018 performance years.
After that, the measure will be assessed based on the phase-in schedule
noted in Table 42.
As a result of these proposed measure changes, the four domains
will include the following number of quality measures (See Table 43 for
details.):
Patient/Caregiver Experience of Care-8 measures
Care Coordination/Patient Safety-10 measures
Preventive Health-8 measures

[[Page 80488]]

At Risk Population-5 measures (3 individual measures and a
2-component diabetes composite measure)
Table 43 provides a summary of the number of measures by domain and
the total points and domain weights that will be used for scoring
purposes under the changes to the quality measure set adopted in this
final rule.

Table 42--Measures for Use in the Establishing Quality Performance Standard That ACOs Must Meet for Shared Savings Starting With the 2017 Performance
Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pay for performance phase in
NQF #/measure Method of data R--reporting P--performance
Domain ACO measure # Measure title New measure steward submission -----------------------------
PY1 PY2 PY3
--------------------------------------------------------------------------------------------------------------------------------------------------------
AIM: Better Care for Individuals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience.. ACO-1............ CAHPS: Getting ............... NQF #0005 AHRQ... Survey........... R P P
Timely Care,
Appointments,
and Information.
ACO-2............ CAHPS: How Well ............... NQF #0005 AHRQ... Survey........... R P P
Your Providers
Communicate.\37
\
ACO-3............ CAHPS: Patients' ............... NQF #0005 AHRQ... Survey........... R P P
Rating of
Provider.\2\
ACO-4............ CAHPS: Access to ............... NQF #N/A CMS/AHRQ Survey........... R P P
Specialists.
ACO-5............ CAHPS: Health ............... NQF #N/A CMS/AHRQ Survey........... R P P
Promotion and
Education.
ACO-6............ CAHPS: Shared ............... NQF #N/A CMS/AHRQ Survey........... R P P
Decision Making.
ACO-7............ CAHPS: Health ............... NQF #N/A CMS/AHRQ Survey........... R R R
Status/
Functional
Status.
ACO-34........... CAHPS: ............... NQF #N/A CMS/AHRQ Survey........... R P P
Stewardship of
Patient
Resources.
Care Coordination/ Patient ACO-8............ Risk- ............... Adapted NQF #1789 Claims........... R R P
Safety. Standardized, CMS.
All Condition
Readmission.
ACO-35........... Skilled Nursing ............... Adapted NQF #2510 Claims........... R R P
Facility 30-Day CMS.
All-Cause
Readmission
Measure (SNFRM).
ACO-36........... All-Cause ............... NQF#TBD CMS...... Claims........... R R P
Unplanned
Admissions for
Patients with
Diabetes.
ACO-37........... All-Cause ............... NQF#TBD CMS...... Claims........... R R P
Unplanned
Admissions for
Patients with
Heart Failure.
ACO-38........... All-Cause ............... NQF#TBD CMS...... Claims........... R R P
Unplanned
Admissions for
Patients with
Multiple
Chronic
Conditions.
ACO-43........... Ambulatory X AHRQ............. Claims........... R P P
Sensitive
Condition Acute
Composite (AHRQ
Prevention
Quality
Indicator (PQI)
#91).
ACO-11........... Use of certified X NQF #N/A CMS..... As finalized R P P
EHR technology. under the QPP.
ACO-12........... Medication X NQF #0097 CMS.... CMS Web Interface R P P
Reconciliation
Post-Discharge.
ACO-13........... Falls: Screening ............... NQF #0101 NCQA... CMS Web Interface R P P
for Future Fall
Risk.
ACO-44........... Use of Imaging X NQF #0052 NCQA... Claims........... R R R
Studies for Low
Back Pain.
--------------------------------------------------------------------------------------------------------------------------------------------------------
AIM: Better Health for Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Preventive Health............. ACO-14........... Preventive Care ............... NQF #0041 AMA- CMS Web Interface R P P
and Screening: PCPI.
Influenza
Immunization.
ACO-15........... Pneumonia ............... NQF #0043 NCQA... CMS Web Interface R P P
Vaccination
Status for
Older Adults.
ACO-16........... Preventive Care ............... NQF #0421 CMS.... CMS Web Interface R P P
and Screening:
Body Mass Index
(BMI) Screening
and Follow Up.
ACO-17........... Preventive Care ............... NQF #0028 AMA- CMS Web Interface R P P
and Screening: PCPI.
Tobacco Use:
Screening and
Cessation
Intervention.
ACO-18........... Preventive Care ............... NQF #0418 CMS.... CMS Web Interface R P P
and Screening:
Screening for
Clinical
Depression and
Follow-up Plan.
ACO-19........... Colorectal ............... NQF #0034 NCQA... CMS Web Interface R R P
Cancer
Screening.
ACO-20........... Breast Cancer ............... NQF #2372 NCQA... CMS Web Interface R R P
Screening.
ACO-42........... Statin Therapy ............... NQF #N/A CMS..... CMS Web Interface R R R
for the
Prevention and
Treatment of
Cardiovascular
Disease.

[[Page 80489]]

Clinical Care for At Risk ACO-40........... Depression ............... NQF #0710 MNCM... CMS Web Interface R R R
Population--Depression. Remission at
Twelve Months.
Clinical Care for At Risk ACO-27........... Diabetes ............... NQF #0059 NCQA CMS Web Interface R P P
Population--Diabetes. Composite (All (individual
or Nothing component).
Scoring): ACO-
27: Diabetes
Mellitus:
Hemoglobin A1c
Poor Control.
ACO-41........... ACO-41: ............... NQF #0055 NCQA CMS Web Interface R P P
Diabetes: Eye (individual
Exam. component).
Clinical Care for At Risk ACO-28........... Hypertension ............... NQF #0018 NCQA... CMS Web Interface R P P
Population--Hypertension. (HTN):
Controlling
High Blood
Pressure.
Clinical Care for At Risk ACO-30........... Ischemic ............... NQF #0068 NCQA... CMS Web Interface R P P
Population--Ischemic Vascular Vascular
Disease. Disease (IVD):
Use of Aspirin
or Another
Antithrombotic.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 43--Number of Measures and Total Points for Each Domain Within the Quality Performance Standard Starting
With the 2017 Performance Year
----------------------------------------------------------------------------------------------------------------
Number of
Domain individual Total measures for Total possible Domain weight
measures scoring purposes points (percent)
----------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience.......... 8 8 individual survey 16 25
module measures.
Care Coordination/Patient Safety...... 10 10 measures, including 22 25
double-weighted EHR
measure.
Preventive Health..................... 8 8 measures.............. 16 25
At-Risk Population.................... 5 3 individual measures, 8 25
plus a 2-component
diabetes composite
measure that is scored
as one measure.
-------------------------------------------------------------------------
Total in all Domains.............. 31 30...................... 62 100
----------------------------------------------------------------------------------------------------------------

b. Improving the Process Used To Validate ACO Quality Data Reporting
(1) Background
In the November 2011 final rule, we finalized a proposal to retain
the right to validate the data ACOs enter into the Web Interface (76 FR
67893 through 67894). This validation process, referred to as the
Quality Measures Validation audit, was based on the process used in
Phase I of the Physician Group Practice (PGP) demonstration. The policy
was finalized at Sec. 425.500(e). In this audit process, CMS selects a
subset of Web Interface measures, and selects a random sample of 30
confirmed and completely reported beneficiaries for each measure in the
subset. The ACO provides medical records to support the data reported
in the Web Interface for those beneficiaries. A measure-specific audit
performance rate is then calculated using a multi-phased audit process:
---------------------------------------------------------------------------

\37\ The quality measure title has been updated to ``Providers''
and is not only referencing ``Doctors.''
---------------------------------------------------------------------------

Phase 1: Eight randomly selected medical records for each
audited measure are reviewed to determine if the medical record
documentation supports what was reported (that is, a match). If all
records reviewed support what was reported, the audit ends. If any
records do not support what was reported (that is, a mismatch), the
audit process continues in a second phase for any measure with a
mismatch identified.
Phase 2: The remaining 22 medical records are reviewed for
any measure that had a mismatch identified in Phase 1. If less than 90
percent of the medical records provided for a measure support what was
reported, the audit process continues to Phase 3.
Phase 3: For each measure with a match rate less than 90
percent, CMS provides education to the ACO about how to correct
reporting and the ACO is given an opportunity to resubmit the
measure(s) in question.
If at the conclusion of the third phase there is a discrepancy
greater than 10 percent between the quality data reported and the
medical records provided during the audit, the ACO will not be given
credit for meeting the quality target for any measure(s) for which the
mismatch rate exists.
As we explained in the proposed rule, since publication of the
initial program rules in 2011, we have gained experience in conducting
audits and believe that certain modifications to our rules should be
made in order to increase the statistical rigor of the audit
methodology, streamline audit operations, and more closely align the
Quality Measures Validation audit used in Shared Savings Program audits
with other CMS quality program audits including those performed in the
Physician Quality Reporting Program and the Hospital Inpatient and
Outpatient Quality Reporting programs. We therefore proposed four
improvements to our audit process that would address the number of
records to be reviewed per measure, the number of audit phases, the
calculation of an audit match rate and the consequences if the audit
match rate falls below 90 percent.
(2) Proposals
First, we proposed to increase the number of records audited per
measure to achieve a high level of confidence that the true audit match
rate is within

[[Page 80490]]

5 percentage points of the calculated result. The November 2011 final
rule indicated that CMS would review as few as 8 records (Phase 1 only)
or as many as 30 records (Phase 1 and 2) per audited measure. With this
phased methodology, the total number of records reviewed for each ACO
varies (range of 40 to 150 records per audited ACO during the
Performance Year 2014 audit). A sample size analysis found that the
number of reviewed records needs to increase in order to provide the
desired high level of confidence that the audited sample is
representative of the ACO's quality reporting performance. We noted
that the precise number of records requested for review would
necessarily vary, depending on the desired confidence level, the number
of measures audited, and the expected match rate. Therefore, we did not
propose a specific number of records that would be requested for
purposes of ACO quality validation audits in the future. However, based
on an analysis using the poorest expected match rate, the highest
degree of confidence and an estimated number of measures to be audited,
we explained we did not anticipate more than 50 records would be
requested per audited measure.
Second, we proposed to modify our regulations in order to conduct
the quality validation audit in a single step rather than the current
multi-phased process described at Sec. 425.500(e)(2). We proposed to
use a more streamlined approach in which all records selected for audit
would be reviewed in a single step and some activities currently
conducted in phase 3 would be removed from the audit process entirely
while others would instead be addressed at the conclusion of the audit.
During the proposed single step, we stated we would review all
submitted medical records and calculate the match rate. We anticipated
that the education we currently provide to ACOs and the opportunity for
ACOs to explain the mismatches that occur in Phase 3 of the current
process would continue, but would occur at the conclusion of the audit.
We stated that under the proposal, there would not be an the
opportunity for ACOs to correct and resubmit data for any measure with
a >10 percent mismatch because we have learned through our experience
with program operations that resubmission of CMS Web Interface measure
data after the close of the CMS Web Interface is not feasible. Instead,
we proposed that an ACO's quality score would be affected by an audit
failure as described below, without requiring re-opening of the CMS Web
Interface. We stated we believed that this single step process would
allow us to maintain the desired level of confidence that the true
audit match rate is within 5 percentage points of the calculated result
and to complete the audit in a timely manner. Therefore, we proposed to
remove the provision at Sec. 425.500(e)(2) that requires 3 phases of
medical record review. In so doing, we proposed to redesignate Sec.
425.500(e)(3) as Sec. 425.500(e)(2).
Third, we proposed to revise the redesignated provision at Sec.
425.500(e)(2) in order to provide for an assessment of the ACO's
overall audit match rate across all measures, instead of assessing the
ACO's audit mismatch rate at the measure level. Specifically, we
proposed to calculate an overall audit match rate which would be
derived by dividing the total number of audited records that match the
information reported in the Web Interface by the total number of
records audited. This would be a change from the current audit
performance calculation methodology, which calculates a measure
specific mismatch rate. We stated that we believe making this change
would be necessary to minimize the number of records that must be
requested in order to achieve the desired level of statistical
certainty as described in the first proposal discussed in this section.
Our analysis suggests that we would have to request a much larger
number of records (approximately 200 per measure) from the ACO during a
quality validation audit of individual measures to achieve a 90 percent
confidence interval for each measure. In addition, combining all
records to calculate an overall audit match rate is less subject to
variability based on the specific subset of measures chosen for audit
each year and better aligns with the methodology used by other CMS
quality program audits.
Fourth, we proposed to revise the redesignated provision at Sec.
425.500(e)(2), to indicate that if an ACO fails the audit (that is, has
an overall audit match rate of less than 90 percent), the ACO's overall
quality score would be adjusted proportional to its audit performance.
Currently, our regulation at Sec. 425.500(e)(3) states that if, at the
conclusion of the audit process there is a discrepancy greater than 10
percent between the quality data reported and the medical records
provided, the ACO will not be given credit for meeting the quality
target for any measures for which this mismatch rate exists. In light
of our proposed modifications to the quality validation audit process
above in which we proposed to assess and validate the ACO's performance
overall rather than the ACO's performance on each measure, we explained
that we believe a modification to this requirement would be necessary
to reflect an overall adjustment. Therefore, we proposed to modify the
provision at newly redesignated Sec. 425.500(e)(2) to state that if an
ACO fails the audit (that is, has an audit match rate of less than 90
percent), the ACO's overall quality score will be adjusted proportional
to the ACO's audit performance. The audit-adjusted quality score would
be calculated by multiplying the ACO's overall quality score by the
ACO's audit match rate. For example, if an ACO's quality score is 75
percent and the ACO's audit match rate is 80 percent, the ACO's audit-
adjusted quality score would be 60 percent. The audit-adjusted quality
score would be the quality score that is used to determine the
percentage of any earned savings that the ACO may share or the
percentage of any losses for which the ACO is accountable.
Finally, we proposed to add a new requirement at Sec.
425.500(e)(3) that in addition to the adjustment to the ACO's overall
quality score, any ACO that has an audit match rate of less than 90
percent, may be required to submit a corrective action plan (CAP) under
Sec. 425.216 for CMS approval. In the CAP, the ACO may be required to
explain the cause of its audit performance and how it plans to improve
the accuracy of its quality reporting in the future. In addition, we
explained that CMS maintains the right, as described in Sec.
425.500(f), to terminate or impose other sanctions on any ACO that does
not report quality data accurately, completely or timely.
We invited comment on the proposed improvements to the process used
to validate ACO quality data reporting.
The following is a summary of the comments we received regarding
the proposed improvements to the process used to validate ACO quality
data reporting.
Comment: Most commenters supported our proposals to improve and
better streamline the process for validating the accuracy of data
reported through the CMS web interface and to use audit results to
adjust the ACO's overall quality performance score. Few commenters
opposed the proposed changes to the audit because they like the current
process that includes multiple phases of review and is focused on
performance on specific measures. Some commenters raised general
concerns regarding the administrative burden for ACOs and providers and
suppliers who are selected for the audit and must submit records for
review. A couple of

[[Page 80491]]

commenters recommended delaying implementation of the new process until
a single web interface measures information document is available or to
allow ACOs additional time to adjust to the proposed changes to the
process for conducting the quality validation audits.
Response: We agree with commenters on the importance of validating
the accuracy of data reported through the web interface. The accuracy
of the reported data is important because it is used by us to conduct
certain activities, such as determining shared savings and shared
losses. The data is also made available to the public, and we
understand that ACOs and ACO providers/suppliers may use it to make
business decisions while beneficiaries may rely on it to determine
whether to work care from practitioners participating in an ACO. We
believe the proposed streamlined approach to quality validation audits
will minimize administrative burden associated with the audit for both
ACOs and CMS because it reduces the multiple phases of documentation
submission contemplated under the existing process to a single phase of
supporting documentation submission.
Additionally, we appreciate stakeholder input on our operational
documents, such as the suggestion to create a single guidance document
that addresses the specifications for and requirements of web interface
measures reporting. Currently, educational materials about web
interface measures are found in several documents. In response to
earlier requests for the creation of a single document, we have been
working closely with our colleagues who are responsible for the CMS web
interface to develop educational documents that would streamline the
information available to all web interface reporters, including ACOs.
We intend to continue to work to improve these communications and
materials to assist ACOs in their preparation for quality measures
submission. However, we believe that information currently available to
ACOs, in addition to the support we provide through our help desks,
webinars, and other methods of communication as noted below, is
sufficient to ensure ACOs' understanding of and compliance with quality
measure submission requirements. We therefore will not delay
implementation of the new streamlined audit process and will use it
beginning in spring 2017 to validate data received from ACOs for the
2016 performance year.
Comment: Some commenters requested more information on the number
of measures that would be selected for the audit or suggested that ACOs
have an opportunity to correct and resubmit data during the audit
process. Some commenters suggested CMS include an appeal process,
because of the audit's potential impact on an ACO's overall quality
score and on the calculation of shared savings. A few commenters
pointed out there is a difference between ACOs selected for audit due
to data anomalies and those that are selected randomly and that these
groups should be treated differently. One commenter noted that innocent
mistakes can be made by those uploading data to CMS systems and that
rather than penalizing the ACO there should be an opportunity for the
ACO to correct such mistakes. Additionally, while some commenters
agreed with the 90 percent match rate, others recommended using a lower
confidence interval.
Response: To streamline the process, we proposed to have a single
process with a single audit step, regardless of the reason an ACO is
selected for the audit. The proposals were intended to streamline the
audit process, provide audit feedback to ACOs and validate the accuracy
of quality data in a timely manner that, in turn, permits timely
feedback and allows accurate information to be used in the
reconciliation of the ACO's performance for the prior year.
Incorporating an appeals process would severely delay ACO
reconciliation, and therefore, we do not agree that such a process
should be included. Additionally, we believe that establishing an
appeals process would be inconsistent with the statutory preclusion on
administrative and judicial review of the assessment of the quality of
care furnished by the ACO under section 1899(g) of the Act.
Nevertheless, we are sympathetic to comments noting that simple
mistakes can be made when reporting quality that, if given the
opportunity to be rectified, would not reflect poorly on the actual
quality of the care delivered by the ACO. We note, however, that the
CMS web interface provides a number of reports that ACOs can access and
use to check their data entry in the CMS Web Interface to assist ACOs
in monitoring the accuracy of the quality data they submit. These
reports can help ACOs to identify and correct errors in their data
submission during the timeframe the CMS Web Interface is open for
quality data submission. Even so, we believe there may be instances
following an audit when CMS may need to employ some discretion related
to the adjustment of an ACO's overall quality score. For example, an
ACO may have experienced an error when reporting measures
electronically (for example, an error in mapping the extensible markup
language (XML) specifications) that affects all beneficiaries reported
on for a quality measure. In this instance, a mapping error could be
out of the control of the ACO that, based on an audit, demonstrated
that it had otherwise fulfilled our quality reporting requirements. In
the absence of flexibility not to apply an adjustment to the ACO's
overall quality score, such an ACO may be unfairly penalized.
Therefore, we are modifying our proposed policy. Specifically, we are
finalizing a policy under which CMS will adjust an ACO's overall
performance score to reflect audit findings when the ACO has an audit
mismatch rate of greater than 10 percent. However, we will retain
discretion not to apply this adjustment to the ACO's score in certain
unusual circumstances where it would be inappropriate to apply the
adjustment. We note that we do not intend to employ this discretion to
avoid adjusting an ACO's overall performance score in instances when
the ACO cannot produce adequate validation of the data submitted or did
not interpret the measure specifications correctly. For example, if we
determine that the ACO has not produced medical record information
sufficient to validate the data the ACO submitted to the web interface,
we would not exercise our discretion not to apply the adjustment to the
ACO's overall performance score based on results of the audit. We
believe it is reasonable to: (1) Hold ACOs accountable for the accuracy
of the data submitted according to information they validate from
medical record reviews; and (2) require ACOs to produce proof of such
accuracy in the event of an audit. Also, if we determine that the ACO
did not interpret the measure specifications correctly, we would apply
the adjustment to the ACO's overall performance based on audit results
because ACOs are provided numerous opportunities to receive assistance
from CMS before and during the quality measure submission process. For
example, ACOs may access measure specification documents that are
available on our Web site, contact the dedicated help desk, and attend
webinars that we hold to educate ACOs about measure specifications and
reporting requirements. Therefore, we believe that this modification of
our proposal addresses stakeholder

[[Page 80492]]

concerns while permitting us to perform timely quality validation
audits that hold ACOs accountable not only for the quality of the care
they provide but also for the accuracy of their quality reporting.
Final Action: For the reasons discussed above, we are finalizing
our proposed changes to the audit process with modification.
Specifically, we are finalizing a policy under which we will audit
enough medical records to achieve a 90 percent confidence interval;
conduct the audit in a single phase; and calculate an overall audit
performance rate. We are modifying our regulations in order to reflect
the new process of conducting the quality validation audit in a single
step by removing the provision at Sec. 425.500(e)(2) that requires 3
phases of medical record review. In so doing, we are redesignating
Sec. 425.500(e)(3) as Sec. 425.500(e)(2). We are also revising the
newly redesignated provision at Sec. 425.500(e)(2) in order to provide
for an assessment of the ACO's overall audit match rate across all
measures, instead of assessing the ACO's audit mismatch rate at the
measure level. For the reasons noted in our responses to comments
above, we are modifying our proposed policy in order to give CMS
discretion, in certain unusual circumstances, not to adjust the ACO's
overall quality score when the ACO has an audit mismatch rate of
greater than 10 percent. Specifically, we are revising the redesignated
provision at Sec. 425.500(e)(2), to indicate that if an ACO has an
overall audit match rate of less than 90 percent, absent unusual
circumstances, CMS will adjust the ACO's overall quality score
proportional to its audit performance. Thus, CMS will retain discretion
to avoid making the adjustment if circumstances warrant.
Finally, we are finalizing our proposal to add a new requirement at
Sec. 425.500(e)(3) that an ACO that has an audit match rate of less
than 90 percent may be required to submit a corrective action plan
(CAP) under Sec. 425.216 for CMS approval. In the CAP, the ACO would
be required to explain the reasons for the low audit match rate and how
it plans to improve the accuracy of its quality reporting in the
future. In addition, we maintain the right, as described in Sec.
425.500(f), to terminate or impose other sanctions on any ACO that does
not report quality data accurately, completely or timely. We will apply
these policies to the quality validation audits beginning in 2017 with
the quality validation audits of quality reporting for the 2016
performance year.
c. Technical Changes Related to Quality Reporting Requirements
In this section of the CY 2017 PFS proposed rule, we proposed
several technical changes to the quality performance standard that an
ACO must meet to be eligible to share in savings, as established in the
November 2011 final rule. Part of the determination of whether an ACO
has met the quality reporting standard in each year is dependent on the
ACO meeting the minimum attainment level for certain measures. We
discussed how the ``minimum attainment'' requirement has been
implemented to date and proposed a modification that we believe is more
consistent with our policies for assessing an ACO's performance over
time. Finally, we proposed to move references to compliance actions
from Sec. 425.502(d)(2)(ii) to a more appropriate provision at Sec.
425.316(c).
First, we proposed to make technical revisions to ensure
stakeholder understanding of the definition of the quality performance
standard. The quality performance standard is established under Subpart
F for each performance year (Sec. 425.502(a)). For the first
performance year of an ACO's first agreement period, the quality
performance standard is defined as complete and accurate reporting of
all quality measures. For each subsequent performance year, quality
measures phase in to pay for performance, and although the ACO must
continue to report all measures completely and accurately, the ACO will
also be assessed on performance based on the quality performance
benchmark and minimum attainment level of certain measures that are
designated as pay for performance. The quality performance standard
that applies to an ACO's final year in its first agreement period also
applies to each year of an ACO's subsequent agreement period (Sec.
425.502(a)(3)) (79 FR 67925 through 67926). ACOs must meet or exceed
the minimum quality performance standard in a given performance year to
be eligible to receive payments for shared savings (Sec. 425.100(b)).
Conversely, failure to meet the quality performance standard in a given
performance year makes ACOs ineligible to share in savings, even if
generated, and such ACOs may be subject to compliance actions.
In the proposed rule, we explained that our intent in the November
2011 final rule was to establish a single quality performance standard
that would apply for each performance year in which an ACO participates
in the program. Because the quality performance standard changes,
depending on the performance year, the ACO may be subject to multiple
quality performance standards over the course of its 3-year agreement
period. We stated that we recognize that some of the language used in
subsequent revisions to our regulations may have generated some
confusion related to this issue. We clarified that while there are
certain standards that must be met for each measure or in each domain,
there is one overall quality performance standard that must be met in
each performance year by an ACO. Therefore, we proposed to make
conforming changes to the regulations text to remove references to the
quality performance standard in contexts where it does not appear to
apply to the overall quality performance standard (particularly
Sec. Sec. 425.316(c)(2), 425.502(a)(4), and 425.502(d)(1)). We
proposed to retain certain references to multiple quality performance
standards, such as the reference at Sec. 425.100(b), because we
believe the use of the plural is appropriate in certain contexts as the
quality performance standard varies depending on the performance year
in question.
Second, we addressed the concept of the minimum attainment level
and its use in determining whether an ACO has met the quality
performance standard. As noted above, beginning in the second year of
an ACO's first agreement period, the quality performance standard is
met by complete and accurate reporting on all measures, but also
includes meeting the minimum attainment level on ``certain'' measures.
As provided at Sec. 425.502(b)(1), we designate a performance
benchmark and minimum attainment level for each measure. Pursuant to
Sec. 425.502(b)(3), the minimum attainment level is set at 30 percent
or the 30th percentile of the performance benchmark. In Sec.
425.502(c)(1) through (c)(2), we state that performance below the
minimum attainment level for a measure will receive zero points for
that measure and performance equal to or greater than the minimum
attainment level for a measure will receive points on a sliding scale
based on the level of performance. Finally, Sec. 425.502(d) outlines
quality performance requirements for the four domains, stating that the
ACO must report all measures in a domain and must score above the
minimum attainment level determined by CMS on 70 percent of the
measures in each domain. If the ACO fails to achieve the minimum
attainment level on at least 70 percent of the measures in a domain,
CMS will take compliance action. Additionally, the ACO must achieve the

[[Page 80493]]

minimum attainment level for at least one measure in each of the four
domains to be eligible to share in savings. In guidance, we have
interpreted the quality performance requirements for domains to apply
only to pay for performance measures because minimum attainment applies
only to ``certain'' measures according to the definition of the quality
performance standard in Sec. 425.502(a)(3), and we have interpreted
the reference to ``certain'' measures in Sec. 425.502(a)(2) to mean
pay for performance measures. In the proposed rule, we explained that,
as a result of this interpretation, we believe an inconsistency in the
application of the policy goals outlined in our November 2011 final
rule has arisen. In particular, we believe certain current policies are
inconsistent with our goal of holding ACOs to higher quality reporting
standards over time. Specifically, because measures are phased-in from
pay for reporting to pay for performance over the course of an ACO's
first 3-year agreement period, there are no pay for performance
measures during PY1 and fewer pay for performance measures in each
domain in PY2 compared to PY3. Thus, under our current interpretation
of the rules, it is not possible to take compliance actions against an
ACO in its first performance year for failure to achieve the minimum
attainment level on at least 70 percent of the measures in a domain
because there are no pay for performance measures on which to assess
performance on a domain. Additionally, because there are fewer pay for
performance measures in PY2 than in PY3, and because of our policy of
designating new measures as pay for reporting, it is more likely that a
compliance action would be taken against an ACO due to failure to meet
the minimum attainment level on 70 percent of the pay for performance
measures in a domain in PY2 than in PY3. We explained that, as a result
of this experience, we now believe it would be more consistent with our
policy goals to take all measures into account when determining whether
a compliance action should be taken against an ACO based on its quality
performance in one or more domains.
Therefore, we proposed to take all measures into account when
determining ACO performance at the domain level for purposes of
compliance actions. Additionally, we stated that we believe compliance
actions should be addressed at Sec. 425.316 rather than in the quality
reporting section, and therefore, we proposed to move the provisions
governing the specific performance levels at which a compliance action
would be triggered from Sec. 425.502 to Sec. 425.316.
The following is a summary of the comments we received regarding
the proposed technical changes related to the quality performance
standard and minimum attainment level.
Comment: We received few comments on the proposed technical
changes. Most commenters generally supported these proposals. However,
some commenters expressed concerns about including pay for reporting
measures in our assessment of whether the ACO could meet the minimum
attainment level on 70 percent of measures within a domain. For
example, one commenter seemed to believe that we had proposed that an
ACO must meet the 30th percent or percentile threshold for all
measures, including pay for reporting measures. One commenter expressed
concerns about whether an ACO would be able to meet the pay for
performance minimum attainment level on newly introduced measures, and
therefore, recommended not including pay for reporting measures in our
assessment of whether an ACO has met the minimum attainment level on 70
percent of measures in a domain. Commenters also requested that these
technical changes be disseminated to all ACOs.
Response: We thank commenters for their support of our proposed
policies and wish to clarify several points for those who expressed
concerns regarding the proposed changes. First, we emphasize that we
proposed to continue to define the ``minimum attainment level'' for pay
for performance measures at the level of the 30th percent or 30th
percentile. We also wish to clarify that we proposed to define the
``minimum attainment level'' for pay for reporting measures at the
level of complete and accurate reporting. In other words, the minimum
requirement for attainment on a particular measure is different
depending on whether the measure is designated as pay for reporting or
pay for performance. Because newly introduced measures are pay for
reporting for the first 2 years, the minimum attainment standard level
for new measures would be pay for reporting. Second, including all
measures in the domain (rather than including only the pay for
performance measures) in our assessment of whether the ACO has met the
minimum attainment level on 70 percent of the measures in the domain
has an end result of insulating many ACOs that would otherwise be
subject to a warning letter or CAP. Some domains have very few pay for
performance measures and poor performance on just one of those measures
increases the likelihood that the ACO will receive a warning letter or
CAP. It was not our intent to subject an ACO to compliance action based
on its poor performance on just one measure in a domain. Therefore,
including pay for reporting measures in this assessment limits the
issuance of warning letters and CAPs to only those ACOs that have
grossly underperformed in a domain by failing to meet the minimum
attainment level on at least 70 percent of the measures in a domain,
including measures that are designated as pay for reporting. Therefore,
we are finalizing this policy as proposed. We intend to include these
changes in the ``Medicare Shared Savings Program Quality Measurement
Methodology and Resources'' document posted on the Shared Savings
Program Portal where it will be available to all ACOs.
Final Action: We are finalizing the technical changes related to
the use of the term ``quality performance standard'' and the
application of the ``minimum attainment level'' to determine whether an
ACO has met the quality performance standard for a performance year as
proposed for the reasons discussed above and in the proposed rule.
Specifically, we are making the following modifications to our
regulations:
Revise introductory text at Sec. 425.502(a) to clarify
that the quality performance standard is the overall standard the ACO
must meet to qualify to share in savings.
Replace the word ``certain'' in Sec. 425.502(a)(2) and
(3) with ``all,'' so that the term ``minimum attainment level'' clearly
applies to both pay for reporting and pay for performance measures.
At Sec. 425.502(a)(4), make modifications to remove the
reference to the quality performance standard each time it appears to
avoid causing confusion between the standards for individual measures
and the overall quality performance standard.
At Sec. 425.502(b)(3), define ``minimum attainment
level'' for both pay for reporting and pay for performance measures. We
will set the minimum attainment level for pay for performance measures
at the 30th percent or 30th percentile of the quality performance
benchmark and for pay for reporting measures at the level of complete
and accurate reporting.
At Sec. 425.502(c)(2), revise the regulation text to
specify that only pay for performance measures are assessed on a
sliding scale.
At Sec. 425.502(c)(5), add a provision to specify that
pay for reporting measures earn the maximum number of

[[Page 80494]]

points for a measure when the minimum attainment level is met.
Modify Sec. 425.502(d) to refer generally to compliance
actions that may be taken for failure to meet quality requirements,
including low quality performance.
We are also modifying Sec. 425.316(c)(1) and (c)(2) to address the
specific levels of quality performance at which compliance action will
be triggered and to reference the single quality performance standard
that an ACO must meet in order to remain eligible to participate in the
Shared Savings Program.
d. Technical Change to Application of Flat Percentages for Quality
Benchmarks
As explained in greater detail in the CY 2017 PFS proposed rule, we
previously finalized a methodology to spread clustered measures when
setting quality benchmarks to promote a clinically meaningful
assessment of ACO quality. Specifically, we finalized a policy that CMS
would set quality benchmarks using flat percentages for a clustered
measure when the national FFS data results in the 60th percentile for
the measure are equal to or greater than 80.00 percent. We noted that
the methodology would not apply to measures whose performance rates are
calculated as ratios, for example, measures such as the two ACO
Ambulatory Sensitive Conditions Admissions and the All Condition
Readmission measures. We subsequently finalized a policy to address
``topped out'' measures by setting benchmarks using flat percentages
when the 90th percentile is equal to or greater than 95 percent.
Although similar to the ``cluster'' policy finalized earlier, we
included measures whose performance rates are calculated as ratios. We
believed this policy was appropriate because measures calculated and
reported as ratios may become topped out and we wanted to treat all
topped out measures consistently.
Since these policies were adopted, we have determined that
converting measures calculated and reported as ratios into benchmarks
expressed as percentiles and percentages creates confusion in the
interpretation of quality results and may yield results that are
contrary to the intended purpose of using flat percentages. As a
result, we proposed to no longer apply the flat percentage policy to
performance measures calculated as ratios. In addition, we proposed two
technical changes to address typographical errors in Sec.
425.502(a)(1), which contains a duplicative reference to CMS, and in
Sec. 425.502(b)(2)(ii), which contains an extra ``t'' at the end of
``percent.''
The following is a summary of the comments we received regarding
the proposed technical change to the application of flat percentages
for quality benchmarks.
Comment: We received three comments on this proposal. All were
supportive of the proposed technical change. One commenter requested
that CMS clarify which measures are calculated as percentages versus
ratios.
Response: We thank the commenters for their support of this
proposed technical change. When we release the quality measure
benchmarks for the 2017 performance year as part of our operational
documents and guidance, we will indicate which measures are calculated
as ratios, and therefore, exempt from our policies with respect to the
use of flat percentages.
Final Action: We are finalizing our proposed technical change to
the use of flat percentages to set quality performance benchmarks.
Specifically, we will no longer use flat percentages to set the quality
performance benchmark for quality performance measures calculated as
ratios. Such measures will be clearly identified in operational
documents posted on our Web site. In addition, we are finalizing the
two technical changes to address typographical errors in Sec.
425.502(a)(1), which contains a duplicative reference to CMS, and in
Sec. 425.502(b)(2)(ii), which contains an extra ``t'' at the end of
``percent.''
e. Incorporation of Other Reporting Requirements Related to the PQRS
The Affordable Care Act gives the Secretary authority to
incorporate reporting requirements and incentive payments from certain
Medicare programs into the Shared Savings Program, and to use
alternative criteria to determine if payments are warranted.
Specifically, section 1899(b)(3)(D) of the Act affords the Secretary
discretion to incorporate reporting requirements and incentive payments
related to the physician quality reporting initiative (PQRI), under
section 1848 of the Act, including such requirements and such payments
related to electronic prescribing, electronic health records, and other
similar initiatives under section 1848, and permits the Secretary to
use alternative criteria than would otherwise apply under section 1848
of the Act for determining whether to make such payments. Under this
authority, in the November 2011 final rule establishing the Shared
Savings Program, we incorporated certain reporting requirements and
payment rules related to the PQRS into the Shared Savings Program at
Sec. 425.504 for ``eligible professionals'' (EPs) who bill under the
TIN of an ACO participant within an ACO. Thus, the Shared Savings
Program rules provide that EPs who bill under the TIN of an ACO
participant within an ACO may only participate under their ACO
participant TIN as a group practice under PQRS under the Shared Savings
Program for purposes of qualifying for a PQRS incentive (prior to 2015)
or avoiding the payment adjustment (starting in 2015). In other words,
the current regulations prohibit ACO participant TINs and the EPs
billing through those TINs from participating in PQRS outside of the
Shared Savings Program such that these entities may not independently
report for purposes of PQRS apart from the ACO.
An ACO, reporting on behalf of its EPs for purposes of PQRS, is
required to satisfactorily submit through the CMS web interface all of
the ACO GPRO measures that are part of the Shared Savings Program
quality performance standard. Under Sec. 425.504(c), for 2016 and
subsequent years, if an ACO fails to satisfactorily report all of the
ACO GPRO measures through the CMS web interface each EP who bills under
the TIN of an ACO participant within the ACO will receive a downward
adjustment, as described in Sec. 414.90(e) for that year. In the 2017
PFS proposed rule, we noted that the current regulations do not provide
any mechanism for these EPs to report separately or otherwise avoid the
downward payment adjustment if the ACO fails to satisfactorily report
on their behalf. We also summarized the reasons discussed in the
November 2011 final rule for not allowing EPs who bill under the TIN of
an ACO participant to report outside their ACO for purposes of PQRS.
Since publication of the November 2011 final rule, we have gained
experience with these policies and program operations, and now believe
there may be limited instances in which it would be appropriate to use
data that is reported by these EPs outside their ACO for purposes of
PQRS. Therefore, we proposed a change in policy in order to be able to
accept and use data that is separately reported outside the ACO by EPs
billing through the TIN of an ACO participant within an ACO for
purposes of PQRS under limited circumstances for the final 2 years of
PQRS before it sunsets and is replaced by the Quality Payment Program
(QPP). We stated that we continue to believe that in most cases it is
appropriate to assess EPs that

[[Page 80495]]

bill through the TIN of an ACO participant under the PQRS as a group
practice because as noted in the November 2011 final rule, the Shared
Savings Program is concerned with measuring the quality of care
furnished to an assigned population of FFS beneficiaries by the ACO, as
a whole, and not that of individual ACO providers/suppliers. We
explained that we believe this framework promotes clinical integration
among the ACO providers/suppliers, which is an important aspect of the
Shared Savings Program. In addition, it is consistent with the
requirement under Sec. 425.108(d) that each ACO provider/supplier must
demonstrate a meaningful commitment to the mission of the ACO to ensure
its likely success. Because an ACO cannot be successful in the Shared
Savings Program without satisfying the quality reporting requirements,
we believe a meaningful commitment by ACO providers/suppliers to the
mission of the ACO includes assisting with and engaging in annual
quality reporting through the ACO. Further, ACO reporting reduces
burden for those in small or solo practices, and places a focus on
population health by encouraging care coordination by ACO providers/
suppliers to improve the health of the broader patient population for
which they are responsible. Finally, we believe that such group
reporting is consistent with group reporting under various other CMS
initiatives, and therefore, we stated that we did not intend to remove
the requirement that ACOs report on behalf of the EPs who bill under
the TIN of an ACO participant. As a corollary, we stated our intent to
continue to use ACO data preferentially for purposes of assessing or
determining an EP's quality performance for purposes of programs such
as PQRS or, by extension, the VM.
However, we went on to explain in the proposed rule that we believe
that when an ACO does not satisfactorily report for purposes of PQRS,
it may be appropriate to accept and use data that is reported outside
the ACO. In order to be able to accept and use data reported outside
the ACO for purposes of PQRS, we noted that we must modify the
provision at Sec. 425.504 prohibiting EPs that bill under the TIN of
an ACO participant in an ACO from reporting separately for purposes of
PQRS. We therefore proposed to modify Sec. 425.504 to lift the
prohibition on separate reporting for purposes of the 2017 and 2018
PQRS payment adjustment. We explained that we believe this change to
our program rules was necessary for several reasons.
First, we stated that we believe it is necessary to protect EPs
that participate in ACOs that fail to satisfactorily report all of the
ACO GPRO measures. Although 98 percent of ACOs successfully complete
required quality reporting annually, there have been a few instances
where an ACO has failed to report all of the required measures, for
example, where an ACO has terminated its participation in the Shared
Savings Program and did not quality report on behalf of the EPs that
bill under the TIN of an ACO participant at the end of the performance
year as required under our close-out procedures. In other instances,
some ACOs continued to participate in the Shared Savings Program but
failed to complete quality reporting in a timely manner. In these
instances, the lack of complete quality reporting by the ACO translated
into a failure for the EPs within the ACO to receive a PQRS incentive
(or to avoid the PQRS downward adjustment) for that year.
Second, PQRS has transitioned away from providing incentive
payments to applying only downward payment adjustments to payments
under the Medicare Physician Fee Schedule, making it even more
important for EPs to ensure they comply with the reporting requirements
for PQRS. Under the current rules, EPs who bill under the TIN of an ACO
participant within an ACO must ultimately rely on the ACO to report on
their behalf. These EPs are only able to encourage and facilitate ACO
reporting, but lack the ability to ensure that the ACO satisfactorily
reports in order to prevent application of the payment adjustment. The
proposed change to allow EPs to report separately would provide them a
mechanism over which they have direct control to ensure satisfactory
reporting occurs. Additionally, we noted that because there are no more
payment incentives under the PQRS, there is no longer any concern that
an EP may inadvertently receive duplicative PQRS incentive payments
from CMS. We address the specific issues and policies related to the
use of data reported by EPs apart from an ACO for purposes of avoiding
the PQRS payment adjustment for payment years 2017 and 2018 in section
III.H. of this final rule.
Third, under the VM, groups and solo practitioners that bill under
the TIN of an ACO participant are evaluated under a quality tiering
methodology and could qualify for an upward payment adjustment if the
ACO satisfactorily reports on their behalf. However, if the ACO does
not satisfactorily report quality data as required under Sec. 425.504
then groups and solo practitioners that bill under the TIN of an ACO
participant fall into Category 2 for the VM and are subject to a
downward payment adjustment. Our proposed and final policies for how
quality data reported by EPs billing under the TINs of ACO participants
that is reported apart from the ACO will be used for purposes of
avoiding the VM downward payment adjustment for 2017 and 2018 are
discussed in section III.L.3.b of this final rule.
For the reasons noted above, we stated that we believed it would be
appropriate to retain the provisions under Sec. 425.504 that require
the ACO to report all of the ACO GPRO measures to satisfactorily report
on behalf of the EPs who bill under the TIN of an ACO participant for
purposes of the PQRS payment adjustment; however, we proposed to modify
the provisions that prohibit EPs that bill under the TIN of an ACO
participant from reporting apart from the ACO. Specifically, we
proposed to add a redesignated and revised paragraph at Sec.
425.504(d) to address the requirement that the ACO report on behalf of
the eligible professionals who bill under the TIN of an ACO participant
for purposes of the 2017 and 2018 PQRS payment adjustment. Under this
revised provision the prohibition on separate quality reporting for
purposes of the PQRS payment adjustment for 2017 and 2018 would be
removed. We also proposed to make a technical change to Sec. 425.504
to move existing Sec. 425.504(d) to Sec. 425.504(c)(5) because the
intent of this provision was to parallel the language of Sec.
425.504(b)(6) for purposes of the payment adjustment for 2016 and
subsequent years. We reiterated our intent that data reported by an ACO
would continue to be preferentially used for purposes of other CMS
initiatives that rely on such data, including the PQRS and the VM. If
an EP who bills under the TIN of an ACO participant chooses to report
apart from the ACO, the EP's data may be used for purposes of PQRS and
VM only when complete ACO reported data is not available. Additionally,
we noted that under the Shared Savings Program, only the quality data
reported by the ACO as required under Sec. 425.500 would be used to
assess the ACO's performance under the Shared Savings Program. In other
words, quality data submitted separately from the ACO would not be
considered under the Shared Savings Program. We requested comments on
this proposal.
The following is a summary of the comments we received regarding
our proposed changes to the reporting requirements under the Shared
Savings Program related to PQRS.

[[Page 80496]]

Comment: Commenters supported the proposal to allow EPs to report
apart from the ACO to meet PQRS reporting requirements and to avoid the
PQRS adjustment. Additionally, commenters supported maintaining this
policy as CMS transitions to the Quality Payment Program (QPP). Several
commenters raised issues related to PQRS proposals discussed in section
III.H related to reporting requirements and timing, and suggested
alternatives to allow EPs who bill under the TIN of an ACO participant
to avoid the PQRS downward payment adjustment when their ACO fails to
report. For example, several commenters were concerned about the effort
and expense that would be incurred by EPs to report apart from their
ACO without first knowing if the ACO had satisfactorily reported. A few
commenters recommended that EPs be held harmless and not incur a
downward payment adjustment under PQRS or the VM if their ACO failed to
report.
Response: We appreciate commenters' support for our proposal to
modify program rules to permit EPs to report quality apart from an ACO.
Additional comments having to do with EP reporting for purposes of PQRS
and the VM are addressed in sections III.H and III.L.3.b of this final
rule, respectively. Comments related to timing and submission of
quality data apart from the ACO for purposes of the QPP have been
shared with the appropriate staff.
Final Action: We are finalizing our proposal to allow EPs that bill
under the TIN of an ACO participant to report for purposes of PQRS
apart from the ACO. For the reasons noted above, we are also finalizing
our proposal to add a redesignated and revised paragraph at Sec.
425.504(d) to address the requirement that the ACO report on behalf of
the eligible professionals who bill under the TIN of an ACO participant
for purposes of the 2017 and 2018 PQRS payment adjustment. We are also
finalizing our proposal to make a technical change to Sec. 425.504 to
move existing Sec. 425.504(d) to Sec. 425.504(c)(5) because the
intent of this provision was to parallel the language of Sec.
425.504(b)(6) for purposes of the payment adjustment for 2016 and
subsequent years. Details regarding the requirements for reporting
quality data apart from the ACO and the use of such quality data for
purposes of PQRS and the VM are addressed in sections III.H. and
III.L.3.b. of this final rule, respectively. We reiterate, however,
that these revisions to our regulations in order to allow quality data
to be submitted apart from the ACO and for such quality data to be used
under other programs (such as PQRS or the VM) does not alter or impact
our assessment of an ACO's quality under the Shared Savings Program.
Only quality data reported by the ACO as required under Sec. 425.500
will be used to assess the ACO's performance under the Shared Savings
Program.
f. Alignment With the Quality Payment Program (QPP)
1. Background and Introduction to the Quality Payment Program
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)
(Pub. L. 114-10, enacted April 16, 2015), amended title XVIII of the
Act to repeal the Medicare sustainable growth rate (SGR) and strengthen
Medicare access by improving physician payments and making other
improvements. The statute established the Merit-Based Incentive Payment
System (MIPS), a new program for certain Medicare-participating
practitioners. MIPS consolidates components of three existing programs,
the PQRS, the Physician Value Modifier (VM), and the Medicare
Electronic Health Record (EHR) Incentive Program for EPs. The statute
also established incentives for participation in certain alternative
payment models (APMs). On April 27, 2016, the Department of Health and
Human Services (HHS) issued a proposed rule to implement key provisions
of the MACRA and establish a new Quality Payment Program (QPP)
(Medicare Program; Merit-Based Incentive Payment System (MIPS) and
Alternative Payment Model (APM) Incentive under the Physician Fee
Schedule, and Criteria for Physician-Focused Payment Models (81 FR
28162 through 28586) (the QPP proposed rule)). On October 19, 2016, HHS
issued the final rule with comment period establishing the Quality
Payment Program (QPP final rule with comment period). (The rule will
publish in the November 4, 2016 Federal Register and can be accessed at
https://qpp.cms.gov/education.) The Quality Payment Program (QPP)
replaces a patchwork system of Medicare reporting programs with a
flexible system that allows practitioners to choose from two paths that
link quality to payments: The Merit-Based Incentive Payment System
(MIPS) and the APM incentive participation in Advanced Alternative
Payment Models (APMs). MIPS and the APM incentive will impact
practitioner payments beginning in payment year 2019 based on 2017
reporting. MIPS is a new program that combines parts of the Physician
Quality Reporting System (PQRS), Value Modifier (VM) and Medicare
Electronic Health Record (EHR) Incentive Program into a single program
in which eligible clinicians (ECs) will be measured over 4 categories
which include quality, resource use, clinical practice improvement, and
advancing care information. The rulemaking implementing the QPP
specifically addresses ECs that participate in APMs and Advanced APMs,
such as the Shared Savings Program. Specifically, for ECs participating
in APMs, the QPP final rule with comment period:
Establishes criteria for reporting under each of the 4
categories. For example, the QPP final rule with comment period
establishes a policy for the quality performance category to use
quality information submitted by the ACO through the CMS Web interface
to assess each EC billing under the TIN of an ACO participant. To
assess performance in the category of advancing care information
performance category for ECs billing under the TIN of an ACO
participant, we will aggregate EC-reported data to calculate an ACO
score which will be applied to each participating EC. Under the QPP
final rule with comment period, this reporting by ECs will be
accomplished by each ACO participant TIN reporting on the advancing
care information as specified in Sec. 414.1375(b). We note that under
the QPP final rule with comment period, ECs for whom a sufficient
percentage of payments for covered professional services, or a
sufficient percentage of patients, are attributable to services
furnished through an Advanced APM for a year will be qualifying APM
participants (QPs) for the year. In addition to earning a 5 percent APM
Incentive Payment, QPs are exempt from the MIPS reporting requirements
and payment adjustment for the year.
Defines an Advanced APM as one that meets several criteria
including requiring participants to use certified EHR technology
(CEHRT). Under the QPP final rule with comment period, only Tracks 2
and 3 of the Shared Savings Program have the potential to meet all
criteria necessary for designation as an Advanced APM. In order for
Tracks 2 and 3 of the Shared Savings Program to meet the CEHRT
requirement for Advanced APMs, the Shared Savings Program must hold
ACOs accountable for their participating eligible clinicians' use of
CEHRT by applying a penalty or reward based on the degree of use of
CEHRT (such as the percentage of EPs that are using CEHRT or the care
coordination or other activities performed using CEHRT).
In the 2017 PFS proposed rule, we reviewed the Shared Savings
Program

[[Page 80497]]

rules and identified several modifications to program rules that we
believed needed to be made in order to support and align with the QPP.
These modifications included the following:
Revisions to Sec. Sec. 425.504 and 425.506 to sunset
Shared Savings Program alignment with PQRS and the EHR Incentive
Program starting with quality reporting period 2017 (corresponding to
payment year 2019).
Addition of new paragraph Sec. 425.506(e) and section
Sec. 425.508 to align with the proposed Quality Payment Program,
including rules addressing annual assessment of the use of CEHRT by ECs
participating in ACOs and for ACO reporting of certain quality measures
to satisfy the quality performance category on behalf of the eligible
clinicians who bill under the TIN of an ACO participant.
Modifications to the EHR measure title and specifications
necessary to align with the proposed QPP criteria for determining
Advanced APM status, including scoring requirements for the limited
circumstances when the measure is designated as pay for reporting.
2. Proposals Related to Sunsetting PQRS and EHR Incentive Program
Alignment and Alignment With APM Reporting Requirements Under the
Quality Payment Program
The Shared Savings Program has established rules at Sec. Sec.
425.504 and 425.506 incorporating reporting requirements related to
PQRS and the EHR Incentive Program. The current provision at Sec.
425.504(c), addresses the PQRS payment adjustment for 2016 and
subsequent years. Under current Shared Savings Program rules, EPs who
bill under the TIN of an ACO participant within an ACO may only
participate under their ACO participant TIN as a group practice under
the PQRS Group Practice Reporting Option for purposes of the PQRS
payment adjustment under the Shared Savings Program. ACOs must submit
all of the ACO GPRO measures to satisfactorily report on behalf of
their eligible professionals for purposes of the PQRS payment
adjustment. If an ACO does not satisfactorily report, each EP
participating in the ACO receives a payment adjustment under PQRS. As
discussed in this final rule, we are finalizing a policy that will
allow EPs who bill under the TIN of an ACO participant within an ACO to
report separately from their ACO for purposes of the PQRS payment
adjustment for 2017 and 2018.
At Sec. 425.506, we address alignment with the EHR Incentive
Program. Specifically, at Sec. 425.506(a), we state that ACOs, ACO
participants, and ACO providers/suppliers are encouraged to develop a
robust EHR infrastructure, which aligns with our eligibility criteria
under Sec. 425.112 that require ACOs to define care coordination
processes, which may include the use of enabling technologies such as
CEHRT. At Sec. 425.506(b) and (c) we state that the quality measure
regarding EHR adoption is measured based on a sliding scale and that it
is weighted twice that of any other measure for scoring purposes and
determining compliance with quality performance requirements for
domains. To align with the EHR incentive program we state in Sec.
425.506(d), that EPs participating in an ACO under the Shared Savings
Program satisfy the CQM reporting component of meaningful use for the
Medicare EHR Incentive Program when the EP extracts data necessary for
the ACO to satisfy the quality reporting requirements under the Shared
Savings Program from CEHRT and when the ACO reports the ACO GPRO
measures through a CMS Web interface. EPs are responsible for meeting
the rest of the EHR incentive program requirements apart from the ACO.
As noted above, the VM, PQRS and the EHR incentive programs are
sunsetting and the last quality reporting period under these programs
will be 2016, which will impact payments in 2018. Quality reporting
under the QPP, as proposed and subsequently finalized, will begin in
2017 for payment year 2019. In order to align with the policies
proposed in the QPP proposed rule (and that were subsequently finalized
in the QPP final rule with comment period), we proposed to amend
Sec. Sec. 425.504 and 425.506 to indicate that these reporting
requirements would apply to ACOs and their EPs through the 2016
performance year. Specifically, at Sec. 425.504(c) we proposed to
remove the phrase ``for 2016 and subsequent performance years'' each
time it appears and add in its place the phrase ``for 2016.'' As
discussed above, we proposed and are finalizing a technical change to
redesignate paragraph (d) as paragraph (c)(5) and then to add new
paragraph (d) to address the PQRS alignment rules for the 2017 and 2018
PQRS payment adjustment. Similarly, at Sec. 425.506, we proposed to
revise paragraph (d) to indicate that the last reporting year for the
EHR Incentive Program is 2016.
In addition, in the CY 2017 PFS proposed rule, we proposed to
require ACOs, on behalf of the ECs who bill under the TIN of an ACO
participant, to report quality measures through the CMS Web interface
in order to satisfy the QPP quality performance category. Currently,
ACOs are required under Sec. 425.504 to report certain quality
measures on behalf of the EPs who bill under the TIN of an ACO
participant for purposes of PQRS. Under the policy proposed in the QPP
proposed and subsequently adopted in the QPP final rule with comment
period, the quality data submitted to the CMS Web interface by ACOs
will satisfy the quality performance category for ECs participating in
the ACO. Therefore, in order to align with the QPP, we proposed to add
a new paragraph at Sec. 425.508(a) that parallels the current
requirement at Sec. 425.504 for reporting on behalf of EPs who bill
under the TIN of an ACO participant for purposes of PQRS. Specifically,
we proposed to require that ACOs, on behalf of ECs who bill under the
TIN of an ACO participant, must submit all the ACO CMS Web interface
measures required by the Shared Savings Program using a CMS Web
interface, to meet reporting requirements for the quality performance
category under MIPS. Because we proposed to maintain flexibility for
EPs to report quality performance category data separately from the ACO
for purposes of PQRS, we did not propose to include a provision that
would restrict an EC from reporting outside the ACO for purposes of the
QPP. While the intent of these proposals was to permit flexibility in
reporting quality data, we reiterated that no quality data reported
apart from the ACO would be considered for purposes of assessing the
quality performance of the ACO under the Shared Savings Program.
The following is a summary of the comments we received regarding
our proposals to sunset PQRS and EHR Incentive Program alignment and to
align with the reporting requirements under the QPP.
Comment: Commenters were supportive of our efforts to align Shared
Savings Program ACO quality reporting with the MIPS quality performance
category. In addition, commenters supported the proposal to allow ECs
to report outside of the ACO for purposes of the QPP, in the event that
the ACO fails to satisfactorily report.
Response: We appreciate commenters' support for our proposals to
align ACO quality reporting with the sunsetting of PQRS and the EHR
Incentive Program and the new reporting requirements under the QPP.
Final Action: We are finalizing our proposal to sunset PQRS and EHR
Incentive Program alignment and to align with the reporting
requirements under the QPP. Specifically, we will amend Sec. Sec.
425.504 and 425.506 to

