Medicare Program; Establishment of Special Payment Provisions and Requirements for Qualified Practitioners and Qualified Suppliers of Prosthetics and Custom-Fabricated Orthotics, 3678-3694 [2017-00425]

Agencies

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

[Federal Register Volume 82, Number 8 (Thursday, January 12, 2017)]
[Proposed Rules]
[Pages 3678-3694]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00425]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 424

[CMS-6012-P]
RIN 0938-AR84


Medicare Program; Establishment of Special Payment Provisions and 
Requirements for Qualified Practitioners and Qualified Suppliers of 
Prosthetics and Custom-Fabricated Orthotics

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would specify the qualifications needed for 
qualified practitioners to furnish and fabricate, and qualified 
suppliers to fabricate prosthetics and custom-fabricated orthotics; 
accreditation requirements that qualified suppliers must meet in order 
to bill for prosthetics and custom-fabricated orthotics; requirements 
that an organization must meet in order to accredit qualified suppliers 
to bill for prosthetics and custom-fabricated orthotics; and a 
timeframe by which qualified practitioners and qualified suppliers must 
meet the applicable licensure, certification, and accreditation 
requirements. In addition, this rule would remove the current exemption 
from accreditation and quality standards for certain practitioners and 
suppliers.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on March 13, 2017.

[[Page 3679]]


ADDRESSES: In commenting, please refer to file code CMS-6012-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-6012-P, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-6012-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period:
    a. For delivery in Washington, DC-- Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD-- Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
call telephone number (410) 786-7195 in advance to schedule your 
arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: John Spiegel, (410) 786-1909.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following Web site as soon as possible after they have been 
received: https://www.regulations.gov.
    Follow the search instructions on that Web site to view public 
comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

I. Background

A. General Overview

    Medicare services are furnished by two types of entities, providers 
and suppliers. The term ``provider of services'' is defined in sections 
1861(u) and 1866(e) of the Social Security Act (the Act). Based on the 
statute definition of ``provider of services'' in sections 1861(u) and 
1866(e) of the Act we define and use the term ``provider'' in our 
regulations. At Sec.  400.202, the term ``provider'' is defined 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 that has in effect an agreement 
to participate in Medicare, or a clinic, a rehabilitation agency, or a 
public health agency that has in effect a similar agreement but only to 
furnish outpatient physical therapy or speech pathology services, or a 
community mental health center that has in effect a similar agreement 
but only to furnish partial hospitalization services.
    The term supplier is defined in section 1861(d) of the Act. 
Supplier is defined as a physician or other practitioner, facility or 
an entity other than a provider of services that furnishes items or 
services under Medicare. A supplier that furnishes durable medical 
equipment, prosthetics, orthotics, and supplies (DMEPOS) is one 
category of supplier. Section 424.57(a) of our regulations defines a 
DMEPOS supplier as an entity or individual, including a physician or 
Part A provider, that sells or rents covered DMEPOS items to Medicare 
beneficiaries that meets the DMEPOS supplier standards. Other supplier 
categories may include, for example, physicians, nurse practitioners, 
and physical therapists. If a supplier, such as a physician, nurse 
practitioners, or physical therapist, also furnishes DMEPOS to a 
patient and bills for those items, then the supplier is also considered 
to be a DMEPOS supplier and must be screened and enrolled in Medicare 
as a DMEPOS supplier, meeting all standards and requirements applicable 
to DMEPOS suppliers in order to be enrolled in and bill Medicare.
    Section 1861(n) of the Act defines ``durable medical equipment.'' 
See https://www.ssa.gov/OP_Home/ssact/title18/1861.htm. Also, the term 
DME is included in the definition of ``medical and other health 
services'' in section 1861(s)(6) of the Act, see https://www.ssa.gov/OP_Home/ssact/title18/1861.htm and also included in the definition of 
medical equipment and supplies in section 1834(j)(5) of the Act. See 
https://www.ssa.gov/OP_Home/ssact/title18/1834.htm. Furthermore, the 
term is defined in Sec.  414.202 as equipment furnished by a supplier 
or a HHA that--
     Can withstand repeated use;
     Effective for items classified as DME after January 1, 
2002 has an expected life of at least 3 years;
     Is primarily and customarily used to serve a medical 
purpose;
     Generally, is not useful to an individual in the absence 
of an illness or injury; and
     Is for use in the home.
    Prosthetics and orthotics which are defined under section 
1861(s)(9) of the Act as leg, arm, back, and neck braces and artificial 
legs, arms, and eyes, including replacements if required because of a 
change in the patient's physical condition, are included under the 
coverage definition under section 1861(s)(9) of the Act. We are using 
this definition of prosthetics and orthotics for the purposes of this 
proposed rule. They are also described in the Medicare Benefit Policy 
Manual (100-02), Chapter 15, Section 130 that specifies that these 
appliances are covered under Part B when furnished incident to 
physicians' services or on a physician's order.

[[Page 3680]]

B. Legislative History

1. Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act 
of 2000 (BIPA)
    Section 427 of the Medicare, Medicaid and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554) added 
section 1834(h)(1)(F) of the Act, which states that no payment shall be 
made for custom-fabricated orthotics or for an item of prosthetics 
unless furnished by a qualified practitioner and fabricated by a 
qualified practitioner or a qualified supplier at a facility that meets 
criteria the Secretary determines appropriate. Section 1834(h)(1)(F) of 
the Act describes custom-fabricated orthotics as individually 
fabricated for the patient over a positive model of the patient and 
also requires education, training, and experience to custom-fabricate.
    A qualified practitioner is defined by BIPA as a physician or other 
individual who is a qualified physical therapist or a qualified 
occupational therapist; or is licensed in orthotics or prosthetics, in 
the cases where the state provides such licensing; or, in states where 
the state does not provide such licensing, is specifically trained and 
educated to provide or manage the provision of prosthetics and custom-
designed or fabricated orthotics and is certified by the American Board 
for Certification in Orthotics, Prosthetics and Pedorthics (ABC) or the 
Board for Orthotist/Prosthetist Certification International, 
Incorporated (BOC); or is credentialed and approved by a program that 
the Secretary determines has training and education standards that are 
necessary to provide such prosthetics and orthotics.
    A qualified supplier is defined by BIPA as any entity that is 
accredited by the ABC or the BOC or is accredited and approved by a 
program that the Secretary determines has accreditation and approval 
standards that are essentially equivalent to those of such Boards.
    The Congress directed the Secretary to implement section 427 of 
BIPA no later than 1 year after the date of the enactment using a 
negotiated rulemaking process. The negotiated rulemaking committee (the 
Committee) on Special Payment Provisions for Prosthetics and Certain 
Custom-Fabricated Orthotics was established following the requirements 
set forth by the Federal Advisory Committee Act (FACA). The Committee 
held nine meetings from October 2002 to July 2003 and failed to reach a 
consensus on the rulemaking. Given the continued need to address 
payment provisions for prosthetics and certain custom-fabricated 
orthotics, we are proposing policies and inviting public comment on our 
proposals as described section II. of this proposed rule.
2. Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (MMA)
    Section 302(a)(1) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (MMA) (Pub. L. 108-173) added a new 
paragraph (20) to section 1834(a) of the Act requiring the Secretary to 
establish and implement DMEPOS quality standards that suppliers must 
meet in order to furnish and bill for covered items and services 
described in new section 1834(a)(20)(D) of the Act, which includes 
prosthetics and orthotics. The new paragraph (20) also required the 
Secretary to designate and approve one or more independent 
accreditation organizations to apply the quality standards. In 
addition, the new section 1834(a)(20) of the Act required that to 
obtain or retain a Medicare Part B billing number DMEPOS suppliers must 
be accredited by one of the approved accreditation organizations.
    The DMEPOS quality standards were posted on our Web site at 
www.cms.gov/medicareprovidersupenroll as required by section 
1834(a)(20)(E) of the Act. On May 1, 2006, we published a proposed rule 
(71 FR 25654) and a subsequent final rule on August 18, 2006 (71 FR 
48354) that specified the criteria that all approved accreditation 
organizations must meet, set forth in Sec.  424.58. In December 2006, 
we approved 11 accreditation organizations. As a result of a merger of 
two of the accreditation organizations, there are now 10 accreditation 
organizations.
    All DMEPOS suppliers must meet the quality standards. The quality 
standards required by section 1834(a)(20) of the Act are used by the 
approved accrediting organizations as the basis for their accrediting 
decisions.
3. Medicare Improvement for Patients and Providers Act of 2008 (MIPPA)
    Section 154(b) of the Medicare Improvement for Patients and 
Providers Act of 2008 (MIPPA) (Pub. L. 110-275 amended section 
1834(a)(20) of the Act by adding a new subparagraph (F) to require 
DMEPOS suppliers furnishing covered items and services, directly or as 
a subcontractor for another entity, to have submitted to the Secretary 
evidence of being accredited as meeting the applicable quality 
standards on or after October 1, 2009. Section 1834 (a)(20)(F)(ii) of 
the Act provided the Secretary the authority to exempt ``eligible 
professionals'' and such ``other persons'' from the quality standards 
and accreditation requirement unless the Secretary determined that the 
standards are designed specifically to be applied to such eligible 
professionals and other persons or if the Secretary determined that 
licensing, accreditation or other mandatory quality requirements apply 
to such eligible professionals and other persons. Eligible 
professionals are defined at section 1848(k)(3)(B) of the Act as a 
physician, physician assistant, nurse practitioner, clinical nurse 
specialist, certified registered nurse anesthetist, certified nurse-
midwife, clinical social worker, clinical psychologist, physical or 
occupational therapist or a qualified speech-language pathologist. 
Section 1834(a)(20)(F)(ii) of the Act specifically refers to orthotists 
and prosthetists as examples of ``other persons.'' Since orthotists and 
prosthetists specifically were mentioned in the statute, we believe 
that the Congress intended for those persons to be exempt unless there 
were standards designed specifically to be applied to such eligible 
professionals and other persons.
    To date there have not been accreditation or quality requirements 
designed specifically to be applied to such eligible professionals and 
thus as a result, all eligible professionals and other persons, 
including orthotists and prosthetists, that furnish, fabricate, and 
bill for prosthetics and certain custom-fabricated orthotic items are 
currently exempt from the quality standards and the accreditation 
requirement.