[[Page 80498]]

indicate that the PQRS and EHR Incentive Program reporting requirements
apply to ACOs and their EPs through the 2016 performance year.
To align with the reporting requirements under the QPP, we are
finalizing our proposal to add a new provision at Sec. 425.508 that
parallels the current requirement at Sec. 425.504 that ACOs report on
behalf of EPs who bill under the TIN of an ACO participant for purposes
of PQRS. Specifically, we are finalizing our proposal to require that
ACOs, on behalf of ECs who bill under the TIN of an ACO participant,
must submit all the CMS Web interface measures required by the Shared
Savings Program using a CMS Web interface, to meet reporting
requirements for the quality performance category under the QPP. As
discussed elsewhere in this final rule, we are also finalizing a policy
to maintain flexibility for EPs to report quality data separately from
the ACO for purposes of PQRS and the VM, and therefore, are not
including a provision that would restrict an EC from reporting outside
the ACO for purposes of the QPP. While the intent of this policy is to
permit flexibility in reporting quality data for purposes of the QPP,
we reiterate that no quality data reported apart from the ACO will be
considered for purposes of assessing the quality performance of the ACO
under the Shared Savings Program.
3. Proposals Related to Alignment With the Quality Payment Program
(QPP)
In the QPP proposed rule (81 FR 28296) and in the subsequent QPP
final rule with comment period, we outlined and defined the criteria
for Advanced APMs, APMs through which ECs would have the opportunity to
become Qualified Participants (QPs) as specified in section
1833(z)(3)(C) and (D) of the Act. First, under MACRA, for an APM to be
considered an Advanced APM, it must meet three requirements: (1)
Require participants to use certified EHR technology; (2) provide
payment for covered professional services based on quality measures
comparable to those used in the quality performance category of MIPS;
and (3) either be a Medical Home Model expanded under section 1115A(c)
of the Act or require the participants to bear more than a nominal
amount of risk for monetary losses. In the rulemaking implementing the
QPP, we established criteria for each of these requirements. As
proposed and subsequently finalized, under the QPP, significant
distinctions between the design of different tracks or options within
an APM mean that certain tracks or options could meet the Advanced APM
criteria while other tracks or options may not. Under the approach
discussed in the QPP proposed rule and as subsequently adopted in the
QPP final rule with comment period, while all Tracks of the Shared
Savings Program would meet the criterion to provide for payment based
on quality measures comparable to those used in the quality performance
category of MIPS, only Tracks 2 and 3 meet the proposed financial risk
standard to bear more than a nominal amount of risk for monetary
losses.
In the rulemaking to establish the QPP, we adopted an alternative
criterion that would allow all three tracks of the Shared Savings
Program to satisfy the EHR criterion if ACOs are held accountable for
their ECs' use of CEHRT. In the QPP final rule with comment period, we
adopted a definition of CEHRT at Sec. 414.1305 for purposes of MIPS
and the APM incentive. We noted that section 1833(z)(3)(D)(i)(I) of the
statute does not specify how the APM must require participants to use
CEHRT in order to be an Advanced APM. For this reason, we stated that
we believed it was reasonable to use discretion when determining the
details of how APMs might meet this criterion. For purposes of the APM
incentive under the QPP, we proposed and subsequently finalized a
policy that an Advanced APM must require at least 50 percent of ECs who
are enrolled in Medicare (or each hospital if hospitals are the APM
participants) to use the certified health IT functions outlined in the
definition of CEHRT to document and communicate clinical care with
patients and other health care professionals. However, although the
Shared Savings Program requires ACOs to encourage and promote the use
of enabling technologies (such as EHRs) to coordinate care for assigned
beneficiaries, the Shared Savings Program does not require a specific
level of CEHRT use for participation in the program. Instead, the
Shared Savings Program, as noted above, includes an assessment of EHR
use as part of the quality performance standard which directly impacts
the amount of shared savings/shared losses generated by the ACO.
Therefore, in the rulemaking to establish the QPP, we proposed and
subsequently finalized an alternative criterion available only to the
Shared Savings Program. Specifically, we proposed and subsequently
finalized an alternative criterion that would allow the Shared Savings
Program to satisfy the EHR criterion to be an Advanced APM if it holds
APM Entities accountable for their ECs' use of CEHRT by applying a
financial penalty or reward based on the degree of CEHRT use (such as
the percentage of ECs that use CEHRT or the engagement in care
coordination or other activities using CEHRT). In the rulemaking for
the QPP, we noted that the current EHR quality measure at ACO #11
assesses the degree to which certain ECs in the ACO successfully meet
the requirements of the EHR Incentive Program, and we stated that
``[s]uccessful reporting of the measure for a performance year gives
the ACO points toward its overall quality score, which in turn affects
the amount of shared savings or shared losses an ACO could earn or be
liable for, respectively.'' Finally, we stated that we believed the
alternative criterion meets the statutory requirement because the
alternative criterion builds on established Shared Savings Program
rules and incentives that directly tie the level of CEHRT use to the
ACO's financial reward which in turn has the effect of directly
incentivizing ever-increasing levels of CEHRT use among participating
clinicians.
In the CY 2017 PFS proposed rule, we proposed several modifications
to our program rules in order to align with the policies proposed for
the QPP.
First, we proposed to modify the title and specifications of the
EHR quality measure (ACO #11). This measure is currently titled Percent
of PCPs Who Successfully Meet Meaningful Use Requirements. Under the
current Shared Savings Program rules, ACOs must report on and are held
accountable for certain measures that make up the quality reporting
standard. One of these measures, ACO #11, assesses the degree of CEHRT
use by primary care physicians participating in the ACO and performance
on this measure is weighted twice that of any other measure for scoring
purposes. To calculate this measure, CMS collects information submitted
by PCPs through the EHR Incentive Program and determines the rate of
CEHRT use by PCPs participating in the ACO. Specifically, as explained
in our guidance [https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/2015-ACO11-Percent-PCP-Successfully-Meeting-Meaningful-Use-Requirement.pdf ], the denominator
is based on all PCPs who are participating in the ACO in the reporting
year under the Shared Savings Program and the numerator for the measure
is based on the PCPs included in the denominator who successfully
qualify to participate in either the Medicare or Medicaid EHR Incentive
Program in the year indicated.

[[Page 80499]]

Results of this measure are used in determining the ACO's overall
quality score which in turn determines the ACO's final sharing/loss
rate and the amount of shared savings earned (or shared losses owed) by
the ACO.
In the QPP proposed rule, we proposed that ECs participating in an
ACO would satisfy the Advancing Care Information performance category
under the MIPS by reporting meaningful use of EHRs apart from the ACO
(81 FR 28247, Table 15). We subsequently finalized this policy in the
QPP final rule with comment period. Similar to the process currently
used under the Shared Savings Program to determine what practitioners
have met criteria for meaningful use for the ACO #11 measure, we will
access EC-reported data under the Advancing Clinical Information
performance category to assess the ACO's overall use of CEHRT. Because
the current EHR measure at ACO-11 only assesses the degree of use of
CEHRT by primary care physicians participating in the ACO, in the CY
2017 PFS proposed rule we proposed to modify the EHR measure to align
with the policy proposed for the QPP. Specifically, we proposed to
change the specifications of the EHR measure in order to assess the ACO
on the degree of CEHRT use by all providers and suppliers designated as
ECs under the QPP that are participating in the ACO, rather than
narrowly focusing on the degree of use of CEHRT of only the primary
care physicians participating in the ACO. We stated that we believed
this modification to the specifications for ACO #11 would better align
with the QPP and ensure a subset of ACOs in the Shared Savings Program
could qualify to be Advanced APM entities by participating in an
Advanced APM. We also proposed to modify the title of the measure to
remove the reference to PCPs. We stated that we believed the
modification in the specifications of ACO #11 would be extensive and
ECs would also have to gain familiarity with the reporting requirements
under the QPP. We therefore proposed that this measure would be
considered a newly introduced measure and set at the level of complete
and accurate reporting for the first 2 reporting periods for which
reporting of the measure is required according to our rules at Sec.
425.502(a)(4). Thus, the measure would be pay for reporting for the
2017 and 2018 performance years. We further proposed to define
requirements specific to this measure for the limited circumstances in
which it is designated as pay for reporting. Specifically, we proposed
to include the requirement at Sec. 425.506(e)(1) that during years in
which ACO #11 is designated as a pay for reporting measure, in order
for us to determine that the ACO has met requirements for complete and
accurate reporting, at least one EC, as that term is defined for
purposes of the QPP, participating in the ACO must meet the reporting
requirements under the Advancing Clinical Information performance
category under the QPP. We stated that we believed this proposal would
safeguard the ability of Tracks 2 and 3 to fully meet all criteria for
designation as Advanced APMs by ensuring the letter and spirit of the
statutory criteria are met, even in the limited circumstances when ACO
#11 is designated as pay for reporting under the Shared Savings
Program. Beginning in the 2019 performance year, we proposed that ACO
#11 would be assessed according to the phase-in schedule indicated in
Table 36 of the proposed rule (81 FR 46421-46422) which is consistent
with the current phase-in schedule for the measure. We further proposed
to add Sec. 425.506(e)(2) reiterating our current requirement at Sec.
425.506(b) that during pay for performance years, the quality measure
regarding EHR adoption is measured based on a sliding scale. We stated
that we did not intend our proposal to use this measure to assess the
degree of CEHRT use by ECs participating in the ACO for purposes of
meeting the CERHT criterion for Advanced APMs under the QPP to change
the way we treat the measure under pay for performance now. Similar to
the current method used by the Shared Savings Program to calculate the
EHR measure, we stated that the data would continue to be derived using
EC reported EHR data that is required and collected for purposes of
MIPS. Additionally, we stated that we intended for the measure to
remain double weighted. We proposed to retain the existing EHR measure
requirements at Sec. 425.506(a)-(c) and to modify Sec. 425.506(d) to
sunset the current EHR reporting requirement as discussed in the prior
section.
We also stated that we did not believe that any additional
modifications or exceptions to current Shared Savings Program rules
(other than the ones proposed, specifically, that the measure
specifications and title of ACO #11 be modified to include all ECs and
not just PCPs, and the proposal for how an ACO would demonstrate
complete and accurate reporting) must be made in order to be consistent
with the spirit and intent of the statute and the Advanced APM
criteria, as proposed in the QPP proposed rule. Rather, we stated that
we believe the existing Shared Savings Program rules are sufficient to
permit Tracks 2 and 3 to meet the criteria to be designated as Advanced
APMs because the EHR quality measure will always be used to impact the
amount of shared savings or losses of an ACO, regardless of whether it
is designated as pay for performance or pay for reporting. We noted
that the EHR measure has an especially significant impact on the
overall quality scoring for an ACO because it is double-weighted
compared to any other measure. In spite of this, we indicated that we
were considering additional options regarding the treatment of the EHR
measure under the Shared Savings Program in order to further enhance
the importance of this measure and its impact on an ACO's quality
performance score and to improve alignment with the intent of the
policies proposed in the QPP proposed rule. Specifically, we were
considering whether to finalize a policy that would require the EHR
measure to be pay for performance in all performance years, including
the first year of an ACO's first agreement period. Additionally, we
were considering whether to finalize a policy that would require the
EHR measure to remain pay for performance, even when a new EHR measure
is introduced or there are significant modifications to the
specifications for the measure. We noted that such modifications may
require additional changes or alternative approaches to certain current
Shared Savings Program rules related to quality benchmarking and
scoring. We anticipated that if such modifications were made, they
would only apply to the EHR measure and would not impact current
scoring and benchmarking rules for other quality measures that make up
the quality performance standard. We solicited comment on how best to
conform to the intent and spirit of the QPP requirements to ensure that
clinicians have assurance they are participating in an Advanced APM. We
specifically solicited comment on our proposals and the alternatives
considered.
Furthermore, we noted that the CMS Web interface measures,
including those proposed in the QPP proposed rule, are consistent
across CMS reporting programs. We stated that we do not believe it is
beneficial to propose CMS Web interface measures for ACO quality
reporting separately. Therefore, to avoid confusion and duplicative
rulemaking, we proposed that any future changes to the CMS Web
interface measures would be proposed and finalized through rulemaking
for the QPP, and that such

[[Page 80500]]

changes would be applicable to ACO quality reporting under the Shared
Savings Program.
The following is a summary of the comments we received regarding
our proposals to align with QPP.
Comment: Many commenters were supportive of our proposed changes to
the title and specifications of the EHR measure (ACO-11) to align with
the QPP. In contrast, several commenters opposed the proposed
modifications to the measure or made additional suggestions. For
example, some commenters requested that CMS keep the current version of
the measure that assesses PCPs (not all ECs). Another commenter
suggested that CMS assess ACOs using two EHR measures. This commenter
recommended keeping the current version of the measure focused on
primary care physicians as pay for performance while adding the
modified version of the measure, which would be assessed under pay for
reporting for 2 years like all new measures, before transitioning to
pay for performance. In contrast, one commenter suggested that the EHR
measure be removed from the ACO measure set entirely. Another commenter
suggested that the proposed modifications to the measure specifications
should apply only to ACOs participating in Shared Savings Program
tracks that could meet the criteria for designation as Advanced APMs
under the QPP.
Response: We are finalizing the proposal to modify the EHR measures
(ACO-11) to align with the Advanced APM criteria under the QPP. We
appreciate commenters' support for these changes. We believe the
modification to ACO-11 to require reporting by all ECs better aligns
with the QPP and will ensure that a subset of ACOs participating in the
Shared Savings Program are able to qualify to be designated as Advanced
APM entities by participaing in an Advanced APM. Accordingly, ACO
participants in ACOs under all tracks of the Shared Savings Program
must report data on the Advancing Care Information performance category
on behalf of all ECs billing through the TIN of the ACO participant
according to the MIPS requirements as specified at Sec. 414.1375(b) in
order to report for purposes of ACO #11.
We note that under the QPP final rule with comment period, eligible
clinicians who become QPs by participating in Advanced APMs will be
exempt from reporting in the advancing care information performance
category for purposes of MIPS. However, under Sec. 425.500(c), ACOs
must submit data on ACO quality performance measures according to the
method of submission established by CMS. Thus, in the QPP final rule
with comment period, we established a policy that all eligible
clinicians participating in ACOs under all tracks of the Shared Savings
Program must report for purposes of the advancing care information
performance category according to the MIPS requirements found at Sec.
414.1375(b) regardless of whether they are excluded from MIPS for the
year by virtue of their participation in an Advanced APM, in order for
the Shared Savings Program to assess the ACO's performance on ACO-11,
as required by the Advanced APM CEHRT use criterion.
We appreciate the suggestion that the old measure (based on percent
of primary care physician use of CEHRT) be retained in addition to
establishing a new EHR measure that assesses EC use of CEHRT. We
decline to retain the old measure at this time because the nature of
the data being submitted to us is changing and primary care physicians
are included in the new measure as a subset of the ECs participating in
the ACO. Although we decline to hold ACOs accountable for both measures
of CEHRT use at this time, we will continue to consider whether in the
future it would be useful to calculate the percent of primary care
physicians using CEHRT and share this information with ACOs.
Comment: Many commenters supported the proposal to treat ACO-11 as
a new measure and set it at the level of pay for reporting for the
first 2 years of its use, consistent with our existing approach to
implementing new measures. Other commenters disagreed with the proposal
to transition the measure to pay for performance according to the
phase-in schedule indicated in Table 36 of the proposed rule (81 FR
46421-46422) and requested that it remain pay for reporting for all 3
years of an ACO's agreement period. One commenter encouraged CMS to set
new benchmarks for the new EHR measure.
Response: We recognize that reporting use of CEHRT under the QPP's
Advancing Care Information performance category according to MIPS
requirements will be new for many ECs and that it will take some time
for ACOs and their ECs to gain some familiarity with the new reporting
requirements for ACO-11. For this reason, we proposed and are
finalizing a policy to treat ACO-11 as a newly introduced measure and
to hold the ACO accountable for pay for reporting only for the first 2
years after the revised measure is introduced. However, to stress the
importance of care coordination and support the use of CEHRT, we intend
to phase in the measure to pay for performance according to the
schedule outlined in Table 36 of the proposed rule (81 FR 46421-46422)
and as indicated in Table 42 of this final rule. Consistent with our
established policies for setting quality performance benchmarks for new
measures, a new benchmark for this measure will be set based on the
data gathered during the two pay for reporting years after the measure
is introduced.
Comment: One commenter expressed concerns over including ECs in the
EHR measure who are excluded from MIPS and thus have the option of not
reporting under the Advancing Care Information performance category
(for example, low volume providers and QPs). They recommended ECs
excluded from MIPS be excluded from the denominator of ACO-11.
Response: As noted above, in the QPP final rule with comment
period, we established a requirement at Sec. 414.1370(g)(4)) that each
ACO participant TIN participating in a Shared Savings Program ACO
(regardless of Track) must submit data on the advancing care
information performance category as specified in MIPS as finalized at
Sec. 414.1375(b). Additionally, it is necessary for ACO participant
TINs to submit such data to meet the requirements under MIPS and for
the calculation of the final score under the APM scoring methodology.
All ECs participating in Track 1 ACOs will be subject to MIPS as will
ECs participating in ACOs under Tracks 2 and 3 that do not qualify as
QPs. We plan to align closely with the QPP when developing our
operational guidance and the measure specifications to ensure a clear
understanding of the data submission requirements for ACO participant
TINs under MIPS.
Comment: We received one comment supporting our proposal that
future changes to the measures an ACO is required to report through the
CMS Web Interface be finalized through rulemaking for the QPP in order
to maintain alignment with QPP.
Response: We appreciate the support for our proposal. We believe a
single rulemaking process for adding and removing Web interface quality
measures will be less confusing for stakeholders and streamline
alignment of ACO and MIPS APM reporting. Therefore, we are finalizing
our proposal that future revisions to the Web interface quality
measures will be adopted through rulemaking for the QPP to avoid
confusion or duplicative rulemaking.

[[Page 80501]]

Comment: Many commenters submitted questions or comments related to
MIPS scoring of the advancing care information performance category and
also requested further clarification regarding the CEHRT criteria for
Advanced APMs.
Response: These comments are out of the scope of the CY 2017 PFS
proposed rule. However, we have shared these comments with our
colleagues who have responsibility for the QPP. We also note that the
QPP final rule with comment period responds to comments received on the
QPP proposed rule and further describes the CEHRT criteria for Advanced
APMs.
Final Action: We are finalizing our policies regarding alignment
with the QPP as proposed. Specifically, we are modifying the title and
specifications of the EHR quality measure (ACO#11) to align with the
QPP. We are changing the specifications of the EHR measure in order to
assess the ACO on the degree of CEHRT use by all providers and
suppliers that are participating in the ACO and that are designed as
ECs under the QPP rather than narrowly focusing on the degree of CEHRT
use by the primary care physicians participating in the ACO.
Additionally, as noted above, although certain eligible clinicians are
exempt from reporting under MIPS, we will require all ACO participant
TINs, regardless of track, to submit data for the advancing care
information performance category.
Because the specifications for this measure are changing, we are
finalizing our proposal to consider it a newly introduced measure and
to set it at the level of complete and accurate reporting for the first
2 reporting periods for which reporting of the measures is required
consistent with our existing rule at Sec. 425.502(a)(4). Specifically
the measure will be pay for reporting for all ACOs for the 2017 and
2018 performance years. We are also finalizing our proposal to include
a requirement at Sec. 425.506(e)(1) that during years in which ACO #11
is designated as a pay for reporting measure, in order for us to
determine that an ACO has met requirements for complete and accurate
reporting, at least one EC participating in the ACO must meet the
reporting requirements under the Advancing Clinical Information
performance category under the QPP. Beginning in the 2019 performance
year, ACO #11 will be assessed according to the phase-in schedule noted
in Table 42. We are finalizing our proposal to add Sec. 425.506(e)(2)
reiterating our current requirement at Sec. 425.506(b) that during pay
for performance years, assessment of EHR adoption will be measured
based on a sliding scale.
Finally, we are finalizing a policy that any future changes to the
CMS Web interface measures will be adopted through rulemaking for the
QPP, and that such changes will be applicable to ACO quality reporting
under the Shared Savings Program.
4. Incorporating Beneficiary Preference Into ACO Assignment
a. Background
Under section 1899(c) of the Act, beneficiaries are required to be
assigned to an ACO participating in the Shared Savings Program based on
the beneficiary's utilization of primary care services rendered by
physicians participating in the ACO. Medicare FFS beneficiaries do not
enroll in the Shared Savings Program, and they retain the right to seek
Medicare-covered services from any Medicare-enrolled provider or
supplier of their choosing. No exclusions or restrictions based on
health conditions or similar factors are applied in the assignment of
Medicare FFS beneficiaries. Thus, a beneficiary's choice to receive
primary care services furnished by physicians and certain non-physician
practitioners that are ACO professionals in the ACO, determines the
beneficiary's assignment to an ACO under the Shared Savings Program. As
discussed in detail in the November 2011 Medicare Shared Savings
Program final rule (76 FR 67851 through 67870), we finalized a claims-
based hybrid approach (called preliminary prospective assignment with
retrospective reconciliation) for assigning beneficiaries to an ACO.
Under this approach, beneficiaries are preliminarily assigned to an ACO
at the beginning of a performance year to help the ACO refine its care
coordination activities, but final beneficiary assignment is determined
at the end of each performance year based on where beneficiaries chose
to receive a plurality of their primary care services during the
performance year. We adopted this policy because we believe that the
methodology balances beneficiary freedom to choose healthcare providers
under FFS Medicare with the ACO's desire to have information about the
FFS beneficiaries that are likely to be assigned at the end of the
performance year. We believe this methodology accomplishes an
appropriate balance because ACOs have the greatest opportunities to
impact the quality and cost of the care of beneficiaries that choose to
receive care from providers and suppliers participating in the ACO
during the course of the year.
A beneficiary is eligible for assignment to an ACO under Sec.
425.402 if the beneficiary had a primary care service with a physician
who is an ACO professional, and thus, is eligible for assignment to the
ACO under the statutory requirement to base assignment on utilization
of primary care services furnished by physicians who are ACO
professionals in the ACO. The beneficiary is then assigned to the ACO
if the allowed charges for primary care services furnished to the
beneficiary by all primary care physicians who are ACO professionals
and non-physician ACO professionals in the ACO are greater than the
allowed charges for such services provided by primary care physicians,
nurse practitioners, physician assistants, and clinical nurse
specialists who are ACO professionals in another ACO or not affiliated
with any ACO and are identified by a Medicare-enrolled TIN. The second
step of the assignment process considers the remainder of beneficiaries
who have received at least one primary care service from an ACO
physician with a specialty designation specified in Sec. 425.402(c),
but have received no services from a primary care physician, nurse
practitioner, physician assistant, or clinical nurse specialist either
inside or outside the ACO. These beneficiaries are assigned to the ACO
if the allowed charges for primary care services furnished by
physicians who are ACO professionals in the ACO with one of the
specialty designations specified in Sec. 425.402(c) are greater than
the allowed charges for primary care services furnished by physicians
with such specialty designations in another ACO or who are not
affiliated with any ACO and are identified by a Medicare-enrolled TIN.
The ``two step'' assignment process simultaneously maintains the
requirement to focus on primary care services in beneficiary
assignment, while recognizing the necessary and appropriate role of
specialists and non-physician practitioners in providing primary care
services, such as in areas with primary care physician shortages. We
revised this two-step claims based methodology in the June 2015 Final
Rule as discussed in detail in that final rule (80 FR 32743 through
32758) and finalized a policy that would exclude services provided by
certain physician specialties from step 2 of the assignment process.
Additionally, in the June 2015 final rule, and in response to
stakeholders' suggestions, we implemented an option for ACOs to
participate in a new two-sided performance-based risk track, Track 3.
Under Track 3, beneficiaries are

[[Page 80502]]

prospectively assigned to the ACO at the beginning of the performance
year using the same two-step methodology, based on the most recent 12
months for which data are available, which reflects where beneficiaries
have chosen to receive primary care services during that period. The
ACO is held accountable for beneficiaries that are prospectively
assigned to it for the performance year. Under limited circumstances, a
beneficiary may be excluded from the prospective assignment list, for
example, if the beneficiary enrolls in Medicare Advantage or no longer
lives in the United States or U.S. territories and possessions, based
on the most recent available data in our beneficiary records at the end
of the performance year. A beneficiary is not excluded from the ACO's
prospective assignment list at the time of reconciliation because the
beneficiary chose to receive most or all of his or her primary care
during the performance year from providers and suppliers outside the
ACO. Additionally, no beneficiaries are added to the ACO's prospective
assignment list at the time of reconciliation because a beneficiary
chose to receive a plurality of his or her primary care during the
performance year from ACO professionals participating in the ACO.
Offering this alternative approach to beneficiary assignment responds
to stakeholders who expressed a desire for a prospective assignment
approach. These stakeholders believe prospective assignment will
provide more certainty about the beneficiaries for whom the ACO will be
held accountable during the performance year, thus enabling ACOs to
redesign their patient care processes to more efficiently and
effectively improve care for specific FFS beneficiaries rather than for
all FFS beneficiaries. We note, however, that such certainty is limited
because prospectively aligned beneficiaries who meet the exclusion
criteria specified in Sec. 425.401(b) during the performance year will
not be aligned to the ACO at the end of the year; and further, as
noted, beneficiaries remain free under FFS Medicare to choose the
healthcare providers from whom they receive services.
Because of uncertainty inherent in FFS Medicare where there is no
beneficiary lock-in or enrollment, both patient advocacy groups and
ACOs have expressed interest in and support for enhancing claims-based
assignment of beneficiaries to ACOs by taking into account beneficiary
attestation regarding the healthcare provider that they consider to be
responsible for coordinating their overall care. Stakeholders believe
that incorporating this information and giving beneficiaries the
opportunity to voluntarily ``align'' with the ACO in which their
primary healthcare provider participates will improve the patient
centeredness of the assignment methodology, and possibly reduce year-
to-year ``churn'' in beneficiary assignment lists.
The Center for Medicare & Medicaid Innovation (Innovation Center)
began conducting a test of beneficiary attestation (which was referred
to as voluntary alignment, a term that we will also use in the context
of the Shared Savings Program) in the Pioneer ACO Model (see https://innovation.cms.gov/initiatives/Pioneer-aco-model/) for the 2015
performance year. In the Pioneer ACO Model, for a Pioneer ACO to
participate in voluntary alignment for performance year four (Pioneer
ACO contract year 2015), the Pioneer ACO was required to submit an
application to CMS in the summer of performance year three (Pioneer ACO
contract year 2014) in which the ACO explained its plan for contacting
beneficiaries. ACOs that were approved to participate in voluntary
alignment were limited to contacting only those beneficiaries who
appeared on the ACO's then current (Pioneer ACO contract year 2014) and
prior year's (Pioneer ACO contract year 2013) prospective assignment
lists.
The ACOs sent letters to beneficiaries during a specified period
asking the beneficiaries to confirm whether a listed Pioneer Provider/
Supplier was their ``main doctor.'' The Innovation Center imposed
certain safeguards on the participating ACOs to protect against actions
that could improperly influence a beneficiary's decision to complete
the voluntary alignment form. The ACOs collected responses and turned
them in to CMS in fall 2014, before the start of the 2015 performance
year. Beneficiaries who confirmed a care relationship with the Pioneer
Provider/Supplier listed on the form, and met all other eligibility
criteria for alignment, were prospectively aligned to the Pioneer ACO
for the upcoming performance year, regardless of whether or not the
practitioners participating in the Pioneer ACO rendered the plurality
of the beneficiary's primary care services during the alignment period.
We refer to the procedures used under the Pioneer ACO Model as ``the
manual process.''
Beneficiary and ACO participation in and experience with voluntary
alignment under the Pioneer ACO Model to date has been mixed.
Initially, beneficiaries often seemed confused about the implications
of attesting to a care relationship with a Pioneer Provider/Supplier,
based on the letters they received from Pioneer ACOs. Beneficiaries,
for example, were often unfamiliar with the name of the Pioneer ACO.
Although most Pioneer ACOs initially expressed high interest in
beneficiary attestation, only half participated. Those that did not
participate cited cost/benefit concerns. To address concerns expressed
by ACOs and beneficiaries, the beneficiary attestation process was
updated for the Pioneer ACO Model for PY 2016, with letters sent to
beneficiaries during the summer of 2015. The new beneficiary
attestation process includes updated language in the letters to
beneficiaries and the attestation form to reduce beneficiary confusion.
The letters now include plainer language, refer to a specific
healthcare provider (in addition to the ACO), and Pioneer Providers/
Suppliers are permitted to discuss beneficiary attestation with
beneficiaries and respond to questions. Other significant changes to
the process are discussed in the proposed rule (81 FR 46432). We would
note that for performance year five (Pioneer ACO contract year 2016),
CMS changed the criteria to allow beneficiaries to voluntarily align
into the performance year five aligned population if, among other
requirements, the beneficiary had at least one paid claim for a
Qualified E/M service, as defined in section 2.4 of Appendix C of the
Pioneer ACO Agreement, furnished by a Pioneer Provider/Supplier on or
after January 1, 2013. Based on some initial feedback, beneficiaries
appear to be wary of the implications of designating a ``main doctor''
but are much more amenable to this type of information request when it
comes from their physician or other practitioner, rather than from an
ACO. However, information is not yet available on the impact or results
of the modifications made to the beneficiary attestation process in the
Pioneer ACO Model. The Next Generation ACO Model, which started
operation on January 1, 2016, includes a beneficiary attestation policy
similar to the updated manual process used under the Pioneer ACO Model.
In order for a Medicare FFS beneficiary to be eligible to voluntarily
align with a Next Generation ACO for performance year two (Next
Generation ACO contract year 2017), the beneficiary must have had at
least one paid claim for a qualified evaluation and management service
on or after January 1, 2014, with an entity that was a Next Generation
Participant during performance year one, among other requirements.

[[Page 80503]]

To date, the Innovation Center has done limited analyses of the
updated voluntary alignment process for effects on beneficiary
engagement. Early experience indicates that for the participating ACOs,
the number of prospectively assigned beneficiaries per ACO increased by
0.2 to 2.7 percent relative to the number of beneficiaries who would
have otherwise been assigned. However, there is not yet enough
information to determine whether beneficiary attestation under the
manual process has had an impact on increasing certainty that a
beneficiary will continue to choose to receive primary care or other
services from practitioners participating in an ACO.
We note that a similar manual process for sending letters to
beneficiaries to provide them notice of their opportunity to opt out of
claims data sharing was removed from the Shared Savings Program in the
June 2015 final rule (see 80 FR 32743). This data sharing opt out
process was removed because it was resource intensive and cumbersome
for ACOs and CMS, and was confusing for beneficiaries. Instead, based
on stakeholder comments, we finalized a process to provide
beneficiaries the opportunity to decline claims data sharing directly
by contacting the Medicare program (through 1-800-MEDICARE) rather than
through the ACO. This more direct process started at the end of 2015
and so far appears to be working well, as it has not generated the
number of complaints and concerns raised by the initial manual process.
b. Proposals
In the CY 2017 PFS proposed rule, we proposed to incorporate
beneficiary attestation into the assignment of beneficiaries to ACOs
participating in the Shared Savings Program, to supplement and enhance
the current claims-based algorithm driven methodology as described in
more detail in this section of the final rule.
We indicated that we believed that it would be appropriate to
implement, at a minimum, a voluntary alignment process under the Shared
Savings Program that would be similar to the updated manual process we
have implemented under the Pioneer ACO Model and that is used under the
Next Generation ACO Model. Supplementing the current claims-based
assignment process with a voluntary alignment process that incorporates
beneficiary attestation about their ``main doctor'' could help ACOs to
increase patient engagement, improve care management and health
outcomes, and lower expenditures for beneficiaries, while also helping
to assure that beneficiaries are assigned to ACOs based on their
relationship with providers that they believe to be truly responsible
for their overall care. However, based on the valuable knowledge and
experience we have gained through these Innovation Center models, we
also expressed our concern that the manual voluntary alignment process
used for the Pioneer ACO Model and that is used under the Next
Generation ACO Model is resource intensive for both ACOs and CMS.
Because of the limitations of the manual process, we proposed to
implement an automated approach under which we could determine which
healthcare provider a FFS beneficiary believes is responsible for
coordinating their overall care (their ``main doctor'') using
information that is collected in an automated and standardized way
directly from beneficiaries (through a system established by us, such
as MyMedicare.Gov), rather than requiring individual ACOs, ACO
participants, or ACO professionals to directly obtain this information
from beneficiaries annually and then communicate these beneficiary
attestations to CMS.
We proposed to make such an automated mechanism available for
beneficiaries to voluntarily align with the provider or supplier that
they believe is responsible for coordinating their overall care
starting early in 2017, making it possible for us to use beneficiary
attestations for assigning beneficiaries to ACOs in all three tracks
for the 2018 performance year. We indicated that voluntary alignment
data would be accessed and incorporated in the beneficiary assignment
process each time we run the assignment algorithm. Under the automated
approach, beneficiaries would be able to change their attestation about
their ``main doctor'' at any time; however, we noted there may be a lag
in using the information to update an ACO's assignment list depending
on the timing of the beneficiary's updated designation and the track
under which the ACO is participating. For example, as described in more
detail in the CY 2017 PFS proposed rule, we proposed for Track 3 to
incorporate the beneficiary's designation annually prior to the start
of the performance year at the time beneficiaries are prospectively
assigned for that performance year.
Further, we proposed to incorporate voluntary alignment for ACOs in
Tracks 1 and 2 on a quarterly basis. We stated that we believe this
policy would be appropriate because it aligns with the current timing
for updates to Track 1 and 2 ACO assignment lists. We also proposed
that if a beneficiary voluntarily aligns with a provider or supplier
whose services would be considered in assignment but who is not
participating in an ACO as an ACO professional, the beneficiary would
not be eligible for alignment to an ACO, even if the beneficiary would
have otherwise been assigned to an ACO under our claims-based approach.
We further proposed that, if an automated voluntary alignment
process is not operationally ready for implementation by spring 2017,
we would implement a manual voluntary alignment process for Track 3
ACOs only that builds upon experience previously gained under the
Pioneer ACO Model. We explained our view that it would be appropriate
to initially limit the manual process to ACOs participating in the
Shared Savings Program under Track 3 because the process and timing for
sending letters to beneficiaries regarding voluntary alignment under
the manual process was developed specifically for prospective alignment
under the Pioneer and Next Generation ACO Models and for a limited
number of ACOs. We indicated that we believe implementing such a manual
process for the hundreds of ACOs in Track 1 and Track 2 whose
beneficiaries are preliminarily prospectively assigned with
retrospective reconciliation would result in operational challenges for
ACOs and CMS and could have unintended consequences that could be
confusing or harmful to beneficiaries. We therefore proposed that if an
automated process is not available to allow beneficiaries to designate
their primary healthcare provider in time for the information to be
considered for beneficiary assignment for PY 2018, we would implement
an alternative manual voluntary alignment process (similar to the
updated process used under the Pioneer ACO Model and described in more
detail in the CY 2017 PFS proposed rule) to allow beneficiaries to
align with Track 3 ACOs for the 2018 performance year and until such
time as an automated process is available.
Regardless of process (manual or automatic), we proposed to begin
to incorporate beneficiary attestation into the assignment methodology
for the Shared Savings Program, effective for assignment for the 2018
performance year. In brief, under the proposal, an eligible beneficiary
would be assigned to an ACO based on the existing claims-based
assignment process unless the beneficiary has designated a primary care
physician as defined at Sec. 425.20, a physician with a specialty
designation included at paragraph (c) of Sec. 425.402, or a nurse
practitioner, physician

[[Page 80504]]

assistant, or clinical nurse specialist as being responsible for their
overall care. If an eligible beneficiary has made such a designation
then the voluntary alignment would override the claims-based assignment
process if certain additional conditions are met. We proposed to revise
the regulation governing the assignment methodology to add a new
paragraph (e) to Sec. 425.402 to address the voluntary alignment
process. Further, we proposed to prohibit ACOs, ACO participants, ACO
providers/suppliers, ACO professionals, and other individuals or
entities performing functions or services related to ACO activities
from directly or indirectly committing any act or omission, or adopting
any policy that coerces or otherwise influences a Medicare
beneficiary's decision to designate or not designate an ACO
professional as responsible for coordinating their overall care.
We stated that to maintain flexibility for ACOs, ACO participants,
ACO providers/suppliers, ACO professionals, beneficiaries, and CMS, we
would intend to provide further operational details regarding the
voluntary alignment process and the applicable implementation timelines
through subregulatory guidance and other outreach activities.
We solicited comments on this proposal, on the effective date, and
on any other related issues that we should consider for the final rule
to address issues related to voluntary alignment under the Shared
Savings Program. In particular, we solicited comment on a variety of
topics such as whether voluntary alignment is an appropriate mechanism
for assigning beneficiaries retrospectively to an ACO, whether ACOs
should be permitted to opt into or out of voluntary alignment, and
whether we should exclude a beneficiary from an ACO's prospective
assignment list for a performance year if later during the performance
year the beneficiary voluntarily aligns with a healthcare provider that
is not an ACO professional in the ACO. We also solicited input on how
concerns about ACO avoidance of at risk beneficiaries might be
addressed.
We also noted that under the proposed automated voluntary alignment
process, a beneficiary's designation of a healthcare provider as
responsible for coordinating their overall care would stay in effect
until the beneficiary chose to make a subsequent change. We indicated
that under the proposal we would rely on appropriate information shared
with beneficiaries at the point of care to ensure the beneficiary's
designation is kept up to date. We solicited comment on this issue and
our proposal under the automated system to continue to use a
beneficiary's designation of the healthcare provider responsible for
coordinating their overall care until it is changed.
We also welcomed suggestions regarding the operational process,
implementation timelines, and related issues regarding the process for
beneficiaries to voluntarily align with an ACO, including how to
strengthen ACOs' beneficiary engagement activities. We noted that
although we proposed to establish a process under which beneficiaries
may designate their ``main doctor'' who they consider responsible for
coordinating their overall care, in establishing the operational
processes for allowing beneficiaries to designate their ``main doctor''
we may not explicitly use the phrase ``responsible for coordinating
overall care'' which we included in the proposed provision at Sec.
425.402(e). Instead, we indicated that we may consider using other
terminology based on focus group testing and/or other feedback from
beneficiary representatives. We welcomed comments on what terminology
would be preferable to ensure beneficiaries understand the significance
of designating a provider or supplier as responsible for coordinating
their overall care. We indicated we would consider such suggestions
further as we develop program guidance and outreach activities for
beneficiaries and ACOs.
The following is a summary of the comments we received regarding
voluntary alignment under the Shared Savings Program.
Comment: Commenters supported the incorporation of voluntary
alignment into the Shared Savings Program, citing the potential for
patient engagement and a more stable beneficiary population. Commenters
indicated that voluntary alignment is appropriate for ACOs that have
either retrospective or prospective assignment. One commenter indicated
that providing beneficiaries with the opportunity to align voluntarily
with an ACO would balance the important considerations of
beneficiaries' freedom to choose their providers with ACOs' interest in
reducing patient turnover or ``churn,'' thus providing a more defined
and stable beneficiary population. The commenter suggested this would
allow ACOs to better target their efforts to manage and coordinate care
for beneficiaries for whose care they will ultimately be held
accountable.
Another commenter suggested there are many times where for a
particular year the current claims-based assignment algorithm may not
be an accurate reflection of the beneficiary's wishes and normal care
pattern. Examples provided by this commenter of when the current
algorithm could lead to inappropriate attribution were in cases where a
beneficiary is dealing with an acute illness or condition requiring
specialized evaluation and management services, is experiencing an
extended time away from a primary residence, is a low health care
utilizer where a single service plays a big role in determining the
plurality of primary care services, or is switching primary care
physicians when entering a skilled nursing facility (SNF). Commenters
indicated that allowing beneficiaries to attest to the provider they
believe is managing their care may also help increase beneficiary
engagement in that care. A number of commenters expressed support for
the proposal to exclude from alignment to an ACO any beneficiaries who
voluntarily align with a healthcare provider who is not an ACO
professional, as that respects the beneficiary's preference.
Response: We agree with stakeholders that supplementing the current
assignment process with a voluntary alignment process that incorporates
beneficiary attestation could help ACOs to increase patient engagement,
improve care management and health outcomes, and lower expenditures for
beneficiaries. Incorporating beneficiary attestation into the
beneficiary assignment process could further strengthen the current
claims-based, two-step assignment process. Supplementing the claims-
based assignment algorithm with beneficiary attestations could further
assure that beneficiaries are assigned to ACOs based on their
relationship with providers and suppliers that they believe to be truly
responsible for their overall care. Therefore, we plan to begin to
incorporate beneficiary attestation into the assignment methodology for
the Shared Savings Program, effective for assignment for the 2018
performance year. Based on comments, we will incorporate beneficiary
attestation as proposed, with certain modifications as discussed in
this section.
Comment: Many of the commenters who supported voluntary alignment
strongly urged CMS to prioritize development and timely implementation
of an automated voluntary alignment process for attestation that
minimizes the burden for beneficiaries and ACOs, and that would be
accessible to ACOs in all three tracks beginning with performance year
2018. Some commenters further noted that the process should be
automated from the beginning even if it were to

[[Page 80505]]

result in a delay in implementation. Commenters indicated that using an
automated approach for voluntary alignment would be less burdensome for
both ACOs and CMS, and would allow for more robust participation by
ACOs and beneficiaries. Otherwise, the commenters believe that
differences in how beneficiary attestation is handled for the three
tracks would cause unnecessary confusion for beneficiaries. These
commenters indicated that the manual voluntary alignment approach used
under the Pioneer and Next Generation ACO Models has been very
cumbersome and confusing, and therefore, has been pursued by only about
one-half of eligible ACOs because of cost/benefit concerns. One
commenter expressed concern that a manual process would increase the
likelihood of errors.
Response: We agree with the commenters who urge us to prioritize
development and implementation of an automated voluntary alignment
process for all three ACO tracks rather than to develop concurrently a
manual process limited to Track 3 ACOs that would be implemented only
in the event that an automated system for all three Tracks is not
available. We also agree the process should be automated from the
beginning even if it were to result in a delay in implementation
because a manual process might increase the likelihood of errors, and
an automated approach would be more efficient for ACOs and their ACO
participants, ACO providers/suppliers, and ACO professionals, as well
as for beneficiaries and CMS. Based on valuable experience gained
through development and testing of beneficiary attestation processes
through the Pioneer ACO Model, the manual process developed thus far
appears to be resource intensive for both ACOs and CMS and may not
significantly impact beneficiary assignment to ACOs.
Comment: Some commenters raised concerns regarding the potential
burden of a voluntary alignment process (whether manual or automated)
and suggested that further testing be done prior to implementation. For
example, one commenter suggested testing voluntary alignment under
Track 1 on a small scale to assess whether it impacts ACO performance
and beneficiary health. Another commenter suggested that voluntary
alignment should not be implemented unless there is a tested automated
process. One commenter supported the testing of both of the manual and
automated models to determine which approach presents lower burden for
providers, CMS, and, most importantly, Medicare beneficiaries.
Response: We believe that the development and testing of manual
beneficiary attestation processes through the Pioneer ACO Model has
been very valuable, and, along with the very helpful public comments
received in response to our proposals, provides a good foundation for
development and implementation of an automated process. Other than our
intent to determine appropriate terminology through focus groups and to
perform other systems quality assurance testing and the like, we do not
believe additional testing of the automated process is needed because
it will incorporate the same or similar policies as the manual process
that has already undergone testing in Innovation Center models.
Therefore, we will prioritize the development of procedures to
implement voluntary alignment using an automated process with the
intent of incorporating beneficiary attestations into the claims-based
assignment algorithm beginning with the 2018 performance year. We do
not intend to develop a manual beneficiary attestation process under
the Shared Savings Program.
Comment: A few commenters suggested that ACOs be permitted to opt
in or out of the use of beneficiary designations in assignment. In
contrast, some other commenters disagreed that ACOs should be given
this option in order to ensure all beneficiaries have the opportunity
to be aligned with the ACO in which the provider or supplier that the
beneficiary considers responsible for their overall care participates.
Response: We agree with the commenters who suggested it would be
inappropriate to permit ACOs to opt into or out of voluntary alignment
under an automated voluntary alignment approach. We agree that, to the
extent feasible, all beneficiaries would benefit by being provided with
the option of designating a healthcare provider responsible for their
overall care.
Comment: One commenter supported voluntary alignment, but urged
that beneficiary designations only be considered, and used to override
otherwise applicable assignment rules, for beneficiaries who have been
assigned to an ACO under the claims-based assignment algorithm.
Response: We disagree. We believe that assignment to ACOs and
beneficiary engagement under the Shared Savings Program would be better
enhanced by taking into account all beneficiary attestations and not
just the beneficiary attestations for those who would have otherwise
been assigned to an ACO under the claims-based assignment algorithm.
Comment: Some commenters expressed support for a quarterly process
to incorporate voluntary alignment for Track 1 and 2 ACOs, and for
keeping beneficiaries who are prospectively assigned to a Track 3 ACO
but designate a provider or supplier outside of the ACO as responsible
for their overall care assigned to the ACO until the end of the
benchmark or performance year. A few other commenters supported the
proposal to incorporate the beneficiary attestations annually for Track
3 ACOs at the time beneficiaries are prospectively assigned for a
performance year, but for Track 1 and 2 ACOs, the commenters
recommended changes to the proposal to incorporate voluntary alignment
on a quarterly basis. For Track 1 and 2 ACOs, the commenter suggested
that only beneficiary attestations made in the previous year or the
during the first 3 months of the performance year should be effective
for that performance year; voluntary alignments made later in the
performance year would not go into effect until the next performance
year. The commenter indicated this timing would allow ACOs to identify
new voluntarily aligned beneficiaries on the quarterly reports
beginning with the first or second quarter reports, thus enabling the
ACO to identify and focus efforts on these beneficiaries. The commenter
indicated this would enable ACOs to be able to better target care for
beneficiaries likely to be retrospectively assigned to the ACO in order
to make a meaningful difference for the performance year. Another
commenter supported keeping a beneficiary who has voluntarily aligned
with a Track 1 or Track 2 ACO assigned to that ACO for the entire
performance year, even if the beneficiary later designates a provider
or supplier outside the ACO as responsible for their overall care in
the middle of the performance year, because it would avoid adding
confusion in the administration of the program. Similarly, another
commenter suggested that variations in the policies regarding voluntary
alignment by track could lead to confusion for ACOs and difficulty in
tracking the effect of voluntary alignment on assignment, and
therefore, recommended that, for all three tracks, voluntary alignment
should be based simply on the most current choice of primary care
physician at the end of the performance year.
Another commenter expressed concerns that voluntary alignment under
a retrospective assignment methodology (Tracks 1 and 2) could increase
adverse incentives for ACOs to selectively encourage some beneficiaries

[[Page 80506]]

to stay aligned to the ACO and others to leave it. For example, the
commenter suggested that a beneficiary having a hip replacement in the
next few months might be inappropriately encouraged to voluntarily
align with a healthcare provider outside the ACO to avoid having the
high cost of a hip replacement included in the ACO's expenditures.
Response: We proposed to incorporate voluntary alignment for ACOs
in Tracks 1 and 2 on a quarterly basis because this approach aligns
with the current timing for updates to the assignment lists for ACOs in
Tracks 1 and 2. However, following further consideration and based on
our review of the comments on this issue, we now agree with the
commenters who indicated that incorporating beneficiary attestation
less frequently under Tracks 1 and 2 could help ACOs to better focus
their efforts to target care for beneficiaries likely to be assigned to
the ACO and make a meaningful difference for the performance year.
Further, we believe that incorporating beneficiary attestations
annually, prior to the beginning of a performance year, for all three
tracks, rather than incorporating beneficiary attestations quarterly
for Tracks 1 and 2, could be less confusing for ACOs and beneficiaries.
This timeline aligns with other annual beneficiary election/designation
processes such as Medicare's annual enrollment period which would
simplify our education and outreach efforts. This approach might also
at least partially address the commenter's concern that voluntary
alignment under Tracks 1 and 2 could increase possible adverse
incentives for ACOs to encourage some beneficiaries to stay aligned to
the ACO and others to leave it. We believe such adverse incentives
under voluntary alignment for Tracks 1 and 2 would be reduced if we
were to incorporate beneficiary attestation annually, as we proposed
for Track 3 ACOs. Accordingly, we are modifying our proposed policy in
order to take beneficiary attestations into account and to voluntarily
align beneficiaries annually and prospectively to ACOs participating in
all tracks at the beginning of each performance year, provided the
beneficiary is eligible for assignment to the ACO. Although we assign
beneficiaries to ACOs under Tracks 1 and 2 using a preliminary
prospective with retrospective reconciliation approach for purposes of
the claims-based assignment methodology, when incorporating beneficiary
voluntary alignment information, we would assign beneficiaries that
have attested to a care relationship with an ACO provider/supplier to
the ACO at the beginning of each performance year and these
beneficiaries would ``stick'' on the assignment list for the full
performance year for ACOs under all tracks. In other words,
beneficiaries who voluntarily align to an ACO participating in Track 1
or Track 2 would be prospectively assigned to that ACO for the entire
performance year even if they would not be retrospectively assigned to
the ACO under the claims-based assignment methodology or later align
with another provider or supplier outside the ACO during the
performance year (we note that in such cases, the change in designation
would be taken into account at the beginning of the next performance
year).
In brief, if a beneficiary designates an ACO professional that they
believe is responsible for coordinating their overall care as their
``main doctor'', the beneficiary will be assigned to the ACO in which
that ACO professional is participating, as long as the ACO
professional's specialty is used in assignment and the beneficiary has
received at least one primary care service from a physician in that ACO
and does not meet the criteria for exclusion. If these criteria are
met, the beneficiary's selection of his or her ``main doctor'' and,
ultimately, assignment to the ACO would take precedence over any
assignment to an ACO based on claims. For example, if a beneficiary
selects a physician in ACO 1 as his or her main doctor, the
beneficiary's designation would take precedence over claims-based
assignment, as long as the physician's specialty is used in assignment
and the beneficiary received a primary care service from a physician in
ACO 1. This will be the case even if the beneficiary would have
otherwise been assigned to ACO 2 through claims-based assignment.
However, if a beneficiary designates a physician or practitioner in
an ACO and the conditions for assignment are not met, then the claims-
based assignment methodology will be used to determine the
beneficiary's assignment. For example, if a beneficiary designates a
physician in ACO 1, he or she could not be assigned to ACO 1 based on
the attestation if he or she did not receive at least one primary care
service from a physician in ACO 1. Similarly, if a beneficiary
designates an ACO professional in ACO 1 whose services are not used in
assignment, the claims-based assignment methodology would be used to
determine whether the beneficiary will be assigned to ACO 1, another
ACO, or to no ACE. Relatedly, if a beneficiary designates a
practitioner with a specialty used in assignment and the practitioner
is not affiliated with an ACO, then the beneficiary will not be
eligible for assignment to an ACO, even if the beneficiary would have
otherwise been assigned to an ACO through claims-based assignment.
Finally, we also clarify that consistent with Sec. 425.400(a)(1),
the assignment methodology described under Sec. 425.402 also applies
to benchmarking years. Accordingly, when determining beneficiary
assignment for a benchmark year, we will incorporate beneficiary
designations that were in place during the assignment window for the
benchmarking year.
Comment: One commenter supported aligning beneficiaries that choose
a ``main doctor'' indefinitely until the beneficiary changes his or her
designation, drawing an analogy with the way beneficiaries who select
an MA Plan continue under that MA Plan until the beneficiary chooses
otherwise. Another commenter expressed concern that this policy could
result in an ACO being inappropriately held responsible for the costs
of a beneficiary's care even in cases where the ACO no longer has a
relationship with the beneficiary and has not furnished services to
that beneficiary for years. The commenter recommended that voluntary
alignment override the existing assignment methodology only when a
beneficiary has at least one qualified primary care service during the
previous or current performance year with an ACO professional that
would be considered under Step 1 or Step 2 of the Shared Savings
Program assignment methodology (based on the existing services used for
Shared Savings Program assignment). Another commenter recommended that
if the beneficiary does not update their selection annually, reverting
to the claims-based alignment should be the default because that will
be updated regularly as beneficiaries express their preference through
their healthcare provider visits.
Response: We continue to believe that it would be appropriate,
under an automated voluntary alignment process, for a beneficiary's
designation of a healthcare provider as being responsible for
coordinating their overall care to stay in effect until the beneficiary
voluntarily changes his or her designation. We intend to remind
beneficiaries to make a selection and update it annually; however, we
believe it would be burdensome to require beneficiaries make this
designation each year. We also agree that it would be