II. Provisions of the Proposed Regulations

    This proposed rule would implement certain provisions of section 
1834(h)(1)(F) of the Act. It would establish the qualifications and 
requirements that must be met in order to be considered a qualified 
practitioner or a qualified supplier. This proposed rule would also 
amend the special payment rules for items furnished by DMEPOS suppliers 
set forth at Sec.  424.57 and the accreditation organization 
requirements in Sec.  424.58. Only qualified practitioners who furnish 
or fabricate prosthetics and custom-fabricated orthotics and qualified 
suppliers that fabricate or bill for prosthetics and custom-fabricated 
orthotics would be subject to these requirements.
    Specifically, we are proposing the following:
     Removing the exemption from quality standards and 
accreditation that is currently in place in accordance with section 
1834(a)(20) of the Act for certain practitioners and suppliers who 
furnish

[[Page 3681]]

or fabricate prosthetics and custom-fabricated orthotics.
     Revising Sec.  424.57 to include a definition of custom-
fabricated orthotics as an item as listed in section 1861(s)(9) of the 
Act that must be individually made for a specific patient, constructed 
using one of the positive model techniques listed in Sec.  424.57(a).
     Revising Sec.  424.57(a) to include a definition of 
positive model of the patient as a particular type of custom 
fabrication in which one of the following modeling techniques is used:
    ++ Molded to the patient model as a negative impression of the 
patient's body part and a positive model rectification are constructed.
    ++ Computer Aided Design-Computer Aided Manufacturing (CAD-CAM) 
system.
    ++ Direct formed model.
     Defining ``qualified supplier'' as a DMEPOS supplier that 
is accredited in accordance with the section 1834(a)(20) of the Act.
     Defining ``qualified practitioner'' as an eligible 
professional or other person that meets the education, training, 
licensure, and certification requirements of the section 
1834(h)(1)(F)of the Act.
     Specifying training, licensure, and certification 
requirements that qualified practitioners must meet in order to furnish 
or fabricate prosthetics and custom-fabricated orthotics.
     Requiring that claims for prosthetics and custom-
fabricated orthotics that are submitted by qualified suppliers or by 
beneficiaries must have been furnished by a qualified practitioner and 
fabricated by a qualified practitioner or a qualified supplier as 
defined in this proposed rule. Suppliers that do not meet these 
requirements are at risk of revocation of their Medicare enrollment.
     Defining the requirements that must be met by 
organizations that are designated and approved by CMS to accredit 
suppliers that bill for prosthetics and custom-fabricated orthotics.
     Define ``fabrication facility'' and specify the 
requirements that a facility must meet in order for qualified 
practitioners and qualified suppliers to be able to fabricate 
prosthetics and custom-fabricated orthotics that can be paid for by 
Medicare.
    Separately, in this proposed rule we also--
     Describe our intent to modify the DMEPOS quality standards 
to reflect the provisions of this rule, including the effective date 
for meeting the revised quality standards; and
     Provide the list of services and supplies subject to the 
requirements of this rule (www.cms.gov/medicareprovidersupenroll).
    We provide a link to the list of items and describe our intent to 
revise the quality standards as information only. We are not soliciting 
comments on the content of or the process for updating the quality 
standards, which will be addressed through the regulatory process we 
reference in section II.A.6.a. of this proposed rule. Nor are we 
soliciting comment on the content of or process for updating the list 
of items and supplies, which is described in section II.B. of this 
proposed rule. Comments on those matters will be considered outside the 
scope of this rule.

A. Updating of Accreditation and Certification Requirements

1. Removing the MIPPA Exemptions for DMEPOS Suppliers and Certain 
Eligible Professionals and Other Persons Who Furnish or Fabricate 
Prosthetics and Custom-Fabricated Orthotics
    Consistent with the provisions of the Act, including those 
provisions added by BIPA, MMA, and MIPPA, we have put in place a 
framework for accreditation of suppliers that fabricate DMEPOS and bill 
for DMEPOS services. However, qualified practitioners and qualified 
suppliers are currently exempt from having to meet the quality 
standards or to be accredited as suppliers in order to be able to bill 
Medicare for prosthetics and custom-fabricated orthotics. We are 
removing the exemptions in order to implement the provisions of section 
1834(a)(20) of the Act.
    As noted previously, section 1834(a)(20)(F)(ii) of the Act provided 
the Secretary the authority to exempt ``eligible professionals'' (as 
defined in section 1848(k)(3)(B) of the Act) and such ``other persons'' 
from the quality standards and accreditation requirement unless the 
Secretary determined that the standards are designed specifically to be 
applied to such eligible professionals and other persons or if the 
Secretary determined that licensing, accreditation or other mandatory 
quality requirements apply to such eligible professionals and other 
persons. The Secretary did not determine that there were standards 
designed specifically to be applied to such eligible professionals and 
other persons and the Secretary did not determine that licensing, 
accreditation or other mandatory quality requirements apply to such 
eligible professionals and other persons. Therefore, we issued a fact 
sheet on our Web site announcing the exemption at www.cms.gov/medicareprovidersupenroll.
    Through this proposed rule, we are now designing standards 
specifically to apply to such eligible professionals and other persons. 
We believe that it is imperative to have both licensure and 
certification requirements for all qualified practitioners (eligible 
professionals and other persons who furnish or fabricate prosthetics 
and custom-fabricated orthotics) and to have accreditation requirements 
for all qualified suppliers (DMEPOS suppliers that fabricate or bill 
for prosthetics and custom-fabricated orthotics that are subject to the 
requirements of this proposed rule). Moreover, we believe that the 
provisions in section 1834(a)(20) of the Act were enacted to achieve 
that objective.
    Therefore, in order to ensure that only those who are qualified to 
do so can furnish, fabricate, and bill for the prosthetics and custom-
fabricated orthotics addressed by this proposed rule, we would remove 
the exemption from having to meet the quality standards and the 
exemption from having to be accredited that currently exist for 
eligible professionals and other persons that furnish, fabricate or 
bill for prosthetics and custom-fabricated orthotics.
2. Definition and Accreditation Requirements for Qualified Suppliers
    Consistent with the provisions in section 1834(h)(1)(F) of the Act, 
which require that no payment will be made unless those furnishing 
prosthetics and custom-fabricated orthotics are qualified to do so, we 
are proposing to define qualified supplier, inSec.  424.57(a), as an 
entity that is--
     Enrolled in Medicare as a DMEPOS supplier; and
     Accredited by one of the CMS-approved accreditation 
organizations that meets the proposed requirements that an organization 
must meet to accredit qualified suppliers of prosthetics and custom-
fabricated orthotics in Sec.  424.58(c) (described in section II.A.5. 
of this proposed rule).
    In our existing regulations at Sec.  424.57(c)(22), we require 
DMEPOS suppliers to be accredited by a CMS-approved accrediting 
organization to receive and retain a supplier billing number. We also 
state that the accreditation must indicate the specific products and 
services for which the DMEPOS supplier is accredited in order for the 
supplier to receive payment. To implement the statutory requirements 
regarding accreditation requirements for eligible professionals and 
other persons who want to furnish and bill for prosthetics and custom-
fabricated

[[Page 3682]]

orthotics, we would revise Sec.  424.57(c)(22) by--
     Redesignating the existing text as paragraph (c)(22)(i). 
We would also make clarifying, technical, and conforming changes. We 
note that changes would not modify the intent of this provision. We 
also note that this requirement would still be applicable to all DMEPOS 
suppliers.
     Adding a new paragraph (c)(22)(ii) to state the additional 
accreditation requirements for DMEPOS suppliers that would be 
fabricating and billing for prosthetics and custom-fabricated 
orthotics. In order to be a qualified supplier, the DMEPOS supplier 
must be accredited by a CMS-approved accreditation organization for 
prosthetics and custom-fabricated orthotics as described in Sec.  
424.58(c). The accreditation must indicate the specific products and 
services for which the DMEPOS supplier is accredited in order for the 
qualified supplier (as defined in Sec.  424.57(a)) to receive payment 
for the specific prosthetics and custom-fabricated orthotics. We are 
also proposing that as part of compliance with the ongoing 
accreditation process, qualified suppliers must notify the AO of any 
change in conditions, practices, or operations that were relied upon by 
the AO at the time of accreditation. This would include, but not be 
limited to, a requirement for notifying the AO of any changes in 
personnel, including changes in status or qualifications of employees 
of the qualified supplier or of any personnel utilized by the qualified 
supplier via contract or other business relationship. This requirement 
is included to ensure that qualified suppliers, once accredited, 
continue to meet all of the accreditation and other supplier standards. 
(See section II.A.5. of this proposed rule for more detailed 
information regarding our proposed requirements for accrediting 
organizations.)
    Section 1834(h)(1)(F) of the Act requires, in part, that no payment 
can be made for prosthetics or custom-fabricated orthotics unless the 
item is fabricated by a qualified practitioner or a qualified supplier 
at a facility that meets such criteria as the Secretary determines 
appropriate. Therefore, we are proposing to define and establish the 
criteria that such a facility must meet. We are proposing to define 
``fabrication facility'' to distinguish this facility type from others 
referenced in our regulations. In Sec.  424.57(a), we would define a 
fabrication facility as a physical structure that--
     Meets the requirements in Sec.  424.57(d)(4); and
     Is utilized by a qualified practitioner or a qualified 
supplier to fabricate prosthetics or custom-fabricated orthotics.
    In Sec.  424.57(d)(4), based on input from other government 
agencies and contractors that are involved in ensuring that prosthetics 
and custom-fabricated orthotics are furnished, fabricated and paid for 
properly, we would specify that the fabrication facility at which 
qualified suppliers and qualified practitioners fabricate prosthetics 
and custom-fabricated orthotics, as defined in Sec.  424.57(a), must 
meet all of the following requirements:
     Be located within the United States or one of its 
territories.
     Be a business that is organized, established and licensed 
under applicable state and federal laws.
     Have a process for maintenance and production of 
fabrication records including the following:
    ++ Job/work orders.
    ++ Record tracking systems.
    ++ Real time recordkeeping, for example, ensuring that records are 
updated as the fabrication takes place.
    ++ Secure storage of records with electronic and hard copy back-up.
     Have a quality assurance process to identify non-standard 
production outcomes, and improve fabrication outcomes.
     Have a periodic review and employee demonstration of 
fabrication/safety/communication/operations competencies with 
corrective action plans for staff that do not meet the minimal 
standards.
     Have full time appropriately credentialed staff member(s) 
who are (qualified practitioners or qualified suppliers) onsite to 
fabricate and to supervise fabrication.
     Have a laboratory area with appropriate safety equipment 
(for example, flammable material storage, gloves, safety glasses, and 
proper ventilation).
     Have a separate waiting area and chairs with armrests, as 
necessary.
     Have patient care and fitting rooms with appropriate 
levels of privacy and sanitation. Patient fitting and care areas should 
be separate from the fabrication area.
     Have disinfecting supplies, gloves, masks, and plastic for 
containing contaminated materials.
     Have a fabrication facility information system, paper or 
digital, that can track the production, list component part number (and 
serial number if available) and quantity, and that is linked to patient 
information and be Health Insurance Portability and Accountability Act 
compliant. Such a system must allow facility staff and management, 
including those fabricating, to identify any parts that could be 
recalled at a later date.
     Have parallel bars, a full-length mirror, and other 
appropriate assessment tools.
     Have a process that mandates following precautions to 
handle used patient devices that are contaminated.
     Have repair and disinfecting areas clearly labeled.
     Have the ability to handle all potentially hazardous 
materials in facility properly.
     Have an emergency management plan and a safety management 
plan.
     Have policy for detecting/reporting counterfeit supplies.
     Have the proper tools, equipment, and computers commonly 
used in the fabrication of particular items and typically associated 
with the particular technical approach (negative impression/positive 
model, CAD-CAM, or direct formed), as applicable. These tools and 
equipment would include, but are not limited to the following:
    ++ Computers with appropriate graphics/modeling capacity and 
technology.
    ++ Band saw.
    ++ Disc sander.
    ++ Sanding paper.
    ++ Flexible shaft sander.
    ++ Lathe.
    ++ Drill press.
    ++ Sewing machine.
    ++ Grinding equipment.
    ++ Paint-spraying equipment.
    ++ Welding equipment.
    ++ Alignment jig.
    ++ Ovens capable of heating plastics for molding.
    ++ Computer controlled milling machine.
    ++ Lockable storage areas for raw materials and finished devices.
    ++ Air compressor.
    We note that these requirements would apply even if the fabrication 
facility is the same location as that of the DMEPOS supplier.
    We intend to require that AO's cannot accredit a qualified supplier 
or renew the accreditation of a qualified supplier unless the qualified 
supplier uses a fabrication facility that meets these criteria. We are 
seeking comment on the definition of a fabrication facility and its 
requirements.
3. Definition of Qualified Practitioner
    We are also proposing to define qualified practitioner in Sec.  
424.57(a). Our proposal would permit certain eligible professionals and 
other persons who are not enrolled as an accredited DMEPOS supplier to 
become a qualified