[[Page 80507]]

inappropriate for an ACO to be held responsible for the costs of a
beneficiary's care in cases where the ACO no longer has a relationship
with the beneficiary and has not furnished services to that beneficiary
for years. However, we believe the voluntary alignment policy directly
addresses this concern because, under the proposal, beneficiaries that
have voluntarily aligned with an ACO by designating an ACO professional
whose services are used in assignment as responsible for coordinating
their overall care would be added to the ACO's list of assigned
beneficiaries for a performance year or benchmark year only if certain
conditions are met. One of these required conditions is that a
beneficiary must have had at least one primary care service with a
physician who is an ACO professional in the ACO and who is a primary
care physician as defined under Sec. 425.20 or who has one of the
primary specialty designations included in Sec. 425.402(c). In this
final rule, we are amending the proposed regulations text at Sec.
425.402(e)(2)(i) to clarify that in order for a beneficiary to be
eligible for assignment under voluntary alignment this service must
have been received during the ``assignment window'' for the applicable
benchmark or performance year as defined at Sec. 425.20. This
requirement will ensure that a beneficiary cannot remain aligned to an
ACO for an extended period if the beneficiary's designation is outdated
and the beneficiary is no longer receiving services from any ACO
providers/suppliers in the ACO.
Comment: Several commenters raised specific concerns over the use
of certain phrases such as ``main doctor'' and recommended testing such
terminology with beneficiaries through focus groups or other methods.
For example, some commenters believe the term ``main doctor'' is too
ambiguous. Other commenters requested that CMS revise physician-centric
language such as ``main doctor'' to avoid miscommunication given that
certain non-physician practitioners are also included in the assignment
process. A commenter suggested that CMS should also work with other
payers to align terms.
Response: We appreciate receiving the helpful comments regarding
what terminology would be preferable to ensure beneficiaries understand
the significance of designating a provider or supplier as responsible
for coordinating their overall care. We will consider these suggestions
further as we implement voluntary alignment and develop program
guidance and outreach activities for beneficiaries and ACOs. We note
that the terms used in the Innovation Center models have undergone
beneficiary focus group testing. However, we may conduct further
beneficiary focus group testing if necessary to ensure the terms used
are appropriate and understandable to beneficiaries.
Comment: One commenter recommended EHR-compatible transfer of
information about beneficiary attestations.
Response: We are not entirely certain what the commenter had in
mind, but we believe it is a request that we consider building in a
method to electronically alert a practitioner that the beneficiary has
designated him or her as their ``main doctor. We agree that such a
feedback loop could be desirable to encourage and enhance the
relationship beneficiaries have with their practitioners. In the future
we may consider such possibilities but at this time we plan to
prioritize development and implementation of an automated voluntary
alignment process within MyMedicare.gov, as discussed in this section.
Comment: Several commenters requested more detail regarding the
process and timing for beneficiaries to designate their ``main doctor''
and how ACOs would be educated about the voluntary alignment process
and applicable program requirements.
Response: We will notify beneficiaries of this opportunity and
encourage them to designate their ``main doctor'' or primary healthcare
provider responsible for coordinating their overall care and explain
how to do this through beneficiary outreach materials such as through
the Medicare & You Handbook (see https://www.medicare.gov/medicare-and-you/medicare-and-you.html), the required Shared Savings Program
notifications under Sec. 425.312, and/or other beneficiary outreach
activities or materials. We intend to issue, either directly or
indirectly through template language (for example, template language
that would be incorporated into the ACO's required written
notifications under Sec. 425.312), written communications to
beneficiaries detailing the automated process for voluntary alignment.
The designation must be made in the form and manner and by a deadline
determined by CMS. Additionally, as noted above, in the proposed rule
we stated that to maintain flexibility for ACOs, ACO participants, ACO
providers/suppliers, ACO professionals, beneficiaries, and CMS, we
would intend to provide further operational details regarding the
voluntary alignment process and the applicable implementation timelines
through subregulatory guidance and other outreach activities. We
anticipate ensuring ACO and practitioner understanding and compliance
with program rules using typical methods, for example, through
guidance, programmatic webinars, newsletter articles, email
notifications, and communications with the ACO's designated CMS
coordinator. We intend to monitor beneficiary use of the voluntary
alignment process and the ACO's compliance with program rules.
Comment: One commenter expressed concerns about using
MyMedicare.gov or 1-800-Medicare as the only avenue to collect
beneficiary attestations, questioning how frequently beneficiaries are
actively engaging with Medicare through these vehicles. The commenter
also recommended that the designation of a ``main doctor'' should be
independent of the ``favorites'' indication in MyMedicare.gov,
suggesting that being designated as a ``favorite'' is not a good
indicator of being a ``main doctor''.
Response: The operational process for beneficiaries to voluntarily
align with an ACO by designating a ``main doctor'' or primary
healthcare provider responsible for coordinating their overall care
will be incorporated into existing processes to the extent feasible. As
we indicated in the proposed rule, examples by which such a process
could be automated include using MyMedicare.gov, 1-800-Medicare, or
Physician Compare. We anticipate that for the first year of the
automated process, we will enable beneficiaries to voluntarily align
with an ACO by designating a ``main doctor'' or primary healthcare
provider responsible for coordinating their overall care through
MyMedicare.gov. Beneficiaries or their representatives that call 1-800-
Medicare during the early implementation of the automated voluntary
alignment process in order to designate a ``main doctor'' or primary
healthcare provider will be provided with information about how to make
the designation in MyMedicare.gov. Subsequently, we plan to consider
expanding the use of 1-800-Medicare as a way for beneficiaries to make
a designation and in order to provide additional avenues or technical
assistance to support beneficiaries in making a designation. As we and
our stakeholders gain experience with the automated process, we intend
to continue to refine and build upon the automated process. More
information will be forthcoming as we gather additional input from
beneficiaries, ACOs, and other stakeholders. We agree that designating
``favorite'' providers is

[[Page 80508]]

not the same as designating a ``main doctor'' and that these two things
should be independent.
Comment: A few commenters suggested beneficiaries also be offered
the opportunity to attest in person, during a visit to an ACO provider/
supplier, if that is their preference.
Response: We are not providing an option for beneficiaries to
attest in person during a visit with an ACO provider/supplier or other
healthcare provider because we are concerned that such an option would
lead to additional program complexity and could defeat the purpose of
having an automated process that is designed to relieve stakeholder
burden experienced when such designations are made manually made at the
point of care. However, as noted above in this section, we plan to
provide written educational material and template language that ACOs
and healthcare providers can use at the point of care to inform and
educate beneficiaries about the ability to designate a healthcare
provider in MyMedicare.gov as responsible for the beneficiary's overall
care.
Comment: Other commenters questioned whether seniors would keep
their ``main doctor'' attestation up to date given their varied and
often unpredictable care needs, and therefore, asked that CMS
explicitly allow physicians and other appropriately qualified
individuals involved with patient care to assist beneficiaries in
keeping their ``main doctor'' attestation up to date.
Response: We believe it is important to promote engagement and
discussion between beneficiaries and their healthcare providers. ACOs,
ACO participants, ACO providers/suppliers, and ACO professionals may
provide a beneficiary with accurate descriptive information about the
potential patient care benefits of designating an ACO professional as
responsible for the beneficiary's overall care. However, we do not
intend for the voluntary alignment process to be used as a mechanism
for ACOs (or their ACO participants, ACO providers/suppliers, ACO
professionals or other individuals or entities performing functions or
services on behalf of the ACO) to target beneficiaries for whose
treatment the ACO might expect to earn shared savings, or to avoid
those for whose treatment the ACO might be less likely to generate
shared savings.
Comment: One commenter recommended that rather than asking
beneficiaries to designate a specific doctor, that they be asked to
designate the ACO they generally identify as where they receive health
services because this approach better aligns with ACO-level
accountability and avoids some of the confusion over ``main doctor.''
Another commenter suggested beneficiaries should be provided
information about the process for opting-out of alignment with an ACO.
Response: Our experience with the Pioneer ACO Model indicates that
beneficiaries are less likely to identify with an ACO as compared to an
individual healthcare provider; that is, when given the option,
beneficiaries are more likely to align with their practitioner, not
with an organization. Accordingly, we continue to believe it is
appropriate under an automated system for beneficiaries to be given the
option to voluntarily align with an individual healthcare provider
rather than to an ACO with which the beneficiary may not be familiar.
For the same reason, we do not believe it is necessary or appropriate
to give beneficiaries the option of ``opting out'' of assignment to an
ACO. The intent of the voluntary alignment process is to seek to
improve beneficiary engagement with a selected practitioner that he/she
designates as being responsible for his/her overall care, regardless of
whether the practitioner is participating in an ACO.
Comment: One commenter recommended information be provided to an
ACO as soon as the attestation is updated within the CMS designated
system when one of its assigned beneficiaries designates a new ``main
doctor.'' The commenter believed this notification would allow ACOs
time to make any updates to their management of their ``participation
programs'' and properly manage their patient populations, and it would
give them guidance on how to set up for their next performance year.
Response: We are considering possible ways of notifying ACOs that a
beneficiary has designated one of their ACO providers/suppliers as
their ``main doctor;'' however, we note that the under the modified
policy we are adopting in this final rule, ACOs in all tracks will have
advanced notice when a beneficiary is assigned to them based on the
voluntary alignment methodology because such beneficiaries will be
prospectively assigned to the ACO for that performance year and will
appear on the ACO's assignment list at the beginning of the performance
year.
Comment: A commenter suggested CMS should provide beneficiaries
with a list of providers that they have seen recently (based on claims)
to simplify their selection and help them accurately select their
``main doctor.'' The commenter believed this approach would mitigate
the risk of beneficiaries accidentally selecting doctors with similar
names, for example.
Response: We agree this information could be useful for
beneficiaries. This is a feature that already exists in MyMedicare.gov
where beneficiaries can access their claims information which includes
information such as the name of the practitioner that submitted the
claim. We note this information can be used currently to build the
beneficiary's ``favorites'' list. Similarly, the beneficiary could use
the information to assist in making their ``main doctor'' designation.
Comment: A commenter suggested an alternative approach for
assigning beneficiaries to ACOs using claims submitted by providers and
suppliers using only the codes for initial Medicare visits, annual
wellness visits, chronic care management, and advanced care planning;
the commenter believed this alternative approach would be less
cumbersome for CMS to administer and a simpler and more streamlined
approach for beneficiaries and the primary care physician.
Response: We will continue to consider suggestions that might
further improve the beneficiary assignment methodology. However, we are
giving priority to supplementing the current claims-based assignment
process with a voluntary alignment process that incorporates
beneficiary attestation about their ``main doctor'' which we believe
will more directly help ACOs to increase patient engagement, improve
care management and health outcomes, and lower expenditures for
beneficiaries. The process may also be advantageous for beneficiaries
by improving engagement between the beneficiary and the practitioner
they believe is primarily responsible for their overall care.
Comment: A commenter suggested CMS provide incentives for
beneficiaries who designate an ACO professional within the ACO.
Response: We are unclear as to what incentives this commenter was
suggesting but we would note that we do not believe we have authority
under the Shared Savings Program to provide incentives for
beneficiaries who designate an ACO professional within the ACO as their
``main doctor.'' Further, the ACO, ACO participants, ACO providers/
suppliers, ACO professionals, and other individuals and entities
performing functions and services related to ACO activities are
prohibited from providing or offering gifts or other remuneration to
Medicare beneficiaries as inducements to influence a Medicare
beneficiary's decision to designate or not designate an

[[Page 80509]]

ACO professional as responsible for coordinating their overall care.
Comment: We received several comments supporting the proposals to
prohibit ACOs from directly or indirectly influencing a Medicare
beneficiary's decision to designate or not designate an ACO
professional as responsible for coordinating their overall care. The
commenters indicated this could help ensure that ACOs do not ``cherry-
pick'' the healthiest patients or ``lemon-drop'' patients with certain
complex, costly diseases. Some commenters also urged CMS to put in
place mechanisms to monitor the impact of voluntary alignment on the
composition of ACOs' assigned beneficiary populations, especially with
regard to any changes in the prevalence of patients with certain
complex, costly diseases within a specific ACO.
Response: We intend to monitor the implementation of voluntary
alignment. As noted above in this section, we emphasize that we do not
intend for the voluntary alignment process to be used as a mechanism
for ACOs (or their ACO participants, ACO providers/suppliers, ACO
professionals or other individuals or entities performing functions or
services on behalf of the ACO) to target beneficiaries for whose
treatment the ACO might expect to earn shared savings, or to avoid
those for whose treatment the ACO might be less likely to generate
shared savings. However, we believe it is important to promote
engagement and discussion between beneficiaries and their healthcare
providers. Therefore ACOs, ACO participants, ACO providers/suppliers,
and ACO professionals are not prohibited from providing a beneficiary
with accurate descriptive information about the potential patient care
benefits of designating an ACO professional as responsible for the
beneficiary's overall care.
Final Action: We are finalizing our proposal to incorporate
beneficiary preference into ACO assignment as proposed with two
modifications as noted above. In addition, we are making a minor
editorial revision to paragraph (b) of Sec. 425.402 in order to more
clearly identify beneficiaries assigned by the claims-based assignment
methodology.
We no longer intend to develop a manual voluntary
alignment process as an alternative for ACOs participating in Track 3
in the event an automated process is not ready for performance year
2018, and instead will focus on developing and implementing an
automated voluntary alignment process with the intent of incorporating
beneficiary designations into the current claims-based assignment
algorithm beginning with the 2018 performance year. If an automated
system is not available during the assignment window for the 2018
performance year, then voluntary alignment would not be used for
performance year 2018.
We are modifying our proposed policy to incorporate new or
revised beneficiary attestations and align such beneficiaries to ACOs
in Tracks 1 and 2 on a quarterly basis and instead will incorporate
these updates and align such beneficiaries prospectively for all tracks
at the beginning of each performance and benchmark year, provided the
beneficiary is eligible for assignment to the ACO in which their
designated ``main doctor'' is participating.
We are modifying Sec. 425.402, paragraph (b), by removing
the phrase ``beneficiaries to an ACO:'' and adding in its place the
phrase ``beneficiaries to an ACO based on available claims
information.'' This revision is necessary to ensure understanding that
the procedure described under paragraph (b) is based on claims data,
not on other data that may be available (such as voluntary alignment
data).
We are also revising the regulations governing the assignment
methodology to amend Sec. 425.402(b) and add a new paragraph (e) to
Sec. 425.402. Beginning in performance year 2018, if a system is
available to allow beneficiaries to designate a provider or supplier as
responsible for coordinating their overall care and for CMS to process
the designation electronically, beneficiaries that have voluntarily
aligned with an ACO by designating an ACO professional whose services
are used in assignment as responsible for coordinating their overall
care will be added to the ACO's list of assigned beneficiaries, for a
benchmark or performance year under the following conditions:
The beneficiary must have had at least one primary care
service during the assignment window as defined under Sec. 425.20 with
a physician who is an ACO professional in the ACO and who is a primary
care physician as defined under Sec. 425.20 of this subpart or who has
one of the primary specialty designations included in Sec. 425.402(c).
The beneficiary must meet the assignment eligibility
criteria established in Sec. 425.401(a), and must not be excluded by
the criteria at Sec. 425.401(b). Such exclusion criteria shall apply
to all tracks for purposes of alignment based on beneficiary
designation information.
The beneficiary must have designated an ACO professional
who is a primary care physician as defined at Sec. 425.20 of this
part, a physician with a specialty designation included at Sec.
425.402(c) of this subpart, or a nurse practitioner, physician
assistant, or clinical nurse specialist as responsible for their
overall care.
The designation must be made in the form and manner and by
a deadline determined by CMS.
In contrast, if a beneficiary designates a provider or supplier
outside the ACO, who is a primary care physician as defined at Sec.
425.20 of this part, a physician with a specialty designation included
at Sec. 425.402(c), or a nurse practitioner, physician assistant, or
clinical nurse specialist, as responsible for coordinating their
overall care, the beneficiary will not be added to the ACO's list of
assigned beneficiaries for a performance year or benchmark year, even
if the beneficiary would otherwise be included in the ACO's assigned
beneficiary population under the assignment methodology in Sec.
425.402(b).
Further, we are finalizing our proposal that the ACO and its ACO
participants, ACO providers/suppliers, ACO professionals, and other
individuals or entities performing functions or services related to ACO
activities are prohibited from providing or offering gifts or other
remuneration to Medicare beneficiaries as inducements to influence a
Medicare beneficiary's decision to designate or not designate an ACO
professional under Sec. 425.402(e). The ACO, ACO participants, ACO
providers/suppliers, ACO professionals, and other individuals or
entities performing functions or services related to ACO activities
must not directly or indirectly, commit any act or omission, nor adopt
any policy that coerces or otherwise influences a Medicare
beneficiary's decision to designate or not designate an ACO
professional as responsible for coordinating their overall care,
including but not limited to the following:
Offering anything of value to the Medicare beneficiary as
an inducement to influence the Medicare beneficiary's decision to
designate or not to designate an ACO professional as responsible for
coordinating their overall care. Any items or services provided in
violation of this prohibition will not be considered to have a
reasonable connection to the medical care of the beneficiary, as
required under Sec. 425.304(a)(2).
Withholding or threatening to withhold medical services or
limiting or threatening to limit access to care.
We will provide further operational details regarding the voluntary
alignment process and the applicable

[[Page 80510]]

implementation timelines through subregulatory guidance and other
outreach activities.
3. SNF 3-Day Rule Waiver Beneficiary Protections
a. Background
The Medicare SNF benefit is for beneficiaries who require a short-
term intensive stay in a SNF, requiring skilled nursing, or skilled
rehabilitation care, or both. Under section 1861(i) of the Act,
beneficiaries must have a prior inpatient hospital stay of no fewer
than 3 consecutive days in order to be eligible for Medicare coverage
of inpatient SNF care. In the June 2015 final rule (80 FR 32804 through
32806), we provided ACOs participating in Track 3 with additional
flexibility to attempt to increase quality and decrease costs by
allowing these ACOs to apply for a waiver of the SNF 3-day rule for
their prospectively assigned beneficiaries when they are admitted to
certain ``SNF affiliates,'' that is, SNFs with whom the ACO has
executed SNF affiliate agreements. (See Sec. 425.612(a)(1)). Waivers
are effective upon CMS notification of approval for the waiver or the
start date of the ACO's participation agreement, whichever is later.
(See Sec. 425.612(c)). We stated in the June 2015 final rule that the
SNF 3-day rule waiver would be effective for services furnished on or
after January 1, 2017. Program requirements for this waiver are
codified at Sec. 425.612. These requirements are primarily based on
criteria previously developed under the Pioneer ACO Model.
Specifically, under Sec. 425.612(a)(1), we waive the requirement in
section 1861(i) of the Act for a 3-day inpatient hospital stay prior to
a Medicare covered post-hospital extended care service for eligible
beneficiaries prospectively assigned to ACOs participating in Track 3
that have been approved to implement the waiver that receive otherwise
covered post-hospital extended care services furnished by an eligible
SNF that has entered into a written agreement to partner with the ACO
for purposes of this waiver. All other provisions of the statute and
regulations regarding Medicare Part A post-hospital extended care
services continue to apply.
We believe that clarity regarding whether a waiver applies to SNF
services furnished to a particular beneficiary is important to help
ensure compliance with the conditions of the waiver and also improve
our ability to monitor waivers for misuse. Therefore, in the June 2015
final rule, we limited the waiver to ACOs in Track 3 because under the
prospective assignment methodology used in Track 3, beneficiaries are
assigned in advance to the ACO for the entire performance year (unless
they meet any of the exclusion criteria under Sec. 425.401(b) during
the performance year), so it will be clearer to a Track 3 ACO whether
the waiver applies to SNF services furnished to a particular
beneficiary than it would be to an ACO in Track 1 or 2, where
beneficiaries are assigned using a preliminary prospective assignment
methodology with retrospective reconciliation (80 FR 32804). An ACO's
use of the SNF 3-day rule waiver will be associated with a distinct and
easily identifiable event, specifically, admission of a prospectively
assigned beneficiary to a previously identified SNF affiliate without
prior inpatient hospitalization or after an inpatient hospitalization
of fewer than 3 days.
Based on our experiences under the Pioneer ACO Model, and in
response to comments, we established certain requirements under Sec.
425.612 for ACOs, ACO providers/suppliers, SNF affiliates, and
beneficiaries with respect to the SNF 3-day rule waiver under the
Shared Savings Program. All ACOs electing to participate in Track 3
will be offered the opportunity to apply for a waiver of the SNF 3-day
rule for their prospectively assigned beneficiaries at the time of
their initial application to participate in Track 3 of the program and
annually thereafter while participating in Track 3. We began accepting
the first SNF 3-day rule waiver applications from Track 3 ACOs this
past summer.
To be eligible to receive covered services under the SNF 3-day rule
waiver, a beneficiary must be prospectively assigned to the ACO for the
performance year in which he or she is admitted to the SNF affiliate,
may not reside in a SNF or other long-term care setting, must be
medically stable and have an identified skilled nursing or
rehabilitation need that cannot be provided as an outpatient, and must
meet the other requirements set forth at Sec. 425.612(a)(1)(ii).
For a SNF to be eligible to partner with ACOs for purposes of the
waiver, the SNF must have an overall quality rating of 3 or more stars
under the CMS 5 Star Quality Rating System, and must sign a written
agreement with the ACO, which we refer to as the ``SNF affiliate
agreement,'' that includes elements determined by CMS, including: A
clear indication of the effective dates of the SNF affiliate agreement;
agreement to comply with Shared Savings Program rules, including but
not limited to those specified in the participation agreement between
the ACO and CMS; agreement to validate beneficiary eligibility to
receive covered SNF services under the waiver prior to admission;
remedial processes and penalties for noncompliance with the terms of
the waiver, and other requirements set forth at Sec.
425.612(a)(1)(iii). The SNF affiliate agreement must include these
elements to ensure that the SNF affiliate understands its
responsibilities related to implementation of the SNF 3-day rule
waiver.
We indicated in the June 2015 final rule that the SNF 3-day rule
waiver would be effective no earlier than January 1, 2017; thereafter,
the waiver will be effective upon CMS notification to the ACO of
approval for the waiver or the start date of the ACO's participation
agreement, whichever is later, and will not extend beyond the term of
the ACO's participation agreement.
We also indicated in the June 2015 final rule that we established
the timeline for implementation of the SNF 3-day rule waiver to allow
for development of additional subregulatory guidance, including
necessary education and outreach for ACOs, ACO participants, ACO
providers/suppliers, and SNF affiliates. We noted that we would
continue to evaluate the waiver of the SNF 3-day rule, including
further lessons learned from Innovation Center models in which a waiver
of the SNF 3-day rule is being tested. We indicated that in the event
we determined that additional safeguards or protections for
beneficiaries or other changes were necessary, such as to incorporate
additional protections for beneficiaries into the ACO's participation
agreement or SNF affiliate agreements, we would propose the necessary
changes through future rulemaking.
In considering additional beneficiary protections that may be
necessary to ensure proper use of the SNF 3-day rule waiver under the
Shared Savings Program, we note that there are existing, well
established payment and coverage policies for SNF services based on
sections 1861(i), 1862(a)(1), and 1879 of the Act that include
protections for beneficiaries from liability for certain non-covered
SNF charges. These existing payment and coverage policies for SNF
services continue to apply to SNF services furnished to beneficiaries
assigned to ACOs participating in the Shared Savings Program, including
services furnished pursuant to the SNF 3-day rule waiver. (For example,
see the Medicare Claims Processing Manual, Chapter 30--Financial
Liability Protections, section 70, available at https://www.cms.gov/
Regulations-and-Guidance/Guidance/Manuals/

[[Page 80511]]

Downloads/clm104c30.pdf; Medicare Coverage of Skilled Nursing Facility
Care beneficiary booklet, Section 6: Your Rights & Protections,
available at https://www.medicare.gov/Pubs/pdf/10153.pdf; and Medicare
Benefit Policy Manual, Chapter 8--Coverage of Extended Care (SNF)
Services Under Hospital Insurance available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/bp102c08.pdf). In
general, CMS requires that the SNF inform a beneficiary in writing
about services and fees before the beneficiary is admitted to the SNF
(Sec. 483.10(b)(6)); the beneficiary cannot be charged by the SNF for
items or services that were not requested (Sec. 483.10(c)(8)(iii)(A));
a beneficiary cannot be required to request extra services as a
condition of continued stay (Sec. 483.10(c)(8)(iii)(B)); and the SNF
must inform a beneficiary that requests an item or service for which a
charge will be made that there will be a charge for the item or service
and what the charge will be (Sec. 483.10(c)(8)(iii)(C)). (See also
section 6 of Medicare Coverage of Skilled Nursing Facility Care at
https://www.medicare.gov/Pubs/pdf/10153.pdf.)
b. Proposals
Since publication of the June 2015 final rule, we have continued to
learn from implementation and refinement of the SNF 3-day rule waiver
in the Pioneer ACO Model (see https://innovation.cms.gov/initiatives/Pioneer-aco-model/) and the Next Generation ACO Model (see https://innovation.cms.gov/initiatives/Next-Generation-ACO-Model). Based on
these experiences, we indicated in the proposed rule that we believe
there are situations where it would be appropriate to require
additional beneficiary financial protections under the SNF 3-day rule
waiver for the Shared Savings Program. Specifically, we are concerned
about potential beneficiary financial liability for non-covered Part A
SNF services that might be directly related to use of the SNF 3-day
rule waiver under the Shared Savings Program.
First, one example of a scenario under which a beneficiary may be
at financial risk relates to the quarterly exclusions from a Track 3
ACO's prospective assignment list. For example, assume a beneficiary
was prospectively assigned to a Track 3 ACO that has been approved for
the SNF 3-day rule waiver (a waiver-approved ACO), but during the first
quarter of the year, the beneficiary's Part B coverage terminated and
the beneficiary is therefore no longer eligible to be assigned to the
ACO. As a result, the beneficiary would be excluded from the ACO's
prospective assignment list because the beneficiary meets one or more
of the exclusion criteria specified at Sec. 425.401(b). That is,
although SNF services are covered under Part A, not Part B, the
beneficiary would be dropped from the ACO's prospective assignment list
if during the performance year the beneficiary is no longer enrolled in
Part B and thus no longer eligible to be assigned to the ACO. We are
concerned about some very limited situations, such as when a
beneficiary's Part B coverage terminates during a quarter when the
beneficiary is also receiving SNF services. The beneficiary may be
admitted to a SNF without a prior 3-day inpatient hospital stay after
his or her Part B coverage ended, but before the beneficiary appears on
a quarterly exclusion list. It is not operationally feasible for CMS to
notify the ACO and for the ACO, in turn, to notify its SNF affiliates,
ACO participants, and ACO providers/suppliers immediately of the
beneficiary's exclusion. The lag in communication may then cause the
SNF affiliate to unknowingly admit a beneficiary who no longer
qualifies for the waiver without a prior 3-day inpatient hospital stay.
Absent specific beneficiary protections, we are concerned that the
beneficiary could be charged for such non-covered SNF services. We do
not believe it would be appropriate for CMS to hold the beneficiary or
the SNF affiliate financially liable for such services. We believe we
should allow for a reasonable amount of time for CMS to communicate
beneficiary exclusions to an ACO and for the ACO to communicate the
exclusions to its SNF affiliates, ACO participants, and ACO providers/
suppliers. Typically there would be no way for the SNF affiliate to
verify in real-time that a beneficiary continues to be prospectively
assigned to the ACO; the SNF affiliate must rely upon the assignment
list and quarterly exclusion lists provided by CMS to the ACO and
communicated by the ACO to its SNF affiliates, ACO participants, and
ACO providers/suppliers. Further, the beneficiary does not receive a
notification regarding his or her eligibility for the SNF 3-day rule
waiver prior to receiving SNF services under the waiver, so
beneficiaries are not able to check their own eligibility.
To address delays in communicating beneficiary exclusions from the
prospective assignment list, the Pioneer ACO Model and Next Generation
ACO Model provide for a 90-day grace period that functionally acts as
an extension of beneficiary eligibility for the SNF 3-day rule waiver
and permits some additional time for the ACO to receive quarterly
exclusions lists from CMS and communicate beneficiary exclusions to its
SNF affiliates. In the proposed rule, we stated that we believe it
would be appropriate, in order to protect beneficiaries from potential
financial liability related to the SNF 3-day rule waiver under the
Shared Savings Program, to establish a similar 90-day grace period in
the case of a beneficiary who was prospectively assigned to a waiver-
approved ACO at the beginning of the performance year but is later
excluded from assignment to the ACO.
Therefore, we explained that we believe it is necessary for
purposes of carrying out the Shared Savings Program to allow formerly
assigned beneficiaries to receive covered SNF services under the SNF 3-
day rule waiver when the beneficiary is admitted to a SNF affiliate
within a 90-day grace period following the date that CMS delivers the
quarterly beneficiary exclusion list to an ACO. The equitable and
efficient implementation of the SNF 3-day rule waiver is necessary to
further support ACOs' efforts to increase quality and decrease costs
under two-sided performance-based risk arrangements. (See 80 FR 32804
for a detailed discussion of the rationale for establishing the SNF 3-
day rule waiver.) Based upon the experience in the Pioneer ACO Model,
we believe it is not possible to adopt such a waiver without providing
some protection for certain beneficiaries who were prospectively
assigned to the ACO at the start of the year, but are subsequently
excluded from assignment. Accordingly, we proposed to modify the waiver
to include a 90-day grace period to allow sufficient time for CMS to
notify the ACO of any beneficiary exclusions, and for the ACO then to
inform its SNF affiliates, ACO participants, and ACO providers/
suppliers of those exclusions.
More specifically, we proposed to modify the waiver under Sec.
425.612(a)(1) to include a 90-day grace period that would permit
payment for SNF services provided to beneficiaries who were initially
on the ACO's prospective assignment list for a performance year but
were subsequently excluded during the performance year. CMS would make
payments for SNF services furnished to such a beneficiary under the
terms of the SNF 3-day rule waiver if the following conditions are met:
The beneficiary was prospectively assigned to a waiver-
approved ACO at the beginning of the performance year

[[Page 80512]]

but was excluded in the most recent quarterly exclusion list.
The SNF affiliate services are furnished to a beneficiary
admitted to the SNF affiliate within 90 days following the date that we
deliver the quarterly exclusion list to the ACO.
We would have otherwise made payment to the SNF affiliate
for the services under the SNF 3-day rule waiver, but for the
beneficiary's exclusion from the waiver-approved ACO's prospective
assignment list.
We further noted that we anticipate that there would be very few
instances where it would be appropriate for SNF services to qualify for
payment under this 90-day grace period. This is because this waiver
only allows for payment for claims that meet all applicable
requirements except the requirement for a prior 3-day inpatient
hospital stay. For example, assume that a beneficiary who had been
assigned to a waiver-approved ACO was admitted to a SNF without a prior
3-day inpatient hospital stay after his or her enrollment in an MA
Plan, but before the beneficiary appears on a quarterly exclusion list.
In this case, these SNF services would not be covered under FFS because
the waiver does not expand coverage to include services furnished to
Medicare beneficiaries enrolled in MA Plans. Both beneficiaries and
healthcare providers are expected to know that the beneficiary is
covered under an MA plan and not FFS Medicare.
Second, we are concerned that there could be other more likely
scenarios where a beneficiary could be charged for non-covered SNF
services that were a result of an ACO's or SNF's inappropriate use of
the SNF 3-day rule waiver. Specifically, we are concerned that a
beneficiary could be charged for non-covered SNF services if a SNF
affiliate were to admit a FFS beneficiary who is not prospectively
assigned to the waiver-approved ACO, and payment for SNF services is
denied for lack of a qualifying inpatient hospital stay.
We believe this situation could occur as a result of a breakdown in
one or more of processes the ACO and SNF affiliate are required to have
in place to implement the waiver. For example, the SNF affiliate and
the admitting ACO provider/supplier may not verify that the beneficiary
appears on the ACO's prospective assignment list prior to admission, as
required under the SNF 3-day rule waiver (Sec.
425.612(a)(1)(iii)(B)(4)) and the terms of the SNF's affiliate
agreement with the ACO. In this scenario, Medicare would deny payment
of the SNF claim under existing FFS rules because the beneficiary did
not have a qualifying inpatient hospital stay. We are concerned that,
once the claim is rejected, the beneficiary may not be protected from
financial liability, and thus could be charged by the SNF affiliate for
these non-covered SNF services that were a result of an inappropriate
attempt to use the waiver, potentially subjecting the beneficiary to
significant financial liability. However, in this scenario, a SNF with
a relationship to the ACO submitted the claim that was rejected for
lack of a qualifying inpatient hospital stay, but that otherwise would
have been paid by Medicare. In this circumstance, we proposed to assume
the SNF's intent was to rely upon the SNF 3-day rule waiver, but the
waiver requirements were not met. We believe it is reasonable to assume
the SNF's intent was to use the SNF 3-day rule waiver because, as a SNF
affiliate, the SNF should be well aware of the ability to use the SNF
3-day rule waiver and, by submitting the claim, demonstrated an
expectation that CMS would pay for SNF services that would otherwise
have been rejected for lack of a 3-day inpatient hospital stay. We
believe that in this scenario, the rejection of the claim under the SNF
3-day rule waiver could easily have been avoided if the ACO, the
admitting ACO provider/supplier, and the SNF affiliate had confirmed
that the requirements for use of the SNF 3-day rule waiver were
satisfied. Because each of these entities is in a better position to
know the requirements of the waiver and ensure that they are met than
the beneficiary is, we believe that the ACO and/or the SNF affiliate
should be accountable for such rejections and the SNF affiliate should
be prevented from attempting to charge the beneficiary for the non-
covered SNF stay.
To address situations similar to this scenario where the
beneficiary may be subject to financial liability due to an eligible
SNF submitting a claim that is not paid only as a result of the lack of
a qualifying inpatient hospital stay, the Next Generation ACO Model
generally places the financial responsibility on the SNF, where the SNF
knew or reasonably could be expected to have known that payment would
not be made for the non-covered SNF services. In such cases, CMS makes
no payment for the services and the SNF may not charge the beneficiary
for the services and must return any monies collected from the
beneficiary. Additionally, under the Next Generation ACO Model, the ACO
must indemnify and hold the beneficiary harmless for payment for the
services. We believe it is appropriate to propose to adopt a similar
policy under the Shared Savings Program because, under Sec.
425.612(a)(1)(iii)(B), to be a SNF affiliate, a SNF must agree to
validate the eligibility of a beneficiary to receive covered SNF
services in accordance with the waiver prior to admission to the SNF,
and otherwise comply with the requirements and conditions of the Shared
Savings Program. SNF affiliates are required to be familiar with the
SNF 3-day rule and the terms and conditions of the SNF 3-day rule
waiver for the Shared Savings Program, and should know to verify that a
FFS Medicare beneficiary who is a candidate for admission has completed
a qualifying hospital stay or that the admission meets the criteria
under a waiver of the SNF 3-day rule that is properly in place.
Additionally, ACOs and their SNF affiliates are required to develop
plans that will govern communication and beneficiary evaluation and
admission prior to use of the SNF 3-day rule waiver. In these
circumstances, we believe it is reasonable that the ultimate
responsibility and liability for a non-covered SNF admission should
rest with the admitting SNF affiliate.
Therefore, to protect FFS beneficiaries from being charged in
certain circumstances for non-covered SNF services related to the
waiver of the SNF 3-day rule under the Shared Savings Program,
potentially subjecting such beneficiaries to significant financial
liability, we proposed to add certain beneficiary protection
requirements in Sec. 425.612(a)(1). These requirements would apply to
SNF services furnished by a SNF affiliate that would otherwise have
been covered except for the lack of a qualifying hospital stay
preceding the admission to the SNF affiliate. Specifically, we proposed
that we would make no payment to the SNF, and the SNF may not charge
the beneficiary for the non-covered SNF services, in the event that a
SNF that is a SNF affiliate of a Track 3 ACO that has been approved for
the SNF 3-day rule waiver admits a FFS beneficiary who was never
prospectively assigned to the waiver-approved ACO (or was assigned but
later excluded and the 90 day grace period has lapsed), and the claim
is rejected only for lack of a qualifying inpatient hospital stay.
In this situation, we proposed that we would apply the following
rules:
We would make no payment to the SNF affiliate for such
services.
The SNF affiliate must not charge the beneficiary for the
expenses incurred for such services, and the SNF affiliate must return
to the beneficiary any monies collected for such services.

[[Page 80513]]

The ACO may be required to submit a corrective action plan
to CMS for approval as specified at Sec. 425.216(b) addressing what
actions the ACO will take to ensure that the SNF 3-day rule waiver is
not misused in the future. If after being given an opportunity to act
upon the corrective action plan the ACO fails to come into compliance,
approval to use the waiver will be terminated in accordance with Sec.
425.612(d). We noted that in accordance with our existing program rules
at Sec. Sec. 425.216 and 425.218, CMS retains the authority to take
corrective action, including terminating an ACO for non-compliance with
program rules. A misuse of a waiver under Sec. 425.612 would
constitute non-compliance with program rules. Accordingly, we proposed
to codify at new provision at Sec. 425.612(d)(4) providing that misuse
of a waiver under Sec. 425.612 may result in CMS taking remedial
action against the ACO under Sec. Sec. 425.216 and 425.218, up to and
including termination of the ACO from the Shared Savings Program.
We proposed that if the SNF submitting the claim is a SNF affiliate
of a waiver-approved ACO, and the only reason for the rejection of the
claim is lack of a qualifying inpatient hospital stay, then CMS would
assume the SNF intended to rely upon the SNF 3-day rule waiver. We
would not assume the SNF intended to rely upon the SNF 3-day rule
waiver if the SNF is not a SNF affiliate of a waiver-approved ACO
because the waiver is not available to SNFs more broadly. We explained
that we believe intended reliance on the waiver is an important factor
in determining whether the proposed additional beneficiary protections
should apply. Outside the context of an intent to rely on the SNF 3-day
rule waiver, we do not believe it would be necessary to include
additional beneficiary protections under the Shared Savings Program
because there is no reason for either the beneficiary or the SNF to
expect that different coverage rules would apply to SNF services. In
these other situations, the beneficiary protections generally
applicable under traditional FFS Medicare, noted earlier in this
section, continue to apply.
We solicited comments on these proposals. We noted that under our
proposed beneficiary protection provision, a SNF affiliate would be
prohibited from charging a beneficiary for non-covered SNF services
even in cases where the beneficiary explicitly requested or agreed to
being admitted to the SNF in the absence of a qualifying 3-day hospital
stay if all other requirements for coverage are met. We therefore
specifically solicited comment on whether it is reasonable to hold SNFs
that are SNF affiliates responsible for all claims that are rejected
solely as a result of lack of a qualifying inpatient hospital stay. We
also solicited comment on whether the ACO rather than or in addition to
the SNF affiliate, should be held liable for such claims and under what
circumstances. We also solicited comment on our proposal to modify the
waiver under Sec. 425.612(a)(1) to include a 90-day grace period for
beneficiaries prospectively assigned to a waiver-approved ACO at the
start of the performance year but later excluded. We solicited comment
on the proposed length of the grace period, and in particular whether
the grace period should be less than 90 days, given our expectation
that ACOs will share the quarterly beneficiary exclusion lists with
their SNF affiliates, ACO participants, and ACO providers/suppliers in
a timely manner. Finally, we solicited comment on any other related
issues that we should consider in connection with these proposals to
protect beneficiaries from significant financial liability for non-
covered SNF services related to the waiver of the SNF 3-day rule under
the Shared Savings Program.
The following is a summary of the comments we received on these
proposals.
Comment: Commenters, in general, supported the proposed enhanced
beneficiary protections under the SNF 3-day rule waiver that are
largely consistent with the beneficiary protections in place under the
Next Generation ACO Model. Commenters agreed that it would be
appropriate to hold beneficiaries harmless for non-covered SNF services
if a SNF affiliate admitted a beneficiary who was not qualified for the
waiver without a qualifying inpatient stay. Commenters also generally
agreed that a 90-day grace period from the date that CMS delivers the
quarterly beneficiary exclusion list to ACOs is a reasonable period to
allow ACOs to incorporate beneficiary exclusions into their processes,
including communicating the updated beneficiary information to ACO
participants, ACO providers/suppliers, and SNF affiliates. Although
most commenters supported the proposals without additional elaboration,
a few commenters expressed other specific concerns or made additional
suggestions which are addressed in this section.
Response: We appreciate commenters' support for our proposal to
incorporate enhanced beneficiary protections under the SNF 3-day rule
waiver that are largely consistent with the beneficiary protections in
place under the Next Generation ACO Model.
Comment: A commenter recommended that the first grace period of the
calendar year be extended to accommodate a very large exclusion file
that is distributed in July. This commenter further noted that the July
exclusion file often includes a change in file format or other criteria
for files transmitted to ACOs, such that it requires significant time
to work through the data file transmission and loading process.
Response: We are a somewhat unclear about the concerns regarding
the exclusion file referenced in this comment and believe they may
perhaps relate to an EHR measure exclusion file that is unrelated to
the quarterly beneficiary exclusion process. Regardless, we believe a
90-day grace period is more than sufficient time for the appropriate
communications to occur regarding exclusions from the prospective
assignment list. Under the rules governing the SNF 3-day rule waiver,
the ACO must have a communication plan, a beneficiary evaluation and
admission plan, and a care management plan in place prior to our
approval of the ACO for use of the waiver. The requirement that an ACO
have these plans in place should help to mitigate concerns regarding
the length of the grace period by ensuring that the ACO has established
procedures in place to govern communications between the ACO, its SNF
affiliates, ACO participants, and ACO providers/suppliers regarding
beneficiary eligibility and admissions under the terms of the waiver.
Thus, we continue to believe that a 90-day grace period is a sufficient
time period for an ACO to process the quarterly exclusion list and
transmit any beneficiary exclusions to its ACO participants, ACO
providers/suppliers, and SNF affiliates.
Comment: Some commenters supported our proposal that no payments
would be made to SNF affiliates for SNF services furnished without a
qualifying inpatient hospital stay to beneficiaries who are not
assigned to the ACO or who are not in the 90-day grace period. These
commenters agreed that the financial responsibility for SNF stays that
do not meet the waiver criteria should lie with the SNF because, in
accordance with our rules for use of the waiver by SNF affiliates, SNF
affiliates are responsible for confirming a beneficiary's eligibility
to receive services under the waiver prior to admission. Some
commenters disagreed with this aspect of the proposal, suggesting that
ACOs should be responsible for at least some the

[[Page 80514]]

liability. One commenter indicated that, SNF affiliates should not be
accountable for identifying waiver-eligible beneficiaries and suggested
that CMS ``require hospitals to share the list of waiver-eligible Track
3-enrolled beneficiaries with all of their ACOs and partner SNFs.''
This commenter also requested that CMS explore additional policies that
would give SNF affiliates independent access to beneficiary waiver
eligibility information that they could access prior to admission to
verify if a beneficiary meets the eligibility requirements for the
waiver. To illustrate possibilities, the commenter suggested that CMS
could: (1) Make it a requirement for SNF affiliate agreements that the
ACO provide all SNF affiliates with timely, accurate lists of waiver-
eligible beneficiaries; or (2) CMS could integrate information
regarding eligibility for the SNF 3-day rule waiver into the Common
Working File so that SNFs may independently verify a beneficiary's
eligibility under the waiver.
Response: After reviewing the comments, we continue to believe the
proposed policy, which is based on beneficiary protections under the
Next Generation ACO Model, is also appropriate under the Shared Savings
Program. Under Sec. 425.612(a)(1)(iii)(B), in order to be a SNF
affiliate, a SNF must agree to validate the eligibility of a
beneficiary to receive covered SNF services in accordance with the
waiver prior to admission to the SNF, and otherwise comply with the
requirements and conditions of the Shared Savings Program. As a result,
we do not believe it is unreasonable to hold the SNF affiliate
financially responsible if it admits a beneficiary that is neither
prospectively assigned to a Track 3 ACO nor in a 90-day grace period
without a qualifying inpatient hospital stay. We also believe it is
reasonable to hold the SNF affiliate fully responsible under these
circumstances because a SNF affiliate is obligated under the terms and
conditions of the SNF 3-day rule waiver to validate the beneficiary's
eligibility for use of the waiver prior to admission.
Further, we do not believe that it is necessary to include the
suggested additional requirements for SNF affiliate agreements. The
current requirements provide SNFs with the flexibility to address, in
their SNF affiliate agreements with Track 3 ACOs, any concerns they may
have about the processes used by ACOs to communicate which
beneficiaries are eligible to receive covered SNF services under the
waiver.
ACOs must create and implement a communication plan between the ACO
and all of its SNF affiliates as required at Sec.
425.612(a)(1)(i)(A)(1). In accordance with our SNF waiver guidance on
the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/SNF-Waiver-Guidance.pdf,
the communication plan should include detailed communication processes
including for example, identifying and designating person(s) at the ACO
with whom SNF affiliates will communicate and coordinate admissions,
and explaining how the ACO will respond to questions and complaints
related to the ACO's use of the SNF 3-day waiver from SNF affiliates,
ACO participants, ACO providers/suppliers, beneficiaries, acute care
hospitals, and other stakeholders.
ACOs are also required to establish a beneficiary evaluation and
admission plan for beneficiaries admitted to a SNF affiliate under the
SNF 3-day rule waiver that is approved by the ACO medical director and
the healthcare professional responsible for the ACO's quality
improvement and assurance processes under Sec. 425.112. Further, as
part of their waiver application, ACOs are required to describe how
they plan to evaluate and periodically update their plan (see section 6
of the guidance at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/SNF-Waiver-Guidance.pdf). It is also recommended in the guidance that the
beneficiary evaluation and admission plan include detailed requirements
including, for example, a protocol for an ACO provider/supplier who is
a physician to evaluate and approve admissions to a SNF affiliate
pursuant to the waiver and consistent with the beneficiary eligibility
requirements described at Sec. 425.612(a)(1)(ii) and a protocol for
educating and training SNF affiliates regarding waiver requirements and
the ACO's communications plan, beneficiary evaluation and admission
plan, and care management plan for purposes of the SNF 3-Day Waiver.
We believe these requirements adequately address the commenter's
concerns about SNF affiliates' ability to verify beneficiaries'
eligibility to receive covered SNF services under the SNF 3-day rule
waiver. However, as we develop operational procedures and guidance
documents, we will further consider whether it would be feasible to
develop a mechanism that could permit SNF affiliates to verify, though
a source other than the ACO, a beneficiary's eligibility to receive SNF
services under the waiver.
Comment: A few commenters suggested that ACOs should not be
required to submit a corrective action plan in cases where the SNF
affiliate, not the ACO, is responsible for inappropriate use of the
waiver, as such corrective action plans could be resource intensive for
ACOs.
Response: We continue to believe that in some circumstances it
could be appropriate for an ACO to be required to submit a corrective
action plan, including in some cases where a SNF affiliate may be
responsible for inappropriate use of the SNF 3-day rule waiver. The
possibility of compliance action provides an incentive for ACOs to work
together with their SNF affiliates to ensure that the SNF 3-day rule
waiver is used appropriately, and reflects the requirement that ACOs
must enter into agreements with their SNF affiliates that contain
detailed requirements providing for the proper use of the waiver. We
are finalizing the proposal that in cases where a SNF affiliate of a
Track 3 ACO has misused the SNF 3-day rule waiver, the ACO may be
required to submit a corrective action plan to CMS for approval as
specified at Sec. 425.216(b) addressing what actions the ACO will take
to ensure that the SNF 3-day rule waiver is not misused in the future.
We are also finalizing the proposal to codify a new provision at Sec.
425.612(d)(4) providing that misuse of a waiver under Sec. 425.612 may
result in CMS taking remedial action against the ACO under Sec. Sec.
425.216 and 425.218, up to and including termination of the ACO from
the Shared Savings Program.
Comment: One commenter suggested that CMS should also modify the
existing financial protections in the Medicare Claims Processing Manual
Chapter 30--Financial Protections at section 70.2.2.2 to address the
SNF 3-day rule waiver rules.
Response: We will further consider whether revisions are necessary
to the Medicare Claims Processing Manual and/or other guidance
documents related to SNF discharges and billing.
Final Action: We are finalizing the SNF 3-day rule waiver
beneficiary protections described in this section as proposed.
Specifically, we are modifying the SNF 3-day rule waiver under Sec.
425.612(a)(1) to include a 90-day grace period that will permit payment
for SNF services provided to beneficiaries without a qualifying
inpatient stay who were initially on the ACO's prospective assignment
list for a performance year but were subsequently excluded during the
performance year, if such services would otherwise be covered under the
SNF 3-day rule waiver. In addition, in the event that a SNF that is a
SNF affiliate of a Track 3 ACO that has been approved for the

[[Page 80515]]

SNF 3-day rule waiver admits a FFS beneficiary who was never
prospectively assigned to the ACO (or was assigned but later excluded
and the 90-day grace period has lapsed), and the claim is rejected only
for lack of a qualifying inpatient hospital stay, we will make no
payment to the SNF, and the SNF may not charge the beneficiary for the
non-covered SNF services. In this circumstance, the SNF affiliate will
be prohibited from charging a beneficiary for non-covered SNF services
even in cases where the beneficiary explicitly requested or agreed to
being admitted to the SNF in the absence of a qualifying 3-day hospital
stay, if all other requirements for coverage are met. We are also
adding a provision at Sec. 425.612(d)(4) providing that misuse of a
waiver under Sec. 425.612 may result in CMS taking remedial action
against the ACO under Sec. Sec. 425.216 and 425.218, up to and
including termination of the ACO from the Shared Savings Program.
We strongly believe it is important to ensure that beneficiaries
have appropriate financial protections, including financial protection
against misuse of the waiver prior to approving any SNF 3-day rule
waiver applications from Track 3 ACOs. We also recognize that ACOs and
their SNF affiliates could be reluctant to enter into a SNF affiliate
agreement without there being clarity as to their potential
responsibility for non-covered SNF services related to the waiver. For
these reasons, we are also developing a process for Track 3 ACOs that
have already applied for the SNF 3-day rule waiver for the 2017
performance year to confirm that they and their SNF affiliates agree to
comply with all requirements related to the SNF 3-day rule waiver,
including the new requirements we are adopting in this rulemaking. ACOs
and SNF affiliates that do not agree to comply with all requirements
will be ineligible to offer services under the SNF 3-day rule waiver.
We note that this confirmation process may delay approval of ACOs'
applications for the SNF 3-day rule waiver for the 2017 performance
year; however, we do not anticipate approval will be delayed beyond the
first quarter of 2017.
4. Technical Changes
a. Financial Reconciliation for ACOs That Fall Below 5,000 Assigned
Beneficiaries
Section 1899(b)(2)(D) of the Act includes a requirement that a
participating ACO must have a minimum of 5,000 Medicare FFS
beneficiaries assigned to it. Currently, the regulations at Sec.
425.110(b) indicate that if at any time during the performance year, an
ACO's assigned population falls below 5,000, the ACO may be subject to
the actions described in Sec. Sec. 425.216 and 425.218; the
regulations further indicate at Sec. 425.110(b)(1) that while under a
CAP, the ACO remains eligible for shared savings and losses and the MSR
and MLR (if applicable) is set at a level consistent with the number of
assigned beneficiaries. We have applied this rule in the past to
perform financial reconciliation for ACOs that fell below 5,000
assigned beneficiaries. In these cases, the ACO was subject to a CAP
and financial reconciliation was based on a variable MSR/MLR that was
determined by the number of assigned beneficiaries. For example, we
have calculated the ACO's MSR based on an expanded sliding scale that
includes a range of 3,000 to 4,999 assigned beneficiaries with a
corresponding MSR range of 5.0 to 3.9 percent.
However, ACOs under risk-based tracks are not limited to financial
reconciliation under a variable MSR/MLR that is based on the number of
assigned beneficiaries. In the June 2015 final rule (see 80 FR 32769-
32771, and 32779-32780), we finalized a policy that provides ACOs under
two-sided performance-based risk tracks with an opportunity to choose
among several options for establishing their MSR/MLR. In addition to
being able to choose a symmetrical MSR/MLR that varies based on the
ACO's number of assigned beneficiaries, ACOs under two-sided
performance-based risk tracks can also choose from a menu of non-
variable MSR/MLR options (either a 0 percent MSR/MLR or a symmetrical
MSR/MLR in a 0.5 percent increment between 0.5 through 2.0 percent).
We stated in the CY 2017 PFS proposed rule that we believe it is
important to clarify the policy regarding situations where an ACO under
a two-sided performance-based risk track has chosen a non-variable MSR/
MLR at the start of the agreement period but has fallen below 5,000
assigned beneficiaries at the time of financial reconciliation. As
discussed in detail in the June 2015 final rule, we continue to believe
that ACOs under two-sided performance-based risk tracks are best
positioned to determine the level of risk that they are prepared to
accept. Therefore, we proposed to update the regulations at Sec.
425.110(b)(1) to be consistent with the regulatory changes in the June
2015 final rule that permit ACOs under a two-sided performance-based
risk track (Track 2 and Track 3) to choose their own MSR/MLR from a
menu of options. Specifically, we proposed to update the regulations at
Sec. 425.110(b)(1) to indicate that in the event an ACO falls below
5,000 assigned beneficiaries at the time of financial reconciliation,
the ACO participating under a two-sided risk track will be eligible to
share in savings (or losses) and the MSR/MLR will be set at a level
consistent with the choice of MSR/MLR that the ACO made at the start of
the agreement period. If the Track 2 or Track 3 ACO selected a
symmetrical MSR/MLR option based on a fixed percentage (for example,
zero percent or a percentage between 0.5 and 2 percent) regardless of
ACO size, then the current methodology for use of a variable MSR/MLR
based on the ACO's number of assigned beneficiaries would not apply.
For example, if at the beginning of the agreement period the ACO chose
a 1.0 percent MSR/MLR and the ACO's assigned population falls below
5,000, the MSR/MLR will remain 1.0 percent for purposes of financial
reconciliation while the ACO is under a CAP. Further, as we noted in
earlier rulemaking, if the ACO has elected a variable MSR/MLR, the
methodology for calculating the variable MSR/MLR under a two-sided
model is consistent with the methodology for calculating the variable
MSR that is required under the under the one-sided model (Track 1) (see
80 FR 32769 through 32771; 32779 through 32780). Under the one-sided
shared savings model (Track 1), we have accounted for circumstances
where an ACO's number of assigned beneficiaries falls below 5,000, by
expanding the variable MSR range based on input from the CMS Office of
the Actuary (OACT). Thus, in the case where a Track 2 or Track 3 ACO
selects a variable MSR/MLR based on its number of assigned
beneficiaries, and the ACO's number of assigned beneficiaries falls
below 5,000, we proposed to continue to use an approach for determining
the MSR/MLR range consistent with the approach for calculating the MSR
range under the one-sided model.
The following is a summary of the comments we received on these
proposals.
Comment: Commenters supported this proposal. One commenter
suggested, without providing a justification, that in the event an
ACO's assigned beneficiary population falls below 5,000, the MSR be
capped at 3.9 percent in cases where the MSR/MLR varies based on the
number of beneficiaries. The commenter did not expressly make a similar
recommendation for capping the MLR.
Response: We appreciate the support for this proposal. For ACOs
with a

[[Page 80516]]

variable MSR and MLR (if applicable), the MSR and MLR (if applicable)
will be set at a level consistent with the number of assigned
beneficiaries. For ACOs with a fixed MSR/MLR, the MSR/MLR will remain
fixed at the level consistent with the ACO's choice of MSR and MLR that
the ACO made at the start of the agreement period. In addition, we
disagree that it would be appropriate to cap the MSR (but not the MLR)
at 3.9 percent in cases where the MSR/MLR varies based on the number of
beneficiaries in the event the ACO falls below 5,000 assigned
beneficiaries beneficiaries.
Section 1899(d)(1)(B)(i) of the Act specifies that the Secretary
shall determine the appropriate percent by which an ACO's expenditures
must be lower than its benchmark in order for the ACO to be eligible to
share in savings to account for normal variation in expenditures under
Title XVIII. Consistent with the statute, this percentage must be based
upon the number of Medicare fee-for-service beneficiaries assigned to
the ACO. As explained in the November 2011 final rule, we believe that
the most appropriate policy concerning determination of the
``appropriate percent'' for the MSR would achieve a balance between the
advantages of making incentives and rewards available to successful
ACOs and prudent stewardship of the Medicare Trust Funds (76 FR 67927).
Capping the MSR for Track 1 ACOs would not be consistent with the
statute and our established policy for computing the MSR for Track 1
ACOs. Capping only the MSR but not the MLR for Track 2 or 3 ACOs would
create an asymmetry that would make it easier for the ACO to share in
savings but not in losses. To the extent that the commenter was
recommending capping both the MSR and MLR for ACOs in Tracks 2 and 3
that choose a variable MSR/MLR, we believe this could be an approach
worthy of consideration in future rulemaking because the approach would
equalize the risk for the ACO and CMS.
Final Action: We are finalizing this policy and the revisions to
Sec. 425.110(b)(1) as proposed, but are making a minor editorial
revision to paragraph (b)(1)(ii) in order to eliminate a redundant
reference.
b. Requirements for Merged or Acquired TINs
ACOs frequently request that we take into account the claims billed
by the TINs of practices that have been acquired by sale or merger for
the purpose of meeting the minimum assigned beneficiary threshold,
establishing a more accurate financial benchmark, and determining the
prospective or preliminary prospective assignment list for the upcoming
performance year. In response to these inquiries, we initially
developed subregulatory guidance that allowed claims billed under the
TIN of a merged or acquired entity to be considered in certain
circumstances. In that guidance we indicated that the merged or
acquired entity's TIN may no longer be used to bill Medicare. In the
June 2015 final rule, we codified the policies outlined in this
guidance allowing for consideration of claims billed under merged or
acquired entities' TINs for purposes of beneficiary assignment and
establishing the ACO's benchmark, provided certain requirements were
met (Sec. Sec. 425.204(g), 425.118(a)(2)). However, the regulation at
Sec. 425.204(g) indicates that an ACO may request that CMS consider,
for purposes of beneficiary assignment and establishing the ACO's
benchmark under Sec. 425.602, claims billed by ``Medicare-enrolled''
entities' TINs that have been acquired through sale or merger by an ACO
participant. Because the regulation at Sec. 425.204(g) refers to such
merged or acquired TINs as ``Medicare-enrolled,'' we have received
inquiries from ACOs regarding whether such merged or acquired TINs must
continue to be Medicare-enrolled after the merger or acquisition has
been completed and the TINs are no longer used to bill Medicare.
We stated in the CY 2017 PFS proposed rule that it was not our
intent to establish such a requirement. We stated we do not believe
there would be a program purpose to require the TIN of a merged or
acquired entity to maintain Medicare enrollment if it is no longer used
to bill Medicare. Therefore, to address this issue, we proposed a
technical change to Sec. 425.204(g) to clarify that the merged/
acquired TIN is not required to remain Medicare enrolled after it has
been merged or acquired and is no longer used to bill Medicare.
The following is a summary of the comments we received on these
proposals.
Comment: The few comments received on this issue supported the
proposal.
Response: We appreciate the support for this proposal.
Final Action: We are finalizing the technical change to Sec.
425.204(g) as proposed.

L. Value-Based Payment Modifier and Physician Feedback Program

1. Overview
Section 1848(p) of the Act requires that we establish a value-based
payment modifier (VM) and apply it to specific physicians and groups of
physicians the Secretary determines appropriate starting January 1,
2015, and to all physicians and groups of physicians by January 1,
2017. On or after January 1, 2017, section 1848(p)(7) of the Act
provides the Secretary discretion to apply the VM to eligible
professionals (EPs) as defined in section 1848(k)(3)(B) of the Act.
Section 1848(p)(4)(C) of the Act requires the VM to be budget neutral.
The VM and Physician Feedback program continue CMS' initiative to
recognize and reward clinicians based on the quality and cost of care
provided to their patients, increase the transparency of health care
quality information and to assist clinicians and beneficiaries in
improving medical decision-making and health care delivery. As stated
in the CY 2016 PFS final rule with comment period (80 FR 71277), the
MACRA was enacted on April 16, 2015. Under section 1848(p)(4)(B)(iii)
of the Act, as amended by section 101(b)(3) of MACRA, the VM shall not
be applied to payments for items and services furnished on or after
January 1, 2019. Section 1848(q) of the Act, as added by section 101(c)
of MACRA, establishes the Merit-based Incentive Payment System (MIPS)
that shall apply to payments for items and services furnished on or
after January 1, 2019.
2. Overview of Existing Policies for the VM
In the CY 2013 PFS final rule with comment period, we discussed the
goals of the VM and also established that specific principles should
govern the implementation of the VM (77 FR 69307). We refer readers to
that rule for a detailed discussion. In the CY 2013 PFS final rule with
comment period (77 FR 69310), we finalized policies to phase-in the VM
by applying it beginning January 1, 2015, to Medicare PFS payments to
physicians in groups of 100 or more EPs. A summary of the existing
policies that we finalized for the CY 2015 VM can be found in the CY
2014 PFS proposed rule (78 FR 43486 through 43488). Subsequently, in
the CY 2014 PFS final rule with comment period (78 FR 74765 through
74787), we finalized policies to continue the phase-in of the VM by
applying it starting January 1, 2016, to payments under the Medicare
PFS for physicians in groups of 10 or more EPs. Then, in the CY 2015

[[Page 80517]]

PFS final rule with comment period (79 FR 67931 through 67966), we
finalized policies to complete the phase-in of the VM by applying it
starting January 1, 2017, to payments under the Medicare PFS for
physicians in groups of 2 or more EPs and to physician solo
practitioners. In the CY 2016 PFS final rule with comment period (80 FR
71277 through 71279), we finalized that in the CY 2018 payment
adjustment period, the VM will apply to nonphysician EPs who are
physician assistants (PAs), nurse practitioners (NPs), clinical nurse
specialists (CNSs), and certified registered nurse anesthetists (CRNAs)
in groups with 2 or more EPs and to PAs, NPs, CNSs, and CRNAs who are
solo practitioners.
3. Provisions of This Final Rule
As a general summary, we proposed to update the VM informal review
policies and establish how the quality and cost composites under the VM
would be affected for the CY 2017 and CY 2018 payment adjustment
periods in the event that unanticipated program issues arise.
a. Expansion of the Informal Inquiry Process To Allow Corrections for
the VM
Section 1848(p)(10) of the Act provides that there shall be no
administrative or judicial review under section 1869 of the Act,
section 1878 of the Act, or otherwise of the following:
The establishment of the VM.
The evaluation of the quality of care composite, including
the establishment of appropriate measures of the quality of care.
The evaluation of the cost composite, including the
establishment of appropriate measures of costs.
The dates of implementation of the VM.
The specification of the initial performance period and
any other performance period.
The application of the VM.
The determination of costs.
These statutory requirements regarding limitations of review are
reflected in Sec. 414.1280. We previously indicated in the CY 2013 PFS
final rule with comment period (77 FR 69326) that we believed an
informal review mechanism is appropriate for groups of physicians to
review and to identify any possible errors prior to application of the
VM, and we established an informal inquiry process at Sec. 414.1285.
In the CY 2016 PFS final rule with comment period (80 FR 71294
through 71295), for the CY 2017 and CY 2018 payment adjustment periods,
we finalized a deadline of 60 days that would start after the release
of the QRURs for the applicable performance period for a group or solo
practitioner to request a correction of a perceived error related to
the VM calculation. We also finalized the continuation of the process
for accepting requests from groups and solo practitioners to correct
certain errors made by CMS or a third-party vendor (for example, PQRS-
qualified registry). We stated we would continue the approach of the
initial corrections process to classify a TIN as ``average quality'' in
the event we determine a third-party vendor error or CMS made an error
in the calculation of the quality composite and the infrastructure was
not available to allow for recomputation of the quality measure data.
Additionally, we finalized that we would reclassify a TIN as Category 1
when PQRS determines on informal review that at least 50 percent of the
TIN's EPs meet the criteria to avoid the PQRS downward payment
adjustment for the relevant payment adjustment year. If the group was
initially classified as Category 2, then we would not expect to have
data for calculating their quality composite, in which case they would
be classified as ``average quality''; however, if the data is available
in a timely manner, then we would recalculate the quality composite.
As we noted in the CY 2017 PFS proposed rule (81 FR 46443 through
46444), as a result of issues that we became aware of prior to and
during the CY 2016 VM informal review process, we learned that re-
running QRURs and recalculating the quality composite is not always
practical or possible, given the diversity and magnitude of the errors,
timing of when we become aware of an error, and practical
considerations in needing to compute a final VM upward payment
adjustment factor after the performance period has ended, based on the
aggregate amount of downward payment adjustments. Furthermore, this
approach can create uncertainty for groups and solo practitioners about
their final VM payment adjustment making it difficult for them to plan
and make forecasts.
Due to the volume and complexities of the informal review issues,
the inconsistency of available PQRS data to calculate a TIN's quality
composite, the case-by-case nature of the informal review process, and
the condensed timeline to calculate an accurate VM upward payment
adjustment factor, we expressed our belief that we needed to update the
VM informal review policies and establish in rulemaking how the quality
and cost composites under the VM would be affected if unanticipated
issues were to arise (for example, the program issues described in the
CY 2017 PFS proposed rule), errors made by a third-party such as a
vendor, or errors in our calculation of the quality and/or cost
composites). We noted that the intent of these proposals is not to
provide relief for EPs and groups who fail to report under PQRS, but
rather to provide a mechanism for addressing unexpected issues such as
the data integrity issues discussed in the proposed rule.
We further noted that limiting the potential movement of TINs
between VM quality tiers based on informal review may result in a more
accurate adjustment factor calculation and provide greater
predictability for the CMS' Office of the Actuary (OACT) in making
assumptions around the adjustment factor including assumptions around
the impact of outstanding informal reviews at the time of the
calculations. We expressed our belief that our proposals would help
groups and solo practitioners to better predict the outcome of their
final VM adjustment and reduce uncertainty as we continue to improve
our systems. We requested comment on all four of the scenarios we
proposed. We provide a combined summary of comments received on the
four scenarios later in this section of this final rule, following the
individual descriptions of the scenarios proposed.
Table 44 summarizes our proposals.

[[Page 80518]]

Table 44--Quality and Cost Composite Status for TINs Due to Informal Review Decisions and Widespread Quality and Cost Data Issues
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Scenario 1: TINS moving from Category Scenario 2: Non-GPRO Category 1 TINs Scenario 3: Category 1 TINs with Scenario 4: Category 1 TINs with
2 to Category 1 as a result of PQRS or with additional EPs avoiding PQRS widespread quality data issues widespread claims data issues
VM informal review process payment adjustment as a result of PQRS -------------------------------------------------------------------------------
---------------------------------------- informal review process
---------------------------------------- Initial composite Revised composite Recalculated Revised composite
Initial composite Revised composite Initial composite Revised composite composite
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Quality......................... N/A............... Average........... Low............... Average........... N/A............... Average........... Low............... Average.
N/A............... Average........... Average........... Average........... N/A............... Average........... Average........... Average.
N/A............... Average........... High.............. High.............. N/A............... Average........... High.............. High.
Cost............................ Low............... Low............... Low............... Low............... Low............... Low............... Low............... Low.
Average........... Average........... Average........... Average........... Average........... Average........... Average........... Average.
High.............. Average........... High.............. High.............. High.............. Average........... High.............. Average.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Scenario 1: TINs Moving From Category 2 to Category 1 as a Result of
PQRS or VM Informal Review Process
As finalized in the CY 2016 PFS final rule with comment period, for
the CY 2017 VM, Category 1 will include those groups that meet the
criteria to avoid the CY 2017 PQRS payment adjustment as a group
practice participating in the PQRS Group Practice Reporting Option
(GPRO) in CY 2015 and groups that have at least 50 percent of the
group's EPs meet the criteria to avoid the CY 2017 PQRS payment
adjustment as individuals (80 FR 71280). Category 1 also includes those
solo practitioners that meet the criteria to avoid the CY 2017 PQRS
payment adjustment as individuals. Category 2 will include groups and
solo practitioners that are subject to the CY 2017 VM and do not fall
within Category 1 (79 FR 67939). We finalized a similar two-category
approach for the CY 2018 VM based on participation in the PQRS by
groups and solo practitioners in 2016 (80 FR 71280 through 71281).
In the CY 2017 PFS proposed rule, we proposed that, if a TIN were
initially classified as Category 2, and subsequently, through the PQRS
or VM informal review process, it was reclassified as Category 1, then
we would classify the TIN's quality composite as ``average quality,''
instead of attempting to calculate the quality composite (81 FR 46444).
We also proposed to calculate the TIN's cost composite using the
quality-tiering methodology. If the TIN were classified as ``high
cost'' based on its performance on the cost measures, then we proposed
to reclassify the TIN's cost composite as ``average cost.'' If the TIN
were classified as ``average cost'' or ``low cost'', then we proposed
that the TIN would retain the calculated cost tier designation. We
noted that in the CY 2016 PFS final rule with comment period (80 FR
71280), we finalized a policy for the CY 2017 and 2018 payment
adjustment periods that when determining whether a group would be
included in Category 1, we would consider whether the 50 percent
threshold had been met, regardless of whether the group registered to
participate in the PQRS GPRO for the relevant performance period. We
expressed our belief that this policy would allow groups that register
for a PQRS GPRO, but fail as a group to meet the criteria to avoid the
PQRS payment adjustment an additional opportunity for the quality data
reported by individual EPs in the group to be taken into account for
the purposes of applying the VM. We noted that consequently, because of
this policy we anticipate that the number of TINs who could fall into
Scenario 1 would be minimal; however, we believe it is necessary to
have a policy in place, in the event that CMS determines on informal
review that Category 2 TINs had been negatively impacted by a third-
party vendor error or CMS made an error in the calculation of the
quality composite. We proposed to apply these policies for the CY 2017
VM and CY 2018 VM.
Calculating a quality composite for a TIN that was initially
classified as Category 2, then reclassified as Category 1 during the
informal review process would be operationally complex, given a number
of factors: The timeline for determining and applying the VM
adjustments for all TINs subject to the VM; the volume of informal
reviews; the need to calculate the VM upward payment adjustment factor
as close to the beginning of the payment adjustment period as possible;
and uncertainty about the availability of the PQRS quality data.
Therefore, classifying the quality composite as ``average quality''
would offer a predictable decision for all informal reviews where a TIN
changes classification from Category 2 to Category 1.
Our proposal to calculate the cost composite and assign ``average
cost'' if the cost composite was initially classified as ``high cost''
would alleviate concerns from stakeholders that a TIN may receive a
downward VM payment adjustment under the quality-tiering methodology as
a result of being classified as average quality and high cost. Under
our proposal discussed above, for TINs in Scenario 1, we would not
consider a TIN's actual performance on the quality measures or
calculate a quality composite score; rather, we would classify the
TIN's quality composite as average quality for the reasons stated
above. In this scenario, we do not believe that we should retain a
TIN's ``high cost'' designation when the TIN's actual cost performance
is not being compared to the TIN's actual quality performance, as it is
possible the TIN might have scored high quality if actual performance
had been considered. We believe that these proposals would help groups
and solo practitioners who receive a favorable determination on
informal review to better predict the outcome of their final VM
adjustment and reduce uncertainty about the impact of the informal
review. Additionally, it is important to note that groups or solo
practitioners who submit an informal review request would not
automatically be covered by the policy proposed for Scenario 1. In the
CY 2017 PFS proposed rule, we stated that we would verify on informal
review that the group or solo practitioner did submit complete and
accurate data and did meet the criteria to avoid the PQRS payment
adjustment to be included in Category 1.
Scenario 2: Non-GPRO Category 1 TINs With Additional EPs Avoiding PQRS
Payment Adjustment as a Result of PQRS Informal Review Process
As finalized in the CY 2016 PFS final rule with comment period, for
the CY 2017 VM, Category 1 will include groups that have at least 50
percent of

[[Page 80519]]

the group's EPs meet the criteria to avoid the CY 2017 PQRS payment
adjustment as individuals (80 FR 71280). A similar policy was finalized
for the CY 2018 VM (80 FR 71280). In the CY 2017 PFS proposed rule (81
FR 46455), we proposed that, if a TIN were classified as Category 1 for
the CY 2017 VM by having at least 50 percent of the group's EPs meet
the criteria to avoid the CY 2017 PQRS payment adjustment as
individuals, and subsequently, through the PQRS informal review
process, it is determined that additional EPs that are in the TIN also
meet the criteria to avoid the CY 2017 PQRS payment adjustment as
individuals, then the following policies would be used to determine the
TIN's quality and cost composites:
If the TIN's quality composite is initially classified as
``low quality'', then we proposed to reclassify the TIN's quality
composite as ``average quality.'' If the TIN's quality composite is
initially classified as ``average quality'' or ``high quality'', then
we proposed that the TIN would retain that quality tier designation.
We would maintain the cost composite that was initially
calculated.
We proposed to apply these policies for the CY 2017 VM and CY 2018
VM. Under these policies, we would not recalculate the TIN's quality
composite to include the additional EPs that were determined to have
met the criteria to avoid the PQRS payment adjustment as individuals
through the PQRS informal review process. As discussed under Scenario
1, recalculating the quality composite is operationally complex, and we
may not have PQRS data for the additional EPs, because they were
initially determined not to have met the criteria to avoid the PQRS
payment adjustment. In addition, we seek to avoid a situation where by
recalculating the quality composite, a TIN may be subject to a lower
quality tier designation because a few EPs in the TIN independently
pursued PQRS informal reviews. As stated above, we proposed to
reclassify a TIN's quality composite as average quality if it is
initially classified as ``low quality'' in order to avoid a situation
where we do not have the PQRS quality data for those few EPs whose
quality performance could have bumped the TIN up from a low quality
designation as the EPs did not meet the criteria to avoid the PQRS
payment adjustment during the initial determination. Additionally, it
is important to note that TINs whose EPs submit an informal review
request would not automatically be covered by the policy proposed for
Scenario 2. We stated in the CY 2017 PFS proposed rule that we would
verify on informal review that an EP did submit complete and accurate
data and did meet the criteria to avoid the PQRS payment adjustment as
an individual in order for the TIN to be included in Category 1.
Scenario 3: Category 1 TINs With Widespread Quality Data Issues
In cases where there is a systematic issue with any of a Category 1
TIN's quality data that renders it unusable for calculating a TIN's
quality composite, we proposed to classify the TIN's quality composite
as average quality. For this proposal, we consider widespread quality
data issues, as issues that impact multiple TINs and we are unable to
determine the accuracy of the data submitted via these TINs (for
example, the EHR and QCDR issues for the CY 2014 performance period as
described in the CY 2017 PFS proposed rule (81 FR 46455). This proposal
would offer a predictable designation for all TINs under this scenario.
We also proposed to calculate the TIN's cost composite using the
quality-tiering methodology. If the TIN were classified as ``high
cost'' based on its performance on the cost measures, then we proposed
to reclassify the TIN's cost composite as ``average cost.'' If the TIN
were classified as ``average cost'' or ``low cost'', then we proposed
that the TIN would retain the calculated cost tier designation. We
proposed to apply these policies for the CY 2017 VM and CY 2018 VM.
As discussed under Scenario 1, our proposal to calculate the cost
composite and assign ``average cost'' if the cost composite is
initially classified as ``high cost'' would alleviate concerns from
stakeholders that a TIN may receive a downward VM payment adjustment
under the quality-tiering methodology as a result of being classified
as average quality and high cost. Similarly, for TINs in Scenario 3, we
would not consider a TIN's actual performance on the quality measures
or calculate a quality composite score; rather, we would classify the
TIN's quality composite as average quality for the reasons stated
above. In this scenario, we do not believe that we should retain a
TIN's high cost designation when the TIN's actual cost performance is
not being compared to the TIN's actual quality performance, as it is
possible the TIN might have scored high quality if actual performance
had been considered. We would continue to show and designate these
groups as high cost in their annual QRURs so they have the opportunity
to understand and improve their performance, but under our proposal, we
would classify their cost composite as average cost for purposes of
determining their VM adjustment.
In the CY 2017 PFS proposed rule, we noted that we expect quality
data issues to be significantly limited moving forward, due to newly-
added front-end edits. Additionally, we noted that TINs are ultimately
responsible for the data that are submitted by their third-party
vendors and that we expect that TINs are holding their vendors
accountable for accurate reporting. We noted that, while we understand
that data submission requirements are evolving and that both vendors
and CMS are developing capabilities for reporting and assessing
performance, we are considering further policies to promote complete
and accurate reporting by registries and other third-party entities
that submit data on behalf of groups and EPs.
Scenario 4: Category 1 TINs With Widespread Claims Data Issues
If we determine after the release of the Quality and Resource Use
Reports (QRURs) that there is a widespread claims data issue that
impacts the calculation of the quality and/or cost composites for
Category 1 TINs, we propose to recalculate the quality and cost
composites for affected TINs. For this proposal, we consider widespread
claims data issues, as issues that impact multiple TINs and require the
recalculation of the quality and/or cost composites (for example, the
incomplete claims identification and specialty adjustment issues
described in the CY 2017 PFS proposed rule (81 FR 46446)
After recalculating the composites, if the TIN's quality composite
is classified as low quality, then we proposed to reclassify the
quality composite as average quality, and if the TIN's cost composite
is classified as high cost, we proposed to reclassify the cost
composite as average cost. If the TIN is classified as average quality,
high quality, average cost or low cost, then we proposed that the TIN
would retain the calculated quality or cost tier designation. We made
the proposals because, after a claims data issue is identified, it
would take approximately 6 weeks to recalculate the composites and
notify groups and solo practitioners about their recalculated VM. Given
that the VM informal review period lasts for 60 days after the release
of the QRURs and the timing of when we become aware of an error, we
would likely not be able to notify groups and solo practitioners about
their recalculated VM before the end of the informal review period.
Further, we expressed our belief that the proposed policies are
necessary to provide certainty for

[[Page 80520]]

groups and solo practitioners about their final VM payment adjustment
and due to the condensed timeline to calculate an accurate VM upward
payment adjustment factor.
We proposed to apply these policies for the CY 2017 VM and CY 2018
VM.
The following is a summary of the comments we received regarding
these proposals.
Comment: Many commenters supported our proposals to modify a TIN's
quality and cost composites based on informal review determination or
widespread quality and cost data issues, agreeing that assigning
``average quality'' would not unfairly penalize those that fall into
these scenarios. Many of these commenters urged CMS to continue efforts
to address data integrity and calculation issues. A few commenters
agreed that limiting the potential movement between the VM quality
tiers based on informal review would result in a more predictable
adjustment factor calculation. Some of these commenters noted that
assignment of an ``average quality'' designation does not recognize the
significant resources invested by physicians and other eligible
professionals in reporting quality data, particularly through agency-
preferred electronic methods. One commenter suggested CMS could shorten
the informal review timeframe or eliminate mid-year reports, in order
to allow more resources for recalculation of the quality composite.
Several commenters were not supportive of our proposals, stating that
CMS should instead correct the underlying issues necessitating such
scenarios, with several expressing added concern that the MIPS program
will be even more complex. One commenter stated that the proposed
changes to the informal review process would hold practices accountable
for performance without a mechanism in place to ensure the accuracy of
the data, thus reclassifying a solo practitioner or group practice's
performance based on an incomplete understanding of their performance.
Another commenter believes it is important to hold solo practitioners
and group practices harmless from penalties resulting from errors made
by external parties. However, they expressed concerns that solo
practitioners and group practices have no opportunity to resubmit their
data allowing their quality composite scores to be recalculated to
reflect all the available data. They suggest that this would deprive
them of upward adjustments to payments because measures were reported
or calculated inaccurately through no fault of their own.
Response: We thank the commenters for their feedback and support of
our policies. We acknowledge commenters' concerns about the complexity
of the underlying data and their suggestions that we correct the
underlying issues, rather than establish policies to address these
scenarios through the informal review process. We note that scenarios
three and four were proposed to address unforeseen issues with reported
quality data or CMS claims data, respectively. Additionally, we note
that as discussed in this final rule, we expect quality data issues to
be significantly limited moving forward. We have worked to resolve PQRS
program and receiving system data issues impacting the VM by
reprioritizing scheduled deliverables and implementing enhancements to
improve 2016 submissions. While some issues may still need to be
handled through the informal review process, enhanced reporting
functionality, with the removal of constraints around ACO reporting
outside of a group, will be supported by both the program and the
receiving system. In 2017, the MIPS receiving systems will provide
further enhanced real-time feedback to submitters in a more rapid and
accurate manner to identify errors earlier and will further accept the
most accurate data submitted. We are finalizing the policies for
Scenarios 1, 2, 3 and 4 as proposed. Additionally we note that under
Scenarios 1 and 3, consistent with the policy adopted in the CY 2013
PFS final rule with comment period (77 FR 69325), for groups of
physicians or solo practitioners classified as average quality/low cost
as a result of informal review, we would apply an additional upward
payment adjustment of +1.0x to those that care for high-risk
beneficiaries (as evidenced by the average HCC risk score of the
attributed beneficiary population). We note further that, under
Scenarios 2 and 4, for groups of physicians or solo practitioners
classified as high quality/low cost, high quality/average cost, or
average quality/low cost as a result of informal review, we would apply
an additional upward payment adjustment of +1.0x to those that care for
high-risk beneficiaries (as evidenced by the average HCC risk score of
the attributed beneficiary population). We would apply this additional
upward +1.0x adjustment, because the results of informal review under
the policy being finalized here, would qualify these solo practitioners
and groups for the additional upward adjustment, based on the policy
previously finalized at 77 FR 69325.
b. Application of the VM to Participant TINs in Shared Savings Program
ACOs That Do Not Complete Quality Reporting
In the CY 2015 PFS final rule with comment period (79 FR 67946),
for groups and solo practitioners, as identified by their TIN, that
participate in a Shared Savings Program ACO, we finalized the same
policy that is generally applicable to groups and solo practitioners
that fail to satisfactorily report or participate under PQRS and thus
fall in Category 2 and are subject to an automatic downward adjustment
under the VM in CY 2017. We stated that, consistent with the
application of the VM to other groups and solo practitioners that
report under PQRS, if the ACO does not successfully report quality data
as required by the Shared Savings Program under Sec. 425.504, all
groups and solo practitioners participating in the ACO will fall in
Category 2 for the VM, and therefore, will be subject to a downward
payment adjustment. We finalized this policy for the 2017 payment
adjustment period for the VM. In the CY 2016 PFS proposed rule (80 FR
41899), we proposed to continue this policy in the CY 2018 payment
adjustment period for all groups and solo practitioners subject to the
VM that participate in a Shared Savings Program ACO and finalized our
proposal in the CY 2016 PFS final rule with comment period (80 FR
71285).
As discussed in sections III.H. and III.K.1.e. of this final rule,
we proposed to remove the prohibition on EPs who are part of a group or
solo practitioner that participates in a Shared Savings Program ACO,
for purposes of PQRS reporting for the CY 2017 and CY 2018 payment
adjustments, to report outside the ACO. As a result of this proposed
policy, the EPs in groups and those who are solo practitioners would be
allowed to report to the PQRS as a group (using one of the group
registry, QCDR, or EHR reporting options) or individually (using the
registry, QCDR, or EHR reporting option) outside of the ACO. This
section addresses how we proposed to use the PQRS data reported by EPs
outside of the ACO for the CY 2018 VM when the ACO does not
successfully report quality data on behalf of their EPs for purposes of
PQRS as required by the Shared Savings Program under Sec. 425.504.
For the CY 2018 payment adjustment period, if a Shared Savings
Program ACO does not successfully report quality data on behalf of
their EPs for purposes of PQRS as required by the Shared Savings
Program under Sec. 425.504, then we proposed to use the

[[Page 80521]]

data reported to the PQRS by the EPs under the participant TIN (as a
group (using one of the group registry, QCDR, or EHR reporting options)
or as individuals (using the registry, QCDR, or EHR reporting option))
outside of the ACO to determine whether the TIN would fall in Category
1 or Category 2 under the VM. We proposed to apply the two-category
approach finalized for the CY 2018 VM (80 FR 71280) based on
participation in the PQRS by groups and solo practitioners to determine
whether groups and solo practitioners that participate in a Shared
Savings Program ACO, but report to the PQRS outside of the ACO, would
fall in Category 1 or Category 2 under the VM. We noted that the
proposed policy was consistent with our policy for groups and solo
practitioners who are subject to the VM and do not participate in the
Shared Savings Program, and we believe it would further encourage
quality reporting by EPs in the event the ACO does not successfully
report quality data as required by the Shared Savings Program under
Sec. 425.504. For example, if groups that participate in a Shared
Savings Program ACO in 2016 report quality data to the PQRS outside of
the ACO and meet the criteria to avoid PQRS payment adjustment for CY
2018 as a group using one of the group registry, QCDR, or EHR reporting
options or have at least 50 percent of the group's EPs meet the
criteria to avoid the PQRS payment adjustment for CY 2018 as
individuals using the registry, QCDR, or EHR reporting option by
reporting quality data to PQRS outside of the ACO, then they would be
included in Category 1 for the CY 2018 VM. If solo practitioners that
participate in a Shared Savings Program ACO in 2016 report quality data
to the PQRS outside of the ACO and meet the criteria to avoid the PQRS
payment adjustment for CY 2018 as individuals using the registry, QCDR,
or EHR reporting option, then they would also be included in Category
1. Category 2 would include those groups and solo practitioners subject
to the CY 2018 VM that participate in a Shared Savings Program ACO and
do not fall within Category 1.
As finalized for the CY 2018 payment adjustment period (80 FR
71285), all groups and solo practitioners that participate in a Shared
Savings Program ACO and fall in Category 2 will be subject to an
automatic downward payment adjustment under the VM. In the CY 2017 PFS
proposed rule, we proposed that, for groups and solo practitioners that
participate in a Shared Savings Program ACO that did not successfully
report quality data as required by the Shared Savings Program under
Sec. 425.504 and are in Category 1 as a result of reporting quality
data to the PQRS outside of the ACO, we would classify their quality
composite for the VM for the CY 2018 payment adjustment period as
``average quality (81 FR 46447).'' As finalized in the CY 2015 PFS
final rule with comment period (79 FR 67943), the cost composite for
groups and solo practitioners that participate in a Shared Savings
Program ACO will be classified as ``average cost.'' Because we would
not have the ACO's quality data for these groups and solo
practitioners, we expressed our belief that it would be appropriate to
use the quality data they reported to the PQRS outside the ACO to
determine whether they avoided the PQRS payment adjustment and whether
they would be in Category 1 or 2 for purposes of the VM, but not to
calculate a quality composite using the quality-tiering methodology. As
we stated previously, we continue to believe that it is appropriate to
calculate a quality composite for groups and solo practitioners
participating in the Shared Savings Program based on the ACO's quality
data (79 FR 67944). We noted that the proposal was not intended to
encourage groups and solo practitioners that participate in a Shared
Savings Program ACO to report to the PQRS outside the ACO, but in the
event the ACO does not successfully report quality data on behalf of
their EPs for purposes of PQRS, to provide them with a safeguard that
would allow them to avoid the PQRS payment adjustment and the automatic
downward adjustment under the VM. We encourage groups and solo
practitioners to continue to report through the ACO in order to promote
clinical and financial integration within the ACO and for the Medicare
beneficiaries they treat. For groups and solo practitioners that
participate in a Shared Savings Program ACO that successfully reports
quality data on behalf of their EPs for purposes of PQRS as required by
the Shared Savings Program under Sec. 425.504, we will calculate their
VM for the CY 2018 payment adjustment period according to the policies
established in the CY 2015 PFS final rule with comment period (79 FR
67941 to 67947 and 79 FR 67956 to 67957) and CY 2016 PFS final rule
with comment period (80 FR 71283 to 71286 and 80 FR 71294). We
solicited comment on these proposals and also proposed corresponding
revisions to Sec. 414.1210(b)(2).
As discussed in section III.H. of this final rule, to allow
affected EPs that participate in an ACO to report separately for the CY
2017 PQRS payment adjustment, we proposed a secondary PQRS reporting
period for EPs that were in an ACO that did not successfully report
quality data on behalf of the EPs in the group and those who are solo
practitioners. Specifically, we proposed that affected individual EPs
or groups, who report under an ACO, may separately report outside the
ACO either as individual EPs (using the registry, QCDR, or EHR
reporting option) or using one of the group registry, QCDR, or EHR
reporting options (note these EPs and groups would not need to register
for one of these group reporting options, but rather could mark the
data as group-level data in their submission) during a secondary PQRS
reporting period for the CY 2017 PQRS payment adjustment if they were a
participant in an ACO that did not successfully report quality data on
their behalf during the established reporting period for the CY 2017
PQRS payment adjustment. We proposed the secondary PQRS reporting
period for the CY 2017 PQRS payment adjustment would coincide with the
reporting period for the CY 2018 PQRS payment adjustment (that is,
January 1, 2016 through December 31, 2016).
This section addresses how we proposed to use, for purposes of the
CY 2017 VM, the PQRS data reported by the EPs in the group and those
who are solo practitioners outside of the ACO using the secondary PQRS
reporting period when the ACO did not successfully report quality data
on behalf of their EPs for purposes of PQRS as required by the Shared
Savings Program under Sec. 425.504 for the CY 2017 PQRS payment
adjustment. For the CY 2017 payment adjustment period, if a Shared
Savings Program ACO did not successfully report quality data on behalf
of their EPs for purposes of PQRS as required by the Shared Savings
Program under Sec. 425.504 for the CY 2017 PQRS payment adjustment,
then we propose to use the data reported to the PQRS by the EPs (as a
group using one of the group registry, QCDR, or EHR reporting options
or as individuals using the registry, QCDR, or EHR reporting option)
under the participant TIN) outside of the ACO during the secondary PQRS
reporting period to determine whether the TIN would fall in Category 1
or Category 2 under the VM. We proposed to apply the two-category
approach finalized for the CY 2017 VM (79 FR 67938 to 67939 and as
revised in 80 FR 71280 to 71281) based

[[Page 80522]]

on participation in the PQRS by groups and solo practitioners to
determine whether groups and solo practitioners that participate in a
Shared Savings Program ACO, but report to the PQRS outside of the ACO,
would fall in Category 1 or Category 2 under the VM. As discussed in
section III.H. of this final rule, we proposed to assess the individual
EP or group's 2016 data submitted outside the ACO and during the
secondary PQRS reporting period against the reporting requirements for
the CY 2018 PQRS payment adjustment. Therefore, we proposed that groups
that meet the criteria to avoid PQRS payment adjustment for CY 2018 as
a group practice participating in the PQRS GPRO (using one of the group
registry, QCDR, or EHR reporting options) or have at least 50 percent
of the group's EPs meet the criteria to avoid the PQRS payment
adjustment for CY 2018 as individuals (using the registry, QCDR, or EHR
reporting option), based on data submitted outside the ACO and during
the secondary PQRS reporting period, would be included in Category 1
for the CY 2017 VM. We also proposed that solo practitioners that meet
the criteria to avoid the PQRS payment adjustment for CY 2018 as
individuals using the registry, QCDR, or EHR reporting option, based on
data submitted outside the ACO and during the secondary PQRS reporting
period, would be included in Category 1 for the CY 2017 VM. Category 2
would include those groups and solo practitioners subject to the CY
2017 VM that participate in a Shared Savings Program ACO and do not
fall within Category 1.
As finalized for the CY 2017 payment adjustment period (79 FR
67946), all groups and solo practitioners that participate in a Shared
Savings Program ACO and fall in Category 2 will be subject to an
automatic downward payment adjustment under the VM. For groups and solo
practitioners that participate in a Shared Savings Program ACO that did
not successfully report quality data as required by the Shared Savings
Program under Sec. 425.504 and are in Category 1 as a result of
reporting quality data to the PQRS outside of the ACO using the
secondary PQRS reporting period, we propose to classify their quality
composite for the VM for the CY 2017 payment adjustment period as
``average quality'' for the same reasons described above for the CY
2018 payment adjustment period. As finalized in the CY 2015 PFS final
rule with comment period (79 FR 67943), the cost composite for groups
and solo practitioners that participate in a Shared Savings Program ACO
will be classified as ``average cost.''
If EPs who are part of a group or are solo practitioners who
participated in a Shared Savings Program ACO in 2015 that did not
successfully report quality data on their behalf decide to use the
secondary PQRS reporting period, it is important to note that such
groups and solo practitioners should expect to be initially classified
as Category 2 and receive an automatic downward adjustment under the VM
for items and services furnished in CY 2017 until CMS is able to
determine whether the group or solo practitioner met the criteria to
avoid the PQRS payment adjustment as described above. First, we would
need to process the data submitted for 2016. Second, we would need to
determine whether or not the group or solo practitioner would be
classified as Category 1 or Category 2 for the CY 2017 VM and notify
the group or solo practitioner if there is a change in the VM status.
Third, we would need to update the group or solo practitioner's status
so that they will stop receiving an automatic downward adjustment under
the VM for items and services furnished in CY 2017 and reprocess all
claims that were previously paid. Since groups and solo practitioners
taking advantage of this secondary reporting period for the 2017 VM
will have missed the deadline for submitting an informal review request
for the 2017 VM, we proposed the informal review submission periods for
these groups and solo practitioners would occur during the 60 days
following the release of the QRURs for the 2018 VM.
We requested comment on these proposals. We also proposed
corresponding revisions to Sec. 414.1210(b)(2).
The following is a summary of the comments we received regarding
these proposals.
Comment: Commenters supported our proposals to use the PQRS data
reported by EPs outside of the ACO for the CY 2017 and CY 2018 VM when
the ACO does not successfully report quality data on behalf of its EPs
for purposes of PQRS as required by the Shared Savings Program under
Sec. 425.504. Several commenters requested that CMS consider holding
these EPs harmless from VM adjustments for both the 2017 and 2018
payment adjustment years. Commenters stated EPs would not know if the
ACO failed to report for PQRS until close to the end of the reporting
period which would not allow sufficient time for them to report
separately. In addition, commenters stated EPs are not in direct
control of decisions made by the ACO, and therefore, should not be
penalized if the ACO does not successfully report quality data. One
commenter also stated that if the EPs had been aware of the option
earlier in the 2016 reporting period, it would be a more viable
proposal.
Response: As discussed in sections III.H. and III.K.1.e. of this
final rule, we are finalizing our proposals to remove the prohibition
on EPs who are part of a group or solo practitioner that participates
in a Shared Savings Program ACO, for purposes of PQRS reporting for the
CY 2017 and CY 2018 payment adjustments, to report outside the ACO. As
discussed in section III.H. of this final rule, to allow affected EPs
that participate in an ACO to report separately for the CY 2017 PQRS
payment adjustment, we are finalizing our proposal to create a
secondary PQRS reporting period for EPs that were in an ACO that did
not successfully report quality data on behalf of the EPs in the group
and those who are solo practitioners. Specifically, in section III.H.
of this final rule, we are finalizing that affected individual EPs or
groups, who report under an ACO, may separately report outside the ACO
either as individual EPs (using the registry, QCDR, or EHR reporting
option) or using one of the group registry, QCDR, or EHR reporting
options (note these EPs and groups would not need to register for one
of these group reporting options, but rather mark the data as group
data in their submission) during a secondary PQRS reporting period for
the CY 2017 PQRS payment adjustment if they were a participant in an
ACO that did not successfully report quality data on their behalf
during the established reporting period for the CY 2017 PQRS payment
adjustment. We are also finalizing in section III.H. of this final rule
that the secondary PQRS reporting period for the CY 2017 PQRS payment
adjustment would coincide with the reporting period for the CY 2018
PQRS payment adjustment (that is, January 1, 2016, through December 31,
2016).
We appreciate the commenters' support of our proposal to use the
PQRS data reported by EPs outside of the ACO for the CY 2017 and CY
2018 VM when the ACO does not successfully report quality data on
behalf of its EPs and are finalizing the policies as proposed. We plan
to communicate with the ACOs (and their participant TINs) that did not
successfully report quality data on behalf of their EPs for purposes of
PQRS for the CY 2017 PQRS payment adjustment to inform them about the
reporting during the secondary PQRS reporting period. We encourage EPs
to

[[Page 80523]]

communicate with their ACO and report quality data in the event the ACO
does not successfully report quality data as required by the Shared
Savings Program under Sec. 425.504 for the CY 2018 PQRS payment
adjustment.
For the CY 2018 payment adjustment period, we are finalizing that,
if a Shared Savings Program ACO does not successfully report quality
data on behalf of their EPs for purposes of PQRS as required by the
Shared Savings Program under Sec. 425.504, then we will use the data
reported to the PQRS by the EPs under the participant TIN (as a group
(using one of the group registry, QCDR, or EHR reporting options) or as
individuals (using the registry, QCDR, or EHR reporting option) outside
of the ACO to determine whether the TIN would fall in Category 1 or
Category 2 under the VM. We are also finalizing that we will apply the
two-category approach finalized for the CY 2018 VM (80 FR 71280) based
on participation in the PQRS by groups and solo practitioners to
determine whether groups and solo practitioners that participate in a
Shared Savings Program ACO, but report to the PQRS outside of the ACO,
would fall in Category 1 or Category 2 under the VM. Thus, if groups
that participate in a Shared Savings Program ACO in 2016 report quality
data to the PQRS outside of the ACO and meet the criteria to avoid PQRS
payment adjustment for CY 2018 as a group using one of the group
registry, QCDR, or EHR reporting options or have at least 50 percent of
the group's EPs meet the criteria to avoid the PQRS payment adjustment
for CY 2018 as individuals using the registry, QCDR, or EHR reporting
option by reporting quality data to PQRS outside of the ACO, then they
will be included in Category 1 for the CY 2018 VM. If solo
practitioners that participate in a Shared Savings Program ACO in 2016
report quality data to the PQRS outside of the ACO and meet the
criteria to avoid the PQRS payment adjustment for CY 2018 as
individuals using the registry, QCDR, or EHR reporting option, then
they will also be included in Category 1. Category 2 will include those
groups and solo practitioners subject to the CY 2018 VM that
participate in a Shared Savings Program ACO and do not fall within
Category 1.
For the CY 2017 payment adjustment period, we are finalizing that,
if a Shared Savings Program ACO did not successfully report quality
data on behalf of their EPs for purposes of PQRS as required by the
Shared Savings Program under Sec. 425.504 for the CY 2017 PQRS payment
adjustment, then we will use the data reported to the PQRS by the EPs
under the participant TIN (as a group using one of the group registry,
QCDR, or EHR reporting options or as individuals using the registry,
QCDR, or EHR reporting option) outside of the ACO during the secondary
PQRS reporting period to determine whether the TIN would fall in
Category 1 or Category 2 under the VM. We are also finalizing that we
will apply the two-category approach finalized for the CY 2017 VM (79
FR 67938 to 67939 and as revised in 80 FR 71280 to 71281) based on
participation in the PQRS by groups and solo practitioners to determine
whether groups and solo practitioners that participate in a Shared
Savings Program ACO, but report to the PQRS outside of the ACO, would
fall in Category 1 or Category 2 under the VM. In section III.H. of
this final rule, we finalized that we will assess the individual EP or
group's 2016 data submitted outside the ACO and during the secondary
PQRS reporting period against the reporting requirements for the CY
2018 PQRS payment adjustment. Therefore, we are also finalizing that
groups that meet the criteria to avoid PQRS payment adjustment for CY
2018 as a group practice participating in the PQRS GPRO (using one of
the group registry, QCDR, or EHR reporting options) or have at least 50
percent of the group's EPs meet the criteria to avoid the PQRS payment
adjustment for CY 2018 as individuals (using the registry, QCDR, or EHR
reporting option), based on data submitted outside the ACO and during
the secondary PQRS reporting period, will be included in Category 1 for
the CY 2017 VM. We are also finalizing that solo practitioners that
meet the criteria to avoid the PQRS payment adjustment for CY 2018 as
individuals using the registry, QCDR, or EHR reporting option, based on
data submitted outside the ACO and during the secondary PQRS reporting
period, will be included in Category 1 for the CY 2017 VM. Category 2
will include those groups and solo practitioners subject to the CY 2017
VM that participate in a Shared Savings Program ACO and do not fall
within Category 1.
Comment: Several commenters supported our proposal to classify the
quality composite of TINs that report outside of the ACO as ``average
quality'' for the CY 2017 VM so that these EPs are protected from
downward adjustments under quality-tiering; however, few commenters
stated that it would be appropriate to apply the quality-tiering
methodology for the 2018 VM payment adjustment when TINs in the Shared
Savings Program report separately from the ACO. One commenter stated
that, for the 2018 VM, in cases where measures are submitted by both
the EP and the ACO, the best performance be counted and the EP should
be eligible for a payment adjustment based on performance; and in cases
where the EP opts to report through an ACO, but the ACO fails to
report, the EP should receive a neutral payment adjustment. One
commenter supported our proposal to classify the quality composite of
TINs that report outside of the ACO as ``average quality'' for the CY
2018 VM.
Response: As we stated previously, we continue to believe that it
is appropriate to calculate a quality composite for groups and solo
practitioners participating in the Shared Savings Program based on the
ACO's quality data (79 FR 67944). Our proposed policies were not
intended to encourage groups and solo practitioners that participate in
a Shared Savings Program ACO to report to the PQRS outside the ACO, but
in the event the ACO does not successfully report quality data on
behalf of their EPs for purposes of PQRS, to provide them with a
safeguard that would allow them to avoid the PQRS payment adjustment
and the automatic downward adjustment under the VM. We encourage groups
and solo practitioners to continue to report through the ACO in order
to promote clinical and financial integration within the ACO and for
the Medicare beneficiaries they treat.
Therefore, we are finalizing as proposed that, for groups and solo
practitioners that participate in a Shared Savings Program ACO that did
not successfully report quality data as required by the Shared Savings
Program under Sec. 425.504 and are in Category 1 as a result of
reporting quality data to the PQRS outside of the ACO, we will classify
their quality composite for the VM for the CY 2018 payment adjustment
period as ``average quality.'' We are also finalizing that for groups
and solo practitioners that participate in a Shared Savings Program ACO
that did not successfully report quality data as required by the Shared
Savings Program under Sec. 425.504 and are in Category 1 as a result
of reporting quality data to the PQRS outside of the ACO using the
secondary PQRS reporting period, we will classify their quality
composite for the VM for the CY 2017 payment adjustment period as
``average quality''.
As finalized in the CY 2015 PFS final rule with comment period (79
FR 67943), the cost composite for groups and solo practitioners that
participate in a Shared Savings Program ACO will be

[[Page 80524]]

classified as ``average cost.'' We are also finalizing the
corresponding revisions to Sec. 414.1210(b)(2).
Since groups and solo practitioners taking advantage of the
secondary PQRS reporting period for the CY 2017 PQRS payment adjustment
will have missed the deadline for submitting an informal review request
for the 2017 VM, we proposed the informal review submission periods for
these groups and solo practitioners would occur during the 60 days
following the release of the QRURs for the 2018 VM. We did not receive
any comments on this proposal and are finalizing this policy as
proposed.