[[Page 3683]]

practitioner to furnish or fabricate prosthetic and custom-fabricated 
services and supplies that are billed to Medicare if the eligible 
professional or other person meets the training, licensure, and 
certification requirements in proposed Sec.  424.57(d)(3).
a. Specific Eligible Professionals and Other Persons
    In Sec.  424.57(a), we would identify and define the types of 
eligible professionals and other persons who can become qualified 
practitioners, and therefore, in accordance with the BIPA provisions, 
furnish or fabricate prosthetics and custom-fabricated orthotics. 
Specifically, we propose to identify and to add definitions for the 
following practitioners: (1) Occupational therapist; (2) ocularist; (3) 
orthotist; (4) pedorthist; (5) physical therapist; (6) physician; and 
(7) prosthetist.
     Occupational Therapist. Our current regulations at Sec.  
484.4 specify in detail the personnel qualifications for an 
occupational therapist. We are proposing to define an occupational 
therapist as an individual who meets the requirements in Sec.  484.4. 
We are specifically requesting comments on these proposed 
qualifications for an occupational therapist to furnish/fabricate 
prosthetics and custom-fabricated orthotics.
     Ocularist. The American Society of Ocularists defines an 
ocularist as a trained technician skilled in the arts of fitting, 
shaping, and painting ocular prostheses. We note, as indicated by the 
National Examining Board of Ocularists, that in addition to creating 
ocular prostheses, the ocularist typically shows the patient how to 
handle and care for the prosthesis, and provides long-term care through 
periodic examinations. We are proposing to define an ocularist as a 
trained technician skilled in the arts of fitting, shaping, and 
painting ocular prostheses who is certified by the American Board for 
Certification in Orthotics, Prosthetics and Pedorthics (ABC), the Board 
for Orthotist/Prosthetist Certification International, Incorporated 
(BOC) or the National Examining Board of Ocularists. We are 
specifically requesting comments on these proposed qualifications for 
an ocularist to furnish/fabricate prosthetics and custom-fabricated 
orthotics.
     Orthotist. Our current regulations in Sec.  485.70(d) 
specify the following personnel qualifications for an orthotist:
    ++ Be licensed by all states in which practicing, if applicable.
    ++ Have successfully completed a training program in orthotics that 
is jointly recognized by the American Council on Education and the 
American Board for Certification in Orthotics and Prosthetics.
    ++ Be eligible to take that Board's certification examination in 
orthotics.
    We are proposing to define an orthotist as an individual who meets 
the personnel qualifications in Sec.  485.70(d). We are specifically 
requesting comments on these proposed qualifications for an orthotist 
to furnish or fabricate prosthetics and custom-fabricated orthotics.
     Pedorthist. The Pedorthic Footcare Association defines a 
pedorthist as a specialist in using footwear--which includes shoes, 
shoe modifications, foot orthoses and other pedorthic devices--to solve 
problems in, or related to, the foot and lower limb. We are proposing 
to define pedorthist in this manner. We are specifically requesting 
comments on these proposed qualifications for a pedorthist to furnish 
or fabricate prosthetics and custom-fabricated orthotics.
     Physical Therapist. Our current regulations at Sec.  484.4 
specify in detail the personnel qualifications for a physical 
therapist. We are proposing to define a physical therapist as an 
individual who meets the requirements in Sec.  484.4. We are 
specifically requesting comments on these proposed qualifications for a 
physical therapist to furnish or fabricate prosthetics and custom-
fabricated orthotics.
     Physician. Our current regulations at Sec.  484.4 specify 
the personnel qualifications for a physician. In addition to those 
requirements, we propose to require that for purposes of furnishing or 
fabricating prosthetics and custom-fabricated orthotics, a physician 
must be specifically educated, certified or trained in the area of 
prosthetics and custom-fabricated orthotics. The physician must be 
knowledgeable and competent (as evidenced by education and experience) 
in the assessment, furnishing, fabrication, care, and follow-up needs 
of the patient as specifically delineated in the DMEPOS quality 
standards (discussed in section II.A.6. of this proposed rule). We are 
proposing such knowledge and competency requirements because we believe 
it is only specialty physicians who are trained and experienced, and 
who understand the specialized needs of the beneficiary requiring 
prosthetics and custom-fabricated orthotics. We are specifically 
requesting comments on these proposed additional qualifications for a 
physician to furnish prosthetics and custom-fabricated orthotics.
    Doctors of dental surgery or dental medicine, doctors of optometry, 
psychiatrists, and chiropractors do not customarily furnish or 
fabricate prosthetics and custom-fabricated orthotics. Therefore, we 
have not proposed requirements for these eligible professionals or any 
others who do not typically furnish or fabricate the prosthetics and 
custom-fabricated orthotics that are subject to the provisions of this 
proposed rule. However, any qualified practitioner who furnishes or 
fabricates prosthetics or custom-fabricated orthotics and any qualified 
supplier that fabricates or bills for such services must meet the 
applicable requirements as specified in this rule.
     Prosthetist. A prosthetist is able to provide all types 
prosthetics, with the exception of facial prosthetics. Our current 
regulations at Sec.  485.70(f) specify the personnel qualifications for 
a prosthetist as follows:
    ++ Be licensed by all states in which they are practicing, if 
applicable.
    ++ Have successfully completed a training program in prosthetics 
that is jointly recognized by the American Council on Education and the 
American Board for Certification in Orthotics and Prosthetics.
    ++ Be eligible to take that Board's certification examination in 
prosthetics.
    We are proposing to define a prosthetist as an individual who meets 
the personnel qualifications in Sec.  485.70(f). We are specifically 
requesting comments on these proposed qualifications for a prosthetist 
to furnish or fabricate prosthetics and custom-fabricated orthotics.
b. Training, Licensure, and Certification Requirements for Qualified 
Practitioners
    In addition to defining the types of professionals that would be 
eligible to furnish and fabricate prosthetics and custom-fabricated 
orthotics, we are proposing certain licensure, training, and 
certification requirements that these practitioners must meet to be 
qualified practitioners who furnish or fabricate prosthetics or custom-
fabricated orthotics that are billed to Medicare by qualified 
suppliers. Furnishing and fabricating prosthetics and custom-fabricated 
orthotics for Medicare beneficiaries, who need these items and 
services, is multifaceted and complex. We have proposed a framework of 
requirements designed to ensure that eligible professionals possess the 
skills and training to furnish and fabricate these items and services. 
It is important that the qualified practitioners who furnish and 
fabricate these items meet the requirements specified in this proposed 
rule.
    Therefore, in proposed Sec.  424.57(d)(3), we would specify that an 
eligible professional or other person who wants

[[Page 3684]]

to be a qualified practitioner who furnishes or fabricates prosthetics 
or custom-fabricated orthotics must meet either of the following 
licensure and certification requirements:
    ++ Licensed in orthotics, pedorthics or prosthetics by the state.
    ++ In states that do not provide licenses for orthotics, pedorthics 
or prosthetics, must be both of the following:
    --Specifically, trained and educated to provide and manage the 
provision of pedorthics, prosthetics, and orthotics.
    --Certified by the one of the following:
    +++ ABC.
    +++ BOC.
    +++ A Secretary-approved organization that has standards equivalent 
to the ABC or BOC.
    We believe these proposed requirements would ensure that the 
specialized needs of Medicare beneficiaries who require prosthetics and 
custom-fabricated orthotics are met. We are specifically seeking 
comment on these requirements and, in particular, we are very 
interested in comments regarding standards by which we should determine 
that qualified practitioners are specifically trained and educated to 
provide and manage the provision of pedorthics, prosthetics, and 
orthotics. For example, we solicit feedback on any relevant metrics, 
data sources or methods and processes to gauge competencies. We would 
appreciate comments on whether a qualified practitioner who is also a 
qualified supplier that is enrolled in Medicare as a DMEPOS supplier 
should be required to obtain certification from ABC or BOC in addition 
to meeting the qualified suppler requirements in this proposed rule.
    We also clarify that, to the extent that a qualified supplier does 
not fabricate a prosthetic or a custom-fabricated orthotic, such 
prosthetic or custom-fabricated orthotic must be fabricated by a 
qualified practitioner, and that it is the responsibility of the 
qualified supplier to verify the practitioner's qualified status.
4. Claims for Prosthetics and Custom-Fabricated Orthotics
    As stated previously, we are proposing that all DMEPOS suppliers 
that bill for prosthetics and custom-fabricated orthotics must meet the 
supplier standards in Sec.  424.57, the quality standards (discussed in 
section II.A.6. of this proposed rule) and be accredited by one of the 
CMS-approved accrediting organizations.
    We have proposed in Sec.  424.535(a)(2)(iii) that we may revoke a 
qualified supplier's enrollment from Medicare for billing for 
prosthetics and custom-fabricated orthotics that are not furnished by a 
qualified practitioner and fabricated by a qualified practitioner or a 
qualified supplier at a facility that meets such criteria as the 
Secretary determines appropriate. This is particularly important 
because for those qualified practitioners who are not eligible to be 
enrolled in Medicare or who are not permitted to opt out of Medicare, 
there will be no CMS repository of information about their licensure or 
certification. The qualified supplier would be responsible for ensuring 
that the qualified practitioners who furnish or the qualified 
practitioners and qualified suppliers who fabricate the items for which 
the qualified supplier submits a bill meet the requirements of this 
rule. The decision about revocation based on the authority in Sec.  
424.535(a)(2)(iii) will be made based on the facts and circumstances of 
the particular situation, and will not be based on a single individual 
billing or miscoding mistake alone on the part of a supplier. We are 
specifically seeking comment on the implementation of this requirement, 
including how DMEPOS suppliers envision that they would comply with the 
requirements that they can bill only for prosthetics and custom-
fabricated orthotics that have been furnished by qualified 
practitioners and fabricated by qualified practitioners or qualified 
suppliers at a facility that meets such criteria as the Secretary 
determines appropriate.
5. Requirements for Accreditation Organizations
    Section 1834(a)(20)(B) of the Act requires the Secretary to 
designate and approve one or more independent accreditation 
organizations to apply the quality standards required in section 
1834(a)(20)(A) of the Act. In the August 18, 2006 final rule (71 FR 
48354), we implemented our regulations at Sec.  424.58 that specified 
the criteria that all approved accreditation organizations must meet. 
In this proposed rule, we would specify requirements for any of the 
CMS-approved accreditation organizations that accredit suppliers 
fabricating prosthetics and custom-fabricated orthotics. In Sec.  
424.58, we are proposing to redesignate paragraphs (c) through (e), as 
paragraphs (d) through (f), and adding a new paragraph (c). In 
paragraph (c), we would specify that any approved accreditation 
organization must meet the following additional accreditation 
requirements to accredit suppliers that bill for prosthetics and 
custom-fabricated orthotics. In addition to meeting the current 
requirements set forth under Sec.  424.58, the accreditation 
organization must be one of the following:
     The ABC.
     The BOC.
     An approved DMEPOS accreditation organization that has 
standards equivalent to the ABC or BOC.
    We are proposing to define ``a DMEPOS accreditation organization 
that has standards equivalent to the ABC or BOC'' as one that employs 
or contracts with an orthotist, prosthetist, occupational therapist, or 
physical therapist who meets the qualified practitioner definition at 
Sec.  424.57(a) and who is utilized for the purpose of surveying the 
supplier for compliance, and has the authority to approve or deny 
accreditation of qualified suppliers.
    We believe that these proposed requirements are in concert with the 
provisions of section 1834(h) of the Act requiring that the supplier be 
accredited by the ABC, the BOC or accredited by a program that the 
Secretary determines has accreditation and approval standards that are 
essentially equivalent to those of such Board. We are specifically 
seeking comment on the proposed definition.
6. Quality Standards Required in Section 1834(a)(20) of the Act
a. Overview of and Process for Updating the Quality Standards
    The quality standards required by section 1834(a)(20) of the Act 
are used by the accreditation organizations in order to determine 
whether a supplier meets statutory and regulatory requirements and 
therefore can be accredited. Any supplier would have to maintain these 
standards in order to meet the accreditation requirements and be 
approved as a qualified supplier to bill, continue to bill or fabricate 
Medicare Part B prosthetics and custom-fabricated orthotics.
    After issuance of the final rule, we would update the DMEPOS 
quality standards to reflect the provisions contained in the final rule 
resulting from this proposed rule. The revised quality standards would 
include specifically the requirements that qualified practitioners must 
meet to furnish and fabricate prosthetics and custom-fabricated 
orthotics and that qualified suppliers must meet in order to fabricate 
and bill Medicare for prosthetics and custom-fabricated orthotics. We 
plan to solicit comments on the proposed updates to the quality 
standards as we have done in the past,

[[Page 3685]]

and as set forth in section 1834(a)(20)(E) of the Act, by posting the 
proposed updates to the quality standards on our Web site at: 
www.cms.gov/medicareprovidersupenroll. The quality standards are 
updated via our subregulatory process. Therefore, while we are 
notifying the public of our intent to update the quality standards, we 
are not, in this proposed rule, soliciting comment on the quality 
standards or the process for updating these standards.
b. Effective Date for Compliance With New Quality Standards
    We are proposing in Sec.  424.57(c)(22)(ii) that qualified 
suppliers who bill Medicare for prosthetics and custom-fabricated 
orthotics would need to meet the requirements included in the final 
rule no later than 1 year after the posting date of the final quality 
standards or at the time of the supplier's re-accreditation cycle, 
whichever is later. For qualified practitioners, we would expect them 
to meet the licensure and certification requirements proposed and 
subsequently finalized via rulemaking within 1 year of publication of 
the final rule. This takes into consideration the average length of 
time (5.5 months) needed by a DMEPOS supplier to complete the DMEPOS 
accreditation process, in addition to the time that may be needed for 
an eligible professional to become a qualified practitioner and become 
licensed or certified, as well as an extended period due to the 
additional numbers of suppliers or individuals that may need to meet 
the new requirements. We are requesting comment on the proposed 
implementation schedule so that we may ensure that there is no 
disruption in patient access to services or care.
    If an ocularist, orthotist, prosthetist, physicians, pedorthist, 
occupational therapist, physical therapist or any other eligible 
professional is not furnishing or fabricating prosthetics or custom-
fabricated orthotics, then they would not need to meet the specific 
prosthetics and custom-fabricated orthotics requirements in this 
proposed rule. Similarly, if an enrolled DMEPOS supplier is not billing 
for the prosthetics and custom-fabricated orthotics subject to the 
provisions of this proposed rule, then the supplier would not need to 
meet the specific prosthetics and custom-fabricated orthotics 
requirements in this proposed rule.

B. List of Prosthetics and Certain Custom-Fabricated Orthotics

    The requirements of section 1834(h)(1)(F) of the Act apply to all 
prosthetics and certain custom-fabricated orthotics described in 
section 1834(h)(1)(F)(ii) of the Act. Section 1834(h)(1)(F)(ii)(I) of 
the Act, as added by section 427 of BIPA, states that an item described 
in this clause is an item of custom-fabricated orthotics that requires 
education, training, and experience to custom-fabricate and that is 
included in a list established by the Secretary. Section 
1834(h)(1)(F)(ii)(I) of the Act also specifies that an item of custom-
fabricated orthotics does not include shoes and shoe inserts.
    Section 1834(h)(1)(F)(ii)(II) of the Act as added by section 427 of 
BIPA states that the Secretary, in consultation with appropriate 
experts in orthotics (including national organizations representing 
manufacturers of the same), shall establish and update as appropriate a 
list of items to which this subparagraph applies. No orthotic may be 
included in such list unless the item is individually fabricated for 
the patient over a positive model of the patient as defined later. On 
August 19, 2005, we issued program instructions (Transmittal 656, CR 
3959) implementing the list of HCPCS codes describing prosthetics and 
custom-fabricated orthotics subject to the requirements of section 
1834(h)(1)(F) of the Act. The list of HCPCS codes describing items 
subject to the requirements of section 1834(h)(1)(F) of the Act has 
been updated to reflect changes in HCPCS codes that have occurred since 
2005. This list of HCPCS codes describing items subject to the 
requirements of section 1834(h)(1)(F) of the Act would continue to be 
updated through program instructions, as needed. The list is available 
on the CMS Web site at www.cms.gov/medicareprovidersupenroll.
    In keeping with the statute's intent to consult with appropriate 
experts in developing the list, we not only reviewed the Committee's 
recommendations, but also consulted with the following:
     American Physical Therapy Association.
     Medicare Pricing, Data, Analysis and Coding (PDAC) 
contractor(s).
     Orthotic & Prosthetic Alliance.
     The American Occupational Therapy Association.
     The American Orthotic & Prosthetic Association.
     The U.S. Department of Veterans Affairs.
    To implement this statutory provision, we propose to add the 
following definitions in Sec.  424.57(a):
     Positive model of the patient means a particular type of 
custom fabrication in which one of the following occurs:
    ++ Is molded to the patient model as a negative impression taken of 
the patient's body part and a positive model rectification are 
constructed.
    ++ A Computer Aided Design-Computer Aided Manufacturing (CAD-CAM) 
system, by use of digitizers, transmits surface contour data to 
software that the practitioner uses to rectify or modify the model on 
the computer screen. The data depicting the modified shape is 
electronically transmitted to a commercial milling machine that carves 
the rectified model.
    ++ A direct formed model is one in which the patient serves as the 
positive model. The device is constructed over the model of the patient 
and is then fabricated to the patient. The completed custom fabrication 
is checked and all the necessary adjustments are made.
     Custom-fabricated means an item that is individually made 
for a specific patient. Specifically, a custom-fabricated item is a 
device that is fabricated based on clinically derived and rectified 
castings, tracings, measurements, and other images such as x-rays of 
the body part. The fabrication may involve using calculation, templates 
and components. This process requires the use of basic materials 
including, but not limited to plastic, metal, leather or cloth in the 
form of uncut or unshaped sheets, bars or other basic forms and 
involves substantial work such as vacuum forming, cutting, bending, 
molding, sewing, drilling, laminating, and finishing prior to fitting 
on the patient. An item is considered custom-fabricated if it is 
constructed by using one of the positive model techniques described in 
the definition of positive model of the patient.
    Lastly, we would specify in Sec.  424.57(d)(2) that items on the 
list must be--(1) furnished by a qualified practitioner; (2) fabricated 
by a qualified practitioner or a qualified supplier at a facility that 
meets such criteria as the Secretary determines appropriate; and (3) 
billed by a qualified supplier or, submitted as a claim by a 
beneficiary.
    The list would be updated through periodic program instructions to 
reflect any changes. We intend to update the list as needed on the CMS 
Web site at www.cms.gov/medicareprovidersupenroll. We note that the 
list of services and supplies that are subject to the provisions of 
this proposed rule is being provided for information only. We are not, 
in this proposed rule, soliciting comments on the list.
    We would continue to consult with experts in orthotics as changes 
in positive model techniques occur that might impact the definition and 
list of items subject to section 1834(h)(1)(F) of the Act. Any such 
changes to the list of

[[Page 3686]]

items would be issued through program instructions. We would continue 
to ensure that any change to the list of prosthetics and custom-
fabricated orthotics is done in concert with our established processes.
    We would issue contractor instructions and a provider educational 
article detailing the list of HCPCS codes for the prosthetics and 
custom-fabricated orthotic items to which the requirements apply, as 
well as instructions to DMEPOS suppliers regarding billing, data 
collection, and systems operations following the publication of the 
final rule. Any changes to the list items would also be published in 
future CMS contractor instructions.