M. Physician Self-referral Updates

1. Unit-based Compensation in Arrangements for the Rental of Office
Space or Equipment
a. The Physician Self-referral Statute and Regulations
(1) Section 1877 of the Act
Section 6204 of the Omnibus Budget Reconciliation Act of 1989 (Pub.
L. 101- 239) (OBRA 1989), enacted on December 19, 1989, added section
1877 to the Act. Section 1877 of the Act, also known as the physician
self-referral law: (1) Prohibits a physician from making referrals for
certain designated health services (DHS) payable by Medicare to an
entity with which he or she (or an immediate family member) has a
financial relationship (ownership or compensation), unless an exception
applies; and (2) prohibits the entity from filing claims with Medicare
(or billing another individual, entity, or third party payer) for those
referred services. The statute establishes a number of specific
exceptions, and grants the Secretary the authority to create regulatory
exceptions for financial relationships that pose no risk of program or
patient abuse. Additionally, the statute mandates refunding any amount
collected under a bill for an item or service furnished under a
prohibited referral. Finally, the statute imposes reporting
requirements and provides for sanctions, including civil monetary
penalty provisions. Section 1877 of the Act became effective on January
1, 1992.
Section 4207(e) of the Omnibus Budget Reconciliation Act of 1990
(Pub. L. 101-508) (OBRA 1990), enacted on November 5, 1990, amended
certain provisions of section 1877 of the Act to clarify definitions
and reporting requirements relating to physician ownership and
referrals and to provide an additional exception to the prohibition.
Several subsequent laws further changed section 1877 of the Act.
Section 13562 of the Omnibus Budget Reconciliation Act of 1993 (Pub. L.
103- 66) (OBRA 1993), enacted on August 10, 1993, expanded the referral
prohibition to cover certain other ``designated health services'' in
addition to clinical laboratory services, modified some of the existing
statutory exceptions, and added new exceptions. Section 152 of the
Social Security Act Amendments of 1994 (SSA 1994) (Pub. L. 103-432),
enacted on October 31, 1994, amended the list of designated health
services, changed the reporting requirements at section 1877(f) of the
Act, and modified some of the effective dates established by OBRA 1993.
Some provisions relating to referrals for clinical laboratory services
were effective retroactively to January 1, 1992, while other provisions
became effective on January 1, 1995.
(2) Regulatory History
(a) General Background
The following discussion provides a chronology of our more
significant and comprehensive rulemakings; it is not an exhaustive list
of all rulemakings related to the physician self-referral law.
Following the passage of section 1877 of the Act, we proposed
rulemakings in 1992 (related only to referrals for clinical laboratory
services) (57 FR 8588) (the 1992 proposed rule) and 1998 (addressing
referrals for all DHS) (63 FR 1659) (the 1998 proposed rule). We
finalized the proposals from the 1992 proposed rule in 1995 (60 FR
41914) (the 1995 final rule), and issued final rules following the 1998
proposed rule in three stages. The first final rulemaking (Phase I) was
published in the January 4, 2001 Federal Register (66 FR 856) as a
final rule with comment period. The second final rulemaking (Phase II)
was published in the March 26, 2004 Federal Register (69 FR 16054) as
an interim final rule with comment period. Due to a printing error, a
portion of the Phase II preamble was omitted from the March 26, 2004
Federal Register publication. That portion of the preamble, which
addressed reporting requirements and sanctions, was published on April
6, 2004 (69 FR 17933). The third final rulemaking (Phase III) was
published in the September 5, 2007 Federal Register (72 FR 51012) as a
final rule. In addition to Phase I, Phase II, and Phase III, we issued
final regulations on August 19, 2008 in the ``Changes to the Hospital
Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates''
final rule with comment period (73 FR 48434) (the FY 2009 IPPS final
rule). That rulemaking made various revisions to the physician self-
referral regulations, including provisions that prohibited certain per
unit-of-service (often referred to as ``per-click'') and percentage-
based compensation formulas for determining the rental charges for
office space and equipment lease arrangements.
We issued additional final regulations after passage of the
Affordable Care Act. In the CY 2011 PFS final rule with comment period
(75 FR 73170), we codified a disclosure requirement established by the
Affordable Care Act for the in-office ancillary services exception. We
also issued regulations in the CY 2011 OPPS final rule with comment
period (75 FR 71800), the CY 2012 OPPS final rule with comment period
(76 FR 74122), and the CY 2015 OPPS final rule with comment period (79
FR 66770) that established or revised certain regulatory provisions
concerning physician-owned hospitals to codify and interpret the
Affordable Care Act's revisions to section 1877 of the Act. Finally, in
the CY 2016 PFS final rule (80 FR 70886), we issued regulations to
accommodate delivery and payment system reform, reduce burden, and to
facilitate compliance. In that rulemaking, we established two new
exceptions, clarified certain provisions of the physician self-referral
law, updated regulations to reflect changes in terminology, and revised
definitions related to physician-owned hospitals. One of the new
exceptions, the exception for timeshare arrangements at Sec.
411.357(y), includes a prohibition on certain per unit-of-service
compensation formulas.
(b) Unit-based Compensation
We have addressed the issue of unit-based compensation in several
rulemakings. Sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act provide
that, for an arrangement for the rental of office space or equipment to
satisfy the relevant exceptions to the physician self-referral law, the
rental charges over the term of the lease must be set in advance, be
consistent with fair market value, and not be determined in a manner
that takes into account the volume or value of any referrals or other
business generated between the parties. Interpreting this ``volume or
value'' standard in the 1998 proposed rule, we proposed that
compensation could be based on units of service (for example, ``per-
use'' equipment rentals) provided that the units of service did not
include services provided to patients who were referred by the
physician receiving the payment. For example, a physician who owned a
lithotripter could rent it to a hospital on a per-procedure basis,

[[Page 80525]]

except for lithotripsies for patients referred by the physician owner.
Instead, payments for the use of the lithotripter for those patients
would have to use a methodology that did not vary with referrals. (63
FR 1714; see also 66 FR 876). We further proposed that arrangements in
which a physician rents equipment to an entity that furnishes a
designated health service, such as a hospital that rents an MRI
machine, with the physician receiving rental payments on a ``per-use''
or ``per-click'' basis (that is, a rental payment is generated each
time the machine is used) do not prohibit the physician from otherwise
referring to the entity, provided that these kinds of arrangements are
typical and comply with the fair market value and other standards that
are included under the rental exception. However, because a physician's
compensation under this exception cannot reflect the volume or value of
the physician's own referrals, we proposed that the rental payments may
not reflect ``per-use'' or ``per-click'' payments for patients who are
referred for the service by the physician lessor (63 FR 1714).
After reviewing the public comments in response to the 1998
proposed rule, we finalized in Phase I significant revisions with
respect to the scope of the volume or value standard. We revised our
interpretation of the ``volume or value'' standard for purposes of
section 1877 of the Act to permit, among other things, payments based
on a unit of service, provided that the unit-based payment is fair
market value and does not vary over time (66 FR 876 through 879).
Importantly, we permitted unit-based compensation formulas, even when
the physician receiving the payment has generated the payment through a
DHS referral. To reach this position, we noted that page 814 of the
House Conference Committee report (H. Rep. No. 213, 103rd Cong., 1st
Sess. (1993)) stated, with respect to the statutory exceptions for the
rental of office space and equipment in sections 1877(e)(1)(A)(iv) and
(B)(iv) of the Act, that the conferees ``intend[ed] that rental charges
for [office] space and equipment leases may be based on daily, monthly,
or other time-based rates, or rates based on units of service
furnished, so long as the amount of the time-based or units of service
rates does not fluctuate during the contract period based on the volume
or value of referrals between the parties to the lease or
arrangement.'' (66 FR 876). However, we stated our unequivocal belief
that arrangements in which the lessor is compensated each time that the
lessor refers a patient to the lessee for a service performed in the
leased office space or using the leased equipment have an obvious
potential for abuse and could incent overutilization (66 FR 878). We
indicated that we would continue to monitor financial arrangements in
the health care industry and would revisit particular regulatory
decisions if we determine that there has been abuse or overutilization
(66 FR 860).
In the CY 2008 PFS proposed rule (72 FR 38122), we stated that
arrangements between a physician lessor and an entity lessee under
which the physician lessor receives unit-of-service payments are
inherently susceptible to abuse because the physician lessor has an
incentive to profit from referring a higher volume of patients to the
lessee. We proposed that space and equipment leases may not include
per-click payments to a physician lessor for services rendered by an
entity lessee to patients who are referred by a physician lessor to the
entity (72 FR 38183). We also solicited comments on the question of
whether we should prevent per-click payments in situations in which the
physician is the lessee and a DHS entity is the lessor. The CY 2008 PFS
proposed rule also included eight other significant proposed revisions
to the physician self-referral regulations. Due to the large number of
physician self-referral proposals, the significance of the provisions
both individually and in concert with each other, and the volume of
public comments received in response to the CY 2008 PFS proposed rule,
we declined to finalize our proposals, including our proposal to
prohibit certain per unit-of-service compensation formulas in
arrangements for the rental of office space and equipment, in the CY
2008 PFS final rule (72 FR 66222).
After consideration of the public comments and our independent
research, we finalized regulations prohibiting certain per-unit of
service compensation formulas for determining office space and
equipment rental charges in the FY 2009 IPPS final rule (73 FR 48434).
Specifically, we revised Sec. 411.357(a)(4) and (b)(4) to prohibit
rental charges for the rental of office space or equipment that are
determined using a formula based on per-unit of service rental charges,
to the extent that such charges reflect services provided to patients
referred by the lessor to the lessee. In doing so, we relied on our
authority in section 1877(e)(1)(A)(vi) and (B)(vi) of the Act, which
permits the secretary to impose by regulation other requirements needed
to protect against program or patient abuse. We also revised the
exceptions at Sec. Sec. 411.357(l) and (p) for fair market value
compensation and indirect compensation arrangements, respectively, to
include similar limitations on the formula for determining office space
and equipment rental charges, as applicable. We did so using our
authority at section 1877(b)(4) of the Act, as those exceptions were
established using that authority (See 73 FR 48713 through 48721). We
determined it necessary to limit the type of per-click compensation
formulas available for arrangements for the rental of office space and
equipment because we believe that arrangements under which a lessor
receives unit-of-service payments are inherently susceptible to abuse.
Specifically, we believe that the lessor has an incentive to profit
from referring a higher volume of patients to the lessee and from
referring patients to the lessee that might otherwise go elsewhere for
services.
b. Development of This Rulemaking
(1) Council for Urological Interests v. Burwell
On June 12, 2015, the D.C. Circuit (the Court) issued an opinion in
Council for Urological Interests v. Burwell, 790 F.3d 212 (D.C. Cir.
2015), that addressed the prohibition on per-click rental charges for
the lease of equipment found at Sec. 411.357(b)(4)(ii)(B). In its
ruling, the Court agreed with CMS that section 1877(e)(1)(B)(vi) of the
Act provides the Secretary the authority to prohibit per-click leasing
arrangements. The Court concluded that--

The text of the statute does not unambiguously preclude the
Secretary from using her authority to add a requirement that bans
per-click leases. To the contrary, the statutory text of the
exception clearly provides the Secretary with the discretion to
impose any additional requirements that she deems necessary ``to
protect against program or patient abuse.'' (Council for Urological
Interests, 790 F.3d at 219.)

The Court further concluded that the relevant language in the House
Conference Report merely interpreted section 1877(e)(1)(B)(iv) of the
Act, and thus did not preclude CMS from imposing additional
requirements under section 1877(e)(1)(B)(vi) of the Act. It stated that
the legislative history ``simply indicates that, as written, the
rental-charge clause [in section 1877(e)(1)(B)(iv) of the Act] does not
preclude per-click leases'' and stated further that ``[n]othing in the
legislative history suggests a limit on [the Secretary's] authority''
to prohibit per-click leases under section 1877(e)(1)(B)(vi) of the Act
(Id. at 222.).
The Court also concluded, however, that CMS's discussion of the
House

[[Page 80526]]

Conference Report in the FY 2009 IPPS final rule contained an
unreasonable interpretation of the conferees' statements concerning
sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act, and it remanded the
case to the agency to permit a fuller consideration of the legislative
history. This rulemaking addresses that decision.
(2) The FY 2009 IPPS Final Rule
As discussed above, in the FY 2009 IPPS final rule, we revised the
exceptions for the rental of office space and equipment to include in
each a requirement that the rental charges for the office space or
equipment are not determined using a formula based on per-unit of
service rental charges, to the extent that such charges reflect
services provided to patients referred by the lessor to the lessee. We
explained that our decision to add this requirement was ultimately
based on our authority under section 1877(e)(1)(B)(vi) of the Act to
promulgate ``other requirements'' needed to protect against program or
patient abuse. However, we also discussed certain legislative history
contained in the House Conference Report addressing sections
1877(e)(1)(A)(iv) and 1877(e)(1)(B)(iv) of the Act, which establish
requirements that rental charges over the term of a lease for office
space or rental equipment be set in advance, be consistent with fair
market value, and not be determined in a manner that takes into account
the volume or value of any referrals or other business generated
between the parties. With respect to those statutory conditions, the
language in the House Conference Report states that--

The conferees intend that charges for space and equipment leases
may be based on daily, monthly, or other time-based rates, or rates
based on units of service furnished, so long as the amount of time-
based or units of service rates does not fluctuate during the
contract period based on the volume or value of referrals between
the parties to the lease or arrangement. (H.R. Rep. No. 103-213, at
814 (1993).)

In the FY 2009 IPPS final rule, we noted that CMS had previously
concluded that this language indicated that Congress intended to permit
leases that included per-click payments, even for patients referred by
the physician lessor (66 FR 940), but stated that the language could
also be interpreted as excluding from the office space and equipment
lease exceptions those lease arrangements that include per-click
payments for services provided to patients referred from one party to
the other (73 FR 48716). Specifically, we stated that, where the total
amount of rent (that is, the rental charges) over the term of the lease
is directly affected by the number of patients referred by one party to
the other, those rental charges can arguably be said to ``take into
account'' or ``fluctuate during the contract period based on'' the
volume or value of referrals between the parties. The Court found this
revised interpretation to be an unreasonable reading of the language of
the House Conference Report. The Court remanded Sec.
411.357(b)(4)(ii)(B) to the Secretary for further proceedings
consistent with its opinion, and directed that the Secretary should
consider whether a ban on per-click equipment leases is consistent with
the House Conference Report.
c. The CY 2017 PFS Proposed Rule: Re-proposal of Limitation on the
Types of Per-unit of Service Compensation Formulas for Determining
Office Space and Equipment Rental Charges
In the CY 2017 PFS proposed rule, we proposed certain requirements
for arrangements involving the rental of office space or equipment.
Specifically, using the same language in existing Sec.
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B), we
proposed to include at Sec. 411.357(a)(5)(ii)(B), (b)(4)(ii)(B),
(l)(3)(ii), and (p)(1)(ii)(B) a requirement that rental charges for the
lease of office space or equipment are not determined using a formula
based on per-unit of service rental charges, to the extent that such
charges reflect services provided to patients referred by the lessor to
the lessee. We used the authority granted to the Secretary in sections
1877(e)(1)(A)(vi) and (B)(vi) of the Act to re-propose this requirement
in the exceptions at Sec. 411.357(a) and (b) for the rental of office
space and equipment, respectively. We used the authority granted to the
Secretary in section 1877(b)(4) of the Act to re-propose this
requirement in the exceptions at Sec. 411.357(l) and (p) for fair
market value compensation and indirect compensation arrangements,
respectively. For the reasons set forth below, we are finalizing
without modification at Sec. 411.357(a)(5)(ii)(B), (b)(4)(ii)(B),
(l)(3)(ii), and (p)(1)(ii)(B) a requirement that rental charges for the
lease of office space or equipment are not determined using a formula
based on per-unit of service rental charges, to the extent that such
charges reflect services provided to patients referred by the lessor to
the lessee.
We emphasize that we did not propose and are not finalizing an
absolute prohibition on rental charges based on units of service
furnished. In general, per-unit of service rental charges for the
rental of office space or equipment are permissible. We proposed to
limit, and in this final rule are finalizing a limit on, the general
rule by prohibiting per-unit of service rental charges where the lessor
generates the payment from the lessee through a referral to the lessee
for a service to be provided in the rented office space or using the
rented equipment. Thus, under this final rule, per-unit of service
rental charges for the rental of office space or equipment are
permissible, but only in those instances where the referral for the
service to be provided in the rented office space or using the rented
equipment did not come from the lessor.
(1) Authority
In accordance with the Court's opinion in Council for Urological
Interests, in the proposed rule, we set forth the Secretary's authority
to include in the exceptions applicable to office space and equipment
leases a requirement that rental charges are not determined using a
formula based on per-unit of service rental charges that reflect
services provided to patients referred by the lessor to the lessee. Our
determination followed the Court's reasoning, excerpted below, in
rejecting the Council for Urological Interests' assertion that the
Secretary lacked the authority to impose a ban on ``per-click''
equipment--and by correlation--office space leases. We also described
why limiting the types of per-click rental charges that would not
violate the physician self-referral law's referral and claims
submission prohibitions is consistent with the language of the House
Conference Report.
As the Court stated, the physician self-referral law gives the
Secretary power to add requirements as needed to protect against
program or patient abuse, even if Congress did not anticipate such
abuses at the time of enactment of the statute. Specifically, although
Congress may not have originally included a ban on per-click rental
charges in office space and equipment lease arrangements, it
``empowered the Secretary to make her own assessment of the needs of
the Medicare program and regulate accordingly.'' (Council for
Urological Interests, 790 F.3d at 220.) The statute explicitly permits
the Secretary to impose additional conditions on arrangements for the
rental of office space or equipment, and nowhere expressly states that
per-click rates must always be permitted. Thus, as the Court confirmed,
the Secretary's regulation limiting the use of per-click compensation
formulas ``can properly be classified as an `other' requirement
expressly permitted by sections

[[Page 80527]]

1877(e)(1)(A)(vi) and (B)(vi) of the Act.'' (Id.)
The Secretary's authority to impose requirements regarding the type
of compensation formulas upon which office space and equipment rental
charges may be based is not constrained by the House Conference Report.
In the proposed rule, we acknowledged that the language in the House
Conference Report states Congress' intent at the time of enactment of
the physician self-referral law that sections 1877(e)(1)(A)(iv) and
(B)(iv) of the Act not be interpreted as prohibiting charges for the
rental of office space or equipment that are based on units of service
furnished. We did not purport to interpret this language as implying
anything other than the conferees' understanding--at the time of
enactment of the statute--that the statute as written did not prohibit
rental charges based on units of service rates. But Congress also gave
the Secretary the authority in sections 1877(e)(1)(A)(vi) and (B)(vi)
of the Act to impose by regulation other requirements as needed to
protect against program or patient abuse. Nowhere in the House
Conference Report did Congress express an intent to limit the authority
granted to the Secretary in sections 1877(e)(1)(A)(vi) and (B)(vi) of
the Act (as enacted). In fact, the House Conference Report was
completely silent regarding sections 1877(e)(1)(A)(vi) and (B)(vi) of
the Act, leaving the express words of the statute to speak for
themselves. As the Court noted--

The conference report . . . states only that rental charges
``may'' be based on units of service. The language is not
obligatory. Instead, it simply indicates that, as written, the
rental-charge clause [(section 1877(e)(1)(B)(iv) of the Act)] does
not preclude per-click leases. But, as we have already explained,
there is more to the statute than this clause, and to qualify for
the exception, a rental agreement must comply with all six clauses,
not merely the rental-charge clause alone. The final clause
[(section 1877(e)(1)(B)(vi) of the Act)] gives the Secretary the
authority to add further requirements. Nothing in the legislative
history suggests a limit on this authority. We conclude that the
statute does not unambiguously forbid the Secretary from banning
per-click leases as she evaluates the needs of the Medicare system
and its patients. (790 F.3d at 221-22 (footnote omitted).)

Moreover, as the Court further noted, a statement that unit of
service-based rental charges are not precluded by sections
1877(e)(1)(A)(iv) and (B)(iv) of the Act as they are written is not
equivalent to a statement that the Secretary must continue to permit
such charges as she reevaluates, in light of experience, the operation
of the statute and the need to protect the Medicare program and its
beneficiaries against abuse. (Id. at 222 n.7; see also id. at 222 n.6
(``Congress has expressly delegated to the Secretary the authority to
promulgate additional requirements, as she has done here, and the
legislative history does not clearly impose a constraint on that
power.'').)
In the proposed rule, we discussed the Secretary's broad authority
under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose
conditions on arrangements for the rental of office space or equipment
in order to protect against program or patient abuse. That authority is
not limited by the express words of the statute as it is in other
provisions of section 1877 of the Act. In agreement, the Court in
Council for Urological Interests explained--

. . . Congress knew how to limit the Secretary's authority to impose
additional requirements to the various exceptions [to the physician
self-referral law]. In [section 1877(e)(2) of the Act], Congress
excludes bona fide employment relationships from the definition of
compensation arrangements. This provision states that the employment
relationship must comply with various requirements, including that
the pay not be determined ``in a manner that takes into account
(directly or indirectly) the volume or value of any referrals by the
referring physician.'' This employment exception also allows the
Secretary to impose ``other requirements,'' just as the equipment
rental exception. But the statute then goes on to say that the
listed requirements ``shall not prohibit the payment of remuneration
in the form of a productivity bonus based on services performed
personally by the physician.'' This language shows that Congress
knew how to cabin the Secretary's authority to impose ``other''
requirements and that it knew how to further clarify what it meant
by compensation that does not take into account the volume of
business generated between parties. That Congress employed neither
of these tools with reference to the [exception for the rental of
office space or equipment] again supports reading the statute as
giving the Secretary broad discretion as she regulates in this area.
(790 F.3d at 221 (citations omitted).)

The Secretary's authority to limit the use of per-unit of service
rental charges in arrangements for the rental of office space or
equipment is particularly clear when the exceptions for the rental of
office space and equipment are compared to other provisions in section
1877 of the Act. According to the Court in Council for Urological
Interests--

[T]he statute elsewhere expressly permits charging per-click
fees in other contexts, showing that Congress knew how to authorize
such payment terms when it wanted to. In [section 1877(e)(7)(A) of
the Act], Congress created an exception to the [physician self-
referral law] that allows the continuation of certain group practice
arrangements with a hospital. . . . The provision states that ``[a]n
arrangement between a hospital and a group under which designated
health services are provided by the group but are billed by the
hospital'' is excepted from the ban on referrals if, among other
things, ``the compensation paid over the term of the agreement is
consistent with fair market value and the compensation per unit of
services is fixed in advance and is not determined in a manner that
takes into account the volume or value of any referrals or other
business generated between the parties.'' Comparing this provision
to the [exceptions for the rental of office space and equipment]
shows that Congress knew how to permit per-click payments
explicitly, suggesting that the omission in this particular context
was deliberate. . . . In other words, Congress's decision not to
include similar language in the [exceptions for the rental of office
space and equipment] supports our conclusion that the statute is
silent regarding the permissibility of per-click leases for
equipment rentals. (790 F.3d at 220-21 (citations omitted).)

In the proposed rule, we stated in summary that, as we similarly stated
in the FY 2009 IPPS final rule (73 FR 48716), the physician self-
referral statute responds to the context of the times in which it was
enacted (by addressing known risks of overutilization and, in
particular, by creating exceptions for common business arrangements),
and also incorporates sufficient flexibility to adapt to changing
circumstances and developments in the health care industry. For
example, in section 1877(b)(4) of the Act, Congress authorized the
Secretary to protect additional beneficial arrangements by promulgating
new regulatory exceptions. In addition, Congress included the means to
address evolving fraud risks by inserting into many of the exceptions--
and notably, for our purposes, in the lease exceptions--specific
authority for the Secretary to add conditions as needed to protect
against abuse. This design reflects a recognition that a fraud and
abuse law with sweeping coverage over most of the health care industry
could not achieve its purpose over the long term if it were frozen in
time. In short, the statute evidences Congress' foresight in
anticipating that the nature of fraud and abuse--and of beneficial
industry arrangements--might change over time. (73 FR 48716 (citations
omitted).)
As we did in 2007 when we first proposed to impose additional
requirements for rental charges in arrangements for the rental of
office space and equipment, and in 2008 when we finalized regulations
incorporating

[[Page 80528]]

such additional requirements, we relied in making our proposal on the
Secretary's clear authority in sections 1877(e)(1)(A)(vi) and (B)(vi)
of the Act to impose such other requirements needed to protect against
program or patient abuse. With respect to our proposal to include the
same requirements at Sec. 411.357(l) and (p), we determined that the
revisions to Sec. 411.357(l) and (p) are necessary to meet the
standard set forth in section 1877(b)(4) of the Act, which authorizes
the Secretary to establish exceptions to the statute's referral and
billing prohibitions only where the excepted financial relationships do
not pose a risk of program or patient abuse.
(2) Rationale for Proposal
As we discussed in prior rulemakings, including the 1998 proposed
rule, we stated in the proposed rule that a number of studies prior to
the enactment of the physician self-referral law found that physicians
who had financial relationships with entities to which they referred
patients ordered more services than physicians without such financial
relationships (63 FR 1661). We noted that studies conducted since that
time, including recent studies by GAO, indicate that financial self-
interest continues to affect physicians' medical decision making.
In the FY 2009 IPPS final rule, we discussed in detail our
rationale for finalizing the limitation on per-unit of service rental
charges in arrangements for the rental of office space or equipment. We
noted primary concerns regarding the potential for overutilization,
patient steering and other anti-competitive effects, and reduction in
quality of care and patient outcomes, as well as concerns regarding the
potential for increased costs to the Medicare program. For the reasons
set forth in the FY 2009 IPPS final rule, some of which we restated in
the proposed rule, we stated our belief that, in order to protect
against program or patient abuse, it is necessary to impose additional
requirements on arrangements for the rental of office space or
equipment. Specifically, we stated that we believe that it is necessary
to prohibit rental charges that are determined using a formula based on
per-unit of service rental charges to the extent that such charges
reflect services provided to patients referred by the lessor to the
lessee of the office space or equipment.
In the CY 2017 PFS proposed rule, we noted that commenters
responding to our proposal in the CY 2008 PFS proposed rule to impose
additional requirements for office space and equipment lease
arrangements provided compelling information regarding potential
program or patient abuse. We were persuaded in 2008 to finalize
requirements limiting per-unit of service rental charges in the
exceptions applicable to the rental of office space or equipment, and
stated our continued belief that these requirements continue to be
necessary, due to our concerns that ``per-click'' lease arrangements in
which the lessor makes referrals to the lessee that generate payments
to the lessor--
Create an incentive for overutilization of imaging
services (as described by MedPAC in its comments to our proposal in the
CY 2008 PFS proposed rule), as well as other services, including
therapeutic services;
Create an incentive for physicians to narrow their choice
of treatment options to those for which they will realize a profit,
even where the best course of action may be no treatment;
Influence physicians to refer to the lessee instead of
referring to another entity that utilizes the same or different (and
perhaps more efficacious) technology to treat the patient's condition;
Result in physicians steering patients to equipment they
own, even if it means having the patient travel to a non-convenient
site for services using the leased equipment; and
Increase costs to the Medicare program when referring
physicians pressure hospitals to use their leasing company despite not
being the low cost provider.
We noted that, in the CY 2016 PFS final rule, we expressed our
continued concern that, when physicians have a financial incentive to
refer a patient to a particular entity, this incentive can affect
utilization, patient choice, and competition. Physicians can
overutilize by ordering items and services for patients that, absent a
profit motive, they would not have ordered. A patient's choice is
diminished when physicians steer patients to less convenient, lower
quality, or more expensive providers of health care, just because the
physicians are sharing profits with, or receiving remuneration from,
the providers. And lastly, where referrals are controlled by those
sharing profits or receiving remuneration, the medical marketplace
suffers if new competitors cannot win business with superior quality,
service, or price (80 FR 41926). We stated that, in establishing the
exception at Sec. 411.357(y) for timeshare arrangements, we determined
it necessary to exclude from the exception any timeshare arrangements
that incorporate compensation formulas based on: (1) A percentage of
the revenue raised, earned, billed, collected, or otherwise
attributable to the services provided while using the timeshare; or (2)
per-unit of service fees, to the extent that such fees reflect services
provided to patients referred by the party granting permission to use
the timeshare to the party to which the permission is granted. We
explained our belief that timeshare arrangements based on percentage
compensation or per-unit of service compensation formulas present a
risk of program or patient abuse because they may incentivize
overutilization and patient steering. We noted in the CY 2016 PFS final
rule, by way of example, that a per-patient compensation formula could
incent the timeshare grantor to refer patients (potentially for
unnecessary consultations or services) to the party using the timeshare
because the grantor will receive a payment each time the premises,
equipment, personnel, items, supplies, or services are used (80 FR
71331 through 71332). Similarly, we believe that arrangements utilizing
rental charges for the rental of office space or equipment that are
determined using a formula that rewards the lessor for each service the
lessor refers to the lessee are susceptible to this and other abuse.
Finally, we noted in the CY 2017 PFS proposed rule that we are not
alone in our concern regarding overutilization and steering of
beneficiaries resulting from arrangements in which a physician's
referral may provide future remuneration back to the physician. In two
notable advisory opinions, OIG expressed its concern with per-unit of
service compensation arrangements. Specifically, in Advisory Opinion
03-08, OIG stated that ```[p]er patient,' `per click,' `per order,' and
similar payment arrangements with parties in a position, directly or
indirectly, to refer or recommend an item or service payable by a
federal health care program are disfavored under the anti-kickback
statute. The principal concern is that such arrangements promote
overutilization . . . .'' In Advisory Opinion 10-23, OIG noted that the
arrangement that was the subject of the opinion ``involves a `per-
click' fee structure, which is inherently reflective of the volume or
value of services ordered and provided . . . .''
The following is a summary of the comments we received regarding
our re-proposal.
Comment: The majority of commenters that addressed the re-proposed
regulations at Sec. 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii),
and (p)(1)(ii)(B) supported the restriction on per-unit of service (or
per-

[[Page 80529]]

click) compensation formulas for determining the rental charges for
office space and equipment lease arrangements. Many of these commenters
offered general support, while others noted appreciation for our
continued monitoring of financial relationships in the health care
industry, particularly with respect to per-click compensation
arrangements and the ``misuses of physician-owned office space.'' One
commenter commended us for continuing to recognize the ``perverse
incentives created by compensation arrangements between physicians and
other providers that are based on volume.'' Another commenter
specifically agreed that overutilization and abuse can occur under
these types of arrangements and agreed with our re-proposal to limit
them.
One commenter commended us for keeping the integrity of the
Medicare program in mind by re-proposing the per-click restrictions.
This commenter and another noted that improper financial relationships
risk wasting funds and could limit access to more appropriate treatment
options. A third commenter encouraged us to ``keep in place the
relevant restriction on per-unit arrangements when payments are made to
referral sources.'' Another commenter acknowledged that a careful
balance must be established between permitting physicians to lease
office space or equipment to ensure access to patient care and avoiding
potential risks of abuse of the Medicare program, and stated its
appreciation that the restrictions we proposed on the formula for
rental charges are reasonable and preserve the ability of physicians to
lease office space and equipment from other physicians.
Response: We continue to believe, and agree with the commenters,
that arrangements for the rental of office space or equipment utilizing
rental charges that are determined using a formula that rewards the
lessor for each service the lessor refers to the lessee are susceptible
to abuse. As discussed in the CY 2017 PFS proposed rule, such abuse
includes the potential for overutilization, patient steering and
stifling patient choice, and the reduction in quality of care and
patient outcomes, as well as the potential for increased costs to the
Medicare program (81 FR 46452). For the reasons explained in detail in
the proposed rule and elsewhere in this final rule, we believe that, in
order to protect against program or patient abuse, it is necessary to
impose additional requirements on arrangements for the rental of office
space or equipment. Specifically, we believe that it is necessary to
prohibit rental charges that are determined using a formula based on
per-unit of service rental charges to the extent that such charges
reflect services provided to patients referred by the lessor to the
lessee of the office space or equipment. Therefore, using our using our
authority at section 1877(e)(1)(A)(vi) and (B)(vi) of the Act, we are
finalizing without modification the regulations re-proposed at Sec.
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B).
Comment: One commenter welcomed what it referred to as a
``clarification'' that the restriction on per-unit of service
compensation formulas applies only in instances where the referral that
results in the payment for the use of the equipment comes from the
lessor.
Response: The regulations at Sec. 411.357(a)(5)(ii)(B),
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) prohibit per-unit of
service rental charges only to the extent that such charges reflect
services provided to patients referred by the lessor to the lessee. We
discussed this limitation in the FY 2009 IPPS final rule, stating that
the regulations do not prohibit per-click rental payments to physician
lessors for services rendered to patients who were not referred to the
lessee by the physician lessors, because such arrangements do not carry
with them risk under the physician self-referral statute (73 FR 48719).
We again discussed the provision in the CY 2017 PFS proposed rule,
stating that per-unit of service rental charges for the rental of
office space or equipment are permissible, but only in those instances
where the referral for the service to be provided in the rented office
space or using the rented equipment does not come from the lessor (81
FR 46450). The re-proposed language at Sec. 411.357(a)(5)(ii)(B),
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) is identical to the
regulatory provisions finalized in the FY 2009 IPPS final rule.
Comment: We received one comment opposing our proposal to prohibit
per-unit of service (``per-click'') rental charges where the lessor
generates the payment from the lessee through a referral to the lessee
for a service to be provided in the rented office space or using the
rented equipment. The commenter asserted that, in its opinion, our re-
proposal of the limitation on per-click rental charges does not comply
with the Court's decision in Council for Urological Interests v.
Burwell. The commenter asserted that, as a result, our re-proposal of
the limitation on per-click rental charges is arbitrary and capricious.
The commenter premised its objection to our proposal in two ways.
First, the commenter asserted that we lacked the authority to re-
propose the regulations because our determination to prohibit certain
per-click rental charges cannot be reconciled with the House Conference
Report. The commenter asserted that we did ``not even try to reconcile
a ban on per-click [compensation formulas] with the [House] Conference
Report.'' At the same time, the commenter asserted that the Court
rejected our explanation that, given the authority granted to the
Secretary under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act, the
House Conference Report does not constrain her authority to impose
requirements regarding the type of compensation formulas upon which
office space and equipment rental charges may be based.
Second, the commenter rejected our justification for re-proposing
the prohibition on certain per-click compensation formulas for
determining rental charges in arrangements for the rental of office
space and equipment. Specifically, the commenter claimed that we cited
no ``industry developments'' since the enactment of the physician self-
referral law or since our Phase I regulations that ``now warrant a
prohibition on per-click [rental charge formulas]''; criticized our
reliance on ``concerns'' and ``belief[s]'' informing our judgment that
per-click rental charge arrangements create incentives for abuse and
overutilization; and asserted that ``only empirical data or evidence''
can support a Secretarial determination under the physician self-
referral law that additional conditions are needed to protect against
program or patient abuse. The commenter acknowledged that the GAO
studies and other studies, as well as an OIG advisory opinion,
referenced in the CY 2017 PFS proposed rule ``stand . . . for the
general proposition that physician financial interests can affect the
utilization of medical tests and procedures.'' Nonetheless, the
commenter asserted that the re-proposed regulations must be based on
``recent'' developments or ``recent'' studies showing abuse in per-
click lease arrangements in order to stand.
Response: We disagree with the commenter. The Secretary's authority
for the regulations re-proposed (and finalized here) at Sec.
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B),
which include a requirement that the rental charges for the lease of
office space or equipment are not determined using a formula based on
per-unit of service rental charges, to the extent that such charges
reflect services provided to patients referred by the lessor to the

[[Page 80530]]

lessee, is found in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act,
which we detail below. The Court in Council for Urological Interests v.
Burwell expressly confirmed this authority. See 790 F.3d at 219-22. We
specifically disagree with--and address below--the commenter's
assertions that we lack the authority for this rulemaking because: (1)
Our regulations cannot be reconciled with the House Conference Report;
and (2) only recent empirical data or evidence can support a
Secretarial determination under the physician self-referral law that
additional conditions in the exceptions for the rental of office space
and equipment are needed to protect against program or patient abuse.
We first address the commenter's assertion that a ban on per-click
rental charges in arrangements for the lease of office space or
equipment cannot be reconciled with the House Conference Report. The
commenter is incorrect. In Council for Urological Interests, the Court
itself explicitly reconciled such a ban with respect to per-click
equipment leases, stating that the legislative history ``simply
indicates that, as written, the rental-charge clause [in section
1877(e)(1)(B)(iv) of the Act] does not preclude per-click leases'' and
emphasized that ``[n]othing in the legislative history suggests a limit
on [the Secretary's] authority'' to prohibit per-click leases under
section 1877(e)(1)(B)(vi) of the Act (790 F.3d at 222.). Here, in
finalizing the re-proposed regulations at Sec. 411.357(a)(5)(ii)(B)
and (b)(4)(ii)(B), we are relying on the Secretary's authority under
sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose such other
requirements needed to protect against program or patient abuse. Thus,
the House Conference Report can be reconciled with a ban on per-click
rental charges in arrangements for the lease of office space or
equipment.
We next address the commenter's assertion that our CY 2017 PFS
rulemaking ``did not even try to reconcile a ban on per-click
[compensation formulas] with the [House] Conference Report.'' The
Court's directive to the Secretary was to ``consider--with more care
than she exercised [in the FY 2009 IPPS final rule]--whether a per-
click ban on equipment leases is consistent with the 1993 Conference
Report.'' (Id. at 224.) The commenter implied that our explanation in
the proposed rule as to why the Secretary's authority to impose
requirements regarding the type of compensation formulas upon which
office space and equipment rental charges may be based is not
constrained by the House Conference Report should be disregarded on the
theory that the Court rejected this explanation in Council for
Urological Interests. As noted above, the Court did not reject this
argument; rather, the Court set out in detail why the Secretary's
authority to impose such regulatory restrictions is not constrained by
the House Conference Report. (Id. at 222.) In the CY 2017 PFS proposed
rule (81 FR 46452) and again in this final rule, we have complied with
the Court's directive and set forth our analysis why a per-click ban on
office space and equipment leases is consistent with the House
Conference Report.
In accordance with the Court's opinion in Council for Urological
Interests and in support of this final rule, we set forth below the
Secretary's authority to include in the exceptions applicable to office
space and equipment leases a requirement that rental charges are not
determined using a formula based on per-unit of service rental charges
that reflect services provided to patients referred by the lessor to
the lessee. Our determination follows the Court's reasoning, which we
excerpt below, in rejecting the Council for Urological Interests'
assertion that the Secretary lacks the authority to impose a ban on
certain ``per-click'' equipment--and by correlation--office space
leases. We also further describe why limiting the types of per-click
rental charges that would not violate the physician self-referral law's
referral and claims submission prohibitions is consistent with the
language of the House Conference Report.
As the Court stated, the physician self-referral law gives the
Secretary power to add requirements as needed to protect against
program or patient abuse, even if Congress did not anticipate such
abuses at the time of enactment of the statute. Specifically, although
Congress may not have originally included a ban on per-click rental
charges in office space and equipment lease arrangements, it
``empowered the Secretary to make her own assessment of the needs of
the Medicare program and regulate accordingly.'' (Council for
Urological Interests, 790 F.3d at 220.) The statute explicitly permits
the Secretary to impose additional conditions on arrangements for the
rental of office space or equipment, and nowhere expressly states that
per-click rates must always be permitted. As the Court confirmed, the
Secretary's regulation ``can properly be classified as an `other'
requirement expressly permitted by sections 1877(e)(1)(A)(vi) and
(B)(vi) of the Act.'' (Id.)
The Secretary's authority to impose requirements regarding the type
of compensation formulas upon which office space and equipment rental
charges may be based is not constrained by the House Conference Report.
Clause (iv) in each of the statutory exceptions for the rental of
office space and equipment (sections 1877(e)(1)(A) and (B) of the Act)
provide that a physician may only make use of either exception if the
rental charges over the term of the lease are set in advance, are
consistent with fair market value, and are not determined in a manner
that takes into account the volume or value of any referrals or other
business generated between the parties. In the 1998 proposed rule, we
proposed to interpret the ``volume or value'' standard, which is common
in many of the exceptions to the physician self-referral law and
included in the exceptions for the rental of office space and equipment
at sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act, respectively, as
permitting only those per-click compensation formulas where the units
of service did not include services provided to patients who were
referred by the physician receiving the payment (63 FR 1714). In our
Phase I interim final rule with comment period, we stated that, after
reviewing the comments on our proposed interpretation of the ``volume
or value'' standard, we were substantially revising the regulation with
respect to the scope of that standard (66 FR 876). Most importantly,
under our revised interpretation of the ``volume or value'' standard,
we would permit time-based or unit-based compensation formulas, even
when the physician receiving the rental payment generated the payment
through a DHS referral. We noted that we reviewed the legislative
history with respect to the exceptions for office space and equipment
lease arrangements and concluded that Congress intended that sections
1877(e)(1)(A)(iv) and (B)(iv) of the Act not be interpreted to prohibit
time-based or unit-of-service-based compensation formulas, so long as
the payment per unit is fair market value at inception and does not
subsequently change during the lease term in any manner that takes into
account DHS referrals.
The passage in the House Conference Report relevant to sections
1877(e)(1)(A)(iv) and (B)(iv) of the Act reads in full--

[[Page 80531]]

contract period based on the volume or value of referrals between
the parties to the lease agreement. (H.R. Rep. No. 103-213, at 814
(1993)).

In the CY 2017 PFS proposed rule, we again acknowledged that the
language in the House Conference Report states Congress' intent at the
time of enactment of the physician self-referral law that sections
1877(e)(1)(A)(iv) and (B)(iv) of the Act (the clauses that contain the
``volume or value'' standard in the exceptions for the rental of office
space and equipment, respectively) not be interpreted as prohibiting
charges for the rental of office space or equipment that are based on
units of service furnished (81 FR 46451). Even so, the House Conference
Report in no way limits any other provision, including clause (vi) of
the exceptions for the rental of office space and equipment.
As in the proposed rule, we do not purport here to interpret this
language as implying anything other than the conferees' understanding--
at the time of enactment of the statute--that the statute as written
did not prohibit rental charges based on unit-of-service rates. But
Congress also gave the Secretary the authority in sections
1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose by regulation other
requirements as needed to protect against program or patient abuse,
which could only happen after the enactment of the statute. Nowhere in
the House Conference Report did Congress express an intent to limit the
authority granted to the Secretary in sections 1877(e)(1)(A)(vi) and
(B)(vi) of the Act (as enacted). In fact, the House Conference Report
was completely silent regarding sections 1877(e)(1)(A)(vi) and (B)(vi)
of the Act, leaving the express words of the statute to speak for
themselves. As the Court noted--

Moreover, as the Court further noted, a statement that unit of
service-based rental charges are not precluded by sections
1877(e)(1)(A)(iv) and (B)(iv) of the Act as they are written is not
equivalent to a statement that the Secretary must continue to permit
such charges as she reevaluates, in light of experience, the operation
of the statute and the need to protect the Medicare program and its
beneficiaries against abuse. (Id. at 222 n.7; see also id. at 222 n.6
(``Congress has expressly delegated to the Secretary the authority to
promulgate additional requirements, as she has done here, and the
legislative history does not clearly impose a constraint on that
power.'').)
The Secretary has broad authority under sections 1877(e)(1)(A)(vi)
and (B)(vi) of the Act to impose conditions on arrangements for the
rental of office space or equipment in order to protect against program
or patient abuse. That authority is not limited by the express words of
the statute as it is in other provisions of section 1877 of the Act. In
agreement, the Court in Council for Urological Interests explained--

. . . Congress knew how to limit the Secretary's authority to
impose additional requirements to the various exceptions [to the
physician self-referral law]. In [section 1877(e)(2) of the Act],
Congress excludes bona fide employment relationships from the
definition of compensation arrangements. This provision states that
the employment relationship must comply with various requirements,
including that the pay not be determined ``in a manner that takes
into account (directly or indirectly) the volume or value of any
referrals by the referring physician.'' This employment exception
also allows the Secretary to impose ``other requirements,'' just as
the equipment rental exception. But the statute then goes on to say
that the listed requirements ``shall not prohibit the payment of
remuneration in the form of a productivity bonus based on services
performed personally by the physician.'' This language shows that
Congress knew how to cabin the Secretary's authority to impose
``other'' requirements and that it knew how to further clarify what
it meant by compensation that does not take into account the volume
of business generated between parties. That Congress employed
neither of these tools with reference to the [exceptions for the
rental of office space or equipment] again supports reading the
statute as giving the Secretary broad discretion as she regulates in
this area. (790 F.3d at 221 (citations omitted).)

In summary, as we stated in the FY 2009 IPPS final rule (73 FR
48716), the physician self-referral statute responds to the context of
the times in which it was enacted (by addressing known risks of
overutilization and, in particular, by creating exceptions for common
business arrangements), and also incorporates sufficient flexibility to
adapt to changing circumstances and developments in the health care
industry. For example, in section 1877(b)(4) of the Act, Congress
authorized the Secretary to protect additional beneficial arrangements
by promulgating new regulatory exceptions. In addition, Congress
included the means to address other fraud risks by inserting into many
of the exceptions--and notably, for our purposes, in the lease
exceptions--specific authority for the Secretary to add conditions as
needed to protect against abuse. This design reflects a recognition
that a fraud and abuse law with sweeping coverage over most of the
health care industry could not achieve its purpose over the long term
if it were frozen in time (73 FR 48716). It also demonstrates Congress'
respect for regulatory expertise of the Secretary. The Secretary
administers and oversees numerous federal health care programs,
including Medicare and Medicaid, and interacts with numerous
participants in

[[Page 80532]]

the health care industry. Aware of the Secretary's expertise in this
area, Congress expressly allowed the Secretary to impose further
restrictions upon compensation arrangements that the Secretary, in her
judgment, finds to present risks of overutilization and abuse. (Accord,
e.g., Council for Urological Interests, 790 F.3d at 220 (``While
Congress may not have originally intended the ban of per-click leases,
it empowered the Secretary to make her own assessment of the needs of
the Medicare program and regulate accordingly.'').)
As we did in 2007 when we first proposed to impose additional
requirements for rental charges in arrangements for the rental of
office space and equipment, and in 2008 when we finalized regulations
incorporating such additional requirements, we are relying in this
final rule on the Secretary's clear authority in sections
1877(e)(1)(A)(vi) and (B)(vi) of the Act to finalize such other
requirements needed to protect against program or patient abuse. With
respect to our determination to include the same requirements at
Sec. Sec. 411.357(l) and (p), we have determined that the revisions to
Sec. Sec. 411.357(l) and (p) that we are finalizing here are necessary
to meet the standard set forth in section 1877(b)(4) of the Act, which
authorizes the Secretary to establish exceptions to the statute's
referral and billing prohibitions only where the excepted financial
relationships do not pose a risk of program or patient abuse.
We intend and believe that the reasoning set forth in this final
rule fully addresses the basis for the D.C. Circuit's conclusion that
the prior regulation of per-click compensation arrangements contained
in the FY 2009 IPPS final rule was arbitrary and capricious. In Council
for Urological Interests, the Court remanded the rule because it
disagreed with our statement in the FY 2009 IPPS final rule that ``both
the statutory language [of section 1877(e)(1)(A)(iv) and (B)(iv)] and
the Conference Report'' could ``reasonably be interpreted to exclude''
the relevant per-click payments even without reliance on the
Secretary's separate authority under sections 1877(e)(1)(A)(vi) and
(B)(vi) of the Act (73 FR 48716). The Court concluded that this
statement undermined the reasonableness of the regulation as a whole
because the agency had ``treate[d] the Conference Report as a key
interpretive roadblock,'' and thus may have relied on an erroneous
interpretation as a basis for the regulation. (Council for Urological
Interests, 790 F.3d at 224.) By contrast, in re-proposing and now
finalizing this rule here, we rely exclusively on the Secretary's
authority under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to
impose such other requirements as needed to protect against program or
patient abuse. We do not rely on the interpretation that the Court in
Council for Urological Interests found to be arbitrary and capricious,
and we note that the House Conference Report does not present any
``interpretive roadblock'' to invoking our authority under sections
1877(e)(1)(A)(vi) and (B)(vi) of the Act.
We next address the commenter's assertion that only recent
empirical data or evidence can support a Secretarial determination
under the physician self-referral law that additional conditions in the
exceptions for the rental of office space and equipment are needed to
protect against program or patient abuse, and that the agency may not
rely on its concerns and beliefs when issuing regulations. As a
preliminary matter, section 1877 of the Act does not require the agency
to ``clear a specific evidentiary hurdle prior to imposing additional
restrictions for lease exceptions.'' (Council for Urological Interests
v. Sebelius, 946 F. Supp. 2d 91, 110 n.15 (D.D.C. 2013), aff'd in part,
rev'd in part sub nom. Council of Urological Interests v. Burwell, 790
F.3d 212 (D.C. Cir. 2015)). Specifically, the provisions upon which we
rely for finalizing the re-proposed regulations, sections
1877(e)(1)(A)(vi) and (B)(vi) of the Act, impose no such precondition
on the Secretary's ability to regulate, and it is reasonable to infer
that ``[i]f Congress had wanted the Secretary to meet a specific
evidentiary burden of proof, it would have said so.'' Id. Moreover, the
Administrative Procedure Act itself does not impose any ``general
obligation on agencies to produce empirical evidence.'' (Stilwell v.
Office of Thrift Supervision, 569 F.3d 514, 519 (D.C. Cir. 2009).) An
agency's reasoned assessment of the potential for abuse inherent in a
particular business arrangement--particularly in circumstances where,
as here, that assessment is corroborated by numerous comments in the
rulemaking--justifies the issuance of a prophylactic rule. (Stilwell,
569 F.3d at 519 (``[A]gencies can, of course, adopt prophylactic rules
to prevent potential problems before they arise. An agency need not
suffer the flood before building the levee.''); see also Ethyl Corp. v.
Envtl. Prot. Agency, 541 F.2d 1, 25 (D.C. Cir. 1976) (``Awaiting
certainty will often allow for only reactive, not preventive,
regulation.'').)
As we discussed in prior rulemakings, including the 1998 proposed
rule, a number of studies prior to the enactment of the physician self-
referral law found that physicians who had financial relationships with
entities to which they referred patients ordered more services than
physicians without such financial relationships (63 FR 1661). Studies
conducted since that time, including recent studies by GAO, indicate
that financial self-interest continues to affect physicians' medical
decision making. We note that the commenter agreed that, as a general
matter, ``physician financial interests can affect the utilization of
medical tests and procedures.'' Nonetheless, the regulations finalized
in this rulemaking at Sec. 411.357(a)(5)(ii)(B), (b)(4)(ii)(B),
(l)(3)(ii), and (p)(1)(ii)(B) are based not merely on general
propositions regarding financial self-interest, but on input from
stakeholders and public comments to proposed rulemaking, as well as our
own conclusions and those of our law enforcement partners regarding the
risks of per-click compensation arrangements. Contrary to the
commenter's contention that we cited ``no industry developments since
the [physician self-referral] law was enacted--or since the 2001 [Phase
I] regulations,'' we stated in the CY 2017 PFS proposed rule and repeat
here that commenters responding to our proposal in the CY 2008 PFS
proposed rule to impose additional requirements for office space and
equipment lease arrangements provided compelling information regarding
potential program or patient abuse. In addition, commenters responding
to our proposal in the CY 2017 PFS proposed rule supported the
continuation of the per-click bans finalized in the FY 2009 IPPS final
rule. We note that, even in the absence of the information upon which
we relied in the FY 2009 IPPS final rule and in this final rule (all of
which was developed after the publication of the Phase I interim final
rule with comment period), the commenter is incorrect that we are now
prohibited from determining that additional conditions on certain per-
click compensation formulas are needed to protect against program or
patient abuse. It is axiomatic that ``agencies are entitled to alter
their policies `with or without a change in circumstances,' so long as
they satisfactorily explain why they have done so.'' (Nat'l Audubon
Soc'y v. Hester, 801 F.2d 405, 408 (D.C. Cir. 1986) (per curiam)
(quoting State Farm, 463 U.S. at 57).)
In the FY 2009 IPPS final rule and the CY 2017 PFS proposed rule,
we discussed in detail our rationale for the limitation on per-unit of
service rental

[[Page 80533]]

charges in arrangements for the rental of office space or equipment. We
explained that under a per-unit of service rental arrangement, the more
referrals that a physician lessor makes, the more revenue he or she
earns. (73 FR 48715 and 48718; 81 FR 46452-46453). We noted primary
concerns regarding the potential for overutilization, patient steering,
and reduction in quality of care and patient outcomes, as well as
concerns regarding the potential for increased costs to the Medicare
program. In summarizing the comments to our proposals in the CY 2008
PFS proposed rule and explaining our rationale for finalizing those
proposals, we stated in the FY 2009 IPPS final rule that numerous
commenters--including physicians, physician groups, and others--
specifically agreed that these risks were raised by per-click leasing
arrangements. For example, we noted that one commenter, a radiation
oncologist, said that some leasing arrangements are abusive and provide
incentives to physicians to narrow their choice of treatment options to
those for which they will realize a profit (73 FR 48714). We further
noted that another commenter, an association of radiologists, stated
that it strongly supports banning use-of-service based leases because
such leases fuel an incentive to order unnecessary examinations. (Id.)
Other commenters expressed similar concerns. We also emphasized in the
FY 2009 IPPS final rule that, even with respect to referrals for
therapeutic (as opposed to diagnostic) services, the risks of
overutilization and abuse may be substantial (73 FR 48718). Regardless
of the use for the equipment at issue, there remains the potential for
a physician lessor, in order to protect his or her investment or gain
additional profits, to refer patients to the lessee of that equipment.
(Id.) As an example of overutilized therapeutic treatments, we noted
that a large hospital system had settled a case involving several of
their physicians who were accused of performing unnecessary cardiac
surgeries. In that case, federal officials alleged that the physicians
had entered into a scheme to cause patients to undergo unneeded,
invasive cardiac procedures such as artery bypass and heart valve
replacement surgeries in order to generate additional revenue. We noted
that the hospital system agreed to pay $54 million to settle the
federal case. (Id.)
For the reasons set forth in the FY 2009 IPPS final rule and the CY
2017 PFS proposed rule, some of which are restated below, we continue
to believe that, in order to protect against program or patient abuse,
it is necessary to impose additional requirements on arrangements for
the rental of office space or equipment. Specifically, we believe that
it is necessary to prohibit rental charges that are determined using a
formula based on per-unit of service rental charges to the extent that
such charges reflect services provided to patients referred by the
lessor to the lessee of the office space or equipment.
We were persuaded to finalize in the FY 2009 IPPS final rule
requirements limiting per-unit of service rental charges in the
exceptions applicable to the rental of office space or equipment, and
agree with the commenters to the CY 2017 PFS proposed rule that these
requirements continue to be necessary, due to our concerns that ``per-
click'' lease arrangements in which the lessor makes referrals to the
lessee that generate payments to the lessor--
Create an incentive for overutilization of imaging
services (as described by MedPAC in its comments to our proposal in the
CY 2008 PFS proposed rule), as well as other services, including
therapeutic services;
Create an incentive for physicians to narrow their choice
of treatment options to those for which they will realize a profit,
even where the best course of action may be no treatment;
Influence physicians to refer to the lessee instead of
referring to another entity that utilizes the same or different (and
perhaps more efficacious) technology to treat the patient's condition;
Result in physicians steering patients to equipment they
own, even if it means having the patient travel to a non-convenient
site for services using the leased equipment; and
Increase costs to the Medicare program when referring
physicians pressure hospitals to use their leasing company despite not
being the low cost provider. (See 73 FR 48715-48718).
We note also that, in the CY 2016 PFS final rule, we expressed our
continued concern that, when physicians have a financial incentive to
refer a patient to a particular entity, this incentive can affect
utilization, patient choice, and competition. Physicians can
overutilize by ordering items and services for patients that, absent a
profit motive, they would not have ordered. A patient's choice is
diminished when physicians steer patients to less convenient, lower
quality, or more expensive providers of health care, just because the
physicians are sharing profits with, or receiving remuneration from,
the providers. And lastly, where referrals are controlled by those
sharing profits or receiving remuneration, the medical marketplace
suffers if new competitors cannot win business with superior quality,
service, or price (80 FR 41926). In that rule, in establishing the
exception at Sec. 411.357(y) for timeshare arrangements, we determined
it necessary to exclude from the exception any timeshare arrangements
that incorporate compensation formulas based on: (1) A percentage of
the revenue raised, earned, billed, collected, or otherwise
attributable to the services provided while using the timeshare; or (2)
per-unit of service fees, to the extent that such fees reflect services
provided to patients referred by the party granting permission to use
the timeshare to the party to which the permission is granted. We
explained our belief that timeshare arrangements based on percentage
compensation or per-unit of service compensation formulas present a
risk of program or patient abuse because they may incentivize
overutilization and patient steering. We noted, by way of example, that
a per-patient compensation formula could incent the timeshare grantor
to refer patients (potentially for unnecessary consultations or
services) to the party using the timeshare because the grantor will
receive a payment each time the premises, equipment, personnel, items,
supplies, or services are used (80 FR 71331 through 71332). Similarly,
we believe that arrangements utilizing rental charges for the rental of
office space or equipment that are determined using a formula that
rewards the lessor for each service the lessor refers to the lessee are
susceptible to this and other abuse. Simply put, per-click lease
arrangements create an incentive for overutilization because the
physician knows that the more referrals he or she makes to the lessee,
the more revenue that that physician will earn.
For all of these reasons, and because we believe that there is a
continued need to protect the program and its beneficiaries against the
potential abuses of per-click office space and equipment leases, we are
finalizing without modification the re-proposed regulations at Sec.
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B),
which include a requirement that the rental charges for the lease of
office space or equipment are not determined using a formula based on
per-unit of service rental charges, to the extent that such charges
reflect services provided to patients referred by the lessor to the
lessee.
Comment: Although not commenting specifically on our actual
proposals, two commenters suggested that we analyze

[[Page 80534]]

the physician self-referral law regulations and any revisions to the
regulations to consider the impact on stakeholders' work to develop
beneficial arrangements that advance health care payment and delivery
reforms.
Response: We note that the restrictions on per-unit of service
compensation formulas have been in place since October 1, 2009.
Although we are cognizant of the impact of the physician self-referral
law on health care payment and delivery reform efforts, we must balance
concerns about impeding such efforts against protecting the Medicare
program and its beneficiaries. For the reasons stated in the FY 2009
IPPS final rule, the CY 2017 PFS proposed rule, and in this final rule,
we believe these restrictions are necessary to protect the Medicare
program and its beneficiaries against abuse.
Comment: Two commenters requested that we confirm that FAQ 9780
regarding lithotripsy services provided ``under arrangements'' to a
hospital by a physician-owned lithotripsy vendor remains CMS policy
despite our re-proposal of the regulations at Sec.
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B). One
of the commenters indicated it would oppose re-proposed Sec.
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) if
the intent of the re-proposed regulations is to reverse the policy set
forth in FAQ 9780. This commenter requested that, if we are indeed
reversing the policy set forth in FAQ 9780, we do so by proposing
regulatory language and offering the opportunity for public comment.
Response: The policy established in FAQ 9780 remains our policy
regarding lithotripsy service arrangements between physician-owned
lithotripsy vendors and hospitals. FAQ 9780 is available on the CMS Web
site at https://questions.cms.gov/faq.php?id=5005&faqId=9780 and states
that, provided that a lithotripsy vendor is actually furnishing a
service (or a package of services) to the hospital, and not merely
leasing equipment over which the hospital would have dominion and
control, the hospital may compensate the lithotripsy vendor using a
per-unit or percentage-based compensation formula, as long as all of
the requirements of a relevant exception are satisfied.
Comment: Many commenters requested that we revise our regulations
in ways other than as re-proposed in the CY 2017 PFS proposed rule.
These comments suggested variously that we ``modernize'' the
definitions and exceptions in the regulations to (1) keep pace with the
rapidly evolving provider landscape and efforts to integrate medical
professionals into accountable networks of integrated providers or (2)
permit hospitals to subsidize the start-up costs needed to meet the
objectives of value-based purchasing, MIPS, and participation in
alternative payment models; modify the in-office ancillary services
exception at Sec. 411.355(b) to exclude certain designated health
services from the coverage of the exception; revise the definition of
``entity'' and our policy regarding services furnished ``under
arrangements'' to an entity furnishing designated health services;
revise the requirements for ``group practices'' to remove the
requirement at Sec. 411.352(g) prohibiting compensation to group
practice physicians that takes into account the volume or value of
referrals; and establish exceptions to or grant waivers of the
physician self-referral law's referral and billing prohibitions similar
to those for ACOs participating in the MSSP and certain CMMI models
that would enable physicians to participate in alternative payment
modes and earn incentives through MIPS.
Response: Although we appreciate the commenters' thoughtful
consideration of the impact of the physician self-referral law on
physicians and entities furnishing designated health services, our
proposals in the CY 2017 PFS proposed rule relate only to the per-click
compensation formula restrictions at Sec. 411.357(a)(5)(ii)(B),
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) and our advisory opinion
regulations at Sec. 411.372. Therefore, the suggested revisions are
outside the scope of this rulemaking.
After considering the comments, for the reasons set forth above and
in the CY 2017 proposed rule (81 FR 46448), we are finalizing without
modification our proposal to include at Sec. 411.357(a)(5)(ii)(B),
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) a requirement that the
rental charges for the lease of office space or equipment are not
determined using a formula based on per-unit of service rental charges,
to the extent that such charges reflect services provided to patients
referred by the lessor to the lessee.
2. Technical Correction: Advisory Opinions Relating to Physician
Referrals, Procedure for Submitting a Request
We proposed to revise Sec. 411.372(a) by making a minor technical
correction to change the instructions for submitting a request for an
advisory opinion relating to physician referrals. We noted that the
current language in this subsection directs a requesting party to
submit its request to a physical address that is out of date. In an
effort to expedite the receipt and processing of these requests, and to
account for any future changes, we proposed to revise paragraph (a) to
state that a party or parties must submit a request for an advisory
opinion to CMS according to the instructions specified on the CMS Web
site.
We noted that, at the time of the proposed rule, the correct
address for such advisory opinion requests was: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Office of
Financial Management, Division of Premium Billing and Collections, Mail
Stop C3-09-27, Attention: Advisory Opinions, 7500 Security Boulevard,
Baltimore, MD 21244-1850. However, we noted that this address is
subject to change, per this technical correction, and that parties
seeking to submit a request for an advisory opinion relating to
physician referrals would need to refer to the instructions on the CMS
Web site.
We received no comments regarding this technical correction and are
finalizing it without modification.

N. Physician Self-Referral Law: Annual Update to the List of CPT/HCPCS
Codes

1. General
Section 1877 of the Act prohibits a physician from referring a
Medicare beneficiary for certain designated health services (DHS) to an
entity with which the physician (or a member of the physician's
immediate family) has a financial relationship, unless an exception
applies. Section 1877 of the Act also prohibits the DHS entity from
submitting claims to Medicare or billing the beneficiary or any other
entity for Medicare DHS that are furnished as a result of a prohibited
referral.
Section 1877(h)(6) of the Act and Sec. 411.351 of our regulations
specify that the following services are DHS:
Clinical laboratory services.
Physical therapy services.
Occupational therapy services.
Outpatient speech-language pathology services.
Radiology services.
Radiation therapy services and supplies.
Durable medical equipment and supplies.
Parenteral and enteral nutrients, equipment, and supplies.
Prosthetics, orthotics, and prosthetic devices and
supplies.
Home health services.
Outpatient prescription drugs.
Inpatient and outpatient hospital services.

[[Page 80535]]

2. Annual Update to the Code List
a. Background
In Sec. 411.351, we specify that the entire scope of four DHS
categories is defined in a list of CPT/HCPCS codes (the Code List),
which is updated annually to account for changes in the most recent CPT
and HCPCS Level II publications. The DHS categories defined and updated
in this manner are:
Clinical laboratory services.
Physical therapy, occupational therapy, and outpatient
speech-language pathology services.
Radiology and certain other imaging services.
Radiation therapy services and supplies.
The Code List also identifies those items and services that may
qualify for either of the following two exceptions to the physician
self-referral prohibition:
EPO and other dialysis-related drugs furnished in or by an
ESRD facility (Sec. 411.355(g)).
Preventive screening tests, immunizations, or vaccines
(Sec. 411.355(h)).
The definition of DHS at Sec. 411.351 excludes services for which
payment is made by Medicare as part of a composite rate (unless the
services are specifically identified as DHS and are themselves payable
through a composite rate, such as home health and inpatient and
outpatient hospital services). Effective January 1, 2011, EPO and
dialysis-related drugs furnished in or by an ESRD facility (except
drugs for which there are no injectable equivalents or other forms of
administration), have been reimbursed under a composite rate known as
the ESRD prospective payment system (ESRD PPS) (75 FR 49030).
Accordingly, EPO and any dialysis-related drugs that are paid for under
ESRD PPS are not DHS and are not listed among the drugs that could
qualify for the exception at Sec. 411.355(g) for EPO and other
dialysis-related drugs furnished by an ESRD facility.
Drugs for which there are no injectable equivalents or other forms
of administration were scheduled to be paid under ESRD PPS beginning
January 1, 2014 (75 FR 49044). However, there have been several delays
of the implementation of payment of these drugs under ESRD PPS. Most
recently, on December 19, 2014, section 204 of the Achieving a Better
Life Experience Act of 2014 (ABLE) (Pub. L. 113-295) was enacted and
delayed the inclusion of these drugs under the ESRD PPS until 2025.
Until that time, such drugs furnished in or by an ESRD facility are not
paid as part of a composite rate and thus, are DHS. For purposes of the
exception at Sec. 411.355(g), only those drugs that are required for
the efficacy of dialysis may be identified on the List of CPT/HCPCS
Codes as eligible for the exception. As we have explained previously in
the CY 2010 PFS final rule with comment period (75 FR 73583), we do not
believe any of these drugs are required for the efficacy of dialysis.
Therefore, we have not included any such drugs on the list of drugs
that can qualify for the exception.
The Code List was last updated in Tables 50 and 51 of the CY 2016
PFS final rule with comment period (80 FR 71342).
b. Response to Comments
We received one public comment relating to the Code List that
became effective January 1, 2016.
Comment: One commenter asked that the screening breast
tomosynthesis code 77063 be added to the list of ``Preventive Screening
Tests, Immunizations and Vaccines'' to which the physician self-
referral law does not apply. The commenter indicated that adding this
code is necessary to conform with various CMS policy statements and
noted that the other screening mammography services codes payable by
Medicare are on this list.
Response: We agree and have added code 77063 to the list of
``Preventive Screening Tests, Immunizations and Vaccines'' to which the
physician self-referral law does not apply.
c. Revisions Effective for CY 2017
The updated, comprehensive Code List effective January 1, 2017, is
available on our Web site at https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/List_of_Codes.html.
Additions and deletions to the Code List conform it to the most
recent publications of CPT and HCPCS Level II and to changes in
Medicare coverage policy and payment status.
Tables 45 and 46 identify the additions and deletions,
respectively, to the comprehensive Code List that become effective
January 1, 2017. Tables 45 and 46 also identify the additions and
deletions to the list of codes used to identify the items and services
that may qualify for the exception in Sec. 411.355(g) (regarding
dialysis-related outpatient prescription drugs furnished in or by an
ESRD facility) and in Sec. 411.355(h) (regarding preventive screening
tests, immunizations, and vaccines).

Table 45--Additions to the Physician Self-Referral List of CPT 1/ HCPCS
Codes
------------------------------------------------------------------------

-------------------------------------------------------------------------
Clinical Laboratory Services
------------------------------------------------------------------------
0008M Onc breast risk score
------------------------------------------------------------------------
Physical Therapy, Occupational Therapy, and Outpatient Speech-Language
Pathology Services
------------------------------------------------------------------------
97161 Pt eval low complex 20 min
97162 Pt eval mod complex 30 min
97163 Pt eval high complex 45 min
97164 Pt re-eval est plan care
97165 Ot eval low complex 30 min
97166 Ot eval mod complex 45 min
97167 Ot eval high complex 60 min
97168 Ot re-eval est plan care
------------------------------------------------------------------------
Radiology and Certain Other Imaging Services
------------------------------------------------------------------------
0422T Tactile breast img uni/bi
76706 Us abdl aorta screen aaa
77065 Dx mammo incl cad uni
77066 Dx mammo incl cad bi
77067 Scr mammo bi incl cad
A9515 Choline c-11
A9587 Gallium Ga-68
A9588 Fluciclovine F-18
A9597 Pet, dx, for tumor id, noc
A9598 Pet dx for non-tumor id, noc
C9461 Choline C 11, diagnostic
C9744 Abd us w/contrast
Q9982 Flutemetamol f18 diagnostic
Q9983 Florbetaben f18 diagnostic
------------------------------------------------------------------------
Radiation Therapy Services and Supplies
------------------------------------------------------------------------
{No additions{time}
------------------------------------------------------------------------
Drugs Used by Patients Undergoing Dialysis
------------------------------------------------------------------------
{No additions{time}
------------------------------------------------------------------------
Preventive Screening Tests, Immunizations and Vaccines
------------------------------------------------------------------------
77063 Breast tomosynthesis bi
77067 Scr mammo bi incl cad
90674 CCIIV4 vac no prsv 0.5 ml im
90687 IIV4 vacc splt 0.25 ml im
G0499 HepB screen high risk indiv
------------------------------------------------------------------------
\1\ CPT codes and descriptions only are copyright 2016 AMA. All rights
are reserved and applicable FARS/DFARS clauses apply.

Table 46--Deletions From the Physician Self-Referral List of CPT 1/
HCPCS Codes
------------------------------------------------------------------------

[[Page 80536]]

C9458 Florbetaben f18
C9459 Flutemetamol f18
------------------------------------------------------------------------
Radiation Therapy Services and Supplies
------------------------------------------------------------------------
0019T Extracorp shock wv tx ms nos
A9545 I131 tositumomab, rx
------------------------------------------------------------------------
Drugs Used by Patients Undergoing Dialysis
------------------------------------------------------------------------
{No deletions{time}
------------------------------------------------------------------------
Preventive Screening Tests, Immunizations and Vaccines
------------------------------------------------------------------------
77052 Comp screen mammogram add-on
77057 Mammogram screening
------------------------------------------------------------------------
\1\ CPT codes and descriptions only are copyright 2016 AMA. All rights
are reserved and applicable FARS/DFARS clauses apply.

IV. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. Chapter
35), we are required to publish a 30-day notice in the Federal Register
and solicit public comment before a collection of information
requirement is submitted to the Office of Management and Budget (OMB)
for review and approval.
To fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the PRA requires that we
solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our burden estimates.
The quality, utility, and clarity of the information to be
collected.
Our effort to minimize the information collection burden
on the affected public, including the use of automated collection
techniques.
In the CY 2017 PFS proposed rule (81 FR 46456-46457) we solicited
public comment on each of the section 3506(c)(2)(A)-required issues for
the following information collection requirements. PRA-related comments
were received as indicated below under section IV.B.2.

A. Wage Estimates

To derive average costs, we used data from the U.S. Bureau of Labor
Statistics' May 2015 National Occupational Employment and Wage
Estimates for all salary estimates. In this regard, Table 47 presents
the mean hourly wage, the cost of fringe benefits (calculated at 100
percent of salary), and the adjusted hourly wage.

Table 47--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
Adjusted
Occupation title Occupation Mean hourly Fringe benefit hourly wage ($/
code wage ($/hr) ($/hr) hr)
----------------------------------------------------------------------------------------------------------------
Compliance Officer.............................. 13-1041 33.26 33.26 66.52
Epidemiologist.................................. 19-1040 36.97 36.97 73.94
Medical Scientist............................... 19-1042 45.06 45.06 90.12
Medical Secretary............................... 43-6013 16.50 16.50 33.00
Non-Physician Practitioner (Health Diagnosing 29-1000 46.65 46.65 93.90
and Treating Practitioners)....................
Office and Administrative Support Operations.... 43-0000 17.47 17.47 34.94
Physicians and Surgeons......................... 29-1060 97.33 97.33 194.66
Physicians and Surgeons, All Other.............. 29-1069 95.05 95.05 190.10
Statistician.................................... 15-2041 40.60 40.60 81.20
----------------------------------------------------------------------------------------------------------------

As indicated, we are adjusting our employee hourly wage estimates
by a factor of 100 percent. This is necessarily a rough adjustment,
both because fringe benefits and overhead costs vary significantly from
employer to employer, and because methods of estimating these costs
vary widely from study to study. Nonetheless, there is no practical
alternative and we believe that doubling the hourly wage to estimate
total cost is a reasonably accurate estimation method.

B. Information Collection Requirements (ICRs) and Burden Estimates

1. ICRs Regarding the Physician Quality Reporting System (PQRS) (Sec.
414.90)
For individual EPs or group practices, who choose to separately
report quality measures during the secondary PQRS reporting period for
the 2017 PQRS payment adjustment, who bill under the TIN of an ACO
participant if the ACO failed to report on behalf of such EPs or group
practices during the previously established reporting period for the
2017 PQRS payment adjustment, we do not believe the individual EP or
group practice incurs any additional burden. The associated reporting
burden which is currently approved by OMB under control number 0938-
1059 (CMS-10276) explains that the PQRS annual burden estimate was
calculated separately for (1) individual eligible professionals and
group practices using the claims (for eligible professionals only), (2)
qualified registry and QCDR, (3) EHR-based reporting mechanisms, and
(4) group practices using the GPRO. We estimated that ALL 1.25 million
eligible professionals will participate in the PQRS in 2016 for
purposes of meeting the criteria for satisfactory reporting (or, in
lieu of satisfactory reporting, satisfactory participation in a QCDR)
for the 2018 PQRS payment adjustment. This is a high estimate according
to the 2014 PQRS Reporting Experience and Trends Report which found
approximately 822,000 EPs participated in PQRS in 2014. Therefore, the
additional EPs who choose to report separately from the ACOs have
already been accounted for in the PQRS burden. We estimate there were
approximately 1,947 EPs that are part of the 218 participant TINs that
are under the 8 ACOs that failed to successfully report their 2015
quality data. There is no change in the reporting mechanisms or
reporting criteria for PQRS. It is important to note that if the ACO
fails to report on behalf of an EP or group practice and the EP or
group practice does not utilize this secondary reporting period they
may be subject to a downward adjustment.
We did not receive any comments pertaining to our position that the
proposed rule would not set out any additional requirements or burden.
Consequently, we are restating our position without change.
2. ICRs Regarding Appropriate Use Criteria for Advanced Diagnostic
Imaging Services (Sec. 414.94)
Consistent with section 1834(q) of the Act (as amended by section
218(b) of the PAMA), we have established specific requirements for
clinical decision support mechanisms (CDSMs) that can be qualified
CDSMs under Sec. 414.94 as

[[Page 80537]]

part of the Medicare appropriate use criteria (AUC) program. CDSMs that
believe they meet the requirements to be qualified CDSMs (for the
purpose of this section) may apply to CMS to be specified as a
qualified CDSM.
Applications must be submitted electronically and demonstrate how
the CDSM meets the requirements under Sec. 414.94(g)(1). Specifically,
applications must demonstrate how the CDSM: (1) Makes available
specified applicable AUC and its related supporting documentation; (2)
identifies the appropriate use criterion consulted if the CDSM makes
available more than one criterion relevant to a consultation for a
patient's specific clinical scenario; (3) makes available, at a
minimum, specified applicable AUC that reasonably address common and
important clinical scenarios within all priority clinical areas
identified in Sec. 414.94(e)(5); (4) is able to incorporate specified
applicable AUC from more than one qualified PLE; (5) determines, for
each consultation, the extent to which the applicable imaging service
is consistent with a specified applicable AUC; (6) generates and
provides a certification or documentation at the time of order each
time an ordering professional consults a qualified CDSM that includes a
unique consultation identifier that documents: Which qualified CDSM was
consulted, the name and national provider identifier (NPI) of the
ordering professional that consulted the CDSM, whether the service
ordered would adhere to specified applicable AUC, whether the service
ordered would not adhere to specified applicable AUC, or whether the
specified applicable AUC consulted was not applicable to the service
ordered; (7) updates AUC content within 12 months from the date the
qualified PLE updates AUC; (8) has a protocol in place to expeditiously
remove AUC determined by the qualified PLE to be potentially dangerous
to patients and/or harmful if followed; (9) makes available specified
applicable AUC that reasonably address common and important clinical
scenarios within any new priority clinical area for consultation
through the qualified CDSM within 12 months of the priority clinical
area being finalized by CMS; (10) meets privacy and security standards
under applicable provisions of law; (11) provides the ordering
professional aggregate feedback regarding their consultations with
specified applicable AUC in the form of an electronic report on at
least an annual basis; (12) maintains electronic storage of clinical,
administrative, and demographic information of each unique consultation
for a minimum of 6 years; (13) complies with modification(s) to any
requirements under Sec. 414.94(g)(1) made through rulemaking within 12
months of the effective date of the modification; and (14) notifies
ordering professionals upon de-qualification.
To be specified as a qualified CDSM by CMS, applicants must
document adherence to the requirements in their application for CMS
review and use the application process identified in Sec. 414.94(g)(2)
which includes: (1) Applications submitted by CDSMs documenting
adherence to each requirement outlined in Sec. 414.94(g)(1) must be
received annually by January 1 except for the first round of
applications following publication of the CY 2017 PFS Final Rule which
will be due by March 1, 2017; (2) CDSMs with applications that document
adherence to all requirements under Sec. 414.94(g)(1) may receive full
qualification and CDSMs with applications that cannot document
adherence to each requirement must document how and when each
requirement is reasonably expected to be met and may receive
preliminary qualification; (3) the preliminary qualification period
begins June 30, 2017 and ends when CMS implements sections
1834(q)(4)(A) and 1834(q)(4)(B) of the Act; (4) CDSMs with preliminary
qualification that fail to meet all requirements by the end of the
preliminary qualification period will not be automatically converted to
qualified status; (5) all qualified CDSMs specified by CMS in each year
will be included on the list of specified qualified CDSMs posted to the
CMS Web site by June 30 of that year; (6) qualified CDSMs are specified
by CMS as such for a period of 5 years; and (7) qualified CDSMs are
required to re-apply during the 5th year after they are specified by
CMS to maintain their status as qualified CDSMs and the applications
must be received by CMS by January 1 of the 5th year after the most
recent approval date. If a qualified CDSM is found to be non-adherent
to the requirements identified above, CMS may terminate its qualified
status or may consider this information during re-qualification.
The one-time burden associated with the requirements under Sec.
414.94(g)(2) is the time and effort it will take each of the
approximately 30 CDSM developers (as estimated by CMS, the Office of
the National Coordinator (ONC), and the Agency for Healthcare Research
and Quality (AHRQ)) that have interests in incorporating AUC
consultation into their mechanisms' functionality to compile, review
and submit documentation demonstrating adherence to the CDSM
requirements. We anticipate 30 respondents based on the number of
existing CDSMs that have expressed an interest in incorporating AUC for
advanced diagnostic imaging, as well as our estimation of the number of
CDSM developers that may be interested in incorporating AUC for
advanced diagnostic imaging in the future as their mechanisms develop
and evolve. Each respondent will voluntarily compile, review and submit
documentation that demonstrates their adherence to the CDSM
requirements listed above.
We estimate it will take 10 hours at $68.18/hr for a business
operations specialist to compile, prepare and submit the required
information, 2.5 hours at $86.72/hr for a computer system analyst to
review and approve the submission, 2.5 hours at $135.58/hr for a
computer and information systems manager to review and approve the
submission, and 5 hours at $131.02/hr for a lawyer to review and
approve the submission. In this regard, we estimate 20 hours per
submission at a cost of $1,892.65. In aggregate, we estimate 600 hours
(20 hr x 30 submissions) at $56,779.50 ($1,892.65 x 30 submissions).
After the anticipated initial 30 respondents, we expect less than
10 applicants to apply to become qualified CDSMs annually. Since we
estimate fewer than 10 respondents, the information collection
requirements and burden are exempt (5 CFR 1320.2(c)) from the
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et
seq).
Given that qualified CDSMs must re-apply every 5 years, in years 6-
10, we expect the initial 30 entities will re-apply. The ongoing burden
for re-applying is expected to be half the burden of the initial
application process. The CDSM developers will be able to make
modifications to their original application which should result in a
burden of 5 hours at $68.18/hr for a business operations specialist to
compile, prepare and submit the required information, 1.25 hours at
$86.72/hr for a computer system analyst to review and approve the
submission, 1.25 hours at $135.58/hr for a computer and information
systems manager to review and approve the submission, and 2.5 hours at
$131.02/hr for a lawyer to review and approve the submission. Annually,
we estimate 10 hours per submission at a cost of $946.33 per CDSM
developer. In aggregate, we estimate 300 hours (10 hr x 30

[[Page 80538]]

submissions) at $28,389.90 ($946.33 x 30 submissions).
In response to public comments, we added a new requirement under
Sec. 414.94(g)(1)(xii) whereby CDSMs are required to notify ordering
professionals upon de-qualification. We estimate that 1 CDSM will be
de-qualified each year. Because this disclosure is required of less
than 10 entities, the PRA is not applicable.
The aforementioned requirements and burden will be submitted to OMB
under control number 0938-1315 (CMS-10624).
As regulatory requirements become more complex, we will look to
innovative technologies that minimize the burden on an organizations'
budget and manpower. To this end, the CDSM functionality requirements
identified in Sec. 414.94(g)(1) will help practitioners meet the
requirements of the AUC program. While the CDSM application process in
Sec. 414.94(g)(2) is a new burden under this program, the CDSM
functionality requirements in Sec. 414.94(g)(1) do not add burden as
they are functions of the CDSM. These mechanisms function consistently
with their voluntary and individualized design so the requirements in
Sec. 414.94(g)(1) are either part of a mechanism's functionality or
not. If CDSM developers wish their CDSMs to become qualified under this
program, they may choose to develop the functionality of their
mechanisms consistent with these requirements to be qualified, but all
CDSMs are not required to participate in this program. For example, a
CDSM that does not incorporate AUC for any advanced diagnostic imaging
services would likely choose not to seek to become qualified under this
Medicare AUC program. As such, only CDSMs that wish to participate in
the Medicare AUC for advanced diagnostic imaging services program are
required to apply for qualification and, in choosing to seek
qualification, CDSM developers would also choose to incorporate the
requirements into their mechanism's functionality.
We received public comments (see below) regarding our proposed
requirements and burden estimates. We considered the comments and are
largely adopting the proposed provisions with minimal changes to
improve clarity. Three areas where we have made more significant
changes include: (1) Revising the proposed requirement for CDSMs to
``reasonably encompass the entire clinical scope of all priority
clinical areas'' to now ``reasonably address common and important
clinical scenarios within all priority clinical areas;'' (2) a new
requirement that qualified CDSMs notify ordering professionals upon de-
qualification; and (3) a new preliminary qualification period for CDSMs
that apply for qualification during the first application period but do
not fully meet all requirements under Sec. 414.94(g)(1).
Comment: The majority of commenters addressed the proposal to
require CDSMs to contain, at a minimum, AUC that encompass the entire
clinical scope of priority clinical areas. Commenters were split
regarding the proposed requirement. Some commenters suggested that
CDSMs requiring minimum AUC content would add cost and be unnecessary
for CDSMs that serve specialists. They favored CDSMs determining, along
with the ordering practitioners they serve, what AUC content would be
made available. Other commenters favored requiring every CDSM to
contain comprehensive AUC. Those commenters said this was the intent of
the PAMA since ordering professionals must consult for every advanced
diagnostic imaging order and takes into account the lessons learned
from the MID to avoid ordering practitioners from consulting for
imaging services and not finding relevant AUC within their CDSM. Other
commenters agreed with a minimum floor of AUC but expressed concerned
about the way CMS proposed that the priority clinical areas must be
addressed stating that encompassing the entire clinical scope of
priority clinical areas is not preferred and would draw in AUC without
a strong evidence base.
Response: We understand the significance of this aspect of the
proposal, as well as the statements made by the commenters both for and
against the requirement of an AUC floor related to priority clinical
areas. We reiterate that, in alignment with statute, ordering
professionals must consult for each advanced diagnostic imaging service
ordered. Therefore, we believe many professionals will choose a
qualified CDSM that best fits their ordering patterns and clinical
practice. Those ordering a wide array of imaging services or perhaps
infrequently ordering imaging services across a spectrum will align
themselves with a mechanism that fits their needs and contains
comprehensive specified applicable AUC so when the qualified CDSM is
consulted they will lessen their chances of the qualified CDSM
identifying no applicable AUC as this was a major frustration of the
MID.
Specialists may seek to align themselves with a qualified CDSM that
contains AUC more exhaustive in one area of medicine to reflect the
imaging services that they order most often.
We continue to believe that all tools should contain the specified
applicable AUC needed by the ordering professionals they serve, as well
as contain specified applicable AUC related to the priority clinical
areas to ensure that if the professional needs to order an imaging
service then they will not have to go outside their regular qualified
CDSM for the consultation. We reiterate that we envision having a given
qualified CDSM allow efficient access to ordering professionals of one
or more specialty-focused specified applicable AUC sets along with more
comprehensive specified applicable AUC sets. We believe the
determination of which AUC sets are made accessible through a given
CDSM should be demand-driven by ordering professionals, who would be
choosing from a marketplace of options for both CDSMs and AUC, all of
which meet basic CMS qualifications to ensure implementation of the
PAMA statutory requirements.
To balance the requirement for the minimum floor, we believe it is
important to reconsider the extent to which specified applicable AUC
encompass the entire clinical scope of priority clinical areas. We
agree that requiring the entire clinical scope may not yield
consultation of the highest quality specified applicable AUC and that
ordering professionals, particularly specialists, may not require
specified applicable AUC addressing the entire clinical scope of a
priority clinical area. Therefore, we agree with commenters who
suggested we keep the AUC floor but allow the requirement to be
fulfilled if specified applicable AUC address less than the entire
scope of the priority clinical areas and instead reasonably address the
common and important clinical scenarios within each priority clinical
area.
Comment: Some commenters expressed concerns regarding CDSMs that
either fail to requalify after the first 5-year qualification period or
are found to no longer be adherent to CDSM requirements during the 5-
year qualification period. One commenter recommended that CDSMs be
temporarily suspended before being disqualified. Other commenters
recommended that CMS ensure providers using these mechanisms not be
penalized while they seek a new mechanism for consultation. Another
commenter suggested that the CDSM be required to notify ordering
professionals of such a disqualification. Other commenters requested
that qualification of CDSMs not be disrupted due to

[[Page 80539]]

standard technical updates to CDSMs made during the 5-year
qualification period.
Response: We agree and do not foresee penalties under these
circumstances or disqualification of a CDSM due to a standard update
assuming no changes are made to functionality that result in non-
adherence to the CDSM requirements in Sec. 414.94(g)(1). We agree that
qualified CDSMs be required to notify ordering professionals in the
event of disqualification and have added this requirement under Sec.
414.94(g)(1).
Comment: Some commenters cited insufficient time for CDSMs to
incorporate requirements between the release of the final CDSM
requirements, on or around November 1, 2016, and the January 1, 2017
due date for qualified CDSM applications. These commenters requested
that CMS delay the deadline and accept applications later into the year
for this first round of applicants. Due to the limited time between
finalization of CDSM requirements and the application deadline, another
commenter recommended that CDSMs be qualified based on their commitment
to support required functionality, rather than an attestation that the
existing functionality is fully implemented in a CDSM.
Response: We recognize the challenge CDSM developers may have
submitting applications by January 1, 2017, and have extended the
deadline only for the first round of applications to March 1, 2017. To
this end, all CDSMs qualified in this round only, receive preliminary
qualification to conclude at such time as we implement the consultation
and reporting requirements of this AUC program.
3. ICRs Regarding the Enrollment of MA Providers, Suppliers, and First-
Tier, Downstream, and Related Entities (FDRs) (Sec. 422.222)
There are approximately 1.9 million providers and suppliers
nationwide that are enrolled in Medicare. Through our analysis of
currently available encounter data provided by MA organizations, we
have found that some providers and suppliers that furnish items or
services to MA organization enrollees are not enrolled in Medicare in
an approved status. Based on preliminary data, we estimate that 64,000
MA providers and suppliers will have to enroll in Medicare under Sec.
422.222 in order to treat enrollees.
About half of the approximately 64,000 unenrolled providers and
suppliers, or 32,000, are individuals and the other half are
organizations. We do not have data at this point to confirm the number
of unenrolled individuals who are physicians as opposed to non-
physician practitioners. For purposes of fulfilling the requirements of
the PRA, we will project that one-half (16,000) are physicians and the
other half (16,000) are practitioners.
Consistent with our prior time (per respondent) estimates, we
project that it will take 3 hours at $194.66/hr for a physician and
$93.30/hr for a non-physician practitioner to complete their individual
enrollments. For organizations (office and administrative support
personnel), we estimate it will take 6 hours at $34.94/hr, since
organizational enrollees typically must submit more data than
individual enrollees. For physicians, we estimate a total burden of
48,000 hours (16,000 applicants x 3 hours) at a cost of $9,343,680
(48,000 hr x $194.66/hr). For non-physician practitioners, we estimate
48,000 hours (16,000 applicants x 3 hours) at a cost of $4,478,400
(48,000 hr x $93.30/hr). For organizations, we estimate 192,000 hours
(32,000 applicants x 6 hours) at a cost of $6,708,480 (192,000 hr x
$34.94). In aggregate, we estimate 288,000 hours at $20,530,560.
When projected annually over OMB's maximum 3-year approval period,
we estimate 96,000 hours at a cost of $6,843,520.
For physicians and non-physician practitioners, the requirements
and annualized burden (32,000 hours) will be submitted to OMB under
control number 0938-0685 (Form CMS-855I) because physicians and non-
physician practitioners enroll via the Form CMS-855I. For
organizations, the requirements and annualized burden of 64,000 hours
(192,000 hours/3 years) will be submitted to OMB under control number
0938-0685 (21,333.3 hours for Form CMS-855A and 21,333.3 hours for Form
CMS-855B) and control number 0938-1056 (21,333.3 hours for Form CMS-
855S). The specific form to be completed will depend upon the provider
or supplier type at issue. For instance, and consistent with current
enrollment policy, certified providers and certain certified suppliers
will complete the Form CMS-855A; group practices, ambulance suppliers,
and certain other supplier types will complete the Form CMS-855B;
suppliers of durable medical equipment, prosthetics, orthotics and
supplies (DMEPOS) will complete the Form CMS-855S.
Please note that breakout of the organization burden (dividing
64,000 hours by 3 forms) is an estimate. Logistically, this is
necessary for the purposes of submitting burden for approval. We have
no way of estimating the number of providers/suppliers that will
complete the individual forms. We welcomed comments on this issue to
help us derive a more reliable breakout but received none. Nor did we
receive comments pertaining to any other aspects of the proposed
requirements or burden. Consequently, we are adopting our proposed
requirements and burden estimates without change.

Table 48--CMS-855 Burden Implications
------------------------------------------------------------------------
Individuals (32,000 Organizations
total respondents) (32,000 total
(3 hours/ respondents) (6
application) hours/application)
------------------------------------------------------------------------
CMS-855-I (32,000).......... 32,000 respondents,
96,000 hours.
Physicians (16,000) $194.66/ 16,000 physicians x
hour. 3 hours = 48,000
hours @$194.66 =
$9,343,680.00.
Non-physician Practitioners 16,000 non-physician
(16,000) $93.30/hour. practitioners x 3
hours = 48,000
hours @$93.30 =
$4,478,400.00.
CMS-855-A (10,666) $34.94/ .................... 10,666 respondents x
hour. 6 hours = 63,996
hours
10,666 respondents x
6 hours = 63,996
hours @$34.94 =
$2,236,020.24
CMS-855-B (10,666).......... .................... 10,666 respondents x
6 hours = 63,996
hours
10,666 respondents x
6 hours = 63,996
hours @$34.94 =
$2,236,020.24

[[Page 80540]]

CMS-855-S (10,666).......... .................... 10,666 respondents x
6 hours = 63,996
hours
10,666 respondents x
6 hours = 63,996
hours @$34.94 =
$2,236,020.24
-------------------------------------------
Sub-total respondents... 32,000 respondents.. 32,000 respondents
Sub-total hours......... 96,000 hours........ 192,000 hours
Sub-total cost.......... $13,822,080.00...... $6,708,060.72
-------------------------------------------
Total............... 64,000 respondents, 288,000 hours,
$20,530,140.72
------------------------------------------------------------------------

4. ICRs Regarding the Release of Medicare Advantage Bid Pricing Data
(Sec. 422.272) and the Release of Part C and Part D Medical Loss Ratio
(MLR) Data (Sec. Sec. 422.2490 and 423.2490)
In the proposed rule, new Sec. 422.272 proposed an annual public
release of MA bid pricing data (with specified exceptions from
release), which would occur after the first Monday in October and would
contain MA bid pricing data that was approved by CMS for a contract
year at least 5 years prior to the upcoming calendar year. Under Part
C, MA organizations (MAOs) are required to submit bid data to CMS each
year for MA plans they wish to offer in the upcoming contract year
(calendar year), under current authority at Sec. 422.254.
Proposed Sec. Sec. 422.2490 (for Part C) and 423.2490 (for Part D)
also provided for the public release of Part C and Part D MLR data for
each contract year, which would occur no sooner than 18 months after
the end of the contract year for which the MLR Report was submitted.
Starting with contract year 2014, if an MAO or Part D sponsor fails to
spend at least 85 percent of the revenue received under an MA or Part D
contract on incurred claims and quality improvement activities, the MAO
or Part D sponsor must remit to the Secretary the product of: (1) The
contract's total revenue; and (2) the difference between 85 percent and
the contract's MLR. For each contract year, each MAO and Part D sponsor
must submit an MLR Report to CMS which includes the data needed by the
MAO or Part D sponsor to calculate and verify the MLR and remittance
amount, if any, for each contract. The proposed rule provided for the
release of the Part C and Part D MLR data contained in the MLR Reports
that we receive from MAOs and Part D sponsors, with specified
exceptions to release.
We determined for the proposed rule that the proposed provisions on
the release of MA bid pricing data and the release of Part C and Part D
MLR data did not change any of the existing requirements regarding
submission of bid data and MLR data by MAOs or Part D plan sponsors,
nor did the proposed rule propose any new or revised reporting,
recordkeeping, or third-party disclosure requirements. We noted that
although the proposed provisions have no impact on respondent
requirements or burden, the changes have been submitted to OMB for
approval under control number 0938-0944 (CMS-10142) for MA bid pricing
data and 0938-1232 (CMS-10476) for Part C and Part D MLR data.
We did not receive any comments on the proposed requirements or
burden and are finalizing them without change.
5. ICRs Regarding Application Requirements (Sec. 422.501) and
Termination of Contract by CMS (Sec. 422.510)
Changes to Sec. Sec. 422.501 and 422.510 involve only CMS contract
changes and will not result in any external charges or operational
costs to MA organizations. Many MA organizations already require
Medicare enrollment for all their network providers and suppliers. So
there will be no additional costs to most MA and MA-PD plans. The only
tangible costs will be to those providers or suppliers that are not
enrolled and those costs are estimated in section IV.B.3. of this final
rule.
6. ICRs Regarding Payment to Organizations That Provide Medicare
Diabetes Prevention Program Services (Sec. 424.59)
Section 1115A(d)(3) of the Social Security Act exempts the Center
for Medicare and Medicaid Innovation (CMMI) model tests and expansions,
including the Medicare Diabetes Prevention Program expansion, from the
PRA. The section provides that Chapter 35 of title 44, United States
Code, which includes such provisions as the PRA, shall not apply to the
testing and evaluation of CMMI models or expansion of such models.
7. ICRs Regarding the Medicare Shared Savings Program (Part 425)
Section 1899(e) of the Act provides that chapter 35 of title 44 of
the U.S. Code, which includes such provisions as the PRA, shall not
apply to any information collection activities under the Shared Savings
Program.

C. Summary of Annual Burden Estimates

Table 49--Annual Recordkeeping and Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Burden per
Regulation section(s) under OMB control Respondents Total responses response Total annual Labor cost of Total cost ($)
title 42 of the CFR No. (hours) burden (hours) reporting ($) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec. 414.94(g)(2)............ 0938-1315 30 30............... 20 600 varies.............. 56,780
Sec. 414.94(g)(2) (reapply).. 30............... 10 300 varies.............. 28,390
Sec. 422.222 (physicians and 0938-0685 32,000 10,666.6 (32,000 3 32,000 varies.............. 4,607,360
non-physician practitioners). responses
annualized over
3 years).

[[Page 80541]]

Sec. 422.222 (organizations). 0938-0685 32,000 7,111.1 for two 6 42,666.6 34.94............... 1,490,771
CMS-855 forms
(21,333.3
responses
annualized over
3 years).
Sec. 422.222 (organizations). 0938-1056 .............. 3,555.6 for one 6 21,333.3 34.94............... 745,386
CMS-855 form.
------------------------------------------------------------------------------------------------------------------------
Total...................... .............. 64,030 21,393........... .............. 96,900 varies.............. 6,928,687
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This rule does not set out any non-labor costs.

D. Associated Information Collections Not Specified in Regulatory Text

This rule references three information collection requirements that
do not pertain to the amendments in the regulatory text. While the
activities meet the PRA's definition of an information collection
requirement, section 220 of the Protecting Access to Medicare Act
(PAMA) of 2014 (Pub. L. 113-93) provides that the activities are exempt
from the requirements of under the PRA. The exemption applies to
information collected to ensure the accurate valuation of services
under the Physician Fee Schedule which includes but is not limited to
surveys of physicians, other suppliers, providers of services,
manufacturers, and vendors; surgical logs, billing systems, or other
practice or facility records; electronic health records; and, any other
mechanism deemed appropriate by the Secretary.
The activities consist of the following:
1. Global Surgical Services
Section II.D.2. of this final rule details our plans for a claims-
based reporting program for global surgical services. Our claims-based
data collection is applicable to 10- and 90-day global services
furnished on or after January 1, 2017, which will set out: Who will be
required to report, what they will be required to report, and how the
reports will be submitted.
2. Survey of Practitioners
As discussed earlier in section II.D.6.e.(1) through (2) of this
final rule, we intend to conduct a survey of practitioners to help us
explore options and collect data with respect to assessing and
revaluing the global surgery services.
3. Data Collection for Accountable Care Organizations
In section II. D.6.e.(3) of this final rule, we intend to conduct a
survey of ACOs on a number of issues surrounding pre- and post-
operative surgical services. In addition to the PRA exemption as
described above under PAMA, the survey is also exempt from the PRA
under section 3022 of the Affordable Care Act which exempts collections
associated with the Medicare Shared Savings Program.

E. Submission of PRA-Related Comments

We have submitted a copy of this rule's information collection and
recordkeeping requirements to OMB for review and approval. The
requirements are not effective until they have been approved by the
OMB.
To obtain copies of the supporting statement and any related forms
for the collections discussed above, please visit CMS' Web site at
https://www.cms.hhs.gov/PaperworkReductionActof1995, or call the Reports
Clearance Office at 410-786-1326.
We invite public comments on these potential information collection
requirements. If you wish to comment, please identify the rule (CMS-
1654-F) and submit your comments to the OMB desk officer via one of the
following transmissions:
Mail: OMB, Office of Information and Regulatory Affairs, Attention:
CMS Desk Officer,
Fax Number: 202-395-5806 OR,
Email: OIRA_submission@omb.eop.gov.
PRA-related comments must be received on/by December 2, 2016.

V. Regulatory Impact Analysis

A. Statement of Need

This final rule makes payment and policy changes under the Medicare
PFS and makes required statutory changes under the MACRA, ABLE, PAMA,
and the Consolidated Appropriations Act of 2016. This final rule also
makes changes to payment policy and other related policies for Medicare
Part B, Part D, and Medicare Advantage.

B. Overall Impact

We examined the impact of this rule as required by Executive Order
12866 on Regulatory Planning and Review (September 30, 1993), Executive
Order 13563 on Improving Regulation and Regulatory Review (February 2,
2013), 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). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
We estimate, as discussed in this section, that the PFS provisions
included in this final rule would redistribute more than $100 million
in 1 year. Therefore, we estimate that this rulemaking is
``economically significant'' as measured by the $100 million threshold,
and hence also a major rule under the Congressional Review Act.
Accordingly, we prepared an RIA that, to the best of our ability,
presents the costs and benefits of the rulemaking. The RFA requires
agencies to analyze options for regulatory relief of small entities.
For purposes of the RFA, small entities include small businesses,
nonprofit organizations, and small governmental jurisdictions. Most
hospitals, practitioners and most other providers

[[Page 80542]]

and suppliers are small entities, either by nonprofit status or by
having annual revenues that qualify for small business status under the
Small Business Administration standards. (For details see the SBA's Web
site at https://www.sba.gov/content/table-small-business-size-standards
(refer to the 620000 series)). Individuals and states are not included
in the definition of a small entity.
The RFA requires that we analyze regulatory options for small
businesses and other entities. We prepare a regulatory flexibility
analysis unless we certify that a rule would not have a significant
economic impact on a substantial number of small entities. The analysis
must include a justification concerning the reason action is being
taken, the kinds and number of small entities the rule affects, and an
explanation of any meaningful options that achieve the objectives with
less significant adverse economic impact on the small entities.
Approximately 95 percent of practitioners, other providers, and
suppliers are considered to be small entities, based upon the SBA
standards. There are over 1 million physicians, other practitioners,
and medical suppliers that receive Medicare payment under the PFS.
Because many of the affected entities are small entities, the analysis
and discussion provided in this section, as well as elsewhere in this
final rule is intended to comply with the RFA requirements regarding
significant impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 604 of the RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside of a Metropolitan Statistical Area for Medicare
payment regulations and has fewer than 100 beds. We did not prepare an
analysis for section 1102(b) of the Act because we determined, and the
Secretary certified, that this final rule 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 on state,
local, or tribal governments or on the private sector before issuing
any rule whose mandates require spending in any 1 year of $100 million
in 1995 dollars, updated annually for inflation. In 2016, that
threshold is approximately $146 million. This final rule will impose no
mandates on state, local, or tribal governments or on the private
sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it issues a proposed rule (and subsequent final
rule) that imposes substantial direct requirement costs on state and
local governments, preempts state law, or otherwise has Federalism
implications. Since this regulation does not impose any costs on state
or local governments, the requirements of Executive Order 13132 are not
applicable.
We prepared the following analysis, which together with the
information provided in the rest of this preamble, meets all assessment
requirements. The analysis explains the rationale for and purposes of
this final rule; details the costs and benefits of the rule; analyzes
alternatives; and presents the measures we would use to minimize the
burden on small entities. As indicated elsewhere in this final rule, we
are implementing a variety of changes to our regulations, payments, or
payment policies to ensure that our payment systems reflect changes in
medical practice and the relative value of services, and implementing
statutory provisions. We provide information for each of the policy
changes in the relevant sections of this final rule. We are unaware of
any relevant federal rules that duplicate, overlap, or conflict with
this final rule. The relevant sections of this final rule contain a
description of significant alternatives if applicable.

C. Changes in Relative Value Unit (RVU) Impacts

1. Resource-Based Work, PE, and MP RVUs
Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or
decreases in RVUs may not cause the amount of expenditures for the year
to differ by more than $20 million from what expenditures would have
been in the absence of these changes. If this threshold is exceeded, we
make adjustments to preserve budget neutrality.
Our estimates of changes in Medicare expenditures for PFS services
compare payment rates for CY 2016 with proposed payment rates for CY
2017 using CY 2015 Medicare utilization. The payment impacts in this
final rule reflect averages by specialty based on Medicare utilization.
The payment impact for an individual practitioner could vary from the
average and would depend on the mix of services he or she furnishes.
The average percentage change in total revenues would be less than the
impact displayed here because practitioners and other entities
generally furnish services to both Medicare and non-Medicare patients.
In addition, practitioners and other entities may receive substantial
Medicare revenues for services under other Medicare payment systems.
For instance, independent laboratories receive approximately 83 percent
of their Medicare revenues from clinical laboratory services that are
paid under the Clinical Lab Fee Schedule.
The annual update to the PFS conversion factor (CF) was previously
calculated based on a statutory formula; for details about this
formula, we refer readers to the CY 2015 PFS final rule with comment
period (79 FR 67741 through 67742). Section 101(a) of the MACRA
repealed the previous statutory update formula and amended section
1848(d) of the Act to specify the update adjustment factors for
calendar years 2015 and beyond. For CY 2017, the specified update is
0.5 percent before applying other adjustments.
Section 220(d) of the PAMA added a new paragraph at section
1848(c)(2)(O) of the Act to establish an annual target for reductions
in PFS expenditures resulting from adjustments to relative values of
misvalued codes. Under section 1848(c)(2)(O)(ii) of the Act, if the net
reduction in expenditures for the year is equal to or greater than the
target for the year, reduced expenditures attributable to such
adjustments shall be redistributed in a budget-neutral manner within
the PFS in accordance with the existing budget neutrality requirement
under section 1848(c)(2)(B)(ii)(II) of the Act. Section
1848(c)(2)(O)(iii) of the Act specifies that, if the estimated net
reduction in PFS expenditures for the year is less than the target for
the year, an amount equal to the target recapture amount shall not be
taken into account when applying the budget neutrality requirements
specified in section 1848(c)(2)(B)(ii)(II) of the Act. We estimate the
CY 2017 net reduction in expenditures resulting from adjustments to
relative values of misvalued codes to be 0.32 percent. Since this
amount does not meet the 0.5 percent target established by the
Achieving a Better Life Experience Act of 2014 (ABLE) (Division B of
Pub. L. 113-295, enacted December 19, 2014), payments under the fee
schedule must be reduced by the difference between the target for the
year and the estimated net reduction in expenditures, known as the
target recapture amount. As a result, we estimate that the CY 2017
target

[[Page 80543]]

recapture amount will produce a reduction to the conversion factor of -
0.18 percent.
Effective January 1, 2012, we implemented an MPPR of 25 percent on
the professional component (PC) of advanced imaging services. Section
502(a)(2)(A) of Division O, Title V of the Consolidated Appropriations
Act of 2016 (Pub. L 114-113, enacted on December 18, 2015) added a new
section 1848(b)(10) of the Act, which revises the MPPR on the
professional component of imaging services from 25 percent to 5
percent, effective January 1, 2017. Section 502(a)(2)(B) of Division O,
Title V of the Consolidated Appropriations Act of 2016 added a new
subclause at section 1848(c)(2)(B)(v)(XI) which exempts the MPPR
reductions attributable to the new 5 percent MPPR on the PC of imaging
from the PFS budget neutrality provision. However, the provision does
not exempt the change attributable to the 25 percent MPPR from PFS
budget neutrality. Therefore, for CY 2017 we must calculate PFS rates
in a manner that exempts the 5 percent MPPR from budget neutrality but
ensures that the elimination of the 25 percent MPPR is included in PFS
budget neutrality. We note that the application of the 25 percent MPPR
has been applied in a budget neutral fashion to date.
The CY 2017 final PFS rates exclude the 5 percent MPPR for the
professional component of imaging services by calculating the rates as
if the discount does not occur, consistent with our approach to other
discounts that occur outside of PFS budget neutrality. In order to
implement the change from the 25 percent discount in 2016 to the 5
percent discount in 2017 within PFS budget neutrality, we measured the
difference in total RVUs for the relevant services, assuming an MPPR of
25 percent and the total RVUs for the same services without an MPPR,
and then applied that difference as an adjustment to the conversion
factor to account for the increased expenditures attributable to the
change, within PFS budget neutrality. This approach is consistent with
the statutory provision that requires the 5 percent MPPR to be
implemented outside of PFS budget neutrality.
To calculate the final conversion factor for this year, we
multiplied the product of the current year conversion factor and the
update adjustment factor by the target recapture amount, the budget
neutrality adjustment and the imaging MPPR adjustment described in the
preceding paragraphs. We estimate the CY 2017 PFS conversion factor to
be 35.8887, which reflects the budget neutrality adjustment, the 0.5
percent update adjustment factor specified under section 1848(d)(18) of
the Act, the adjustment due to the non-budget neutral 5 percent MPPR
for the professional component of imaging services, and the -0.18
percent target recapture amount required under section
1848(c)(2)(O)(iv) of the Act and described above. We estimate the CY
2017 anesthesia conversion factor to be 22.0454, which reflects the
same overall PFS adjustments.
We note that the proposed RVU budget neutrality adjustment was
negative, due to the estimated overall increases in proposed RVUs
relative to 2016. However, because we did not finalize the proposed
changes to make separate payment for the additional resource costs
involved in mobility impairment services, we are finalizing an overall
decrease in RVUs relative to 2016. This results in an RVU budget
neutrality adjustment that is positive.