III. Collection of Information Requirements

A. Background

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-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. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.

B. ICRs Regarding DMEPOS Suppliers and Eligible Professionals Providing 
Custom-Fabricated Orthotics (Sec.  424.57)

1. Accreditation for Physicians and Practitioners Enrolled as DMEPOS 
Suppliers
    Under Sec.  424.57(c)(22), DMEPOS suppliers that furnish, fabricate 
and bill for prosthetics or custom-fabricated orthotics must meet all 
accreditation requirements specified in these provisions, and be 
licensed in orthotics, pedorthics, or prosthetics in the state in which 
its practice is located (if the state requires such licensure). Table 1 
identifies categories and approximate numbers of individuals who, as of 
February 2014: (1) Are enrolled in Medicare as DMEPOS suppliers; (2) 
have billed Medicare for prosthetic devices; and (3) are ABC or BOC 
certified. This data is based on internal CMS statistics, though the 
figures in Table 1 are merely rough estimates for purposes of this 
proposed rule. These individuals have met all applicable state 
licensure requirements (for example, for furnishing prosthetics).

                          Table 1--Prosthetics
------------------------------------------------------------------------
                                              Number
                                            enrolled as   Number who are
                Category                      DMEPOS        ABC or BOC
                                             suppliers       certified
------------------------------------------------------------------------
Prosthetists............................           8,000           5,000
Physicians..............................           5,000           3,000
Physical and Occupational Therapists....           1,000             500
Ocularists..............................             400             200
Orthotists..............................           1,500             800
Pedorthists.............................             900             500
                                         -------------------------------
    Total...............................          16,800          10,000
------------------------------------------------------------------------

    The 10,000 physicians and practitioners in Table 1 who are enrolled 
as DMEPOS suppliers and are accredited would meet the requirements of 
proposed Sec.  424.57(c)(22); hence, the information collection 
requirements in this proposed rule would not affect them. However, the 
remaining 6,800 would need to obtain ABC or BOC accreditation in order 
to bill Medicare for prosthetics.
    Table 2 identifies categories and approximate numbers of 
individuals who, as of February 2014: (1) Are enrolled in Medicare as 
DMEPOS suppliers; (2) have billed Medicare for custom-fabricated 
orthotics; and (3) are ABC or BOC certified. This data, too, is based 
on internal CMS statistics. All of these persons have met the 
applicable state licensure requirements (for example, for furnishing 
custom-fabricated orthotics).

                  Table 2--Custom-Fabricated Orthotics
------------------------------------------------------------------------
                                              Number
                                            enrolled as   Number who are
                Category                      DMEPOS        ABC or BOC
                                             suppliers       certified
------------------------------------------------------------------------
Prosthetists............................           4,000           2,000
Physicians..............................           3,000           1,500
Physical and Occupational Therapists....           1,000             500
Ocularists..............................             300             200
Orthotists..............................           4,000           2,500
Pedorthists.............................             700             400
                                         -------------------------------
    Total...............................          13,000           7,100
------------------------------------------------------------------------


[[Page 3687]]

    The 7,100 physicians and practitioners in Table 2 who are currently 
enrolled as DMEPOS suppliers and are accredited would meet the 
requirements of proposed Sec.  424.57(c)(22). Accordingly, the 
information collection requirements in this proposed rule would not 
affect them. However, the remaining 5,900 would need to obtain ABC or 
BOC accreditation in order to bill Medicare for custom-fabricated 
orthotics.
    Although it is highly likely that some of the individuals in Tables 
1 and 2 provide both prosthetics and custom-fabricated orthotics, we 
have chosen to assume that the tables reflect unduplicated counts of 
physicians and practitioners.
    We cannot estimate the number of physicians and practitioners in 
the universe of 12,700 (6,800 + 5,900) who would either decline to 
obtain accreditation because of cost, other factors or inability to 
meet the accreditation requirements. We believe that the overwhelming 
majority of the 12,700 physicians and practitioners would elect to and 
become accredited to continue to provide, bill, or both provide and 
bill for these devices. We expect that a lower percentage of 
physicians, physical therapists, and occupational therapists would seek 
accreditation than would prosthetists, orthotists, pedorthists, and 
ocularists. This is because furnishing prosthetics and custom-
fabricated orthotics traditionally constitutes a smaller portion of 
their practices than is the case with the latter four practitioner 
types. For purposes of this burden estimate only, and as outlined in 
Table 3, we project that--(1) all prosthetists, orthotists, ocularists, 
and pedorthists would pursue accreditation; and (2) 90 percent of 
physicians, physical therapists, and occupational therapists would seek 
accreditation. This results in a base figure of 12,250 physicians and 
practitioners that is only slightly less than the 12,700-person 
universe mentioned previously.

  Table 3--Number of Physicians and Practitioners Seeking Accreditation
------------------------------------------------------------------------
                                            Approximate
                Category                   percentage of      Number
                                            universe *
------------------------------------------------------------------------
Prosthetists............................            40.8           5,000
Physicians..............................            25.7           3,150
Physical and Occupational Therapists....             7.3             900
Ocularists..............................             2.5             300
Orthotists..............................            18.0           2,200
Pedorthists.............................             5.7             700
                                         -------------------------------
    Total...............................  ..............          12,250
------------------------------------------------------------------------
* Rounded to nearest tenth.

    The hour and cost burdens on these physicians and practitioners of 
completing and submitting the paperwork associated with accreditation 
would vary because each physician's and practitioner's specific 
circumstances differ. However, we believe that an average per 
physician/practitioner time burden of 10 hours is reasonable, though we 
welcome comments on this estimate. This 10-hour period would include 
the time involved in completing and submitting the necessary 
accreditation paperwork, including obtaining any required supporting 
documentation.
    Many of the 12,250 physicians and practitioners are part of group 
practices that have administrative personnel who handle various 
paperwork functions on behalf of the group's physicians and 
practitioners. It is probable that some administrative personnel would 
complete and submit the physicians' and practitioners' accreditation 
paperwork. However, we have no data that can help us predict the number 
of instances in which this would occur. In an effort not to 
underestimate the potential cost burden, we will assume for purposes of 
our analysis that physicians and practitioners would complete and 
submit their accreditation applications.
    Table 4 identifies the mean hourly wages for the Bureau of Labor 
Statistics (BLS) categories that most appropriately apply to the 
physician and practitioner types mentioned previously. The data is from 
May 2015, the most recent month for which information is available; see 
https://www.bls.gov/oes/current/oes_nat.htm#43-0000. As there are no 
specific BLS categories for ocularists and pedorthists, we will include 
them within the larger category of orthotists and prosthetists.

           Table 4--BLS Mean Hourly Wages Using May 2015 Data
------------------------------------------------------------------------
                                                            Hourly wage
                                             BLS mean       with fringe
              BLS category                  hourly wage    benefits and
                                                ($)        overhead ($)
------------------------------------------------------------------------
Orthotists and Prosthetists *...........           33.63           67.26
Physicians and Surgeons.................           97.33          194.66
Physical Therapists.....................           41.25        ** 82.50
Occupational Therapists.................           39.27        ** 78.54
------------------------------------------------------------------------
* Includes ocularists and pedorthists.
** The average mean hourly wage for physical and occupational therapists
  combined, which we will use in our analysis, is $80.52 (or ($82.50 +
  $78.54)/2).


[[Page 3688]]

    Table 5 identifies the total hour and cost burdens for enrolled 
physicians and practitioners seeking accreditation. The cost burdens 
are based on the wage estimates in Table 4.

      Table 5--Total Hour and Costs Burdens for Enrolled Physicians and Practitioners Seeking Accreditation
----------------------------------------------------------------------------------------------------------------
                                     Number of
            Category              physicians and    Hour burden     Total hour      Hourly wage     Total cost
                                   practitioners  per submission      burden            ($)         burden ($)
----------------------------------------------------------------------------------------------------------------
Prosthetists....................           5,000              10          50,000           67.26       3,363,000
Physicians......................           3,150              10          31,500          194.66       6,131,790
Physical and Occupational                    900              10           9,000           80.52         724,680
 Therapists.....................
Ocularists......................             300              10           3,000           67.26         201,780
Orthotists......................           2,200              10          22,000           67.26       1,479,720
Pedorthists.....................             700              10           7,000           67.26         470,820
                                 -------------------------------------------------------------------------------
    Total.......................          12,250  ..............         122,500  ..............      12,371,790
----------------------------------------------------------------------------------------------------------------

    Although this burden would be incurred in the first year of our 
proposed requirement, 3 years is the maximum length of an OMB approval. 
Therefore, we must average the totals in Table 5 over a 3-year period. 
This result in the following average annual figures of: (1) 4,083 
affected physicians and practitioners; (2) 40,830 ICR burden hours; and 
(3) $4,123,930 in ICR burden costs.
2. Accreditation for Newly Enrolling Physicians and Practitioners
    Table 6 outlines the annual number of physicians and practitioners 
who, based on historical CMS data, would--(1) seek accreditation in 
accordance with Sec.  424.57(c)(22); (2) enroll in Medicare as DMEPOS 
suppliers; and (3) bill Medicare for prosthetics or custom-fabricated 
orthotics.

  Table 6--Annual Number of Physicians and Other Practitioners Seeking
  Accreditation, Enrolling in Medicare as DMEPOS Suppliers, and Billing
             for Prosthetics or Custom-Fabricated Orthotics
------------------------------------------------------------------------
                                                             Number of
                        Category                             enrollees
------------------------------------------------------------------------
Prosthetists............................................             400
Physicians..............................................             250
Physical and Occupational Therapists....................             100
Ocularists..............................................              40
Orthotists..............................................             400
Pedorthists.............................................             100
                                                         ---------------
    Total...............................................           1,290
------------------------------------------------------------------------

    Table 7 outlines the annual hour and cost burdens for newly 
enrolling physicians and practitioners. The table applies the 10-hour 
and BLS wage estimates mentioned previously.

  Table 7--Annual Hour and Cost Burdens for Newly Enrolling Physicians and Practitioners Seeking Accreditation
----------------------------------------------------------------------------------------------------------------
                                     Number of
            Category              physicians and    Hour burden     Total hour      Hourly wage     Total cost
                                   practitioners  per submission      burden            ($)         burden ($)
----------------------------------------------------------------------------------------------------------------
Prosthetists....................             400              10           4,000           67.26         269,040
Physicians......................             250              10           2,500          194.66         486,650
Physical and Occupational                    100              10           1,000           80.52          80,520
 Therapists.....................
Ocularists......................              40              10             400           67.26          26,904
Orthotists......................             400              10           4,000           67.26         269,040
Pedorthists.....................             100              10           1,000           67.26          67,260
                                 -------------------------------------------------------------------------------
    Total.......................           1,290  ..............          12,900  ..............       1,199,414
----------------------------------------------------------------------------------------------------------------

3. Reporting Accreditation via the CMS-855S (Medicare Enrollment 
Application: Durable Medical Equipment, Prosthetics, Orthotics, and 
Supplies (DMEPOS) Suppliers)
    The CMS-855S is currently approved under OMB control number 0938-
1056. In order to account for the application information collection 
requirements contained in this notice of proposed rulemaking, we will 
submit a revised information collection request for OMB review and 
approval.
a. Enrolled Physicians and Practitioners
    Upon becoming accredited, physicians and practitioners would need 
to report the accreditation to us via a CMS-855S change of information 
request. We estimate that it would take physicians and practitioners 30 
minutes to complete and submit this change request. Table 8 outlines 
the total hour and cost burdens of this requirement.

[[Page 3689]]



 Table 8--Total Hour and Cost Burdens for Enrolled Physicians and Practitioners Reporting Accreditation via CMS-
                                                      855S
----------------------------------------------------------------------------------------------------------------
                                     Number of
            Category              physicians and    Hour burden     Total hour      Hourly wage     Total cost
                                   practitioners  per submission      burden            ($)         burden ($)
----------------------------------------------------------------------------------------------------------------
Prosthetists....................           5,000             0.5           2,500           67.26         168,150
Physicians......................           3,150             0.5           1,575          194.66         306,590
Physical and Occupational                    900             0.5             450           80.52          36,234
 Therapists.....................
Ocularists......................             300             0.5             150           67.26          10,089
Orthotists......................           2,200             0.5           1,100           67.26          73,986
Pedorthists.....................             700             0.5             350           67.26          23,541
                                 -------------------------------------------------------------------------------
    Total.......................          12,250  ..............           6,125  ..............         618,590
----------------------------------------------------------------------------------------------------------------

    Although this burden would be incurred in the first year of our 
proposed requirement, we must average the totals in Table 8 over a 3-
year period. This results in: (1) 4,083 affected physicians and 
practitioners; (2) 2,042 ICR burden hours; and (3) $206,197 in ICR 
burden costs.
b. Newly Enrolling Physicians and Practitioners
    When completing the CMS-855S initial enrollment application, 
physicians and practitioners would have to furnish accreditation 
information on the form. We estimate that this would take 30 minutes 
per application. Table 9 outlines the total annual hour and cost 
burdens.

     Table 9--Total Annual Hour and Cost Burdens for Newly Enrolling Physicians and Practitioners Reporting
                                           Accreditation via CMS-855S
----------------------------------------------------------------------------------------------------------------
                                     Number of
            Category              physicians and    Hour burden     Total hour      Hourly wage     Total cost
                                   practitioners  per submission      burden            ($)         burden ($)
----------------------------------------------------------------------------------------------------------------
Prosthetists....................             400             0.5             200           67.26          13,452
Physicians......................             250             0.5             125          194.66          24,333
Physical and Occupational                    100             0.5              50           80.52           4,026
 Therapists.....................
Ocularists......................              40             0.5              20           67.26           1,345
Orthotists......................             400             0.5             200           67.26          13,452
Pedorthists.....................             100             0.5              50           67.26           4,026
                                 -------------------------------------------------------------------------------
    Total.......................           1,290  ..............             645  ..............          60,634
----------------------------------------------------------------------------------------------------------------

4. Requirements for Becoming a Qualified Practitioner
    Under Sec.  424.57(d)(3), all eligible professionals who wish to 
become qualified practitioners, to provide prosthetics or custom-
fabricated orthotics, and who are not enrolled in Medicare as DMEPOS 
suppliers (and therefore do not bill Medicare for these items) must--
     Be licensed in orthotics, pedorthics, or prosthetics in 
the state in which his or her practice is located if the state requires 
such licensure; or
     If the state does not require such licensure--
     Be specifically trained and educated to provide and manage 
the provision of pedorthics, prosthetics, or orthotics; and
     Meet the certification requirements specified in Sec.  
424.57(d)(3)(i)(B)(2).
    Specifically, this section discusses the hour and cost burdens for 
physicians and practitioners who are--(1) not enrolled in Medicare as 
DMEPOS suppliers; (2) located in a state that does not require 
licensure in orthotics, pedorthics, and prosthetics; and (3) must 
obtain certification under Sec.  424.57(d)(3).
    Approximately 15 states require licensure to furnish prosthetics 
and custom-fabricated orthotics. However, we do not have concrete data 
regarding the number of unenrolled and unlicensed individuals in the 35 
other states or the territories who provide these items, for these 
persons do not bill Medicare for them. For purposes of this burden 
estimate, and solely to establish a rough figure on which commenters 
can submit feedback to us, we project that approximately 5,000 
physicians and practitioners would seek certification within the first 
year following the implementation of Sec.  424.57(d)(3). We estimate 
that 500 physicians and practitioners would seek certification under 
Sec.  424.57(d)(3) each year thereafter.
    As we lack sufficient data regarding the number of qualified 
practitioners, who fall within the universe of 5,000 physicians and 
practitioners, we will use the figures in Table 3 as a baseline 
estimate. To illustrate, orthotists represented 18 percent of the 
12,250 suppliers referenced in Table 3 (or 2,200 out of 12,250); we 
project that 18 percent of the 5,000-person universe (or 900) would 
consist of orthotists. We also utilized the wage estimates and the 10-
hour projection. This results in the following Year 1 hour and cost 
burdens associated with Sec.  424.57(d)(3).

[[Page 3690]]



                  Table 10--Hour and Cost Burdens Associated With Sec.   424.57(d)(3) in Year 1
----------------------------------------------------------------------------------------------------------------
                                     Number of
            Category              physicians and    Hour burden     Total hour      Hourly wage     Total cost
                                   practitioners  per submission      burden            ($)         burden ($)
----------------------------------------------------------------------------------------------------------------
Prosthetists....................           2,040              10          20,400           67.26       1,372,104
Physicians......................           1,285              10          12,850          194.66       2,501,381
Physical and Occupational                    365              10           3,650           80.52         293,898
 Therapists.....................
Ocularists......................             125              10           1,250           67.26          84,075
Orthotists......................             900              10           9,000           67.26         605,340
Pedorthists.....................             285              10           2,850           67.26         191,691
                                 -------------------------------------------------------------------------------
    Total.......................           5,000  ..............          50,000  ..............       5,048,489
----------------------------------------------------------------------------------------------------------------

    Table 11 reflects the annual hour and cost burdens in Year 2 and 
each year thereafter. The figures are based on the 500-individual 
universe.

          Table 11--Annual Hour and Cost Burdens of Sec.   424.57(d)(3) in Year 2 and Subsequent Years
----------------------------------------------------------------------------------------------------------------
                                     Number of
            Category              physicians and    Hour burden     Total hour      Hourly wage     Total cost
                                   practitioners  per submission      burden            ($)         burden ($)
----------------------------------------------------------------------------------------------------------------
Prosthetists....................             204              10           2,040           67.26         137,210
Physicians......................             128              10           1,280          194.66         249,165
Physical and Occupational                     36              10             360           80.52          28,987
 Therapists.....................
Ocularists......................              13              10             130           67.26           8,744
Orthotists......................              90              10             900           67.26          60,534
Pedorthists.....................              29              10             290           67.26          19,505
                                 -------------------------------------------------------------------------------
    Total.......................             500  ..............           5,000  ..............         504,145
----------------------------------------------------------------------------------------------------------------

    We averaged the totals in Tables 10 and 11 over a 3-year period. 
This results in the following annual figures of: (1) 2,000 affected 
physicians and practitioners; (2) 20,000 burden hours; and (3) 
$2,018,926.

C. Final ICR Hour and Cost Burdens

    We estimate the following total ICR burdens associated with our 
proposed provisions in each of the first 3 years of this rule.

                                               Table 12--Summary of Annual Information Collection Burdens
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Total
                                                             Number of    Number of    Burden per     annual     Hourly labor   Total labor   Total cost
       Regulation section(s)            OMB Control No.     respondents   responses     response      burden       cost ($)       cost ($)       ($)
                                                                                        (hours)      (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   424.57(c)(22)--Enrolled      0938-New..............       12,250       12,250           10      122,250  [dagger]          4,123,930    4,123,930
 seeking accreditation.
Sec.   424.57(c)(22)--Newly         0938-New..............        1,290        1,290           10       12,290  [dagger][dagge    1,199,414    1,199,414
 enrolling seeking accreditation.                                                                                r]
Sec.   424.57(c)(22)--Enrolled      0938-1056.............        4,083        4,083          0.5        2,042  [dagger][dagge      206,197      206,197
 reporting accreditation via 855S.                                                                               r][dagger]
Sec.  Sec.   424.57(c)(22)--Newly   0938-1056.............        1,290        1,290          0.5          645  [dagger][dagge       60,634       60,634
 enrolling reporting accreditation                                                                               r][dagger][da
 via 855S.                                                                                                       gger]
Sec.   424.57(d)(3) ***...........  0938-New..............        2,000        2,000           10       20,000  [dagger][dagge    2,018,926    2,018,926
                                                                                                                 r][dagger][da
                                                                                                                 gger][dagger]
                                                           ----------------------------------------------------                -------------------------
    Total.........................  ......................       12,746       12,746  ...........       75,807  ..............    7,609,101    7,609,101
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: There are no capital/maintenance costs associated with the information collection requirements contained in this rule; therefore, we have removed
  the associated column from Table 1.
[dagger] See the values listed in Table 5.
[dagger][dagger] See the values listed in Table 7.
[dagger][dagger][dagger] See the values listed in Table 8.
[dagger][dagger][dagger][dagger] See the values listed in Table 9.
*** The values are based on the 3-year average of the values listed in tables 10 and 11. Three years is the maximum length of an OMB approval.
[dagger][dagger][dagger][dagger][dagger] See the values listed in Tables 10 and 11.