Table 50--Calculation of the Final CY 2017 PFS Conversion Factor
------------------------------------------------------------------------
Conversion factor in effect in CY
2016 35.8043
------------------------------------------------------------------------
Update Factor..................... 0.50 percent
(1.0050).
CY 2017 RVU Budget Neutrality -0.013 percent
Adjustment. (0.99987).
CY 2017 Target Recapture Amount... -0.18 percent
(0.9982).
CY 2017 Imaging MPPR Adjustment... -0.07 percent
(0.9993).
CY 2017 Conversion Factor......... .................... 35.8887
------------------------------------------------------------------------

Table 51--Calculation of the Final CY 2017 Anesthesia Conversion Factor
(CM Estimate)
------------------------------------------------------------------------
CY 2016 National Average
Anesthesia Conversion Factor 21.9935
------------------------------------------------------------------------
Update Factor..................... 0.50 percent
(1.0050).
CY 2017 RVU Budget Neutrality 0.013 percent
Adjustment. (0.99987).
CY 2017 Target Recapture Amount... -0.18 percent
(0.9982).
CY 2017 Imaging MPPR Adjustment... -0.07 percent
(0.9993).
CY 2017 Conversion Factor......... .................... 22.0454
------------------------------------------------------------------------

Table 52 shows the payment impact on PFS services of the proposals
contained in this final rule. To the extent that there are year-to-year
changes in the volume and mix of services provided by practitioners,
the actual impact on total Medicare revenues would be different from
those shown in Table 52 (CY 2017 PFS Estimated Impact on Total Allowed
Charges by Specialty). The following is an explanation of the
information represented in Table 52.
Column A (Specialty): Identifies the specialty for which
data are shown.
Column B (Allowed Charges): The aggregate estimated PFS
allowed charges for the specialty based on CY 2015 utilization and CY
2016 rates. That is, allowed charges are the PFS amounts for covered
services and include coinsurance and deductibles (which are the
financial responsibility of the beneficiary). These amounts have been
summed across all services furnished by physicians, practitioners, and
suppliers within a specialty to arrive at the total allowed charges for
the specialty.
Column C (Impact of Work RVU Changes): This column shows
the estimated CY 2017 impact on total allowed charges of the changes in
the work RVUs, including the impact of changes due to potentially
misvalued codes.
Column D (Impact of PE RVU Changes): This column shows the
estimated CY 2017 impact on total allowed charges of the changes in the
PE RVUs.
Column E (Impact of MP RVU Changes): This column shows the
estimated CY 2017 impact on total allowed charges of the changes in the
MP RVUs, which are primarily driven

[[Page 80544]]

by the required five-year review and update of MP RVUs.
Column F (Combined Impact): This column shows the
estimated CY 2017 combined impact on total allowed charges of all the
changes in the previous columns. Column F may not equal the sum of
columns C, D, and E due to rounding.

Table 52--CY 2017 PFS Estimated Impact on Total Allowed Charges by Specialty *
----------------------------------------------------------------------------------------------------------------
(C) Impact of (D) Impact of (E) Impact of
(A) Specialty (B) Allowed work RVU PE RVU changes MP RVU changes (F) Combined
charges (mil) changes (%) (%) (%) impact ** (%)
----------------------------------------------------------------------------------------------------------------
TOTAL........................... $89,866 0 0 0 0
ALLERGY/IMMUNOLOGY.............. 231 0 1 0 1
ANESTHESIOLOGY.................. 1,982 0 0 0 0
AUDIOLOGIST..................... 61 0 0 0 0
CARDIAC SURGERY................. 324 0 0 0 0
CARDIOLOGY...................... 6,485 0 0 0 0
CHIROPRACTOR.................... 784 0 0 0 0
CLINICAL PSYCHOLOGIST........... 734 0 0 0 0
CLINICAL SOCIAL WORKER.......... 606 0 0 0 0
COLON AND RECTAL SURGERY........ 161 0 0 0 0
CRITICAL CARE................... 311 0 0 0 0
DERMATOLOGY..................... 3,308 0 0 0 0
DIAGNOSTIC TESTING FACILITY..... 754 0 -1 0 -1
EMERGENCY MEDICINE.............. 3,145 0 0 0 0
ENDOCRINOLOGY................... 460 0 0 0 0
FAMILY PRACTICE................. 6,110 0 1 0 1
GASTROENTEROLOGY................ 1,747 -1 0 0 -1
GENERAL PRACTICE................ 456 0 0 0 1
GENERAL SURGERY................. 2,172 0 0 0 0
GERIATRICS...................... 213 0 1 0 1
HAND SURGERY.................... 182 0 0 0 0
HEMATOLOGY/ONCOLOGY............. 1,751 0 0 0 0
INDEPENDENT LABORATORY.......... 706 0 -5 0 -5
INFECTIOUS DISEASE.............. 656 0 0 0 0
INTERNAL MEDICINE............... 10,915 0 1 0 1
INTERVENTIONAL PAIN MGMT........ 769 0 -1 0 0
INTERVENTIONAL RADIOLOGY........ 317 -1 0 0 -1
MULTISPECIALTY CLINIC/OTHER PHYS 129 0 0 0 1
NEPHROLOGY...................... 2,210 0 0 0 0
NEUROLOGY....................... 1,521 0 0 0 0
NEUROSURGERY.................... 789 -1 0 0 -1
NUCLEAR MEDICINE................ 47 0 0 0 0
NURSE ANES/ANES ASST............ 1,214 0 0 0 0
NURSE PRACTITIONER.............. 2,988 0 0 0 0
OBSTETRICS/GYNECOLOGY........... 651 0 0 0 0
OPHTHALMOLOGY................... 5,492 -1 -2 0 -2
OPTOMETRY....................... 1,219 0 -1 0 -1
ORAL/MAXILLOFACIAL SURGERY...... 49 0 -1 0 -1
ORTHOPEDIC SURGERY.............. 3,695 0 0 0 0
OTHER........................... 27 0 0 0 0
OTOLARNGOLOGY................... 1,210 0 0 0 -1
PATHOLOGY....................... 1,135 0 -2 0 -1
PEDIATRICS...................... 61 0 0 0 0
PHYSICAL MEDICINE............... 1,068 0 0 0 0
PHYSICAL/OCCUPATIONAL THERAPY... 3,407 0 1 0 1
PHYSICIAN ASSISTANT............. 1,964 0 0 0 0
PLASTIC SURGERY................. 378 0 0 0 0
PODIATRY........................ 1,972 0 0 0 0
PORTABLE X-RAY SUPPLIER......... 106 0 0 0 0
PSYCHIATRY...................... 1,265 0 0 0 0
PULMONARY DISEASE............... 1,765 0 0 0 0
RADIATION ONCOLOGY.............. 1,726 0 0 0 0
RADIATION THERAPY CENTERS....... 44 0 0 0 0
RADIOLOGY....................... 4,683 0 0 0 -1
RHEUMATOLOGY.................... 537 0 0 0 0
THORACIC SURGERY................ 357 0 0 0 0
UROLOGY......................... 1,772 -1 0 0 -2
VASCULAR SURGERY................ 1,046 0 0 0 -1
----------------------------------------------------------------------------------------------------------------
** Column F may not equal the sum of columns C, D, and E due to rounding.

[[Page 80545]]

2. CY 2017 PFS Impact Discussion
a. Changes in RVUs
The most widespread specialty impacts of the final RVU changes are
generally related to the changes to RVUs for specific services
resulting from the Misvalued Code Initiative, including finalized RVUs
for new and revised codes. Several specialties, including
interventional radiology and independent labs, would experience
significant decreases to overall payments for services that they
frequently furnish as a result of revisions to the coding structure or
the final inputs used to develop RVUs for the codes that describe
particular services. Other specialties, including endocrinology and
family practice, would experience significant increases to payments for
similar reasons.
We note that the positive impact for CY 2017 several specialties is
lower than it was in the proposed rule, especially for certain
specialties disproportionately likely to have reported the proposed
code related to mobility impairment services. Because we did not
finalize that proposal, we do not anticipate that shift in payment for
CY 2017. However, we note that we believe that many practitioners of
those same specialties will likely report the several other new codes
described in section F of this final rule. Based on the history with
other, similar codes, we would anticipate significant changes in
allowed charges for these specialties over a longer period of time
thanis shown by the single year comparison that we believe is more
generally relevant in displaying the impacts of changes in payment
under the PFS.
We often receive comments regarding the changes in RVUs displayed
on the specialty impact table, including comments received in response
to the proposed rates for the current year. We remind stakeholders that
although the estimated impacts are displayed at the specialty level,
typically the changes are driven by the valuation of a relatively small
number of new and/or potentially misvalued codes. The percentages in
the table are based upon aggregate estimated PFS allowed charges summed
across all services furnished by physicians, practitioners, and
suppliers within a specialty to arrive at the total allowed charges for
the specialty, and compared to the same summed total from the previous
calendar year. They are therefore averages, and may not necessarily be
representative of what is happening to the particular services
furnished by a single practitioner within any given specialty.
b. Impact
Column F of Table 52 displays the estimated CY 2017 impact on total
allowed charges, by specialty, of all the RVU changes. A table shows
the estimated impact on total payments for selected high volume
procedures of all of the changes is available under ``downloads'' on
the CY 2017 PFS final rule Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/. We selected these
procedures for sake of illustration from among the most commonly
furnished by a broad spectrum of specialties. The change in both
facility rates and the nonfacility rates are shown. For an explanation
of facility and nonfacility PE, we refer readers to Addendum A on the
CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.

D. Effect of Changes in Telehealth List

As discussed in section II.I. of this final rule, we added several
new codes to the list of Medicare telehealth services. Although we
expect these changes to increase access to care in rural areas, based
on recent utilization of similar services already on the telehealth
list, we estimate no significant impact on PFS expenditures from the
additions relative to overall PFS expenditures.

E. Geographic Practice Cost Indices (GPCIs)

Based upon statutory requirements, we proposed new GPCIs for each
Medicare payment locality. The final GPCIs incorporate updated data and
cost share weights as discussed in section II.I. The Act requires that
updated GPCIs be phased in over two years. Addendum D shows the
estimated effects of the revised GPCIs on area GAFs for the transition
year (CY 2017) and the fully implemented year (CY 2018). The GAFs
reflect the use of the updated underlying GPCI data, and the cost share
weights remain unchanged from the previous (seventh) GPCI update. The
GAFs are a weighted composite of each area's work, PE and malpractice
expense GPCIs using the national GPCI cost share weights. Although we
do not actually use the GAFs in computing the PFS payment for a
specific service, they are useful in comparing overall areas costs and
payments. The actual effect on payment for any actual service will
deviate from the GAF to the extent that the proportions of work, PE and
malpractice expense RVUs for the service differ from those of the GAF.
The most significant changes occur in 19 non-California payment
localities, where the fully implemented (CY 2018) GAF moves up by more
than 1 percent (14 payment localities) or down by more than 2 percent
(5 payment localities). These changes, required by section 1848(e)(6)
of the Act, are discussed in section II.I. of this final rule.

F. Other Provisions of the Proposed Regulation

1. Impact of Changing the Direct Supervision Requirement to General
Supervision for CCM Services Furnished Incident to RHCs and FQHCs, and
Impact of Revising the CCM Requirements for RHCs and FQHCs
We are finalizing our proposal to revise Sec. 405.2413(a)(5) and
Sec. 405.2415(a)(5) to state that services and supplies furnished
incident to TCM and CCM services can be furnished under general
supervision of a RHC or FQHC practitioner. This regulatory change was
already made for CCM services furnished by practitioners billing the
PFS, and changes to RHC and FQHC regulations have no impact on
regulations for practitioners billing under the PFS. The impact of this
change on RHCs and FQHCs in 2017 is negligible, as estimates are
rounded to the nearest 5 million and 2017 was too small of an impact to
have a notable effect on the estimate.
We are also finalizing our proposal to revise the CCM requirements
for RHCs and FQHCs to be consistent with the proposed revisions to the
CCM requirements for practitioners billing under the PFS. These
revisions will allow RHCs and FQHCs to provide TCM and CCM services at
the level that was projected when the programs were authorized, and
therefore, no impact on spending is expected.
2. FQHC-Specific Market Basket
As discussed in section III.B of this final rule, we are finalizing
our proposal to create a 2013-based FQHC market basket to update the
FQHC PPS base payment rate. Table 53 shows the 5-year and 10-year
fiscal cost estimates from switching from a MEI-adjusted base payment
rate to a FQHC PPS market basket-adjusted base payment rate. This was
determined by compiling data on historical FQHC spending, projecting it
forward, and creating two separate baselines. The first baseline
assumed an MEI price update and the second baseline assumed an FQHC
specific market basket price update which was created by the Office of
the Actuary within CMS. The utilization of services was held constant
between the two

[[Page 80546]]

baselines, and therefore, the impact table specifically captures the
change in price from now growing at an FQHC MB update relative to how
it was growing at the MEI updates. We estimate that this will cost
approximately 210 million dollars over 10 years from FY 2017-2026, 45
million of which would be paid for through beneficiary premiums and the
remaining 165 million would be paid for through Part B.

Table 53--5-Year and 10-Year Fiscal Cost Estimates From Switching From an MEI-Adjusted Base Payment Rate to a FQHC PPS Market Basket-Adjusted Base
Payment Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
5-year 10-year
Estimate (in millions) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 impact impact
2017-2021 2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY Cash Impact (with MC)
Part B
Benefits..................................... ..... 5 10 10 15 16 20 25 30 35 45 55 210
Premium Offset............................... ..... ..... ..... ..... (5) (5) (5) (5) (5) (10) (10) (10) (45)
Total Part B................................. ..... 5 10 10 10 10 15 20 25 25 35 45 165
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Appropriate Use Criteria for Advanced Diagnostic Imaging Services
The clinical decision support mechanism (CDSM) requirements, as
well as the application process that CDSM developers must comply with
for their mechanisms to be specified as qualified under this program do
not impact CY 2017 physician payments under the PFS.
4. Reports of Payments or Other Transfers of Value to Covered
Recipients
We solicited comments to inform future rulemaking. We do not intend
to finalize any requirements directly as a result of this final rule;
so there is no impact to CY 2017 physician payments under the PFS.
5. Release of Part C Medicare Advantage Bid Pricing Data and Part C and
Part D Medical Loss Ratio (MLR) Data
Under section III.E. of the preamble of this final rule, we
describe our proposal to revise the existing regulations by adding
Sec. 422.272 to provide for an annual public release of MA bid pricing
data (with specified exceptions from release). We proposed that the
annual release would occur after the first Monday in October and would
contain MA bid pricing data that was accepted or approved by CMS for a
contract year at least 5 years prior to the upcoming calendar year. We
noted that under current authority at Sec. 422.254, MA organizations
(MAOs) are required to submit bid pricing data to CMS each year for MA
plans they wish to offer in the upcoming contract year (calendar year).
In addition, we proposed to add Sec. 422.2490 for Part C and Sec.
423.2490 for Part D to provide for an annual public release of Part C
and Part D medical loss ratio (MLR) data (with specified exceptions
from release). This annual release would occur no sooner than 18 months
after the end of the contract year for which MLR data was reported to
us. Starting with contract year 2014, each MAO or Part D sponsor that
fails to spend at least 85 percent of revenue received under an MA or
Part D contract on incurred claims and quality improving activities
must remit the difference to the government. Under current authority at
Sec. 422.2460 and Sec. 423.2460, each year MAOs and Part D sponsors
must submit an MLR Report to us, which includes the data needed by the
MAO or Part D sponsor to calculate and verify the MLR and remittance
amount, if any, for each contract.
We proposed to add regulatory language to permit our release of
such data to the public. In the proposed rule, we determined that the
proposed regulatory amendments do not impose any mandatory costs on the
public or entities that seek to download and use the released data. We
expect that this data will be available to the public from the CMS Web
site (https://www.cms.gov/). The public may elect to download the data
files, which will not impose mandatory costs on any user. Therefore, we
determined that there were not any significant effects of the proposed
provisions. We also determined that the proposed regulatory amendments
would not impose a burden on the entity requesting or downloading the
data files. We did not receive any public comments on our proposed
regulatory impact analysis and are finalizing our language as proposed.
6. Prohibition on Billing Qualified Medicare Beneficiary Individuals
for Medicare Cost-Sharing
We are restating information to inform providers to take steps to
educate themselves and their staff about QMB billing prohibitions and
to exempt QMB individuals from Medicare cost-sharing billing and
related collection efforts. Therefore, there is no impact to CY 2017
physician payments under the PFS.
7. Recoupment or Offset of Payments to Providers Sharing the Same
Taxpayer Identification Number
This final rule implements section 1866(j) of the Act which grants
the Secretary the authority to make any necessary adjustments to the
payments of an applicable provider of services or supplier who shares a
TIN with an obligated provider of services or supplier that has an
outstanding Medicare overpayment. The Secretary is authorized to adjust
the payments of such applicable provider, regardless of whether that
applicable provider is assigned a different Medicare billing number or
National Provider Identifier (NPI) number from the obligated provider
with the outstanding Medicare overpayment. The concept of offsetting or
recouping payments of providers sharing a TIN to satisfy a Medicare
overpayment is analogous to Treasury's current practice of offsetting
against entities that share a TIN to collect Medicare overpayments.
This final rule will help support our efforts to safeguard the Medicare
Trust Funds by collecting its own overpayments more quickly and
reducing the accounts receivable delinquency rates reported in the
Treasury Report on Receivables. This final rule also helps the
obligated provider because we will collect the overpayments more
quickly; thus reducing the additional interest assessments that would
continue on the provider's outstanding delinquent balance until paid in
full. Therefore, there is no impact to CY 2017 physician payments under
the PFS.
8. Medicare Advantage Provider Enrollment
This final rule will require that providers and suppliers must be
enrolled in Medicare in approved status

[[Page 80547]]

in order to render services to beneficiaries in the Medicare Advantage
program. This final rule will not have a significant economic impact on
a substantial number of small businesses because the total number of
non-enrolled providers and suppliers required to enroll in Medicare to
comply with this rule appears to be small in comparison to the general
population of providers and suppliers. The completion of the Form CMS-
855 (as explained in section III.) will be required very infrequently,
in many cases either only one time or once every several years. Also,
the hour and cost burden per provider or supplier will not pose a
significant burden on a provider and supplier, especially when
considering the overall revenue that providers and suppliers receive
per year. We thus do not believe our proposal will impact a substantial
number of small businesses.
Virtually all of the quantifiable costs associated with this final
rule involve the paperwork burden to providers and suppliers (see
section IV. of this final rule). The estimates presented in this
section do not address the potential financial benefits of this final
rule from the standpoint of the rule's effectiveness in preventing or
deterring certain providers from enrolling in or maintaining their
enrollment in Medicare. We simply have no means of quantifying these
benefits in monetary terms.
There are three main uncertainties associated with this final rule.
First, we are uncertain as to the number of providers and suppliers
that will be required to enroll in Medicare under Sec. 422.222.
Second, we cannot estimate the savings in fraud and abuse prevention
that will accrue from this rule. Third, since we have no systematic
method to know how many FDRs may be used by MA or MA-PD organizations
to deliver services to Medicare beneficiaries, therefore, we cannot
estimate the possible impact to FDRs.
9. Expansion of the Diabetes Prevention Program (DPP) Model
We proposed to expand the Diabetes Prevention Program (DPP) Model
in accordance with section 1115A(c) of the Act, and we proposed to
refer to this expanded model as the Medicare Diabetes Prevention
Program (MDPP). We proposed that MDPP would become effective January 1,
2018, and we would continue to test and evaluate MDPP as finalized. In
the future, we will assess whether the nationwide implementation of the
MDPP is continuing to either reduce Medicare spending without reducing
quality of care or improve the quality of patient care without
increasing spending, and could modify the nationwide MDPP as
appropriate. In this final rule, we are finalizing the framework for
expansion and finalizing details of the MDPP benefit, beneficiary
eligibility criteria, and MDPP supplier eligibility criteria and
enrollment policies. We will engage in additional rulemaking within the
next year to address payment, delivery of virtual MDPP services, the
preliminary recognition standard, use of coach information during
enrollment and monitoring, and other program integrity safeguards. MDPP
policies finalized in this rule and those proposed in future rulemaking
will result in changes to our current financial projections and
therefore affect economic impact estimates of MDPP. For these reasons,
it is premature to provide an impact statement at this time. We intend
to provide an impact statement in future rulemaking.
10. Medicare Shared Savings Program
We are finalizing certain rules having to do with ACO quality
reporting: (1) We are finalizing conforming changes to align with the
policies adopted for the Merit-Based Incentive Payment System (MIPS)
and Alternative Payment Models (APMs) in the QPP final rule with
comment period including changes to the quality measure set; (2) we are
finalizing a policy to streamline the quality validation audit process
and, absent unusual circumstances, to use the results to modify an
ACO's overall quality score; (3) we are finalizing revisions to
references to the Quality Performance Standard and Minimum Attainment
Level; (4) we are revising our policies regarding the application of
flat percentages to provide that measures calculated as ratios are
excluded from use of flat percentages when such benchmarks appear
``clustered'' or ``topped out''; and (5) we are modifying our PQRS
alignment rules to permit flexibility for EPs to report quality data to
PQRS to avoid the PQRS and VM downward adjustments for 2017 and 2018 in
cases where an ACO fails to report on their behalf. (The rule can be
accessed at https://qpp.cms.gov/education.) In addition, we are
updating the assignment methodology to include beneficiaries who
identify ACO professionals as being responsible for coordinating their
overall care.
We are also finalizing additional beneficiary protections when ACOs
in Track 3 make use of the SNF 3-day rule waiver under the Shared
Savings Program. Finally, we are finalizing certain technical changes
and clarifications related to financial reconciliation for ACOs that
fall below 5,000 assigned beneficiaries and related to our policies for
consideration of claims billed by merged and acquired TINs.
Because the final policies are not expected to substantially change
the quality reporting burden for ACOs participating in the Shared
Savings Program and their ACO participants or financial calculations
under the Shared Savings Program, we do not anticipate any impact for
these final policies.
11. Value-Based Payment Modifier and the Physician Feedback Program
Section 1848(p) of the Act requires that we establish a value-based
payment modifier (VM) and apply it to specific physicians and groups of
physicians the Secretary determines appropriate starting January 1,
2015 and to all physicians and groups of physicians by January 1, 2017.
Section 1848(p)(4)(C) of the Act requires the VM to be budget neutral.
Budget-neutrality means that, in aggregate, the increased payments to
high performing physicians and groups of physicians equal the reduced
payments to low performing physicians and groups of physicians, as well
as those physicians and groups of physicians that failed to avoid the
PQRS payment adjustment as a group or as individuals.
In the CY 2015 PFS final rule with comment period (79 FR 67936 and
67941 through 67942), we established that, beginning with the CY 2017
payment adjustment period, the VM will apply to physicians in groups
with two or more EPs and to physicians who are solo practitioners based
on the applicable performance period, including physicians that
participate in an ACO under the Shared Savings Program. In the CY 2014
PFS final rule with comment period (78 FR 74771 through 74772), we
established CY 2015 as the performance period for the VM that will be
applied to payments during CY 2017. In CY 2017, the VM will be waived
for groups and solo practitioners, as identified by their TIN, if at
least one EP who billed for Medicare PFS items and services under the
TIN during 2015 participated in the Pioneer ACO Model or the
Comprehensive Primary Care initiative in 2015 (80 FR 71288).
In the CY 2015 PFS final rule with comment period (79 FR 67938
through 67939), we adopted a two-category approach for the CY 2017 VM
based on participation in the PQRS by groups and solo practitioners.
Category 1 will include those groups that meet the criteria to avoid
the PQRS payment adjustment for CY 2017 as a group

[[Page 80548]]

practice participating in the PQRS GPRO in CY 2015. We finalized in the
CY 2016 PFS final rule with comment period (80 FR 71280 through 71281)
that, for the CY 2017 VM, Category 1 will also include groups that have
at least 50 percent of the group's EPs meet the criteria to avoid the
PQRS payment adjustment for CY 2017 as individuals. In determining
whether a group will be included in Category 1, we will consider
whether the 50 percent threshold has been met regardless of whether the
group registered to participate in the PQRS GPRO in CY 2015. Lastly,
Category 1 will include those solo practitioners that meet the criteria
to avoid the PQRS payment adjustment for CY 2017 as individuals.
For groups and solo practitioners that participated in an ACO under
the Shared Savings Program in CY 2015, they are considered to be
Category 1 for the CY 2017 VM if the ACO in which they participated
successfully reported on quality measures via the GPRO Web Interface in
CY 2015 (79 FR 67946). As discussed in sections III.H. and III.K.1.e.
of this final rule, we are finalizing our proposal to remove the
prohibition on EPs who are part of a group or solo practitioner that
participates in a Shared Savings Program ACO, for purposes of PQRS
reporting for the CY 2017 and CY 2018 payment adjustments, to report
outside the ACO. In section III.L.3.b. of this final rule, we are
finalizing that for the CY 2017 payment adjustment period, if a Shared
Savings Program ACO did not successfully report quality data as
required by the Shared Savings Program under Sec. 425.504 for the CY
2017 PQRS payment adjustment, then we will use the data reported to the
PQRS by the EPs (as a group using one of the group registry, QCDR, or
EHR reporting options or as individuals using the registry, QCDR, or
EHR reporting option) under the participant TIN) outside of the ACO
during the secondary PQRS reporting period to determine whether the TIN
will fall in Category 1 or Category 2 under the VM. We are finalizing
that groups that meet the criteria to avoid PQRS payment adjustment for
CY 2018 as a group practice participating in the PQRS GPRO (using one
of the group registry, QCDR, or EHR reporting options) or have at least
50 percent of the group's EPs meet the criteria to avoid the PQRS
payment adjustment for CY 2018 as individuals (using the registry,
QCDR, or EHR reporting option), based on data submitted outside the ACO
and during the secondary PQRS reporting period, will be included in
Category 1 for the CY 2017 VM. We are also finalizing that solo
practitioners that meet the criteria to avoid the PQRS payment
adjustment for CY 2018 as individuals using the registry, QCDR, or EHR
reporting option, based on data submitted outside the ACO and during
the secondary PQRS reporting period, will be included in Category 1 for
the CY 2017 VM and be classified as ``average quality'' and ``average
cost'' under the quality-tiering methodology. Category 2 will include
those groups and solo practitioners subject to the CY 2017 VM that
participate in a Shared Savings Program ACO and do not fall within
Category 1.
The CY 2017 VM payment adjustment amount for groups and solo
practitioners in Category 2 is -4.0 percent for groups of physicians
with 10 or more EPs and -2.0 percent for groups of physicians with
between 2 to 9 EPs and physician solo practitioners.
In the CY 2015 PFS final rule with comment period (79 FR 67939
through 67941), we finalized that quality-tiering, which is the
methodology for evaluating performance on quality and cost measures for
the VM, will apply to all groups of physicians and physician solo
practitioners in Category 1 for the VM for CY 2017. However, groups of
physicians with between 2 to 9 EPs and physician solo practitioners
will be subject only to upward or neutral adjustments derived under
quality-tiering, while groups of physicians with 10 or more EPs will be
subject to upward, neutral, or downward adjustments derived under
quality-tiering. That is, groups of physicians with between 2 to 9 EPs
and physician solo practitioners in Category 1 will be held harmless
from any downward adjustments derived under quality-tiering for the CY
2017 VM.
Under the quality-tiering methodology, each group and solo
practitioner's quality and cost composites will be classified into
high, average, and low categories depending upon whether the composites
are at least one standard deviation above or below the mean and
statistically different from the mean. We will compare their quality of
care composite classification with the cost composite classification to
determine their VM adjustment for the CY 2017 payment adjustment period
according to the amounts in Tables 54 and 55.

Table 54--CY 2017 VM Payment Adjustment Amounts Under Quality-Tiering for Groups of Physicians With Two to Nine
EPs and Physician Solo Practitioners
----------------------------------------------------------------------------------------------------------------
Cost/quality Low quality Average quality High quality
----------------------------------------------------------------------------------------------------------------
Low cost............................................... +0.0% +1.0x* +2.0x*
Average cost........................................... +0.0% +0.0% +1.0x*
High cost.............................................. +0.0% +0.0% +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups and solo practitioners eligible for an additional +1.0x if reporting measures and average beneficiary
risk score is in the top 25 percent of all beneficiary risk scores, where `x' represents the upward payment
adjustment factor.

Table 55--CY 2017 VM Payment Adjustment Amounts Under Quality-Tiering for Groups of Physicians With Ten or More
EPs
----------------------------------------------------------------------------------------------------------------
Cost/quality Low quality Average quality High quality
----------------------------------------------------------------------------------------------------------------
Low cost............................................... +0.0% +2.0x* +4.0x*
Average cost........................................... -2.0% +0.0% +2.0x*
High cost.............................................. -4.0% -2.0% +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups eligible for an additional +1.0x if reporting measures and average beneficiary risk score is in the top
25 percent of all beneficiary risk scores, where `x' represents the upward payment adjustment factor.

Under the quality-tiering methodology, for groups and solo
practitioners that participated in a Shared Savings ACO that
successfully reports quality data for CY 2015, the cost composite will
be classified as

[[Page 80549]]

``Average'' and the quality of care composite will be based on ACO-
level quality measures. We will compare their quality of care composite
classification with the ``Average'' cost composite classification to
determine their VM adjustment for the CY 2017 payment adjustment period
according to the amounts in Tables 54 and 55.
We are finalizing in section III.L.3.b. of this final rule, for
groups and solo practitioners that participate in a Shared Savings
Program ACO that did not successfully report quality data for CY 2015
and are in Category 1 as a result of reporting quality data to the PQRS
outside of the ACO using the secondary PQRS reporting period, our
proposal to classify their quality composite for the VM for the CY 2017
payment adjustment period as ``average quality.'' Their cost composite
will be classified as ``average cost'' (79 FR 67943).
To ensure budget neutrality, we first aggregate the downward
payment adjustments in Tables 54 and 55 for those groups and solo
practitioners in Category 1 with the automatic downward payment
adjustments of -2.0 percent or -4.0 percent for groups and solo
practitioners subject to the VM that fall within Category 2. Using the
aggregate downward payment adjustment amount, we then calculate the
upward payment adjustment factor (x). We plan to incorporate
assumptions about the number of physicians in groups and physician solo
practitioners in the ACOs that did not successfully report their CY
2015 quality data whose status could potentially change from Category 2
to Category 1 if the group or solo practitioner satisfactorily report
their 2016 data during the secondary PQRS reporting period.
Additionally, as we had done when calculating the upward payment
adjustment factor for the 2016 VM, we will also incorporate adjustments
made for estimated changes in physician behavior (i.e., changes in the
volume and/or intensity of services delivered and shifting of services
to TINs that receive higher VM adjustments) and estimated impact of
pending PQRS and VM informal reviews. These calculations will be done
after the performance period has ended and announced around the start
of the payment adjustment year after the informal review period ends.
On September 26, 2016, we made the 2015 Annual QRURs available to
all groups and solo practitioners based on their performance in CY
2015. We also completed a preliminary analysis (based on results
included in the 2015 Annual QRURs and prior to accounting for the
informal review process) of the impact of the VM in CY 2017 on
physicians in groups with 2 or more EPs and physician solo
practitioners based on their performance in CY 2015. A summary of the
results for groups and solo practitioners subject to the 2017 VM is
presented below.
There are 208,832 groups and physician solo practitioners (as
identified by their Taxpayer Identification Number (TIN)) consisting of
885,108 physicians whose physicians' payments under the Medicare PFS
will be subject to the VM in the CY 2017 payment adjustment period.
These counts include both TINs that participated in a Shared Savings
Program ACO in CY 2015 and TINs that did not. Of all the physicians
subject to the CY 2017 VM, approximately 65 percent of the physicians
(577,959 physicians) are in TINs that met the criteria for inclusion in
Category 1 and are subject to the quality-tiering methodology in order
to calculate their CY 2017 VM; and approximately 35 percent of the
physicians (307,149 physicians) are in TINs that are Category 2.
Physicians in Category 2 TINs with between 1 to 9 EPs will be subject
to an automatic -2.0 percent payment adjustment, while physicians in
Category 2 TINs with 10 or more EPs will be subject to an automatic -
4.0 percent payment adjustment under the VM during the CY 2017 payment
adjustment period for failing to meet quality reporting requirements.
For physicians (428,461) that are in Category 1 TINs that did not
participate in a Shared Savings Program ACO (61,445) in CY 2015, Tables
56 and 57 show the distribution of these physicians and TINs with
between 1 to 9 EPs and 10 or more EPs, respectively, into the various
quality and cost tiers. The results show that 2,351 TINs consisting of
12,026 physicians will receive an upward payment adjustment; 58,099
TINs consisting of 384,922 physicians will receive a neutral payment
adjustment; and 995 TINs consisting of 31,513 physicians will receive a
downward payment adjustment under the VM in CY 2017.

Table 56--Preliminary Distribution of Category 1 Non-Shared Savings Program TINs With Between 1 to 9 EPs (and
Physicians in the TINs) Under the CY 2017 VM
[53,119 TINs; 101,168 physicians]
----------------------------------------------------------------------------------------------------------------
Cost/quality Low quality Average quality High quality
----------------------------------------------------------------------------------------------------------------
Low Cost............................. +0.0% (6 TINs; 7 +1.0x (36 TINs; 72 +2.0x (8 TINs; 28
physicians). physicians). physicians).
+2.0x* (36 TINs; 75 +3.0x* (11 TINs; 32
physicians). physicians).
Average Cost......................... +0.0% (4,632 TINs; +0.0% (44,895 TINs; +1.0x (1,478 TINs;
9,009 physicians). 85,466 physicians). 2,480 physicians)
+2.0x* (531 TINs; 1,104
physicians).
High Cost............................ +0.0% (516 TINs; 943 +0.0% (948 TINs; 1,889 +0.0% (22 TINs; 63
physicians). physicians). physicians).
----------------------------------------------------------------------------------------------------------------
* These TINs were eligible for an additional +1.0x for reporting measures and having an average beneficiary risk
score in the top 25 percent of all beneficiary risk scores.

Table 57--Preliminary Distribution of Category 1 Non-Shared Savings Program TINs With 10 or More EPs (and
Physicians in the TINs) Under the CY 2017 VM
[8,326 TINs; 327,293 physicians]
----------------------------------------------------------------------------------------------------------------
Cost/quality Low quality Average quality High quality
----------------------------------------------------------------------------------------------------------------
Low Cost............................. +0.0% (3 TINs; 149 +2.0x (11 TINs; 383 +4.0x (0 TINs; 0
physicians). physicians). physicians).
+3.0x* (24 TINs; 2,414 +5.0x* (3 TINs; 69
physicians). physicians).
Average Cost......................... -2.0% (612 TINs; 17,272 +0.0% (7,069 TINs; +2.0x (95 TINs; 2,439
physicians). 287,111 physicians). physicians)
+3.0x* (118 TINs; 2,930
physicians).

[[Page 80550]]

High Cost............................ -4.0% (122 TINs; 4,051 -2.0% (261 TINs; 10,190 +0.0% (8 TINs; 285
physicians). physicians). physicians)
----------------------------------------------------------------------------------------------------------------
* These TINs were eligible for an additional +1.0x for reporting measures and having an average beneficiary risk
score in the top 25 percent of all beneficiary risk scores.

For physicians (149,498) that are in Category 1 TINs that
participated in a Shared Savings Program ACO (12,500) in CY 2015, Table
58 shows the distribution of the 389 ACOs into the various quality
tiers along with the number of physicians in the ACOs. The results show
that physicians in participant TINs in 3 ACOs will receive an upward
payment adjustment; physicians in participant TINs in 382 ACOs will
receive a neutral payment adjustment; and physicians in participant
TINS with 10 or more EPs in 4 ACOs will receive a downward payment
adjustment under the VM in CY 2017. Physicians in ACO TINs are more
likely to be in a Category 1 TIN compared to those in non-ACO TINs and
are less likely to get the downward adjustment based on performance
compared to those in Category 1 non-ACO TINs. Physicians in ACOs are
also more likely to get either an average or upward adjustment under
the VM compared to physicians overall. The VM is applied at the TIN-
level, and the amount of the upward or downward adjustment will vary
based on the size of the ACO's participant TIN.

Table 58--Preliminary Distribution of Category 1 Shared Savings Program ACOs (and Physicians in the ACOs'
Participant TINs) Under the CY 2017 VM
[389 ACOs; 149,498 physicians]
----------------------------------------------------------------------------------------------------------------
Cost/quality Low quality Average quality High quality
----------------------------------------------------------------------------------------------------------------
Low Cost............................. Does not apply......... Does not apply......... Does not apply.
Average Cost......................... 4 ACOs................. 382 ACOs............... 3 ACOs.
High Cost............................ Does not apply......... Does not apply......... Does not apply.
----------------------------------------------------------------------------------------------------------------
* These TINs were eligible for an additional +1.0x for reporting measures and having an average beneficiary risk
score in the top 25 percent of all beneficiary risk scores.

The numbers presented above are preliminary numbers and may be
subject to change as a result of the informal review process. In late
2016, after the conclusion of the informal review period, we will
release updates to the number of TINs receiving upward, neutral, and
downward adjustments, along with the adjustment factor for the CY 2017
VM on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/2015-QRUR.html. We note
that in the 2015 QRUR Experience Report, which we intend to release in
early 2017, we will provide a detailed analysis of the impact of the
2017 VM policies on physicians in groups of 2 or more EPs and physician
solo practitioners subject to the VM in CY 2017, including findings
based on the data contained in the 2015 Annual QRURs for all groups and
solo practitioners.
12. Physician Self-Referral Updates
The physician self-referral update provisions are discussed in
section III.M of this final rule. We re-issued regulatory provisions
prohibiting certain per-unit of service compensation formulas for
determining rental charges in the exceptions for the rental of office
space, rental of equipment, fair market value compensation, and
indirect compensation arrangements. These provisions are necessary to
protect against potential abuses such as overutilization and stifling
patient choice. We believe that most parties comply with these
regulatory provisions since they originally became effective on October
1, 2009, and the re-issued regulations text is identical to the
existing regulations text. Therefore, we do not believe that the
provisions will have a significant burden.

G. Alternatives Considered

This final rule contains a range of policies, including some
provisions related to specific statutory provisions. The preceding
preamble provides descriptions of the statutory provisions that are
addressed, identifies those policies when discretion has been
exercised, presents rationale for our final policies and, where
relevant, alternatives that were considered. For purposes of the
payment impact on PFS services of the policies contained in this final
rule, we presented the estimated impact on total allowed charges by
specialty. The alternatives we considered, as discussed in the
preceding preamble sections, will result in different final payment
rates, and therefore, result in different estimates than those shown in
Table 52 (CY 2017 PFS Estimated Impact on Total Allowed Charges by
Specialty). For example, the estimated increases to primary care
specialties would be lessened without the revised payment policies for
certain care management and patient-specific services as described in
section II.E. of this final rule with comment period. However, because
PFS rates are based on relative value units, the final rates reflect
all of the final changes and eliminate some of the proposed changes
that might have multi-faceted impacts on the payment rates for other
services.

H. Impact on Beneficiaries

There are a number of changes in this final rule that would have an
effect on beneficiaries. In general, we believe that many of these
changes, including those intended to improve accuracy in payment
through revisions to the inputs used to calculate payments under the
PFS, would have a positive impact and improve the quality and value of
care provided to Medicare beneficiaries. In particular, we believe that
improving payment for primary care and care management services based
on more accurate assessment of patient needs and the resources involved
in caring for them will benefit beneficiaries by improving care
coordination and

[[Page 80551]]

providing more effective treatment, particularly to those beneficiaries
with behavioral health conditions.
Most of the aforementioned final policy changes could result in a
change in beneficiary liability as relates to coinsurance (which is 20
percent of the fee schedule amount, if applicable for the particular
provision after the beneficiary has met the deductible). To illustrate
this point, as shown in our public use file Impact on Payment for
Selected Procedures available on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/, the CY 2016 national payment amount in the
nonfacility setting for CPT code 99203 (Office/outpatient visit, new)
was $108.85, which means that in CY 2016, a beneficiary would be
responsible for 20 percent of this amount, or $21.77. Based on this
final rule, using the CY 2017 CF, the CY 2017 national payment amount
in the nonfacility setting for CPT code 99203, as shown in the Impact
on Payment for Selected Procedures table, is $109.46, which means that,
in CY 2017, the final beneficiary coinsurance for this service would be
$21.89.
As discussed in section III.B of this final rule, we proposed that
beginning on January 1, 2017, the FQHC base rate would be updated using
a FQHC-specific market basket instead of using the MEI to more
accurately reflect changes in the cost of furnishing FQHC services.
This would result in a higher payment to FQHCs, and since coinsurance
is 20 percent of the lesser of the FQHC's charge for the specific
payment code or the PPS rate, beneficiary coinsurance would also
increase. The FQHC market basket cost estimates in Table 53 include a
premium offset line which is the amount of cost that would be offset by
the beneficiaries. The beneficiaries would pay approximately $5 million
and $35 million over the 5 and 10 year projection windows.

I. Accounting Statement

As required by OMB Circular A-4 (available at https://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Tables 59 and 60
(Accounting Statements), we have prepared an accounting statement. This
estimate includes growth in incurred benefits from CY 2016 to CY 2017
based on the FY 2017 President's Budget baseline.

Table 59--Accounting Statement: Classification of Estimated Expenditures
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
CY 2017 Annualized Monetized Transfers Estimated increase in
expenditures of $0.2
billion for PFS CF update
From Whom To Whom? Federal Government to
physicians, other
practitioners and providers
and suppliers who receive
payment under Medicare.
------------------------------------------------------------------------

Table 60--Accounting Statement: Classification of Estimated Costs,
Transfer, and Savings
------------------------------------------------------------------------
Category Transfer
------------------------------------------------------------------------
CY 2017 Annualized Monetized Transfers of $0.0 billion.
beneficiary cost coinsurance
From Whom to Whom? Federal Government to
Beneficiaries.
------------------------------------------------------------------------

J. Conclusion

The analysis in the previous sections, together with the remainder
of this preamble, provided an initial Regulatory Flexibility Analysis.
The previous analysis, together with the preceding portion of this
preamble, provides a Regulatory Impact Analysis. In accordance with the
provisions of Executive Order 12866, this regulation was reviewed by
the Office of Management and Budget.

List of Subjects

42 CFR Part 405

Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medical devices, Medicare, Reporting and
recordkeeping requirements, Rural areas, X-rays.

42 CFR Part 410

Health facilities, Health professions, Kidney diseases,
Laboratories, Medicare, Reporting and recordkeeping requirements, Rural
areas, X-rays.

42 CFR Part 411

Kidney diseases, Medicare, Physician Referral, Reporting and
recordkeeping requirements.

42 CFR Part 414

Administrative practice and procedure, Biologics, Drugs, Health
facilities, Health professions, Kidney diseases, Medicare, Reporting
and recordkeeping requirements.

42 CFR Part 417

Administrative practice and procedure, Grant programs-health,
Health care, Health insurance, Health maintenance organizations (HMO),
Loan programs-health, Medicare, Reporting and recordkeeping
requirements.

42 CFR Part 422

Administrative practice and procedure, Health facilities, Health
maintenance organizations (HMO), Medicare, Penalties, Privacy,
Reporting and recordkeeping requirements.

42 CFR Part 423

Administrative practice and procedure, Emergency medical services,
Health facilities, Health maintenance organizations (HMO), Medicare,
Penalties, Privacy, Reporting and recordkeeping requirements.

42 CFR Part 424

Emergency medical services, Health facilities, Health professions,
Medicare, Reporting and recordkeeping requirements.

42 CFR Part 425

Administrative practice and procedure, Health facilities, Health
professions, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 460

Aged, Health care, Health records, Medicaid, Medicare, Reporting
and recordkeeping requirements.

For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

0
1. The authority citation for part 405 continues to read as follows:

Authority: Secs. 205(a), 1102, 1861, 1862(a), 1869, 1871, 1874,
1881, and 1886(k) of the Social Security Act (42 U.S.C. 405(a),
1302, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and
1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C.
263a).

0
2. Section 405.373 is amended by--
0
a. Revising paragraphs (a) introductory text and (b).
0
b. Adding paragraph (f).
The revisions and addition read as follows:

Sec. 405.373 Proceeding for offset or recoupment.

(a) General rule. Except as specified in paragraphs (b) and (f) of
this section, if

[[Page 80552]]

the Medicare Administrative Contractor or CMS has determined that an
offset or recoupment of payments under Sec. 405.371(a)(3) should be
put into effect, the Medicare Administrative Contractor must--
* * * * *
(b) Exception to recouping payment. Paragraph (a) of this section
does not apply if the Medicare Administrative Contractor, after
furnishing a provider a written notice of the amount of program
reimbursement in accordance with Sec. 405.1803, recoups payment under
paragraph (c) of Sec. 405.1803. (For provider rights in this
circumstance, see Sec. Sec. 405.1809, 405.1811, 405.1815, 405.1835,
and 405.1843.)
* * * * *
(f) Exception to offset or recoupment of payments for shared
Taxpayer Identification Number. Paragraph (a) of this section does not
apply in instances where the Medicare Administrative Contractor intends
to offset or recoup payments to the applicable provider of services or
supplier to satisfy an amount due from an obligated provider of
services or supplier when the applicable and obligated provider of
services or supplier share the same Taxpayer Identification Number.

0
3. Section 405.2413 is amended by revising paragraph (a)(5) to read as
follows:

Sec. 405.2413 Services and supplies incident to a physician's
services.

(a) * * *
(5) Furnished under the direct supervision of a physician, except
that services and supplies furnished incident to transitional care
management and chronic care management services can be furnished under
general supervision of a physician when these services or supplies are
furnished by auxiliary personnel, as defined in Sec. 410.26(a)(1) of
this chapter.
* * * * *

0
4. Section 405.2415 is amended by revising paragraph (a)(5) to read as
follows:

Sec. 405.2415 Incident to services and direct supervision.

(a) * * *
(5) Furnished under the direct supervision of a nurse practitioner,
physician assistant, or certified nurse-midwife, except that services
and supplies furnished incident to transitional care management and
chronic care management services can be furnished under general
supervision of a nurse practitioner, physician assistant, or certified
nurse-midwife, when these services or supplies are furnished by
auxiliary personnel, as defined in Sec. 410.26(a)(1) of this chapter.
* * * * *

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
5. The authority citation for part 410 continues to read as follows:

Authority: Secs. 1102, 1834, 1871, 1881, and 1893 of the Social
Security Act (42 U.S.C. 1302. 1395m, 1395hh, and 1395ddd).

0
6. Section 410.26 is amended by--
0
a. Redesignating paragraphs (a)(3) through (7) as paragraphs (a)(4)
through (8), respectively.
0
b. Adding new paragraph (a)(3).
0
c. Revising paragraph (b)(5).
The addition and revision reads as follows:

Sec. 410.26 Services and supplies incident to a physician's
professional services: Conditions.

(a) * * *
(3) General supervision means the service is furnished under the
physician's (or other practitioner's) overall direction and control,
but the physician's (or other practitioner's) presence is not required
during the performance of the service.
* * * * *
(b) * * *
(5) In general, services and supplies must be furnished under the
direct supervision of the physician (or other practitioner). Designated
care management services can be furnished under general supervision of
the physician (or other practitioner) when these services or supplies
are provided incident to the services of a physician (or other
practitioner). The physician (or other practitioner) supervising the
auxiliary personnel need not be the same physician (or other
practitioner) who is treating the patient more broadly. However, only
the supervising physician (or other practitioner) may bill Medicare for
incident to services.
* * * * *

0
7. Section 410.79 is added to subpart B to read as follows:

Sec. 410.79 Medicare diabetes prevention program expanded model:
Conditions of coverage.

(a) Medicare Diabetes Prevention Program (MDPP) services will be
available beginning on January 1, 2018.
(b) Definitions. For purposes of this section, the following
definitions apply:
Baseline weight refers to the eligible beneficiary's body weight
recorded during that beneficiary's first core session.
CDC-approved DPP curriculum refers to the content of the core
sessions, core maintenance sessions, and ongoing maintenance sessions.
The curriculum may be either the CDC-preferred curriculum as designated
by the CDC DPRP Standards or an alternative curriculum approved for use
in DPP by the CDC.
Coach refers to an individual who furnishes MDPP services on behalf
of an MDPP supplier as an employee, contractor, or volunteer.
Core maintenance sessions refer to at least 6 monthly sessions
furnished over the MDPP core benefit's months 6-12 and furnished after
the core sessions, regardless of weight loss.
Core sessions refer to at least 16 weekly sessions that are
furnished over the MDPP core benefit's months 1-6.
Diabetes Prevention Recognition Program (DPRP) refers to a program
administered by the Centers for Disease Control and Prevention (CDC)
that recognizes organizations that are able to furnish diabetes
prevention program (DPP) services, follow a CDC-approved DPP
curriculum, and meet CDC's performance standards and reporting
requirements.
Evaluation weight refers to the beneficiary's body weight updated
from the first core session and recorded before or during that
beneficiary's final core session.
Full CDC DPRP recognition refers to the designation from the CDC
that an organization has consistently furnished CDC-approved DPP
sessions, met CDC-performance standards and met CDC reporting
requirements for at least 24-36 months following the organization's
application to participate in the DPRP.
Maintenance of weight loss refers to achieving the required minimum
weight loss from baseline weight at any point during each 3-month core
maintenance or ongoing maintenance session bundle.
Maintenance session bundle refers to each 3-month interval of core
maintenance or ongoing maintenance sessions. They must include at least
one maintenance session furnished in each of the 3 months, for a
minimum of three sessions in each bundle.
MDPP core benefit refers to a 12-month intensive behavioral change
program that applies a CDC-approved curriculum. The core benefit
consists of at least 16 weekly core sessions over the first 6 months
and at least 6 monthly core maintenance sessions over the second 6
months, furnished regardless of weight loss.
MDPP eligible beneficiary refers to an individual who satisfies the
criteria defined in paragraph (c)(1) of this section.

[[Page 80553]]

MDPP services refer to structural health behavior change sessions
with the goal of preventing diabetes among individuals with pre-
diabetes. MDPP services consist of core sessions, core maintenance
sessions, and ongoing maintenance sessions that follow a CDC-approved
curriculum. The sessions provide practical training in long-term
dietary change, increased physical activity, and problem-solving
strategies for overcoming challenges to maintaining weight loss and a
healthy lifestyle.
MDPP supplier refers to an entity that has enrolled in Medicare,
furnishes MDPP services, and has either preliminary or full CDC DPRP
recognition.
Medicare Diabetes Prevention Program (MDPP) refers to an expanded
model test under section 1115A(c) of the Act that makes MDPP services
available to MDPP eligible beneficiaries.
National Diabetes Prevention Program (DPP) refers to an evidence-
based intervention targeted to individuals with pre-diabetes that is
furnished in community and health care settings and administered by the
Centers for Disease Control and Prevention (CDC).
Ongoing maintenance sessions refer to monthly sessions furnished
after the 12-month core benefit has been completed and that teach a
CDC-approved curriculum.
Required minimum weight loss refers to the percentage by which the
beneficiary's evaluation weight is less than the baseline weight. The
required minimum weight loss percentage is 5 percent.
(c) Program requirements--(1) Beneficiary eligibility. Medicare
beneficiaries are eligible for MDPP services if they meet all of the
following criteria:
(i) Are enrolled in Medicare Part B.
(ii) Have as of the date of attendance at the first core session a
body mass index (BMI) of at least 25 if not self-identified as Asian
and a BMI of at least 23 if self-identified as Asian.
(iii) Have, within the 12 months prior to attending the first core
session, a hemoglobin A1c test with a value between 5.7 and 6.4
percent, a fasting plasma glucose of 110-125 mg/dL, or a 2-hour plasma
glucose of 140-199 mg/dL (oral glucose tolerance test).
(iv) Have no previous diagnosis of type 1 or type 2 diabetes.
(v) Do not have end-stage renal disease (ESRD).
(2) MDPP services--(i) Core sessions and core maintenance sessions.
MDPP suppliers must furnish to MDPP beneficiaries the MDPP core
benefit. 16 core sessions must be furnished at least a week apart over
a period of at least 16 weeks to 26 weeks. At least one core
maintenance session must be furnished in each of the second 6 months.
All core sessions and core maintenance sessions must have a duration of
approximately one hour. MDPP suppliers must address at least 16
different curriculum topics in the core sessions and at least 6
different curriculum topics in the core maintenance sessions.
(ii) Ongoing maintenance sessions. MDPP suppliers must furnish each
ongoing maintenance session bundle after the core benefit to MDPP
eligible beneficiaries who have achieved maintenance of weight loss
during the previous maintenance session bundle. All ongoing maintenance
sessions must have a duration of approximately one hour. All curriculum
topics may be offered except for the introductory sessions.
(d) Limitations on coverage of MDPP services. (1) The MDPP core
benefit is available only once per lifetime per MDPP eligible
beneficiary.
(2) Ongoing maintenance sessions are available only if the MDPP
eligible beneficiary has achieved maintenance of weight loss.

PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE
PAYMENT

0
8. The authority citation for part 411 continues to read as follows:

Authority: Secs. 1102, 1860D-1 through 1860D-42, 1871, and 1877
of the Social Security Act (42 U.S.C. 1302, 1395w-101 through 1395w-
152, 1395hh, and 1395nn).

0
9. Section 411.357 is amended by revising paragraphs (a)(5)(ii)(B),
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) to read as follows:

Sec. 411.357 Exceptions to the referral prohibition related to
compensation arrangements.

* * * * *
(a) * * *
(5) * * *
(ii) * * *
(B) Per-unit of service rental charges, to the extent that such
charges reflect services provided to patients referred by the lessor to
the lessee.
* * * * *
(b) * * *
(4) * * *
(ii) * * *
(B) Per-unit of service rental charges, to the extent that such
charges reflect services provided to patients referred by the lessor to
the lessee.
* * * * *
(l) * * *
(3) * * *
(ii) Per-unit of service rental charges, to the extent that such
charges reflect services provided to patients referred by the lessor to
the lessee.
* * * * *
(p) * * *
(1) * * *
(ii) * * *
(B) Per-unit of service rental charges, to the extent that such
charges reflect services provided to patients referred by the lessor to
the lessee.
* * * * *

0
10. Section 411.372 is amended by revising paragraph (a) to read as
follows:

Sec. 411.372 Procedure for submitting a request.

(a) Format for a request. A party or parties must submit a request
for an advisory opinion to CMS according to the instructions specified
on the CMS Web site.
* * * * *

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

0
11. The authority citation for part 414 continues to read as follows:

Authority: Secs. 1102, 1871, and 1881(b)(l) of the Social
Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)).

0
12. Section 414.22 is amended by revising paragraphs (b)(5)
introductory text and (b)(5)(i)(A) and (B) to read as follows:

Sec. 414.22 Relative value units (RVUs).

* * * * *
(b) * * *
(5) For services furnished in 2002 and subsequent years, the
practice expense RVUs are based entirely on relative practice expense
resources.
(i) * * *
(A) Facility practice expense RVUs. The facility practice expense
RVUs apply to services furnished to patients in a hospital, a skilled
nursing facility, a community mental health center, a hospice, or an
ambulatory surgical center, or in a wholly owned or wholly operated
entity providing preadmission services under Sec. 412.2(c)(5) of this
chapter, or via telehealth under Sec. 410.78 of this chapter.
(B) Nonfacility practice expense RVUs. The nonfacility practice
expense RVUs apply to services furnished to patients in all locations
other than those listed in paragraph (b)(5)(i)(A) of this section, but
not limited to, a physician's office, the patient's home, a nursing
facility, or a comprehensive outpatient rehabilitation facility (CORF).
* * * * *

[[Page 80554]]

Sec. 414.32 [Removed]

0
13. Section 414.32 is removed.

0
14. Section 414.90 is amended by adding paragraphs (j)(1)(ii),
(j)(4)(v), (j)(7)(viii) and (k)(4)(ii) to read as follows:

Sec. 414.90 Physician Quality Reporting System (PQRS).

* * * * *
(j) * * *
(1) * * *
(ii) Secondary Reporting Period for the 2017 PQRS payment
adjustment for certain eligible professionals or group practices-
Individual eligible professionals or group practices, who bill under
the TIN of an ACO participant if the ACO failed to report data on
behalf of such EPs or group practices during the previously established
reporting period for the 2017 PQRS payment adjustment, may separately
report during a secondary reporting period for the 2017 PQRS payment
adjustment. The secondary reporting period for the 2017 PQRS payment
adjustment for the affected individual eligible professionals or group
practices is January 1, 2016 through December 31, 2016.
* * * * *
(4) * * *
(v) Paragraphs (j)(8)(ii), (iii), and (iv) of this section apply to
individuals reporting using the secondary reporting period established
under paragraph (j)(1)(ii) of this section for the 2017 PQRS payment
adjustment.
* * * * *
(7) * * *
(viii) Paragraphs (j)(9)(ii), (iii), and (iv) of this section apply
to group practices reporting using the secondary reporting period
established under paragraph (j)(1)(ii) of this section for the 2017
PQRS payment adjustment.
* * * * *
(k) * * *
(4) * * *
(ii) Section 414.90(k)(5) applies to individuals and group
practices reporting using the secondary reporting period established
under paragraph (j)(1)(ii) of this section for the 2017 PQRS payment
adjustment.
* * * * *

0
15. Section 414.94 is amended by--
0
a. Amending paragraph (b) to add the definitions of ``Applicable
payment system'' and ``Clinical decision support mechanism'' in
alphabetical order.
0
b. Adding paragraphs (e)(5), (g), (h), and (i).
The additions read as follows:

Sec. 414.94 Appropriate use criteria for advanced diagnostic imaging
services.

* * * * *
(b) * * *
Applicable payment system means the following:
(i) The physician fee schedule established under section 1848(b) of
the Act;
(ii) The prospective payment system for hospital outpatient
department services under section 1833(t) of the Act; and
(iii) The ambulatory surgical center payment systems under section
1833(i) of the Act.
* * * * *
Clinical decision support mechanism (CDSM) means the following: an
interactive, electronic tool for use by clinicians that communicates
AUC information to the user and assists them in making the most
appropriate treatment decision for a patient's specific clinical
condition. Tools may be modules within or available through certified
EHR technology (as defined in section 1848(o)(4)) of the Act or private
sector mechanisms independent from certified EHR technology or
established by the Secretary.
* * * * *
(e) * * *
(5) Priority clinical areas include the following:
(i) Coronary artery disease (suspected or diagnosed).
(ii) Suspected pulmonary embolism.
(iii) Headache (traumatic and non-traumatic).
(iv) Hip pain.
(v) Low back pain.
(vi) Shoulder pain (to include suspected rotator cuff injury).
(vii) Cancer of the lung (primary or metastatic, suspected or
diagnosed).
(viii) Cervical or neck pain.
* * * * *
(g) Qualified clinical decision support mechanisms (CDSMs).
Qualified CDSMs are those specified as such by CMS. Qualified CDSMs
must adhere to the requirements described in paragraph (g)(1) of this
section.
(1) Requirements for qualification of CDSMs. A CDSM must meet all
of the following requirements:
(i) Make available specified applicable AUC and its related
supporting documentation.
(ii) Identify the appropriate use criterion consulted if the CDSM
makes available more than one criterion relevant to a consultation for
a patient's specific clinical scenario.
(iii) Make available, at a minimum, specified applicable AUC that
reasonably address common and important clinical scenarios within all
priority clinical areas identified in paragraph (e)(5) of this section.
(iv) Be able to incorporate specified applicable AUC from more than
one qualified PLE.
(v) Determines, for each consultation, the extent to which the
applicable imaging service is consistent with specified applicable AUC.
(vi) Generate and provide a certification or documentation at the
time of order that documents which qualified CDSM was consulted; the
name and national provider identifier (NPI) of the ordering
professional that consulted the CDSM; whether the service ordered would
adhere to specified applicable AUC; whether the service ordered would
not adhere to specified applicable AUC; or whether the specified
applicable AUC consulted was not applicable to the service ordered.
Certification or documentation must:
(A) Be generated each time an ordering professional consults a
qualified CDSM.
(B) Include a unique consultation identifier generated by the CDSM.
(vii) Modifications to AUC within the CDSM must comply with the
following timeline requirements:
(A) Make available updated AUC content within 12 months from the
date the qualified PLE updates AUC.
(B) A protocol must be in place to expeditiously remove AUC
determined by the qualified PLE to be potentially dangerous to patients
and/or harmful if followed.
(C) Specified applicable AUC that reasonably address common and
important clinical scenarios within any new priority clinical area must
be made available for consultation through the qualified CDSM within 12
months of the priority clinical area being finalized by CMS.
(viii) Meet privacy and security standards under applicable
provisions of law.
(ix) Provide to the ordering professional aggregate feedback
regarding their consultations with specified applicable AUC in the form
of an electronic report on at least an annual basis.
(x) Maintain electronic storage of clinical, administrative, and
demographic information of each unique consultation for a minimum of 6
years.
(xi) Comply with modification(s) to any requirements under
paragraph (g)(1) of this section made through rulemaking within 12
months of the effective date of the modification.
(xii) Notify ordering professionals upon de-qualification.
(2) Process to specify qualified CDSMs. (i) The CDSM developer must

[[Page 80555]]

submit an application to CMS for review that documents adherence to
each of the CDSM requirements outlined in paragraph (g)(1) of this
section;
(ii) Receipt of applications. (A) Applications must be received by
CMS annually by January 1 (except as stated in paragraph (g)(2)(ii)(B)
of this section).
(B) For CDSM applicants seeking qualification in CY 2017,
applications must be submitted by March 1, 2017; and
(1) Applications that document current adherence to qualified CDSM
requirements will receive full qualification.
(2) Applications that do not document current adherence to each
qualified CDSM requirement, but that document how and when each
requirement is reasonably expected to be met, will receive preliminary
qualification.
(3) A preliminary qualification period begins under paragraph (2)
on June 30, 2017 and ends on the effective date of the requirements
under sections 1834(q)(4)(A) and 1834(q)(4)(B) of the Act.
(4) A CDSM with preliminary qualification will become fully
qualified by the end of the preliminary qualification period, or
earlier if CMS determines that the CDSM has demonstrated adherence to
each qualified CDSM requirement, unless we determine that the CDSM
fails to meet all requirements (including those requirements they
expected to meet in paragraph (g)(2)(ii)(B)(2) of this section) by the
end of the preliminary qualification period.
(iii) All qualified CDSMs specified by CMS in each year will be
included on the list of specified qualified CDSMs posted to the CMS Web
site by June 30 of that year; and
(iv) Qualified CDSMs are specified by CMS as such for a period of 5
years.
(v) Qualified CDSMs are required to re-apply during the fifth year
after they are specified by CMS in order to maintain their status as
qualified CDSMs. This application must be received by CMS by January 1
of the 5th year after the most recent approval date.
(h) Identification of non-adherence to requirements for qualified
CDSMs. (1) If a qualified CDSM is found non-adherent to the
requirements in paragraph (g)(1) of this section, CMS may terminate its
qualified status or may consider this information during
requalification.
(i) Exceptions. Consulting and reporting requirements are not
required for orders for applicable imaging services made by ordering
professionals under the following circumstances:
(1) Emergency services when provided to individuals with emergency
medical conditions as defined in section 1867(e)(1) of the Act.
(2) For an inpatient and for which payment is made under Medicare
Part A.
(3) Ordering professionals who are granted a significant hardship
exception to the Medicare EHR Incentive Program payment adjustment for
that year under Sec. 495.102(d)(4) of this chapter, except for those
granted such an exception under Sec. 495.102(d)(4)(iv)(C) of this
chapter.

0
16. Section 414.1210 is amended by revising paragraphs (b)(2)(i)(B),
(C), (D), and (F) to read as follows:

Sec. 414.1210 Application of the value-based payment modifier.

* * * * *
(b) * * *
(2) * * *
(i) * * *
(B) For groups and solo practitioners that participate in a Shared
Savings Program ACO that successfully reports quality data as required
by the Shared Savings Program under Sec. 425.504 of this chapter, the
quality composite score is calculated under Sec. 414.1260(a) using
quality data reported by the ACO for the performance period through the
ACO GPRO Web interface as required under Sec. 425.504(a)(1) of this
chapter or another mechanism specified by CMS and the ACO all-cause
readmission measure. Groups and solo practitioners that participate in
two or more ACOs during the applicable performance period receive the
quality composite score of the ACO that has the highest numerical
quality composite score. For the CY 2018 payment adjustment period, the
CAHPS for ACOs survey also will be included in the quality composite
score. For the CY 2017 and 2018 payment adjustment periods, for groups
and solo practitioners who participate in a Shared Savings Program ACO
that does not successfully report quality data as required by the
Shared Savings Program under Sec. 425.504 and who meet the
requirements to avoid the PQRS payment adjustment for CY 2018 by
reporting to the PQRS outside the ACO, the quality composite is
classified as ``average'' under Sec. 414.1275(b).
(C) For the CY 2017 payment adjustment period, the value-based
payment modifier adjustment will be equal to the amount determined
under Sec. 414.1275 for the payment adjustment period, except that if
the ACO (or groups and solo practitioners that participate in the ACO)
does not successfully report quality data as described in paragraph
(b)(2)(i)(B) of this section for the performance period, such
adjustment will be equal to -4% for groups of physicians with 10 or
more eligible professionals and equal to -2% for groups of physicians
with two to nine eligible professionals and for physician solo
practitioners. If the ACO has an assigned beneficiary population during
the performance period with an average risk score in the top 25 percent
of the risk scores of beneficiaries nationwide, and a group of
physician or physician solo practitioner that participates in the ACO
during the performance period is classified as high quality/average
cost under quality-tiering for the CY 2017 payment adjustment period,
the group or solo practitioner receives an upward adjustment of +3 x
(rather than +2 x) if the group has 10 or more eligible professionals
or +2 x (rather than +1 x) for a solo practitioner or the group has two
to nine eligible professionals.
(D) For the CY 2018 payment adjustment period, the value-based
payment modifier adjustment will be equal to the amount determined
under Sec. 414.1275 for the payment adjustment period, except that if
the ACO (or groups and solo practitioners that participate in the ACO)
does not successfully report quality data as described in paragraph
(b)(2)(i)(B) of this section for the performance period, such
adjustment will be equal to the downward payment adjustment amounts
described at Sec. 414.1270(d)(1). If the ACO has an assigned
beneficiary population during the performance period with an average
risk score in the top 25 percent of the risk scores of beneficiaries
nationwide, and a group or solo practitioner that participates in the
ACO during the performance period is classified as high quality/average
cost under quality-tiering for the CY 2018 payment adjustment period,
the group or solo practitioner receives an upward adjustment of +3 x
(rather than +2 x) if the group of physicians has 10 or more eligible
professionals, +2 x (rather than +1 x) for a physician solo
practitioner or if the group of physicians has two to nine eligible
professionals, or +2 x (rather than +1 x) for a solo practitioner who
is a nonphysician eligible professional or if the group consists of
nonphysician eligible professionals.
* * * * *
(F) For groups and solo practitioners that participate in a Shared
Savings Program ACO that successfully reports quality data as required
by the Shared Savings Program under Sec. 425.504 of this chapter, the
same value-based payment modifier adjustment will be applied in the
payment adjustment period to all groups based on size as specified
under Sec. 414.1275 and solo practitioners that

[[Page 80556]]

participated in the ACO during the performance period.
* * * * *

PART 417--HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL
PLANS, AND HEALTH CARE PREPAYMENT PLANS

0
17. The authority citation for part 417 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh), secs. 1301, 1306, and 1310 of the Public
Health Service Act (42 U.S.C. 300e, 300e-5, and 300e-9), and 31
U.S.C. 9701.

0
18. Section 417.478 is amended by adding paragraph (e) to read as
follows:

Sec. 417.478 Requirements of other laws and regulations.

* * * * *
(e) Sections 422.222 and 422.224 of this chapter which requires all
providers or suppliers that are types of individuals or entities that
can enroll in Medicare in accordance with section 1861 of the Act, to
be enrolled in Medicare in an approved status and prohibits payment to
providers and suppliers that are excluded or revoked. This includes
locum tenens suppliers and, if applicable, incident-to suppliers.

0
19. Section 417.484 is amended by adding paragraph (b)(3) to read as
follows:

Sec. 417.484 Requirement applicable to related entities.

* * * * *
(b) * * *
(3) All providers or suppliers that are types of individuals or
entities that can enroll in Medicare in accordance with section 1861 of
the Act, are enrolled in Medicare in an approved status.

PART 422--MEDICARE ADVANTAGE PROGRAM

0
20. The authority citation for part 422 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

0
21. Section 422.1 is amended by redesignating paragraphs (a)(1)(i)
through (x) as paragraphs (a)(1)(ii) through (xi) and adding new
paragraph (a)(1)(i) to read as follows:

Sec. 422.1 Basis and scope.

(a) * * *
(1) * * *
(i) 1106--Disclosure of information in possession of agency.
* * * * *

0
22. Section 422.204 is amended by adding paragraph (b)(5) to read as
follows:

Sec. 422.204 Provider selection and credentialing.

* * * * *
(b) * * *
(5) Ensures compliance with the provider and supplier enrollment
requirements at Sec. 422.222.

0
23. Section 422.222 is added to subpart E to read as follows:

Sec. 422.222 Enrollment of MA organization network providers and
suppliers; first-tier, downstream, and related entities (FDRs); cost
HMO or CMP, and demonstration and pilot programs.

(a) Providers or suppliers that are types of individuals or
entities that can enroll in Medicare in accordance with section 1861 of
the Act, must be enrolled in Medicare and be in an approved status in
Medicare in order to provide health care items or services to a
Medicare enrollee who receives his or her Medicare benefit through an
MA organization. This requirement applies to all of the following
providers and suppliers:
(1) Network providers and suppliers.
(2) First-tier, downstream, and related entities (FDR).
(3) Providers and suppliers in Cost HMOs or CMPs, as defined in 42
CFR part 417.
(4) Providers and suppliers participating in demonstration
programs.
(5) Providers and suppliers in pilot programs.
(6) Locum tenens suppliers.
(7) Incident-to suppliers.
(b) MA organizations that do not ensure that providers and
suppliers comply with paragraph (a) of this section, may be subject to
sanctions under Sec. 422.750 and termination under Sec. 422.510.

0
24. Section 422.224 is added to subpart E to read as follows:

Sec. 422.224 Payment to providers or suppliers excluded or revoked.

(a) An MA organization may not pay, directly or indirectly, on any
basis, for items or services (other than emergency and urgently needed
services as defined in Sec. 422.113) furnished to a Medicare enrollee
by any individual or entity that is excluded by the Office of the
Inspector General (OIG) or is revoked from the Medicare program except
as provided.
(b) If an MA organization receives a request for payment by, or on
behalf of, an individual or entity that is excluded by the OIG or is
revoked in the Medicare program, the MA organization must notify the
enrollee and the excluded or revoked individual or entity in writing,
as directed by contract or other direction provided by CMS, that
payments will not be made. Payment may not be made to, or on behalf of,
an individual or entity that is excluded by the OIG or is revoked in
the Medicare program.

0
25. Section 422.250 is revised to read as follows:

Sec. 422.250 Basis and scope.

This subpart is based largely on section 1854 of the Act, but also
includes provisions from sections 1853 and 1858 of the Act, and is also
based on section 1106 of the Act. It sets forth the requirements for
the Medicare Advantage bidding payment methodology, including CMS'
calculation of benchmarks, submission of plan bids by Medicare
Advantage (MA) organizations, establishment of beneficiary premiums and
rebates through comparison of plan bids and benchmarks, negotiation and
approval of bids by CMS, and the release of MA bid submission data.

0
26. Section 422.272 is added to subpart F to read as follows:

Sec. 422.272 Release of MA bid pricing data.

(a) Terminology. For purposes of this section, the term ``MA bid
pricing data'' means the following information that MA organizations
must submit for each MA plan bid for the annual bid submission:
(1) The pricing-related information described at Sec.
422.254(a)(1); and
(2) The information required for MSA plans, described at Sec.
422.254(e).
(b) Release of MA bid pricing data. Subject to paragraph (c) of
this section and to the annual timing identified in paragraph (d) of
this section, CMS will release to the public MA bid pricing data for MA
plan bids accepted or approved by CMS for a contract year under Sec.
422.256. The annual release will contain MA bid pricing data from the
final list of MA plan bids accepted or approved by CMS for a contract
year that is at least 5 years prior to the upcoming calendar year.
(c) Exclusions from release of MA bid pricing data. For the purpose
of this section, the following information is excluded from the data
released under paragraph (b) of this section:
(1) For an MA plan bid that includes Part D benefits, the
information described at Sec. 422.254(b)(1)(ii), (c)(3)(ii), and
(c)(7).
(2) Additional information that CMS requires to verify the
actuarial bases of

[[Page 80557]]

the bids for MA plans for the annual bid submission, as follows:
(i) Narrative information on base period factors, manual rates,
cost-sharing methodology, optional supplement benefits, and other
required narratives.
(ii) Supporting documentation.
(3) Any information that could be used to identify Medicare
beneficiaries or other individuals.
(4) Bid review correspondence and reports.
(d) Timing of data release. CMS will release MA bid pricing data as
provided in paragraph (b) of this section on an annual basis after the
first Monday in October.

0
27. Section 422.501 is amended by adding paragraph (c)(1)(iv) and
revising paragraph (c)(2) to read as follows:

Sec. 422.501 Application requirements.

* * * * *
(c) * * *
(1) * * *
(iv) Documentation that all providers or suppliers in the MA or MA-
PD plan that are types of individuals or entities that can enroll in
Medicare in accordance with section 1861 of the Act, are enrolled in an
approved status.
(2) The authorized individual must thoroughly describe how the
entity and MA plan meet, or will meet, all the requirements described
in this part, including providing documentation that all providers and
suppliers referenced in Sec. 422.222 are enrolled in Medicare in an
approved status.
* * * * *

0
28. Section 422.504 is amended by--
0
a. Revising paragraph (a)(6).
0
b. Adding paragraph (i)(2)(v).
0
c. Revising paragraph (n).
The revisions and addition read as follows:

Sec. 422.504 Contract provisions.

* * * * *
(a) * * *
(6) To comply with all applicable provider and supplier
requirements in subpart E of this part, including provider
certification requirements, anti-discrimination requirements, provider
participation and consultation requirements, the prohibition on
interference with provider advice, limits on provider indemnification,
rules governing payments to providers, limits on physician incentive
plans, and Medicare provider and supplier enrollment requirements.
* * * * *
(i) * * *
(2) * * *
(v) They will require all of their providers and suppliers to be
enrolled in Medicare in an approved status consistent with Sec.
422.222.
* * * * *
(n) Acknowledgements of CMS release of data--(1) Summary CMS
payment data. The contract must provide that the MA organization
acknowledges that CMS releases to the public summary reconciled CMS
payment data after the reconciliation of Part C and Part D payments for
the contract year as follows:
(i) For Part C, the following data--
(A) Average per member per month CMS payment amount for A/B
(original Medicare) benefits for each MA plan offered, standardized to
the 1.0 (average risk score) beneficiary.
(B) Average per member per month CMS rebate payment amount for each
MA plan offered (or, in the case of MSA plans, the monthly MSA deposit
amount).
(C) Average Part C risk score for each MA plan offered.
(D) County level average per member per month CMS payment amount
for each plan type in that county, weighted by enrollment and
standardized to the 1.0 (average risk score) beneficiary in that
county.
(ii) For Part D plan sponsors, plan payment data in accordance with
Sec. 423.505(o) of this subchapter.
(2) MA bid pricing data and Part C MLR data. The contract must
provide that the MA organization acknowledges that CMS releases to the
public data as described at Sec. Sec. 422.272 and 422.2490.
* * * * *

0
29. Section 422.510 is amended by adding paragraph (a)(4)(xiii) to read
as follows:

Sec. 422.510 Termination of contract by CMS.

(a) * * *
(4) * * *
(xiii) Fails to meet provider and supplier enrollment requirements
in accordance with Sec. Sec. 422.222 and 422.224.
* * * * *

0
30. Section 422.752 is amended by adding paragraph (a)(13) to read as
follows:

Sec. 422.752 Basis for imposing intermediate sanctions and civil
money penalties.

(a) * * *
(13) Fails to comply with Sec. Sec. 422.222 and 422.224, that
requires the MA organization to ensure providers and suppliers are
enrolled in Medicare and not make payment to excluded or revoked
individuals or entities.
* * * * *

0
31. Section 422.2400 is revised to read as follows:

Sec. 422.2400 Basis and scope.

This subpart is based on sections 1857(e)(4), 1860D-12(b)(3)(D),
and 1106 of the Act, and sets forth medical loss ratio requirements for
Medicare Advantage organizations, financial penalties and sanctions
against MA organizations when minimum medical loss ratios are not
achieved by MA organizations, and release of medical loss ratio data to
entities outside of CMS.

0
32. Section 422.2490 is added to subpart X to read as follows:

Sec. 422.2490 Release of Part C MLR data.

(a) Terminology. Subject to the exclusions in paragraph (b) of this
section, Part C MLR data consists of the information contained in
reports submitted under Sec. 422.2460.
(b) Exclusions from Part C MLR data. For the purpose of this
section, the following items are excluded from Part C MLR data:
(1) Narrative descriptions that MA organizations submit to support
the information reported to CMS pursuant to the reporting requirements
at Sec. 422.2460, such as descriptions of expense allocation methods.
(2) Information that is reported at the plan level, such as the
number of member months associated with each plan under a contract,
including information submitted for a contract consisting of only one
plan.
(3) Any information that could be used to identify Medicare
beneficiaries or other individuals.
(4) MLR review correspondence.
(5) Any information for a contract for those contract years for
which the contract is determined to be non-credible, as defined in
accordance with Sec. 422.2440(d).
(c) Data release. CMS releases to the public Part C MLR data, for
each contract for each contract year, no earlier than 18 months after
the end of the applicable contract year.

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
33. The authority citation for part 423 continues to read as follows:

Authority: Sections 1102, 1106, 1860D-1 through 1860D-42, and
1871 of the Social Security Act (42 U.S.C. 1302, 1306, 1395w-101
through 1395w-152, and 1395hh).

0
34. Section 423.505 is amended by revising paragraph (o) to read as
follows:

Sec. 423.505 Contract provisions.

* * * * *
(o) Acknowledgements of CMS release of data--(1) Summary CMS
payment data. The contract must provide that the

[[Page 80558]]

Part D sponsor acknowledges that CMS releases to the public summary
reconciled Part D payment data after the reconciliation of Part D
payments for the contract year as follows:
(i) The average per member per month Part D direct subsidy
standardized to the 1.0 (average risk score) beneficiary for each Part
D plan offered.
(ii) The average Part D risk score for each Part D plan offered.
(iii) The average per member per month Part D plan low-income cost
sharing subsidy for each Part D plan offered.
(iv) The average per member per month Part D Federal reinsurance
subsidy for each Part D plan offered.
(v) The actual Part D reconciliation payment data summarized at the
Parent Organization level including breakouts of risk sharing,
reinsurance, and low income cost sharing reconciliation amounts.
(2) Part D MLR data. The contract must provide that the Part D
sponsor acknowledges that CMS releases to the public data as described
at Sec. 423.2490.
* * * * *

0
35. Section 423.2400 is revised to read as follows:

Sec. 423.2400 Basis and scope.

This subpart is based on sections 1857(e)(4), 1860D-12(b)(3)(D),
and 1106 of the Act, and sets forth medical loss ratio requirements for
Part D sponsors, financial penalties and sanctions against Part D
sponsors when minimum medical loss ratios are not achieved by Part D
sponsors and release of medical loss ratio data to entities outside of
CMS.

0
36. Section 423.2490 is added to subpart X to read as follows:

Sec. 423.2490 Release of Part D MLR data.

(a) Terminology. Subject to the exclusions in paragraph (b) of this
section, Part D MLR data consists of the information contained in
reports submitted under Sec. 423.2460.
(b) Exclusions from Part D MLR data. For the purpose of this
section, the following items are excluded from Part D MLR data:
(1) Narrative descriptions that Part D sponsors submit to support
the information reported to CMS pursuant to the reporting requirements
at Sec. 423.2460, such as descriptions of expense allocation methods.
(2) Information that is reported at the plan level, such as the
number of member months associated with each plan under a contract,
including information submitted for a contract consisting of only one
plan.
(3) Any information that could be used to identify Medicare
beneficiaries or other individuals.
(4) MLR review correspondence.
(5) Any information for a contract for those contract years for
which the contract is determined to be non-credible, as defined in
accordance with Sec. 423.2440(d).
(c) Data release. CMS releases to the public Part D MLR data, for
each contract for each contract year, no earlier than 18 months after
the end of the applicable contract year.

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
37. The authority citation for part 424 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

0
38. Section 424.59 is added to subpart D to read as follows:

Sec. 424.59 Requirements for Medicare diabetes prevention program
suppliers.

(a) Conditions for enrollment. An entity may enroll as an MDPP
supplier if it satisfies all of the following criteria and meets all
other applicable Medicare enrollment requirements:
(1) At the time of enrollment has either preliminary or full CDC
DPRP recognition.
(2) Has obtained and maintains an active and valid TIN and NPI at
the organizational level.
(3) Has passed application screening at a high categorical risk
level per Sec. 424.518(c).
(4) All coaches who will be furnishing MDPP services on the
entity's behalf have obtained and maintain active and valid NPIs.
(5) Submits a roster of all coaches who will be furnishing MDPP
services on the entity's behalf that includes the coaches' first and
last names, date of birth, SSN, and NPI.
(b) Documentation retention and provision requirements. An MDPP
supplier must maintain all documentation in accordance with Sec.
424.516(f) and all other federal and state laws. The MDPP supplier must
submit any documentation requested by the government or a contractor to
substantiate the attestations or claims submitted for payment under the
Medicare program.
(1) The records must contain documentation of the services
furnished including evidence of the beneficiary's eligibility, specific
session topics attended, the NPI of the coach who furnished the session
attended, the date and place of service of sessions attended, and
weight.
(2) MDPP suppliers are required to maintain and handle any
beneficiary PII and PHI in compliance with HIPAA, other applicable
privacy laws and CMS standards.
(3) The MDPP supplier must maintain a crosswalk between the
beneficiary identifiers submitted to CMS for billing and the
beneficiary identifiers submitted to CDC for beneficiary level-clinical
data.
(4) The records must include an attestation from the supplier that
the MDPP eligible beneficiary for which it is submitting a claim:
(i) Has attended 1, 4 or 9 core sessions, or
(ii) Has achieved the required minimum weight loss percentage
specified in Sec. 410.79 of this chapter, or
(iii) Has achieved maintenance of weight loss and attended core
maintenance sessions, or
(iv) Has achieved maintenance of weight loss and attended ongoing
maintenance sessions.
(c) Conditions for payment of claims for MDPP services furnished.
An MDPP supplier must meet all of the following requirements in order
to receive payment for claims made for MDPP services furnished:
(1) Establishes and maintains all enrollment and program
requirements under Title 42.
(2) Submits attestation as specified in paragraph (b) of this
section.
(d) Revocation of MDPP supplier enrollment. An MDPP supplier is
subject to revocation of its MDPP supplier enrollment if:
(1) It loses its CDC DPRP recognition or withdraws from seeking CDC
DPRP recognition.
(2) One of the revocation reasons specified in Sec. 424.535
applies.
(e) Procedures for revoking or denying MDPP supplier enrollment.
(1) MDPP suppliers are subject to the enrollment regulations set forth
in subpart P of this part.
(2) An MDPP supplier that has had its MDPP supplier enrollment
revoked may:
(i) Become eligible to bill for MDPP services again if it reapplies
for CDC DPRP recognition, successfully achieves preliminary CDC DPRP
recognition, and enrolls again Medicare as an MDPP supplier subject to
paragraph (a) of this section.
(ii) Appeal in accordance with the procedures specified in 42 CFR
part 405, subpart H, 42 CFR part 424, and 42 CFR part 498. References
to suppliers in these sections apply to MDPP suppliers.

[[Page 80559]]

PART 425--MEDICARE SHARED SAVINGS PROGRAM

0
39. Authority: Secs. 1102, 1106, 1871, and 1899 of the Social Security
Act (42 U.S.C. 1302, 1306, 1395hh, and 1395jjj).

0
40. Section 425.110 is amended by revising paragraph (b)(1) to read as
follows:

Sec. 425.110 Number of ACO professionals and beneficiaries.

* * * * *
(b) * * *
(1) While under the CAP, the ACO remains eligible for shared
savings and losses.
(i) For ACOs with a variable MSR and MLR (if applicable), the MSR
and MLR (if applicable) will be set at a level consistent with the
number of assigned beneficiaries.
(ii) For ACOs with a fixed MSR/MLR, the MSR/MLR will remain fixed
at the level consistent with the choice of MSR and MLR that the ACO
made at the start of the agreement period.
* * * * *

Sec. 425.204 [Amended]

0
41. Sec. 425.204 is amended by--
0
a. Amending paragraph (g) heading to remove the phrase ``and acquired
Medicare-enrolled TINs'' and adding in its place the phrase ``and
acquired entities' TINs''.
0
b. Amending paragraph (g) introductory text to remove the phrase
``claims billed by Medicare-enrolled entities' TINs that'' and adding
in its place the phrase ``claims billed under the TINs of entities
that''.
0
c. Amending paragraph (g)(1) introductory text to remove the phrase
``an acquired Medicare-enrolled entity's TIN'' and adding in its place
the phrase ``an acquired entity's TIN''.
0
d. Amending paragraph (g)(1)(i) to remove the phrase ``the acquired
entity's Medicare-enrolled TIN'' and adding in its place the phrase
``the acquired entity's TIN''
0
e. Amending paragraph (g)(2)(i)(A) to remove the phrase ``Identifies by
Medicare-enrolled TIN'' and adding in its place the phrase ``Identifies
by TIN''.

Sec. 425.316 [Amended]

0
42. Amend 425.316--
0
a. In paragraph (c)(1), by removing the phrase ``minimum attainment
level in one or more domains as determined under Sec. 425.502 and may
be subject to a CAP. CMS, may forgo the issuance'' and adding in its
place the phrase ``minimum attainment level on at least 70 percent of
the measures, as determined under Sec. 425.502, in one or more domains
and may be subject to a CAP. CMS may forgo the issuance''.
0
b. In paragraph (c)(2) by removing the phrase ``quality performance
standards'' and adding in its place the phrase ``quality performance
standard''.

0
43. Section 425.402 is amended by--
0
a. In paragraph (b) introductory text, removing the phrase
``beneficiaries to an ACO:'' and adding in its place the phrase
``beneficiaries to an ACO based on available claims information:''
0
b. Adding paragraph (e).
The addition reads as follows:

Sec. 425.402 Basic assignment methodology.

* * * * *
(e) For performance year 2018 and subsequent performance years, if
a system is available to allow a beneficiary to designate a provider or
supplier as responsible for coordinating their overall care and for CMS
to process the designation electronically, CMS will supplement the
claims-based assignment methodology described in this section with
information provided by beneficiaries regarding the provider or
supplier they consider responsible for coordinating their overall care.
Such designations must be made in the form and manner and by a deadline
determined by CMS.
(1) Notwithstanding the assignment methodology under paragraph (b)
of this section, beneficiaries who designate an ACO professional
participating in an ACO as responsible for coordinating their overall
care are prospectively assigned to that ACO, regardless of track,
annually at the beginning of each benchmark and performance year based
on available data at the time assignment lists are determined for the
benchmark and performance year.
(2) Beneficiaries will be added to the ACO's list of assigned
beneficiaries if all of the following conditions are satisfied:
(i) The beneficiary must have had at least one primary care service
during the assignment window as defined under Sec. 425.20 with a
physician who is an ACO professional in the ACO who is a primary care
physician as defined under Sec. 425.20 or who has one of the primary
specialty designations included in paragraph (c) of this section.
(ii) The beneficiary meets the eligibility criteria established at
Sec. 425.401(a) and must not be excluded by the criteria at Sec.
425.401(b). The exclusion criteria at Sec. 425.401(b) apply for
purposes of determining beneficiary eligibility for alignment to ACOs
under all tracks based on the beneficiary's designation of an ACO
professional as responsible for coordinating their overall care under
paragraph (e) of this section.
(iii) The beneficiary must have designated an ACO professional who
is a primary care physician as defined at Sec. 425.20, a physician
with a specialty designation included at paragraph (c) of this section,
or a nurse practitioner, physician assistant, or clinical nurse
specialist as responsible for coordinating their overall care.
(iv) If a beneficiary has designated a provider or supplier outside
the ACO who is a primary care physician as defined at Sec. 425.20, a
physician with a specialty designation included at paragraph (c) of
this section, or a nurse practitioner, physician assistant, or clinical
nurse specialist, as responsible for coordinating their overall care,
the beneficiary will not be added to the ACO's list of assigned
beneficiaries for a performance year under the assignment methodology
in paragraph (b) of this section.
(3) The ACO, ACO participants, ACO providers/suppliers, ACO
professionals, and other individuals or entities performing functions
and services related to ACO activities are prohibited from providing or
offering gifts or other remuneration to Medicare beneficiaries as
inducements for influencing a Medicare beneficiary's decision to
designate or not to designate an ACO professional under paragraph (e)
of this section. The ACO, ACO participants, ACO providers/suppliers,
ACO professionals, and other individuals or entities performing
functions and services related to ACO activities must not, directly or
indirectly, commit any act or omission, nor adopt any policy that
coerces or otherwise influences a Medicare beneficiary's decision to
designate or not to designate an ACO professional as responsible for
coordinating their overall care under paragraph (e) of this section,
including but not limited to the following:
(i) Offering anything of value to the Medicare beneficiary as an
inducement to influence the Medicare beneficiary's decision to
designate or not to designate an ACO professional as responsible for
coordinating their overall care under paragraph (e) of this section.
Any items or services provided in violation of paragraph (e)(3) will
not be considered to have a reasonable connection to the medical care
of the beneficiary, as required under Sec. 425.304(a)(2).
(ii) Withholding or threatening to withhold medical services or
limiting or threatening to limit access to care.

0
44. Section 425.500 is amended by revising paragraphs (e)(2) and (3) to
read as follows:

[[Page 80560]]

Sec. 425.500 Measures to assess the quality of care furnished by an
ACO.

* * * * *
(e) * * *
(2) If, at the conclusion of the audit process the overall audit
match rate between the quality data reported and the medical records
provided under paragraph (e)(1) of this section is less than 90
percent, absent unusual circumstances, CMS will adjust the ACO's
overall quality score proportional to the ACO's audit performance.
(3) If, at the conclusion of the audit process CMS determines there
is an audit match rate of less than 90 percent, the ACO may be required
to submit a CAP under Sec. 425.216 for CMS approval.
* * * * *

0
45. Section 425.502 is amended by--
0
a. Revising paragraph (a) introductory text.
0
b. In paragraph (a)(1), removing the phrase ``period, CMS, CMS
defines'' and adding in its place the phrase ``period, CMS defines''.
0
c. In paragraphs (a)(2) and (3), removing the phrase ``level of certain
measures'' and adding in its place ``level of all measures''.
0
d. In paragraph (a)(4), removing the phrases ``The quality performance
standard for a newly'' and ``periods, the quality performance standard
for the measure'' and adding in their place the phrases ``A newly'' and
``periods, the measure'', respectively.
0
e. In paragraph (b)(2)(ii), removing the phrase ``95 percentt'' and
adding in its place the phrase ``95 percent''.
0
f. Revising paragraph (b)(3).
0
g. In paragraph (c)(2), removing the phrase ``level for a measure'' and
adding in its place the phrase ``level for a pay-for-performance
measure''.
0
h. Adding paragraph (c)(5).
0
i. In paragraph (d) heading, removing the phrase ``quality performance
requirements'' and adding in its place the phrase ``quality
requirements''.
0
j. In paragraph (d)(1) introductory text, removing the phrase
``individual quality performance standard measures'' and adding in its
place the phrase ``individual measures''.
0
k. In paragraph (d)(2) introductory text, removing the phrase ``quality
performance requirements'' and adding in its place the phrase ``quality
requirements''.
0
l. Revising paragraph (d)(2)(ii).
The revisions and addition read as follows:

Sec. 425.502 Calculating the ACO quality performance score.

(a) Establishing a quality performance standard. CMS designates the
quality performance standard in each performance year. The quality
performance standard is the overall standard the ACO must meet in order
to be eligible for shared savings.
* * * * *
(b) * * *
(3) The minimum attainment level for pay for performance measures
is set at 30 percent or the 30th percentile of the performance
benchmark. The minimum attainment level for pay for reporting measures
is set at the level of complete and accurate reporting.
* * * * *
(c) * * *
(5) Performance equal to or greater than the minimum attainment
level for pay-for-reporting measures will receive the maximum available
points.
(d) * * *
(2) * * *
(ii) CMS may take the compliance actions described in Sec. 425.216
for ACOs exhibiting poor performance on a domain, as determined by CMS
under Sec. 425.316.
* * * * *

0
46. Section 425.504 is amended by--
0
a. Amending paragraph (c) to remove the phrase ``for 2016 and
subsequent years'' everywhere it appears and adding in its place the
phrase ``for 2016''.
0
b. Redesignating paragraph (d) as paragraph (c)(5).
0
c. Adding new paragraph (d).
The addition reads as follows:

Sec. 425.504 Incorporating reporting requirements related to the
Physician Quality Reporting System Incentive and Payment Adjustment.

* * * * *
(d) Physician Quality Reporting System payment adjustment for 2017
and 2018. (1) ACOs, on behalf of eligible professionals who bill under
the TIN of an ACO participant, must submit all of the ACO GPRO measures
determined under Sec. 425.500 using a CMS web interface, to
satisfactorily report on behalf of their eligible professionals for
purposes of the Physician Quality Reporting System payment adjustment
under the Shared Savings Program for 2017 and 2018.
(2) Eligible professionals who bill under the TIN of an ACO
participant within an ACO participate under their ACO participant TIN
as a group practice under the Physician Quality Reporting System Group
Practice Reporting Option of the Shared Savings Program for purposes of
the Physician Quality Reporting System payment adjustment under the
Shared Savings Program for 2017 and 2018.
(3) If an ACO, on behalf of eligible professionals who bill under
the TIN of an ACO participant, does not satisfactorily report for
purposes of the Physician Quality Reporting System payment adjustment
for 2017 or 2018, each eligible professional who bills under the TIN of
an ACO participant will receive a payment adjustment, as described in
Sec. 414.90(e) of this chapter, unless such eligible professionals
have reported quality measures apart from the ACO in the form and
manner required by the Physician Quality Reporting System.
(4) For eligible professionals subject to the Physician Quality
Reporting System payment adjustment under the Medicare Shared Savings
Program for 2017 or 2018, the Medicare Part B Physician Fee Schedule
amount for covered professional services furnished during the program
year is equal to the applicable percent of the Medicare Part B
Physician Fee Schedule amount that would otherwise apply to such
services under section 1848 of the Act, as described in Sec. 414.90(e)
of this chapter.
(5) The reporting period for a year is the calendar year from
January 1 through December 31 that occurs 2 years prior to the program
year in which the payment adjustment is applied, unless otherwise
specified by CMS under the Physician Quality Reporting System.

0
47. Section 425.506 is amended by--
0
a. Revising the section heading.
0
b. Amending paragraph (d) introductory text to remove the phrase
``Eligible professionals participating in an ACO'' and adding in its
place the phrase ``Through reporting period 2016, eligible
professionals participating in an ACO''
0
c. Adding paragraph (e).
The revision and addition read as follows:

Sec. 425.506 Incorporating reporting requirements related to
adoption of certified electronic health record technology.

* * * * *
(e) For 2017 and subsequent years, CMS will annually assess the
degree of use of certified EHR technology by eligible clinicians
billing through the TINs of ACO participants for purposes of meeting
the CEHRT criterion necessary for Advanced Alternative Payment Models
under the Quality Payment Program.
(1) During years in which the measure is designated as pay for
reporting, in order to demonstrate complete and accurate reporting, at
least one eligible clinician billing through the TIN of an ACO
participant must meet the reporting requirements under the Advancing
Clinical Information category under the Quality Payment Program.

[[Page 80561]]

(2) During years in which the measure is designated as pay for
performance, the quality measure regarding EHR adoption will be
measured based on a sliding scale.

0
48. Section 425.508 is added to subpart F to read as follows:

Sec. 425.508 Incorporating quality reporting requirements related to
the Quality Payment Program.

(a) For 2017 and subsequent reporting years. ACOs, on behalf of
eligible clinicians who bill under the TIN of an ACO participant, must
submit all of the CMS web interface measures determined under Sec.
425.500 to satisfactorily report on behalf of their eligible clinicians
for purposes of the quality performance category of the Quality Payment
Program.
(b) [Reserved]

0
49. Section 425.612 is amended by--
0
a. Amending paragraph (a)(1) introductory text to remove the phrase
``ACOs participating in Track 3 that receive otherwise'' and adding in
its place the phrase ``ACOs participating in Track 3, and as provided
in paragraph (a)(1)(iv) of this section during a grace period for
beneficiaries excluded from prospective assignment to a Track 3 ACO,
who receive otherwise''.
0
b. Adding paragraphs (a)(1)(iv), (a)(1)(v), and (d)(4).
The additions read as follows:

Sec. 425.612 Waivers of payment rules or other Medicare
requirements.

(a) * * *
(1) * * *
(iv) For a beneficiary who was included on the prospective
assignment list under Sec. 425.400(a)(3) for a performance year for a
Track 3 ACO for which a waiver of the SNF 3-day rule has been approved
under paragraph (a)(1) of this section, but who was subsequently
excluded from the ACO's prospective assignment list, CMS makes payment
for SNF services furnished to the beneficiary by a SNF affiliate if the
following conditions are met:
(A) The beneficiary was prospectively assigned to the ACO at the
beginning of the applicable performance year but was excluded in the
most recent quarterly update to the prospective assignment list under
Sec. 425.401(b).
(B) The SNF services are furnished to a beneficiary who was
admitted to a SNF affiliate within 90 days following the date that CMS
delivers the quarterly exclusion list to the ACO.
(C) But for the beneficiary's exclusion from the ACO's prospective
assignment list, CMS would have made payment to the SNF affiliate for
such services under the waiver under paragraph (a)(1) of this section.
(v) The following beneficiary protections apply when a beneficiary
receives SNF services without a prior 3-day inpatient hospital stay
from a SNF affiliate that intended to provide services pursuant to a
SNF 3-day rule waiver under paragraph (a)(1) of this section, but the
beneficiary was not prospectively assigned to the ACO and was not in
the 90 day grace period under paragraph (a)(1)(iv) of this section. The
SNF affiliate services must be non-covered only because the SNF
affiliate stay was not preceded by a qualifying hospital stay under
section 1861(i) of the Act.
(A) A SNF is presumed to intend to provide services pursuant to the
SNF 3-day rule waiver under paragraph (a)(1) of this section if the SNF
submitting the claim is a SNF affiliate of an ACO for which such a
waiver has been approved.
(B) CMS makes no payments for SNF services to a SNF affiliate of an
ACO for which a waiver of the SNF 3-day rule has been approved when the
SNF affiliate admits a FFS beneficiary who was never prospectively
assigned to the ACO or was prospectively assigned but was later
excluded and the 90 day grace period under paragraph (a)(1)(iv) of this
section has lapsed.
(C) In the event that CMS makes no payment for SNF services
furnished by a SNF affiliate as a result of paragraph (a)(1)(v)(B) of
this section and the only reason the claim was non-covered is due to
the lack of a qualifying inpatient stay, the following beneficiary
protections will apply:
(1) The SNF must not charge the beneficiary for the expenses
incurred for such services; and
(2) The SNF must return to the beneficiary any monies collected for
such services; and
(3) The ACO may be required to submit a corrective action plan
under Sec. 425.216(b) for CMS approval. If after being given an
opportunity to act upon the corrective action plan the ACO fails to
come into compliance with the requirements of paragraph (a)(1),
approval for the SNF 3-day rule waiver under this section will be
terminated as provided under paragraph (d) of this section.
* * * * *
(d) * * *
(4) CMS reserves the right to take compliance action, including
termination, against an ACO for noncompliance with program rules,
including misuse of a waiver under this section, as specified at
Sec. Sec. 425.216 and 425.218.
* * * * *

PART 460--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)

0
50. The authority citation for part 460 continues to read as follows:

Authority: Secs. 1102, 1871, 1894(f), and 1934(f) of the Social
Security Act (42 U.S.C. 1302, 1395, 1395eee(f), and 1396u-4(f)).

0
51. Section 460.40 is amended by adding paragraph (j) to read as
follows:

Sec. 460.40 Violations for which CMS may impose sanctions.

* * * * *
(j) Employs or contracts with any provider or supplier that is a
type of individual or entity that can enroll in Medicare in accordance
with section 1861 of the Act, that is not enrolled in Medicare in an
approved status.

0
52. Section 460.50 is amended by revising paragraph (b)(1)(ii) to read
as follows:

Sec. 460.50 Termination of PACE program agreement.

* * * * *
(b) * * *
(1) * * *
(ii) The PACE organization failed to comply substantially with
conditions for a PACE program or PACE organization under this part, or
with terms of its PACE program agreement, including employing or
contracting with any provider or supplier that are types of individuals
or entities that can enroll in Medicare in accordance with section 1861
of the Act, that is not enrolled in Medicare in an approved status.
* * * * *

0
53. Section 460.68 is amended by adding paragraph (a)(4) to read as
follows:

Sec. 460.68 Program integrity.

(a) * * *
(4) That are not enrolled in Medicare in an approved status, if the
providers or suppliers are of the types of individuals or entities that
can enroll in Medicare in accordance with section 1861 of the Act.
* * * * *

0
54. Section 460.70 is amended by adding paragraph (b)(1)(iv) to read as
follows:

Sec. 460.70 Contracted services.

* * * * *
(b) * * *
(1) * * *
(iv) Providers or suppliers that are types of individuals or
entities that can enroll in Medicare in accordance with section 1861 of
the Act, must be enrolled in Medicare and be in an

[[Page 80562]]

approved status in Medicare in order to provide health care items or
services to a PACE participant who receives his or her Medicare benefit
through a PACE organization.
* * * * *

0
58. Section 460.71 is amended by adding paragraph (b)(7) to read as
follows:

Sec. 460.71 Oversight of direct participant care.

* * * * *
(b) * * *
(7) Providers or suppliers that are types of individuals or
entities that can enroll in Medicare in accordance with section 1861 of
the Act, must be enrolled in Medicare and be in an approved status in
Medicare in order to provide health care items or services to a PACE
participant who receives his or her Medicare benefit through a PACE
organization.

0
59. Section 460.86 is added to subpart E to read as follows:

Sec. 460.86 Payment to providers or suppliers excluded or revoked.

(a) A PACE organization may not pay, directly or indirectly, on any
basis, for items or services (other than emergency or urgently needed
services as defined in Sec. 460.100) furnished to a Medicare enrollee
by any individual or entity that is excluded by the Office of the
Inspector General (OIG) or is revoked from the Medicare program.
(b) If a PACE organization receives a request for payment by, or on
behalf of, an individual or entity that is excluded by the OIG or is
revoked in the Medicare program, the PACE organization must notify the
enrollee and the excluded or revoked individual or entity in writing,
as directed by contract or other direction provided by CMS, that
payments will not be made. Payment may not be made to, or on behalf of,
an individual or entity that is exclude by the OIG or is revoked in the
Medicare program.

Dated: October 24, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: October 27, 2016.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-26668 Filed 11-2-16; 4:15 pm]
BILLING CODE 4120-01-P

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