[[Page 3691]]

    We welcome comments on all burden estimates contained in the 
collection of information section of this notice of proposed 
rulemaking.
    If you comment on these information collection and recordkeeping 
requirements, please do either of the following:
    1. Submit your comments electronically as specified in the 
ADDRESSES section of this proposed rule; or
    2. Submit your comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: CMS Desk Officer, 
(CMS-6012-P), Fax: (202) 395-6974; or Email: 
OIRA_submission@omb.eop.gov.

IV. Regulatory Impact Statement

    This proposed rule would implement a statutory mandate that only 
individuals and suppliers qualified to do so can furnish, fabricate or 
bill for prosthetics and custom fabricated orthotics. The statute was 
enacted to ensure quality of care and eliminate care or services 
furnished or fabricated by individuals who were not qualified to do so. 
The idea inherent in the statute is not to deny necessary services but 
to ensure that the individuals and suppliers furnishing or fabricating 
these items are qualified to do so. As with all program changes, 
whether undertaken by us or in response to statutory imperative--as is 
the case with this rule--we always consider the impact of the proposed 
changes on access to care. In the case of the statutory provisions 
being implemented via this rule, we do not believe beneficiary access 
to care will be significantly affected. This rule involves only a very 
small percentage of the overall universe of physician, non-physician 
practitioner, and organizational suppliers. Of those affected, we 
believe that many either already comply with our proposed requirements 
or would come into compliance. We acknowledge that there may be some 
discontinuity of care in instances where a beneficiary seeks or has 
been receiving items from an individual or supplier that does not meet 
the requirements of the statute. However, we believe it will be 
minimal, and the benefit in improved quality of care outweighs the 
possible discontinuity. In addition, the phased in effective dates for 
compliance will allow reasonable time for practitioners and suppliers 
to meet the statutory and regulatory requirements thus minimizing any 
disruption in access to needed services. We welcome comment on these 
assumptions.
    In summary, we believe that our proposed rule would, as the 
Congress ostensibly intended in its enactment of section 1834(h)(1)(F) 
of the Act, protect Medicare beneficiaries and the Medicare Trust Funds 
by ensuring that only qualified practitioners furnish prosthetics and 
custom fabricated orthotics.
    We have 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 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995, Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Order 12866 and 13563 directs agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year).
    As previously stated in section III. of this proposed rule, we 
estimate that 12,250 physicians and practitioners who are enrolled as 
DMEPOS suppliers and who have billed Medicare for prosthetics or 
custom-fabricated orthotics, but who are not accredited, would seek to 
obtain accreditation under Sec.  424.57(c)(22) in order to continue 
billing for such items. Though accreditation figures vary by 
accreditation organization and by supplier type, we project (based on 
internal statistics and our review of the range of accreditation fees 
charged by various accreditation organizations) that the average annual 
cost for a physician or practitioner to obtain and remain accredited 
under Sec.  424.57(c)(22) would be roughly $1,500; this represents the 
fee charged by the applicable accreditation organization. (This is 
predicated on a triennial accreditation cycle, with the accreditation 
costs being incurred incrementally over the 3-year period.) This 
results in an annual cost to these individuals of $18,375,000 (12,250 x 
$1,500). In combining this cost with the ICR costs of this proposed 
rule (as shown in section III. of this proposed rule), we determine 
that in no year would the total costs of this proposed rule exceed $100 
million. Therefore, this is not a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organization and small governmental 
jurisdictions. Most entities and most other providers and suppliers are 
small entities, either by nonprofit status or by having revenues of 
$7.5 million to $38.5 million in any 1 year. Individuals and states are 
not included in the definition of a small entity. We are not preparing 
an analysis for the RFA because we have determined, and the Secretary 
certifies, that this proposed rule would not have a significant 
economic impact on a substantial number of small entities for two 
reasons. First, the number of affected parties represents only an 
extremely small percentage of the universe of over 1.5 million 
individual and organizational medical providers nationwide. Second, we 
do not believe an annual cost of $1,500 combined with the occasional 
submission of paperwork (as described in section III. of this proposed 
rule) would have a significant economic impact on these suppliers and 
practitioners. We believe these costs would be less than 3 percent of 
the supplier's or practitioner's revenue, as defined by HHS for 
significant impact.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area for Medicare payment regulations and has fewer than 
100 beds. We are not preparing an analysis for section 1102(b) of the 
Act because we have determined, and the Secretary certifies, that this 
proposed 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 anticipates costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation, as the 
anticipated annual spending is $30 million. In 2016, that threshold is 
approximately $146 million. This proposed rule would have no 
consequential effect on state, local or tribal governments or on the 
private sector.
    Executive Order 13132 establishes certain requirements that an 
agency

[[Page 3692]]

must meet when it promulgates a proposed rule (and subsequent final 
rule) that imposes substantial direct requirement cost on state and 
local governments, preempts state law, or otherwise has Federalism 
implications. Since this rule does not impose any costs on state or 
local governments, the requirements of Executive Order 13132 are not 
applicable.
    There were several uncertainties associated with our proposed 
projections. First, we could not determine precisely the number of 
DMEPOS suppliers who would choose not to pursue accreditation or be 
unable to become accredited. Second, we had no data on which to base 
our 5,000-person and 500-person estimates in Tables 10 and 11. As such, 
these estimates are merely designed to solicit comment on the number of 
individuals who would be affected by Sec.  424.57(d)(3). Third, we 
welcome comment on our estimation of $1,500 as the annual cost for a 
qualified supplier to obtain and remain accredited in accordance our 
proposals. Fourth, as we lack sufficient data to estimate any potential 
burden on fabricating facilities, we request comments regarding the 
types of possible burden and, if there are any, the costs involved.
    We note that by limiting payment to the circumstances described in 
this rule, our regulations would likely reduce the provision of and 
billing for these items to instances consistent with the statute. We 
believe, however, that this would enhance the quality of services and 
items by ensuring that unqualified entities and individuals are not 
furnishing such goods, while simultaneously having no real effect on 
how prices are set for them.
    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.

V. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

List of Subjects for 42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR part 424 as set forth 
below:

PART 424--CONDITIONS FOR MEDICARE PAYMENT

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

    Authority: Sections 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).
0
2. Section 424.57 is amended as follows:
0
a. In paragraph (a) by adding the definition of ``Custom-fabricated 
orthotics,'' Fabrication facility'', ``Occupational therapist'', 
``Ocularist'', ``Orthotist'', ``Pedorthist'', ``Physical therapist'', 
``Physician'', ``Positive model of the patient'', ``Prosthetics'', 
``Prosthetist'', ``Qualified practitioner'', and ``Qualified supplier'' 
in alphabetical order and in the definition of ``DMEPOS supplier'' by 
removing the reference ``paragraphs (c) and (d) of this section'' and 
adding in its place the reference ``paragraphs (c) and (h) of this 
section''.
0
b. Revising paragraph (c)(22);
0
c. In paragraph (c)(26) removing the reference ``paragraph (d) of this 
section'' and adding in its place the reference ``paragraph (h) of this 
section'';
0
d. Redesignating paragraph (d) as paragraph (h) and adding a new 
paragraph (d);
0
e. In newly designated paragraph (h)(1)(i) and (ii), removing the 
reference ``paragraph (d)(15) of this section'' and adding in its place 
the reference ``paragraph (h)(15) of this section''.
0
f. In newly designated paragraphs (h)(1)(i), (ii), (h)(4)(ii)(B), 
(h)(5)(iii) introductory text, (h)(12), and (h)(15)(ii), removing the 
reference ``paragraph (d)'' of this section and adding in its place the 
reference ``paragraph (h)'' of this section.
0
g. In newly designated paragraphs (h)(2)(i), (ii), and (iii) removing 
the reference ``paragraph (d)(3) of this section'' and adding in its 
place the reference ``paragraph (h)(3) of this section''.
0
h. In newly designated paragraphs (h)(3)(i), removing the references 
``paragraph (d)(2) of this section'' and adding in its place the 
reference ``paragraph (h)(2)'' and removing the reference ``paragraph 
(d)(3)(ii) of this section'' and adding in its place the reference 
``paragraph (h)(3)(ii) of this section''.
0
i. In newly designated paragraph (h)(15)(ii), removing the reference 
``paragraph (d)(15)(i) of this section'' and adding in its place 
``paragraph (h)(15)(i) of this section''.
    The revisions and additions read as follows:


Sec.  424.57  Special payment rules for items furnished by DMEPOS 
suppliers and issuance of DMEPOS supplier billing privileges.

    (a) * * *
    Custom-fabricated orthotic means an item as listed in section 
1861(s)(9) of the Act that meets all of the following:
    (i) Is individually made for a specific patient.
    (ii) Is constructed using one of the positive model techniques (as 
defined in this paragraph).
    (iii) Is made based on clinically derived and rectified castings, 
tracings, measurements, and other images (such as x-rays) of the body 
part and may involve the use of calculations, templates, and 
components.
    (iv) Is made using basic materials including, but not limited to 
the following:
    (A) Plastic.
    (B) Metal.
    (C) Leather or cloth in the form of uncut or unshaped sheets or 
bars.
    (D) Other basic forms and involves substantial work such as the 
following:
    (1) Vacuum forming.
    (2) Cutting.
    (3) Bending.
    (4) Molding.
    (5) Sewing.
    (6) Drilling.
    (7) Laminating.
* * * * *
    Fabrication facility means the physical structure that--
    (1) Meets the requirements in paragraph (d)(4) of this section; and
    (2) Must be used by a qualified practitioner or a qualified 
supplier to fabricate prosthetics or custom-fabricated orthotics that 
are billed to and paid for by Medicare.
* * * * *
    Occupational therapist means an individual who meets the personnel 
qualifications for an occupational therapist as specified in Sec.  
484.4 of this chapter.
    Ocularist means a trained technician skilled in the arts of 
fitting, shaping, and painting ocular prostheses who is certified by 
the National Examining Board of Ocularist.
    Orthotist means an individual who meets the personnel 
qualifications for an orthotist as specified in Sec.  485.70(d) of this 
chapter.
    Pedorthist means an individual with specific training in footwear 
which includes other pedorthic devices to solve problems in, or related 
to, the foot.
* * * * *
    Physical therapist means an individual who meets the personnel 
qualifications for a physical therapist as specified in Sec.  484.4 of 
this chapter.

[[Page 3693]]

    Physician means an individual who meets the personnel 
qualifications for a physician as specified in Sec.  484.4 of this 
chapter.
    Positive model of the patient means a particular type of custom 
fabrication in which one of the following modeling techniques is used:
    (i) Molded to the patient model as a negative impression of the 
patient's body part and a positive model rectification are constructed.
    (ii) Computer Aided Design-Computer Aided Manufacturing (CAD-CAM) 
system.
    (iii) Direct formed model.
    Prosthetics means an item as described in section 1861(s)(9) of the 
Act.
    Prosthetist means an individual who meets the personnel 
qualifications for a prosthetist as specified in Sec.  485.70(f) of 
this chapter.
    Qualified practitioner means one of the following eligible 
professionals or other persons defined in paragraph (a) of this section 
who meets the prosthetic and custom-fabricated orthotic requirements 
specified in paragraph (d)(3) of this section:
    (i) Occupational therapist.
    (ii) Ocularist.
    (iii) Orthotist.
    (iv) Pedorthist.
    (v) Physical therapist.
    (vi) Physician.
    (vii) Prosthetist.
    Qualified supplier means a DMEPOS supplier as defined in paragraph 
(a) of this section that is accredited by a CMS-approved accreditation 
organization to fabricate prosthetics and custom-fabricated orthotics 
as described in Sec.  424.58(c).
* * * * *
    (c) * * *
    (22)(i) DMEPOS supplier requirements. A DMEPOS supplier must be 
accredited by a CMS-approved accreditation organization in order to 
receive and retain a supplier billing number and to enroll in Medicare. 
The accreditation must indicate the specific products and services for 
which the DMEPOS supplier is accredited in order for the DMEPOS 
supplier to receive payment for those specific products and services.
    (ii) Requirements for DMEPOS suppliers fabricating or billing 
prosthetics and custom-fabricated orthotics. Effective 1 year after the 
posting of the final revised quality standards or the next 
revalidation, whichever is later, a DMEPOS supplier fabricating or 
billing for prosthetics or any of the custom-fabricated orthotics 
identified on the list described in paragraph (d)(2) of this section 
must do all of the following:
    (A) Meet the requirements specified in paragraph (c)(22)(i) of this 
section.
    (B) Be accredited by a CMS-approved accreditation organization for 
orthotics and prosthetics as described in Sec.  424.58(c). The 
accreditation must indicate the specific products and services for 
which the DMEPOS supplier is accredited in order for the qualified 
supplier (as defined in Sec.  424.57(a)) to receive payment for the 
prosthetics and specific custom-fabricated orthotics.
    (C) Notify the AO of any change in conditions, practices, or 
operations that were relied upon by the AO at the time of 
accreditation. This would include, but not be limited to, a requirement 
for notifying the AO of any changes in personnel, including changes in 
status or qualifications of employees of the qualified supplier or of 
any personnel utilized by the qualified supplier via contract or other 
business relationship. This requirement is included to ensure that 
qualified suppliers, once accredited, continue to meet all of the 
accreditation and other supplier standards.
* * * * *
    (d) Additional standards for qualified suppliers fabricating or 
billing for prosthetics or custom-fabricated orthotics, or qualified 
practitioners furnishing or fabricating prosthetics and custom-
fabricated orthotics.
    (1) General rule. CMS makes payment for a bill or claim for a 
prosthetic or custom-fabricated orthotic identified on the list in 
paragraph (d)(2) of this section and meets all of the following:
    (i) Furnished by a qualified practitioner.
    (ii) Fabricated by a qualified practitioner or qualified supplier 
at a fabrication facility as defined in paragraph (a) of this section.
    (iii)(A) Billed by a qualified supplier; or
    (B) Submitted as a claim by a Medicare beneficiary.
    (2) List of prosthetics and custom-fabricated orthotics subject to 
the additional standards. CMS maintains a list of prosthetics and 
custom-fabricated orthotics subject to the requirements in this 
section. The list is--
    (i) Updated as necessary; and
    (ii) Posted on the CMS Web site.
    (3) Training, licensure, and certification requirements for 
qualified practitioners. (i) A qualified practitioner who is not 
enrolled in Medicare as a DMEPOS supplier must meet either of the 
following licensure and certification requirements:
    (A) Licensed in orthotics, pedorthics or prosthetics by all States 
in which they practice.
    (B) In States that do not provide licenses for orthotics, 
pedorthics or prosthetics a qualified practitioner must be--
    (1) Specifically trained and educated to provide and manage the 
provision of pedorthics, prosthetics, and orthotics; and
    (2) Certified by any of the following:
    (i) ABC.
    (ii) BOC.
    (iii) A Secretary-approved organization that has standards 
equivalent to the ABC or BOC.
    (ii) Qualified practitioners must meet the licensure, training, 
education and certification requirements specified in this section 
within 1 year of publication of the final rule.
    (4) Fabrication facility requirements. A fabrication facility at 
which qualified suppliers and qualified practitioners fabricate 
prosthetics and custom-fabricated orthotics, as defined in Sec.  
424.57(a), must meet all of the following requirements:
    (i) Be located within the United States or one of its territories.
    (ii) Be a business that is organized, established and licensed 
under applicable state and federal laws.
    (iii) Have a process for maintenance and production of fabrication 
records including the following:
    (A) Job/work orders.
    (B) Record tracking systems.
    (C) Real time recordkeeping, for example, ensuring that records are 
updated as the fabrication takes place.
    (iv) Have a quality assurance process to identify non-standard 
production outcomes, and improve fabrication outcomes.
    (v) Have a periodic review and employee demonstration of 
fabrication/safety/communication/operations competencies with 
corrective action plans for staff that do not meet the minimal 
standards.
    (vi) Have full time appropriately credentialed staff member(s) who 
are (qualified practitioners or qualified suppliers) onsite to 
fabricate and to supervise fabrication.
    (vii) Have a laboratory area with appropriate safety equipment (for 
example, flammable material storage, gloves, safety glasses, proper 
ventilation).
    (viii) Have a separate waiting area and chairs with armrests, as 
necessary.
    (ix) Have a patient care and fitting rooms with appropriate levels 
of privacy and sanitation. Patient fitting and care areas should be 
separate from the fabrication area.

[[Page 3694]]

    (x) Have disinfecting supplies, gloves, masks, and plastic for 
containing contaminated materials.
    (xi) Have a fabrication facility information system, paper or 
digital, that can track the production, list component part number (and 
serial number if available), quantity, that is linked to patient 
information and be Health Insurance Portability and Accountability Act 
compliant. Such a system must allow facility staff and management, 
including those fabricating, to identify any parts that could be 
recalled at a later date.
    (xii) Have parallel bars, a full-length mirror, and other 
appropriate assessment tools.
    (xiii) Have a process using precautions to handle used patient 
devices that are contaminated.
    (xiv) Have repair and disinfecting areas clearly labeled.
    (xv) Have the ability to handle all potentially hazardous materials 
in facility properly.
    (xvi) Have an emergency management plan and a safety management 
plan.
    (xvii) Have policy for detecting/reporting counterfeit supplies.
    (xviii) Have the proper tools, equipment, and computers commonly 
used in the fabrication of particular items and typically associated 
with the particular technical approach (negative impression/positive 
model, CAD-CAM, or direct formed), as applicable: These tools and 
equipment would include, but are not limited to the following
    (A) Computers with appropriate graphics/modeling capacity and 
technology.
    (B) Band saw.
    (C) Disc sander.
    (D) Sanding paper.
    (E) Flexible shaft sander.
    (F) Lathe.
    (G) Drill press.
    (H) Sewing machine.
    (I) Grinding equipment.
    (J) Paint-spraying equipment.
    (K) Welding equipment.
    (L) Alignment jig.
    (M) Ovens capable of heating plastics for molding.
    (N) Computer controlled milling machine.
    (O) Lockable storage areas for raw materials and finished devices.
    (P) Air compressor.
* * * * *
0
3. Section 424.58 is amended as follows:
0
a. Revising the section heading.
0
b. Redesignating paragraphs (c) through (e) as paragraphs (d) through 
(f) respectively.
0
c. Adding a new paragraph (c).
    The revision and addition read as follows:


Sec.  424.58   Requirements for DMEPOS accreditation organizations.

* * * * *
    (c) Additional requirements for accrediting qualified suppliers. To 
accredit qualified suppliers that fabricate or bill Medicare for 
prosthetics and custom-fabricated orthotics as specified in Sec.  
424.57(c)(22)(ii), an independent accreditation organization must be 
one of the following:
    (1) American Board for Certification in Orthotics and Prosthetics, 
Incorporated (ABC).
    (2) Board for Orthotist/Prosthetist Certification International, 
Incorporated (BOC).
    (3) An organization that--
    (i) Employs or contracts with an orthotist, prosthetist, 
occupational therapist or physical therapist who--
    (A) Meets the definition of qualified practitioner specified in 
Sec.  424.57(a); and
    (B) Is utilized for the purpose of surveying the supplier or 
practitioner for compliance; and
    (ii) Has the authority granted by CMS to approve or deny the 
accreditation of qualified suppliers as defined in Sec.  424.57(a) 
based on a determination that the organization has standards equivalent 
to the ABC or BOC.
* * * * *
0
4. Section Sec.  424.535 is amended as follows:
0
a. Revising the section heading.
0
b. In paragraph (a)(2) introductory text by removing the phrase ``the 
provider or supplier is--'' and adding in its place ``the provider or 
supplier is any of the following:''.
0
c. In paragraph (a)(2)(ii) by removing the phrase ``Is debarred, 
suspended, or'' and adding in its place the phrase ``Debarred, 
suspended or''.
0
d. Adding paragraph (a)(2)(iii).
    The revision and addition reads as follows:


Sec.  424.535   Revocation of enrollment and billing privileges in the 
Medicare program.

    (a) * * *
    (2) * * *
    (iii) A qualified supplier as defined in Sec.  424.57(a) that 
submitted a claim for payment for a prosthetic or custom-fabricated 
orthotic that was not--
    (A) Furnished by a qualified practitioner; and
    (B) Fabricated by a qualified practitioner or qualified supplier as 
defined in Sec.  424.57(a) at a fabrication facility as defined in 
Sec.  424.57(a).
* * * * *

    Dated: December 9, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.

    Dated: December 22, 2016.
Sylvia M. Burwell
Secretary, Department of Health and Human Services.
[FR Doc. 2017-00425 Filed 1-11-17; 8:45 am]
 BILLING CODE 4120-01-P